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Obama’s Funding Cuts: Is This The End For Carbon Capture And Storage (CCS)?

James Osborne, Houston Chronicle

WASHINGTON – The future of developing a form of a coal that produces lower levels of greenhouse gases is falling into greater uncertainty, as the Obama administration slices funding for technologies once considered critical in fighting climate change.

The administration wants to cut spending on so-called clean-coal technologies by 3 percent in next year’s budget, even as it more than doubles the federal investment into renewable energy such as wind, solar and geothermal to more than $600 million. Under the administration’s plan, funding for clean coal would fall to $368 million in the next budget year, down from $377 million this year.

The declining support for clean coal is likely to cast further doubt on the efforts of several Houston and Texas companies to capture the intense carbon dioxide emissions from and underscores the broader retreat from coal in the face of abundant, cleaner, cheaper natural gas and tougher pollution rules. NRG Energy, which is building a carbon capture system on its W.A. Parish coal plant south of Houston, said the project is scheduled to come online later this year. But the company also said for now it does not plan to install any more carbon capture systems on other coal plants.

“NRG cannot invest further in large carbon capture projects, but we continue to closely follow technologies that could help improve the economics,” spokesman David Knox said in an email, “either by decreasing the cost of the technology to capture carbon dioxide or by increasing the value of the carbon dioxide.”

Policymakers hoped that new technologies able to dramatically reduce the pollution of one of the dirtiest fossil fuels would allow the country to tap its massive coal reserves. But hydraulic fracturing and horizontal drilling technologies – pioneered by Texas companies – unlocked massive reserves of natural gas in shale formations, and today, many power companies are shuttering coal plants and expanding their natural gas generation.

Prime market

Clean-coal technologies also have been hurt by the oil bust. The oil patch was viewed as the prime market for carbon dioxide captured from smokestacks. Oil producers use carbon dioxide in older fields to extract the last dregs of oil from beneath the ground. But with oil prices at historic lows, few companies are going after such supplies.

At a House hearing this week, Assistant Secretary for Fossil Energy Chris Smith said the Obama administration remained committed to developing clean-coal technology while admitting its economic prospects were limited without a carbon tax or other mechanism that creates a financial incentive for polluters to reduce carbon emissions.

He said the challenge of clean-coal projects is it’s free for power plants “to emit as much carbon dioxide as they can.”

Coal-fired plants produce carbon dioxide at almost twice the rate of natural gas facilities. With tougher air pollution standards and increased competition from natural gas and renewable energy, the electricity generated by coal in the U.S. has fallen 29 percent since 2007, according to the Energy Department.

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