Remarks as Prepared for Acting Deputy Kupfer
Good morning. Thank you, Howard. On behalf of Secretary Bodman and my other D.O.E. colleagues-Bob Kane and Sean Plasynski-I want to say we're very glad to be a co-sponsor of this Conference.
I would like to extend a special welcome to the international delegates to this conference - representing 39 countries and six continents.
I also want to recognize the participants joining us from the Carbon Sequestration Leadership Forum (CSLF) Capacity Building Workshop. The CSLF has done great work to advance Carbon Capture and Storage technologies globally. I would also like to thank the organizers of this conference from the IEA Greenhouse Gas Programme-and MIT-for inviting me to share some opening remarks.
I am glad to be here this morning to address this prestigious conference. It provides an important forum for the exchange of information and ideas on technologies to reduce greenhouse gases, while enhancing our use of coal and other fossil fuels.
Events like this are such a critical part of the larger energy policy discussion taking place today. I want to thank all of you for your participation. I know you share my concern about-and interest in-securing our global energy future.
Having grown up in Pittsburgh, I certainly understand the important role coal plays in meeting America's vast energy needs. The reality of course is that U.S. energy production is heavily reliant on coal. As you well know, coal-powered electricity generation accounts for roughly half of our domestic electricity mix-and it is the most abundant of our domestic fossil fuels. Some estimates account for recoverable reserves sufficient to last in excess of 240 years at current rates of consumption.
In 2007 alone, the U.S. consumed 1.1 billion tons of coal, and that figure is expected to grow to an estimated 1.5 billion tons by 2030, a 37 percent increase, according to the Energy Information Administration. As economies around the world continue to expand, increases in global coal consumption are expected to be even more dramatic.
So clearly coal is playing-and will continue to play-a very critical role in meeting both our domestic and global energy needs.
However, as you well know, the burning of this tremendous resource for electricity generation results in a release of emissions, including carbon dioxide, which contributes to climate change. This presents a real challenge-a challenge President Bush and this Administration recognize and have been committed to overcoming.
How do we do this? One way is through greater efficiency. The International Energy Agency for the G8 Nations has talked about the important role that increased efficiency can play to moderate CO2 emissions in coal-based power generation.
IEA-recommended steps for increasing efficiency include retirement and replacement of the least-efficient plants; up-grading of mid-rank plants; pre-combustion coal preparation; improving plant performance; and requiring that all new plants be state of the art.
As you are aware, efficiency increases are prominent in the Hokkaido declarations of the G8 nations and the Major Economies Meeting. They were singled out as a low-cost way to reduce greenhouse gas emissions and elevate energy security.
Of course, another major way to mitigate CO2 emissions in coal-based power is carbon dioxide capture and storage-or CCS, a technology that is indispensable in dealing with concerns about energy and climate.
This past summer, the G8 Nations called for advancing CCS internationally. We called for 20 major demonstrations by 2020. And the U.S. agreed to sponsor at least ten of these.
7 will come from what we call our Regional Carbon Sequestration Partnerships; others will come from a 3rd Round of the of President's Clean Coal Power Initiative-we call it CCPI-and from the restructured FutureGen Project.
I will talk more about these initiatives and what we in the U.S. are doing to spur the development of advanced coal technologies. But 1st I'd like to talk a bit more about the U.S. commitment-both domestically and internationally-to address climate change.
The new Administration will have to develop its own policies. And I'm not going to predict what they may do. But at the same time, it is important to recognize all that this Administration has done. We have laid a solid foundation-and as we finish up the last few months, I think it is a record that we can be proud of.
In April 2008, President Bush committed America to a new goal: to stop the growth in CO2 and CO2-equivalent greenhouse gases by 2025-and, thereafter, to reverse it. This announcement furthered a commitment made in 2002 to reduce the carbon intensity of the U.S. economy by 18 percent by 2012.
All statistics show we are on track to achieve at least this. In fact, United Nations data show that the U.S. has reduced net greenhouse emissions by 3 percent since 2000, the 2nd best among 17 major economies-and this was achieved through voluntary programs. The U.S. was among only 5 nations and one grouping of nations that were able to reduce emissions at all: France, the U.S., the United Kingdom, the EU-15 and Japan.
The next step referred to by the President-to stop the growth in emissions-foresees a peaking of power plant emissions in 10-to-15 years, followed by a decline that will be brought about by accelerated development and deployment of advanced technology.
Our responsibility at the D.O.E. is to develop this technology. As I mentioned earlier, a major way to mitigate CO2 emissions in coal-based power is CCS. In fact, not long ago, IEA identified it as the most important way. The former chairman of Shell Oil called CCS the one technology we cannot do without.
The Department's Office of Fossil Energy works on CCS research, development and demonstration on a cost-sharing basis with industry, academia and others in the private sector.
As the federal government, we specify objectives-and the private sector, responds with technology proposals. We have in excess of 70 active and on-going plans through the Carbon Sequestration Program, which includes capture and monitoring, mitigation and verification.
We have significantly increased our investment in these projects-by a factor of almost 50. Appropriations for the carbon sequestration plan were close to non-existent (less than $1 million) in 1997. Our current appropriation is $118.9 million, with a pending budget request for $149 million. The increases reflect the importance that we assign to CCS.
Let's look, for example, at the 1st C in CCS: capture. The Department's Countrywide Energy Technology Lab has work in progress on a range of capture technologies: on pre-combustion, post-combustion, and oxygen combustion and on technologies for new construction and retrofit.
Large-scale tests and demonstrations of storage will begin next year under the Regional Carbon Sequestration Partnerships program. This initiative, launched by the Department in 2003, forms the centerpiece of our Countrywide efforts to develop the infrastructure and knowledge base needed to place CCS technologies on the path to commercialization.
I have the pleasure this morning of announcing the Department's award of $66.9 million to the Big Sky Regional Carbon Sequestration Partnership-our 7th large-scale carbon sequestration project-and the final award in this series.
Led by Montana State University-Bozeman, the Big Sky Partnership will conduct a large-volume test in the Nugget Sandstone formation to demonstrate the ability of a geologic formation to safely, permanently, and economically store in excess of 2 million tons of carbon dioxide. The estimated cost of the plan is $131 million, including the partnership's cost share.
The Big Sky partnership's large-volume injection test will be located at the Riley Ridge Unit on the LaBarge Platform in Southwest Wyoming. The plan will demonstrate the entire CO2 injection process-pre-injection characterization, injection process monitoring, and post-injection monitoring-and provide the foundation for the future development of CO2 capture and storage opportunities in the region.
As I mentioned, today's award to Big Sky is the 7th in the 3rd phase of the Regional Carbon Sequestration Partnership program. 6 other large-scale field plans are currently being developed throughout the U.S. by other Regional Partnerships. In total, the 7 partnerships include in excess of 350 organizations from government, industry, and academia and extend across the U.S. and Canada.
During the 1st phase of the program, the partnerships characterized the potential for CO2 storage in deep oil-, gas-, coal-, and saline-bearing formations. When Phase I ended in 2005, the partnerships had identified in excess of three trillion metric tons of potential storage capacity in promising sinks. This has the potential to represent in excess of 1,000 years of storage capacity from point sources in North America.
In the program's 2nd phase, the partnerships implemented a portfolio of small-scale geologic and terrestrial sequestration projects. The purpose of these tests was to validate that different geologic formations have the injectivity, containment, and storage effectiveness needed for long-term sequestration.
Phase III large-volume tests are designed to validate that the capture, transportation, injection, and long-term storage of over one million tons of carbon dioxide can be done safely, permanently, and economically.
Each large-scale test of the Deployment Phase is intended to lay the foundation for future commercial demonstrations by validating a region's principal reservoir. It will also validate that sequestration can be commercially applied in many different geologies.
Of equal importance, the partnerships also are developing formal procedures and scientific principles necessary to establish a regulatory and statutory basis for the successful practice of safe and permanent long-term storage. Activities will include qualifying projects, permitting, injection, post-injection monitoring and successful closure.
A panel of independent experts assembled by the International Energy Agency found earlier this year that the Regional Carbon Sequestration Partnerships constitute the world's most ambitious capture and storage program. The experts found that it will significantly advance the cause of CCS in the U.S., in Canada and internationally.
I mentioned earlier that some of the ten major CCS demonstrations the U.S. will be sponsoring will also come from CCPI and from the restructured FutureGen Project.
Both CCPI and the FutureGen Plan were reoriented this year toward commercial-scale capture and storage to pull the technology forward. Both aim at multiple demonstrations in commercial settings at commercial scale. Round 3 of CCPI will provide $340 million for multiple demonstrations of capture technologies capable of 90 percent capture efficiency and of storing-or providing for beneficial reuse-at least 300,000 tons of CO2 a year.
And so the appropriate technologies are nearing take-off speed. I would add that our loan guarantee plan plays a significant role in spurring clean coal innovation. This past summer, the Department issued a solicitation for up to $8 billion in loan guarantees for advanced fossil energy projects. This marked the 3rd round of solicitations for our Loan Guarantee program, which encourages the development of new, clean energy technologies.
As part of an earlier round of solicitations, pre-applications were submitted, and sixteen projects-including 3 advanced fossil energy projects-were selected to submit full applications. Plans supported by loan guarantees will help fulfill President Bush's goal of reducing our reliance on foreign oil by diversifying our nation's energy mix and increasing energy efficiency.
Meanwhile, other IGCC plants and advanced coal systems are under construction around the world. Capture technologies are being tested at pilot scale and readied for scale-up in many nations. Storage and storage technologies are also under development. And many projects for near-zero emissions plants are moving forward.
In the U.S. market, for instance, Duke Energy began construction this year on its landmark scale-up of IGCC to 630 megawatts. This plant is intended to replace 160 megawatts of very old, coal-fired capacity in the state of Indiana. It is designed to produce 45 percent less CO2 per kilowatt hour and deliver ten times more power. The company is apparently studying the possibility of linking it with CCS.
We have opened the door on a new era in energy security and climate security. To achieve success we must advance on parallel paths to develop the right technologies and implement the right policies.
The world is moving in a common direction. We are accelerating deployment of advanced coal-generating technologies, including CCS. The next few years should yield enormous amounts of experience in design, construction and operations.
Now is the time to think about how to share that kind of information widely and frequently. There is no doubt that cooperation and collaboration will lead us toward greater energy and environmental security on a global scale. Your meeting is one part of that important collaboration.
Thank you very much.
