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DOE spent more than $500M on dead projects

DOE spent more than $500M on dead projects


Nearly half the $2.7 billion in fossil research money spent by the Department of Energy over the last seven years supported nine carbon capture demonstration projects, the majority of which were canceled or withdrawn, according to a report yesterday from the Government Accountability Office.

The GAO analysis highlights an ongoing debate about carbon capture, utilization and sequestration (CCUS). Opponents say that CCUS had its shot and shouldn’t get extensive federal support, while supporters say the technology has received less federal money than nuclear and other low-carbon sources and is a critical component of holding global temperatures at manageable levels.

Models show that the technology is needed to ensure temperature rise stays below 2 degrees Celsius, according to Erin Burns, a Third Way analyst, during a breakfast event this morning. She pointed to International Energy Agency data showing CCUS will be required at a much broader scale to meet climate targets.

The GAO examined 794 projects funneled through the National Energy Technology Laboratory between 2010 and 2017, as well as money distributed through the 2009 American Recovery and Reinvestment Act. In general, recipients were required to share the cost of the projects.

Of the $2.66 billion spent on those projects, $1.12 billion went for nine large demonstrations. Within that, $475 million was provided to four projects from which DOE later pulled its support, either because they failed to meet technical milestones or because they could not meet deadlines enshrined in the Recovery Act.

The withdrawn projects included FutureGen 2.0, a planned zero-emissions coal plant in Illinois, and Summit Power’s Texas Clean Energy Project, also a proposed low-emissions coal generator.

An additional $30 million went to two demonstration projects that were withdrawn by companies themselves, including American Electric Power’s capture project on its Mountaineer coal plant in West Virginia. The other was Leucadia Energy LLC’s plan to capture CO2 from a petcoke-to-chemicals plant, which the company withdrew in 2014 because of financial challenges.

Fifty-five percent of the total $1.12 billion for CCUS led to three demonstrations that are still active. NRG Energy Inc.’s Petra Nova project in Texas, the world’s largest retrofit of a coal plant, was one of them, as was an Archer Daniels Midland Co. initiative capturing CO2 from an ethanol facility. Petra Nova came online last year (Energywire, Jan. 10, 2017).

The other remaining money — $1.54 billion — went for projects that were “relatively small,” often funded at less than $1 million each. Those were not just CCUS, but encompassed research on rare earth elements, natural gas infrastructure, general coal efficiency, and offshore oil and gas.

Opponents of CCUS say the numbers indicate that money was lost and could have gone to develop other types of low-carbon technologies.

“This report is a clear reminder of money thrown into the abyss looking at increasingly obsolete technologies instead of investing in the clean energy future we need,” said Ernesto Vargas, climate and energy project director at Friends of the Earth. “The DOE has spent billions of dollars to help coal, oil and gas industries to find new ways to keep polluting and destroying our environment.”

At the breakfast event, which included Sen. Sheldon Whitehouse (D-R.I.) and members of the Carbon Capture Coalition, advocates said CCUS will be necessary because of global projections of continued use of coal, gas and oil.

The focus should not be on overall dollar amounts but on changing the policy structure and understanding that DOE money helped progress understanding of the technology, they said. In their view, the tax code is a more efficient way to finance many projects and cuts back on federal review.

“All spending is not created equal. The technology has quietly been marching forward,” said Jeffrey Bobeck, director of energy policy at the Center for Climate and Energy Solutions.

Burns said other technologies now “successfully commercialized” also witnessed expensive projects that sometimes failed.

President Trump this year signed into law a measure supported by Whitehouse that doubled existing tax credits for carbon storage and set up an entirely different financial model for the technology, more similar to tax credits that exist for renewables (Greenwire, Feb. 9).

“We believe that is going to be a successful method for getting technology out into the market,” said Kurt Waltzer, managing director for the Clean Air Task Force. “The 50 percent cost share approach is, I think, a more challenging way to go on that,” he said.

The IRS has not yet released guidance on using the tax credit, but that is expected within a year.

Whitehouse is backing an additional bill, co-sponsored by Sen. John Barrasso (R-Wyo.) and others, that would establish guidance on CO2 pipelines and carbon capture facilities and alter federal laws to clarify permitting (E&E Daily, April 12).

Whitehouse said GOP lawmakers are holding back the legislation, but he didn’t name names.

“I don’t think anybody is holding it in bad faith. We’re still optimistic,” Whitehouse said.

Twitter: @christa_mars Email:

FutureGen. Photo credit: Energy Department/Wikipedia

An artist’s rendering of the FutureGen plant in Illinois. Energy Department/Wikipedia

Source: E&E News – Greenwire

By: Christa Marshall, E&E News reporter


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