Bad Gas Policy

The late Dr. Carl Sagan once observed, “We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology (S&T).” I would add that those who know the least about S&T are often the ones responsible for determining policy and funding priorities. One good example of this problem is the piecemeal approach taken to developing carbon capture and sequestration (CCS) technologies.

CCS: A Four-Step Process

Let’s assume the end game is a fully developed and reliable CCS infrastructure capable of handling the gaseous CO₂ emissions from existing and future fossil plants. If so, then the CCS system requires the simultaneous development of four distinct links in the technology supply chain: CO₂ must be stripped from the syngas (in the case of an integrated gasification combined-cycle plant) or exhaust gas (from conventional coal plants); CO₂ must then be compressed; CO₂ is then transported through pipelines to storage fields; and CO₂ is injected into underground storage facilities. All four processes must work in concert if we wish to sweep CO₂ under the rug, so to speak.

Both the development of commercial processes to strip CO₂ from gases and geologic characterization work are in progress. Compressing the CO₂ without using a third of the plant’s output remains a technical challenge requiring intense research and development. Noticeably missing is any substantive work on either the cost or policy formulations for interstate transportation of the gas from disparate sources to injection points.

Enormous CO₂ Volumes

A typical 500-MW coal-fired plant produces about 3 million tons per year of CO₂. For comparison, the largest sequestration project in operation today injects 1 million tons of CO₂ per year into a North Sea saline aquifer. Overall, the U.S. coal fleet produces about 1.5 billion tons of CO₂ each year—approximately equal to one-third of the total volume of natural gas transported through 500,000 miles of pipelines in the U.S. each year. According to the Massachusetts Institute of Technology (MIT) study, “The Future of Coal (2007),” if 60% of that CO₂ were captured and compressed to a liquid for injection into a geologic formation, that volume would be equivalent to the 20 million barrels of oil the U.S. consumes each day.

The enormous volumes of collected CO₂ will require a system of pipelines that will be extremely expensive to build and operate. The MIT study estimated the cost to transport and store CO₂ at approximately $5 per metric ton. That puts annual operating costs for sequestrating CO₂ in the billions of dollars each year.

A 2007 Duke Energy study estimated that it would cost $5 billion to construct a pipeline along existing rights of way from North Carolina to sequestration sites in the Gulf States and Appalachia. Extrapolated across the nation, the first cost of a network of pipelines would quickly climb to the hundreds of billions of dollars. In fact, the International Energy Agency in its Blue Case scenario (50% reduction of CO₂ emissions by 2050) concluded that U.S. investment in CO₂ pipelines by 2030 would be approximately $300 billion.

Many Policy Hurdles

Those wishing to construct a CO₂ pipeline also face a regulatory quagmire. For example, the Interstate Commerce Commission (ICC)—not the Federal Energy Regulatory Commission (FERC)—regulates interstate pipelines that carry commodities other than water, oil, or natural gas. Unlike FERC, the ICC has an uncertain regulatory structure with no pipeline-siting authority and, therefore, no eminent domain authority. That means developers are responsible for obtaining the hundreds, or perhaps thousands, of local, state, and federal permits necessary, plus easements from public and private landowners. There are also significant legal barriers to using existing gas pipeline right-of-ways. For an interstate pipeline crossing heavily populated or environmentally sensitive regions, the challenges would far exceed those of siting transmission lines.

Existing laws are also a barrier to building new CO₂ pipelines. For example, some state laws classify CO₂ as a commodity, while others consider it a pollutant. States that have pipelines supplying CO₂ to enhanced oil recovery facilities have classified CO₂ as a commodity with economic value for tax purposes. This creates an interesting policy dilemma for states that wish to construct an identical pipeline (or use the same pipeline) to carry CO₂ to a sequestration facility if they classify the gas as a pollutant with negative economic value.

Another observation is that the Department of Transportation (DOT) has primary authority to regulate CO₂ pipeline safety under the Hazardous Liquid Pipeline Act of 1979. DOT lists CO₂ as a hazardous material, so the same pipeline safety and design rules that apply to building a gasoline pipeline apply to a CO₂ pipeline.

And then there is the broader issue of who shoulders the liability for damages caused by leaks. I suspect that CO₂ pipeline operators will want the same blanket liability protection for leaks as an operator of a CO₂ sequestration facility.

My suspicion is that policy makers are either avoiding or have hugely misjudged the difficulty of forging the gas transportation link in the CCS supply chain. On the other hand, perhaps a failed CCS policy is our best economic option.

— Dr. Robert Peltier, PE is POWER’s editor-in-chief.