USA

Brief description:

POLICY

The USA’s Energy Policy Act, 2005, included provision for CCS and tasked the Department of Energy with setting up programmes in cooperation with industry for CCS R&D, demonstration, and commercial deployment over ten years. As of January 2011, the EPA also requires large stationary sources obliged to obtain permits under the Clean Air Act to also tackle GHG emissions.

I June 2014, the EPA proposed a new Clean Power Plan rule to cut emissions from power plants, and to cut emissions from existing coal plants with up to 30 % by 2030, compared to 2005 levels. The final rule will happen in June 2015.

Environmentalists welcomed news in March 2012 that the Environmental Protection Agency (EPA) planned to introduce limits, for the first time, on greenhouse gas emissions from new power plants. The ruling, when approved, would set a limit of no more than 1000 lbs of CO2 per megawatt of electricity produced. The average natural gas plant already meets that standard, but conventional coal plants emit almost double the limit. Power plants already under construction or those which had permits in place and were due to start within 12 months were to be exempt. Read EPA's statement here.

In October 2012, NETL published its report, Techno-Economic Analysis of CO2 Capture-Ready Coal-Fired Power Plants, which evaluated options for new CO2 capture-ready supercritical pulverized coal-fired power plants, capable of meeting the EPA's performance standards. The agency concluded that CCS was crucial if domestic supplies of coal were to remain part of the national energy mix.

In August 2011, the US Environmental Protection Agency proposed to exclude CO2 streams from its hazardous waste regulations, under the Resource Conservation and Recovery Act. The injection of CO2 into specific wells would fall within its Safe Drinking Water Act. EPA has stated its intention to encourage the use of CCS technologies “in a safe and environmentally protective manner” while also ensuring protection of underground sources of drinking water.

California set into law in 2006 mandatory emissions reductions, as well as an emission performance standard for new base load generation plants. Colorado recognises in law that it is in the public interest of the state to support the deployment of CCS and offers
project cost sharing and incentives to projects via, for example, tax exemptions.

Illinois has established a state funding source for CCS through mandating utilities to charge a fee to create the Renewable Energy Resources Trust Fund, for which a portion is allocated to supporting CCS projects and research. Its Clean Coal Portfolio Standard Law establihes emission performance standards for new coal-fired plants of 50% capture 2009 to 2015, 70% from 2016-2017 and 90% post 2017).

Many other states are supporting CCS through policies such as tax incentives and CCS mandates.

INITIATIVES

According to the Global CCS Institute's CCS status report for 2012, the US had the largest number of large-scale integrated CCS projects under way, with 24 active and planned projects. Read report here.

In late 2006, the Strategic Plan – US Climate Change Technology Program (CCTP) was authorised as part of the EPA. It is managed by DoE and focuses on five technologies. Carbon capture and storage is its “third goal”.

The taskforce identified four major barriers to CCS deployment in the USA, such as a lack of climate policy), the need for a regulatory framework that would support CCS, and clarity over long term liability for CO2 storage.  By 2010, it believed these barriers were not insurmountable and stated that CCS had an important role in tackling emissions.

The government is providing loans through the DoE for early stage CCS projects up to 80% of costs. There are also tax incentives to encourage CCS. The USDA Rural Utilities Service (RUS) makes direct loans and loan guarantees to power plants, including at least one CCS project.

In 2009, the American Recovery and Reinvestment Act (ARRA) was passed, providing substantial additional funding for the DoE’s Office of Fossil Energy. In February 2010, a CCS taskforce was set up, co-chaired by DoE and EPA, to develop a plan that would see the “cost-effective deployment of CCS” within 10 years, with a goal of ensuring between five and 10 commercial demonstration projects were online by 2016.

TRANSPORT

State/provincial level regulations in the US and Canada are long established for permitting pipeline transport of hazardous gases including CO2 for the purpose of EOR in the Permian Basin and acid gas from oil production in Alberta and BC.

CO2 STORAGE

The DoE is continuing to support nine large-volume CO2 injection tests - over 1 million tonnes - under seven Regional Carbon Sequestration Partnerships. SECARB began injection in Mississippi in 2009, and MGSC began injection in Illinois in November 2011.

There are established regulations for any above ground installation for injection of CO2. For below ground, Class 1 UIC covers injection of hazardous materials, Class II regulates wells injecting CO2 for EOR purposes. Class V covers research wells. Most consider that class I or II should be applied to CO2 injection. Depending on state level implementation, class I or II generally lays down requirements on well construction, monitoring and testing by regulators. US Environmental Protection Agency (EPA)17 is considering introducing Class VI for CO2 injection. CO2 storage operation on Federal lands is likely subject to review under the National Environmental Policy Act. In Canada, acid gas injection regulations in Alberta and BC generally lay down controls on citing of wells, monitoring requirements for wells and various other technical controls on well operations. Province level Environmental assessment regulations are also wide ranging in coverage, and could likely imposes strict environmental quality standards for CO2 storage site monitoring requirements for environmental protection policy.

Although the Interstate Oil & Gas Compact Commission (IOGCC)18 concluded that CCS regulatory issues could be covered under existing regulations in both the US and Canada, the US EPA is currently reviewing the regulatory scheme that could be applicable to CCS operations in the US, with a view to drawing conclusions over the next year or so. Some say the Canadian regulators are more in line with the view of the IOGCC and consider that no new regulations are needed for CCS in the future.

Legislation, dubbed S3581, was introduced in September 2012 to make changes to existing tax credits regarding carbon capture and oil recovery, or CO2-EOR. However, this aims to give more support to the development of domestic energy resources rather than contribute to climate change mitigation.

FINANCING

Aug 2010 :

US awards €16.5 million to CO2 storage research

U.S. Energy Secretary Steven Chu announced on August 11th his decision to award $21.3 million (€16.5 million) to universities and private companies to develop 15 projects in 12 states involving the safe and economic storage of CO2 in geologic formations. According to Chu, this funding decision is part of the US administration’s commitment to ‘lead the world in carbon capture and storage technology’.

http://www.energy.gov/news/9333.htm


US awards €750 million to CCS oxy-combustion project

U.S. Energy Secretary Steven Chu and U.S. Senator Dick Durbin announced on August 5th the award of $1 billion (€750 million) as part of the Recovery Act funds to the FutureGen alliance for the implementation of a pioneering CCS project in Illinois using oxy-combustion technology. The aim of this award was described during the press release as establishing the US as a leading player in an important part of the global clean energy economy.

http://www.energy.gov/news/9309.htm


US president Obama’s ’Interagency Task Force on CCS’ delivered on August 12 a report describing a series of recommendations to the president on overcoming the barriers to the commercial, cost-effective deployment of CCS within 10 years. According to the report a carbon price that forces companies to pay for their emissions as well as public funding are key to achieving a timely, widespread deployment of CCS.

http://www.epa.gov/climatechange/downloads/CCS-Task-Force-Report-2010.pdf

 

INTERNATIONAL LINKS

In July 2012, the governments of the US and Canada renewed a pledge to jointly progress with clean energy technologies, and released the US-Canada Clean Energy Dialogue (CED) Action Plan II, outlining their next phase of activities.

In early 2011, the US and governments signed a "new era" agreement to set up the US-China Clean Energy Research Center (CERC). The public-private partnership – with funding from both countries of $150 million –  includes research consortia that will focus efforts on clean technologies, including CCS. Each consortium is led by a research institution, with the World Resources Institute focusing on advanced coal and CCS. As the top two coal consumers in the world, both countries hope to benefit significantly from the collaboration.

In early 2012, Duke Energy and the China Huaneng Group announced that they had signed a three-year agreement to continue research into advanced coal and CCS technologies. The study was to focus on applying Huaneng Group’s low-cost carbon capture process at unit 3 of Duke Energy’s Gibson Station in Indiana.

The Asia-Pacific Partnership on Clean Development and Climate was set up in 2006 comprising a membership of the national governments of India, Australia, Japan, China, South Korea, Canada and the US. Its eight action plans included the Action Plan on Cleaner Fossil Energy, which identified 13 project proposals for exploring clean coal and gas technologies. Australia chaired the partnership and was the main financial contributor, pledging A$200 million over 5 years towards the so-called AP6 projects. The partnership had also worked to build links between the public and private sector, disseminate knowledge and promote best practice. It concluded its work in early 2011, with a number of its projects continuing and/or being transferred to other agencies.

Other information

US sets limits on power plant emissions, ZERO, 30 March




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