[csusbpeace] Biden’s Climate Law Solved A Major Problem With A Polarizing Fossil Fuel Technology

From: "raccoon" <dmarc-noreply@xxxxxxxxxxxxx> ("bigraccoon1")
To: "CSUSBPEACE@xxxxxxxxxxxxx" <CSUSBPEACE@xxxxxxxxxxxxx>
Date: Tue, 18 Oct 2022 12:29:03 -0700

https://www.huffpost.com/entry/joe-biden-carbon-capture_n_634ddc11e4b03e8038d733f0

<https://www.huffpost.com/entry/joe-biden-carbon-capture_n_634ddc11e4b03e8038d733f0>

Biden’s Climate Law Solved A Major Problem With A Polarizing Fossil Fuel
Technology

The vast majority of captured carbon dioxide is used to drill more oil.
That’s about to change.

Oct 18, 2022
For years now, the United States has had the technology to capture carbon
dioxide from smokestacks before the planet-heating gas enters the atmosphere.
But carbon capture and storage hardware proved so expensive and clunky that
one of the only ways to make a so-called CCS investment pencil out was to
sell the CO2 to oil drillers, who inject the supercooled gas into wells to
get at hard-to-reach crude.

As a result, 73% of 43 million tons of carbon diverted from smokestacks
worldwide last year ended up producing more oil, counteracting any real
climate benefits the CCS could have had. By comparison, just 20% of that
pollution wound up in underground storage aquifers, where it makes the
biggest difference in terms of emissions.

By 2030, however, those numbers are set to reverse. Thanks in large part to
President Joe Biden’s landmark federal climate law, just 20% of carbon is
forecast to go to oil drilling, while 66% is destined for underground
storage, according to a new study from the energy consultancy BloombergNEF.
Another 12% will likely be used in other industries, such as chemical
production or soda carbonation.

A Shell employee walks through the company's new Quest carbon capture and
storage (CCS) facility in Fort Saskatchewan, Alberta, Canada, last October.
Attempts at transforming carbon dioxide from a freely-dumped waste product
into a valued commodity have hitherto failed. Congress started incentivizing
carbon capture with a tax credit known as 45Q in 2008, but set the payout per
ton of CO2 too low. Federal lawmakers tried fixing the problem in 2018 by
raising the price to $35 per ton for CO2 used in oil drilling, and $50 per
ton for carbon stored underground. But it took the Internal Revenue Service
until January 2021 to issue guidelines
<https://docs.google.com/document/d/1TQu8EybInMgw5EIdAxiRt_FSKXBNr_twJlh1QuPS0Ts/edit#:~:text=Treasury%20Department%20and%20Internal%20Revenue%20Service%20Release%20Final%20Rule%20on%20Section%2045Q%20Credit%20Regulations>
for how those credits could be used.

And even then, it made more sense in many cases to sell CO2 for oil drilling.
With oil prices at $100 per barrel, the sale of CO2 plus a $35 credit would
equal out to $58 per ton, well above the flat $50 earned for storing the gas.

Under the newly passed Inflation Reduction Act, selling captured carbon to an
oil driller is now worth $60 per ton. Combined with revenues from
$100-per-barrel oil, that ton of CO2 could net $73. But the federal
government will now let polluters write $85 off their taxes for every ton of
CO2 stored underground: a $12 million difference for a company that might
capture 1 million tons of CO2 every year.

CCS is cheapest at facilities whose flue gas is pure carbon dioxide, meaning
that only a few industries — such as natural gas processing or the production
of corn into ethanol fuel — really benefited from the old payouts. Under the
higher credits, manufacturers of steel, cement and petrochemicals can make
money off carbon capture installations.

A chart shows how the mix of industries using carbon capture technology is
set to change over the next eight years.
The dramatic shift over the next eight years will come as the world deploys
six times as much CCS equipment as exists today, with the potential to
capture 279 million tons of carbon dioxide per year.

On its own, that surge will do little to change the trajectory of global
warming, covering just 0.6% of today’s emissions and taking place
overwhelmingly in rich nations, with the U.S. dominating nearly half the
market, and the United Kingdom and Canada trailing with 14% and 9% of global
capacity for capturing carbon dioxide, respectively.

But researchers say it’s a necessary first step toward bringing down costs
for poorer countries with faster-growing emissions, where carbon capture can
make the biggest global impact.

“It’s still the usual suspects as far as 2030,” said Julia Attwood, the head
of sustainable materials at BNEF. “But once those countries have built a lot
of capacity and lowered the cost for everybody, that’s when you’ll see
countries like China and others in Southeast Asia following.”

Just 20% of carbon dioxide captured today ends up in permanent storage
underground, while the vast majority is used for oil drilling. By 2030, those
numbers are on pace to reverse.
Still, it’s a controversial gambit. After two decades of high-profile failed
attempts to commercialize CCS, environmentalists have largely written the
technology off as a fig leaf fossil fuel that producers use to justify
continued investments in oil and gas production.

But experts say
<https://www.huffpost.com/entry/ira-climate-ccs_n_62feb480e4b0c8c57f5a5e2c>
there are few alternatives for decarbonizing heavy industries, and this first
wave of infrastructure could also spur companies to not only capture and
transport carbon from polluting plants but actually start cleaning up CO2
spewed long ago. Removing carbon from the atmosphere, where it can circulate
for centuries, is needed to reduce the damage the last three centuries of
fossil-fuel-based industrialization have wrought.

While trees naturally suck up CO2 through photosynthesis and certain soil
techniques could also help, the need for measurable, increased carbon removal
is driving investments in what’s known as direct air capture, a type of
carbon capture that essentially vacuums CO2 from the sky. Under the new 45Q
tax credit, the federal government will pay between $130 and $180 per ton of
carbon dioxide removed via direct air capture.

“We think the U.S. is now the best place in the world to do direct air
capture given the subsidies that are available and the potential transport
and storage that could be coming online,” Attwood said.

Transportation and storage remain major bottlenecks. The U.S. has a small,
aging network of highly pressurized pipelines to ship CO2 around. New
pipelines are being proposed, with the first set expected to break ground in
the Midwest as a way to ship carbon dioxide from ethanol facilities to
storage wells.

Earlier this month, the federal government started taking applications
<https://www.huffpost.com/entry/biden-co2-pipelines_n_633eea63e4b0b7f89f495a97>
for up to $2 billion in loans for CO2 transportation projects. But
opposition is growing, fueled by fears of the health risks CO2 leaks pose and
concern federal regulators aren’t up to the task of ensuring their safety.

The federal permitting process for the first well to permanently store CO2,
meanwhile, took more than half a decade to complete. At least two states now
have approval to complete their own permitting without a separate federal
process. But a faster, more efficient procedure that wins over local
communities will be needed to make a bigger dent in emissions.

“We need to permit projects,” said Julio Friedmann, a leading carbon capture
researcher and former Department of Energy appointee who reviewed the BNEF
findings for HuffPost but did not participate in the study. “That means doing
a good job in equity and justice. It means listening to concerns of
communities that will host projects. And that means agencies in the state and
federal governments working hard to get to yes.”

The planet has already warmed, on average, 1.1 degrees Celsius. To avoid
another disastrous half a degree of heating or more, Friedmann said,
“frankly, we need to be more aggressive in our deployment of CCS.”

[csusbpeace] Biden’s Climate Law Solved A Major Problem With A Polarizing Fossil Fuel Technology

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