5
Coal

As Jeff Bingaman pointed out, the United States has more energy resources in coal reserves than the Middle East has in petroleum reserves. But the current methods for use of coal, either for electricity generation or for the production of liquid fuels, produce substantial amounts of carbon dioxide. For example, even if the conversion of coal to liquid fuels were 100 percent efficient, 1 ton of coal would yield about a half ton of fuel and 2 tons of carbon dioxide. The United States could “wind up spending a great deal of money on coal liquefaction plants that would then be rendered uneconomic in light of future developments related to global warming,” said Bingaman.

Despite its environmental effects, coal use in the United States and other countries is currently on a rising trajectory. “Virtually any scenario that we see shows coal use growing,” said Ernest Moniz. “It’s cheap, abundant, and—in contrast to oil, for example—has a strong correlation between supply and demand.” The three countries that use the most coal—China, India, and the United States—also are the three most populous countries in the world. Together they account for about 40 percent of the world’s population and economic activity. Yet they use about 60 percent of the coal burned worldwide, and the amount of coal used in each country is increasing.

For coal to be a major source of energy in the future, much of the carbon it releases must be captured and sequestered underground, Moniz said. This carbon capture and sequestration (CCS) will require immense amounts of technology development. Also, CCS must prove to be economical in comparison with other technologies, including nuclear power or renewable energy sources. In contrast to the problems with nuclear waste, Moniz said, the challenge of CCS “is one where the experts are far more concerned than the public.”



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5 Coal A s Jeff Bingaman pointed out, the United States has more energy resources in coal reserves than the Middle East has in petroleum reserves. But the current methods for use of coal, either for electricity generation or for the production of liquid fuels, produce substantial amounts of carbon dioxide. For example, even if the conversion of coal to liquid fuels were 100 percent efficient, 1 ton of coal would yield about a half ton of fuel and 2 tons of carbon dioxide. The United States could “wind up spending a great deal of money on coal liquefaction plants that would then be rendered uneconomic in light of future developments related to global warming,” said Bingaman. Despite its environmental effects, coal use in the United States and other countries is currently on a rising trajectory. “Virtually any scenario that we see shows coal use growing,” said Ernest Moniz. “It’s cheap, abundant, and—in contrast to oil, for example—has a strong correlation between supply and demand.” The three countries that use the most coal—China, India, and the United States—also are the three most populous countries in the world. Together they account for about 40 percent of the world’s population and eco- nomic activity. Yet they use about 60 percent of the coal burned worldwide, and the amount of coal used in each country is increasing. For coal to be a major source of energy in the future, much of the carbon it releases must be captured and sequestered underground, Moniz said. This carbon capture and sequestration (CCS) will require immense amounts of tech- nology development. Also, CCS must prove to be economical in comparison with other technologies, including nuclear power or renewable energy sources. In contrast to the problems with nuclear waste, Moniz said, the challenge of CCS “is one where the experts are far more concerned than the public.” 

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0 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE TAKING CARBON CAPTURE AND SEQUESTRATION TO SCALE Moniz summarized the conclusions of a report on the future of coal that was recently conducted by a group at the Massachusetts Institute of Technology (Deutch and Moniz, 2007). According to that report, coal is today a cheaper source of energy than oil, natural gas, nuclear power, or renewable sources of energy. But the use of CCS technology to reduce future climate change will substantially increase the cost of coal as an energy supply. The MIT study set out to find a path that mitigates carbon dioxide emissions yet continues to use coal to meet urgent energy needs, especially in developing countries. Maintaining and increasing the use of coal as a major energy source without harming the environment will require that tremendous amounts of carbon diox- ide be sequestered, Moniz observed. A single coal-fired plant produces millions of metric tons of carbon dioxide per year, which translates into more than a bil- lion barrels of carbon dioxide over the course of its lifetime. Mitigating climate risks will require that billions of tons of carbon dioxide be sequestered globally each year. No laws of physics rule out such an accomplishment, but achieving it will require, as Moniz put it, “exquisite reservoir management.” Carbon dioxide capture has been done before in refineries and other indus- trial settings. But those technologies have been extremely expensive. “We really need some new technology to improve cost and performance,” Moniz said. Developing these technologies will require that many scientific and technologi- cal questions be addressed, including questions about the physics and manage- ment of underground reservoirs. Large investments in infrastructure also will be needed, and a broad range of regulations will need to be put in place dealing with such issues as permitting, liability, siting, and monitoring. Once CCS technology is developed, economic incentives will be needed to spur its commercial application. The MIT study examined the effects of imposing a tax on the use of fossil fuels designed to encourage CCS and the development and use of other energy sources (Deutch and Moniz, 2007). The high-tax trajectory starts at $25 per metric ton of carbon dioxide in 2015 and increases at a real rate of 4 percent per year. The low-tax trajectory begins with a carbon dioxide emission price of $7 per metric ton in 2015 and increases at a rate of 5 percent thereafter. Both taxes have a substantial effect on the amount of carbon dioxide released into the atmosphere (Figure 5.1). However, the high-tax scenario makes sequestration an economically attractive technology well in advance of the low-tax scenario (Figure 5.2). “If you start delaying projects for 10 years and then add 20 years for deployment, . . . the conclusion is [that we need] to begin the process now.”

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 COAL 40 35 BAU Low Tax 30 High Tax Billion metric tons CO2 25 20 15 10 5 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 FIGURE 5.1 Global carbon dioxide emissions from coal would drop substantially from a business-as-usual (BAU) scenario through the imposition of taxes on carbon emissions. SOURCE: Deutch and Moniz (2007). Reprinted, with permission, from Ernest Moniz and Massachusetts Institute of Technology. 9 Figure 5-1.eps 8 High Tax redrawn to vector Low Tax 7 Billion metric tons CO2 6 5 4 3 2 1 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 FIGURE 5.2 The annual sequestration of carbon dioxide, in billions of metric tons per Year year, would rise substantially with a high carbon tax and less substantially with a lower Figure 5-2.eps tax. SOURCE: Deutch and Moniz (2007). Reprinted, with permission, from Ernest redrawn to vector Moniz and Massachusetts Institute of Technology.

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2 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE MOVING FORWARD WITH DEMONSTRATION PROJECTS To begin the process now requires that technology development and dem- onstration projects begin immediately. “We need to put a demonstration pro- gram in place over the next 10 to 15 years,” said Moniz. “It must operate at large scale. It’s not good enough to have a bunch of small projects.” The major problem is that large-scale demonstration projects are expensive—typically $100 million per year for a decade, “and that’s significant change, even if you are a large oil company.” Moniz called for roughly $4 bil- lion of public funds over a decade for a portfolio of demonstration studies. Similarly, Steven Specker, in a summary of work done by the Electric Power Research Institute (EPRI), called for a series of pilot-scale projects involving various capture technologies. “We have to develop the pilots and focus on get- ting the cost of capturing carbon dioxide down,” he said. “Then we have to scale those up to demonstrations.” Finally, technologies need to be integrated into full-scale plants. The adoption of CCS has important implications for the kinds of coal plants that are constructed in the future. Some kinds of plants are more easily adapted to CCS technologies than others, and some can be retrofitted much more economically if a decision is made later to adopt CCS. There is no clear technology winner at the moment, Moniz said, and different plants will be needed for different situations, such as different types of coal. “The real mes- sage is that we need several projects going on in parallel and not serially.” Specker laid out a timeline for the parallel development of different plant and sequestration technologies, noting that EPRI was recently involved in the startup of a pilot project in Wisconsin to capture carbon dioxide using chilled ammonia (Figure 5.3). “This is real hardware that’s really going to break,” Specker said. “It’s really going to have problems. We’re going to learn from it. We’re going to figure it out. This is what it takes to get the technology evolved. Analysis doesn’t do it. You have to build it. You have to operate it, you have to learn from it, and then you have to scale it up.” Both Specker and Moniz mentioned the recent cancellation by the Depart- ment of Energy of the FutureGen project, which was a $1 billion project to design, build, and operate a coal-fired power plant with CCS. Later in the sum- mit, Samuel Bodman cited cost overruns for the decision along with a choice to spend the money on several projects rather than one. “We are not walking away from carbon sequestration,” Bodman said. “On the contrary, we are going to fund it in a very aggressive fashion. . . . We’re trying to redirect the money in a more intelligent way, but that’s hard to do in Washington.” Moniz, in his talk, said that the reasons given by the Department of Energy for FutureGen’s cancellation were that the demonstration projects needed to be closer to commercial application and that funding a portfolio of projects was a

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 COAL FIGURE 5.3 Advanced coal plants with carbon dioxide capture and sequestration have to be developed in parallel to be deployed by 2020. SOURCE: Energy Technology As- sessment Center of the Electric Power Research Institute. better option. “Both of those are good principles,” Moniz said. “However, in our view, they are overwritten by the urgency of getting the race going. . . . We need to find a way of building on the work that has been done with FutureGen [while moving toward] a portfolio that emphasizes good commercial practice and multiple technology demonstrations.” The highest priority at present, said Moniz, is to move aggressively to demonstrate sequestration at scale.