[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
             CARBON CAPTURE AND SEQUESTRATION: AN OVERVIEW

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND AIR QUALITY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 6, 2007

                               __________

                           Serial No. 110-12


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

    JOHN D. DINGELL, Michigan, 
             Chairman
HENRY A. WAXMAN, California
EDWARD J. MARKEY, Massachusetts
RICK BOUCHER, Virginia
EDOLPHUS TOWNS, New York
FRANK PALLONE, Jr., New Jersey
BART GORDON, Tennessee
BOBBY L. RUSH, Illinois
ANNA G. ESHOO, California
BART STUPAK, Michigan
ELIOT L. ENGEL, New York
ALBERT R. WYNN, Maryland
GENE GREEN, Texas
DIANA DeGETTE, Colorado
    Vice Chairman
LOIS CAPPS, California
MIKE DOYLE, Pennsylvania
JANE HARMAN, California
TOM ALLEN, Maine
JAN SCHAKOWSKY, Illinois
HILDA L. SOLIS, California
CHARLES A. GONZALEZ, Texas
JAY INSLEE, Washington
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
DARLENE HOOLEY, Oregon
ANTHONY D. WEINER, New York
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana               JOE BARTON, Texas
                                         Ranking Member
                                     RALPH M. HALL, Texas
                                     J. DENNIS HASTERT, Illinois
                                     FRED UPTON, Michigan
                                     CLIFF STEARNS, Florida
                                     NATHAN DEAL, Georgia
                                     ED WHITFIELD, Kentucky
                                     BARBARA CUBIN, Wyoming
                                     JOHN SHIMKUS, Illinois
                                     HEATHER WILSON, New Mexico
                                     JOHN B. SHADEGG, Arizona
                                     CHARLES W. ``CHIP'' PICKERING, 
                                         Mississippi
                                     VITO FOSSELLA, New York
                                     STEVE BUYER, Indiana
                                     GEORGE RADANOVICH, California
                                     JOSEPH R. PITTS, Pennsylvania
                                     MARY BONO, California
                                     GREG WALDEN, Oregon
                                     LEE TERRY, Nebraska
                                     MIKE FERGUSON, New Jersey
                                     MIKE ROGERS, Michigan
                                     SUE WILKINS MYRICK, North Carolina
                                     JOHN SULLIVAN, Oklahoma
                                     TIM MURPHY, Pennsylvania
                                     MICHAEL C. BURGESS, Texas
                                     MARSHA BLACKBURN, Tennessee
_________________________________________________________________

                           Professional Staff

 Dennis B. Fitzgibbons, Chief of 
               Staff
Gregg A. Rothschild, Chief Counsel
   Sharon E. Davis, Chief Clerk
   Bud Albright, Minority Staff 
             Director

                                  (ii)
                 Subcommittee on Energy and Air Quality

                    RICK BOUCHER, Virginia, Chairman
G. K. BUTTERFIELD, North Carolina    J. DENNIS HASTERT, Illinois,
    Vice Chairman                         Ranking Member
CHARLIE MELANCON, Louisiana          RALPH M. HALL, Texas
JOHN BARROW, Georgia                 FRED UPTON, Michigan
HENRY A. WAXMAN, California          ED WHITFIELD, Kentucky
EDWARD J. MARKEY, Massachusetts      JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland             JOHN B. SHADEGG, Arizona
MIKE F. DOYLE, Pennsylvania          CHARLES W. ``CHIP'' PICKERING, 
JANE HARMAN, California                  Mississippi
TOM ALLEN, Maine                     STEVE BUYER, Indiana
CHARLES A. GONZALEZ, Texas           MARY BONO, California
JAY INSLEE, Washington               GREG WALDEN, Oregon
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York          MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah                   JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex 
    officio)
                                 ------                                

                           Professional Staff

                      Sue Sheridan, Chief Counsel
                      Bruce Harris, Senior Advisor
                    Laura Vaught, Policy Coordinator
                 David McCarthy, Minority Chief Counsel


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Rick Boucher, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
Hon. J. Dennis Hastert, a Representative in Congress from the 
  State of Illinois, opening statement...........................     3
Hon. Mike Doyle, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     4
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     5
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, prepared statement......................................     7
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, prepared statement.............................     8

                               Witnesses

Thomas D. Shope, Principal Deputy Assistant Secretary, Fossil 
  Energy, U.S. Department of Energy..............................     9
    Prepared statement...........................................   142
William Wehrum, Acting Assistant Administrator, Office of Air and 
  Radiation, U.S. Environmental Protection Agency................    10
    Prepared statement...........................................   174
John A. Fees, chief executive officer, Babcock & Wilcox Company, 
  Lynchburg, VA..................................................    41
    Prepared statement...........................................    84
David G. Hawkins, director, Climate Center, Natural Resources 
  Defense Council, Washington, DC................................    43
    Prepared statement...........................................   102
Edward C. Loew, general manager, Gasification Market Development, 
  GE Energy, Schenectady, NY.....................................    44
    Prepared statement...........................................   122
S. Julio Friedmann, Carbon Management Program, Lawrence Livermore 
  National Laboratory, Livermore, CA.............................    45
    Prepared statement...........................................    95
Mark K. Schoenfield, senior vice president, operations; general 
  counsel, Jupiter Oxygen Corporation, Schiller Park, IL.........    47
    Prepared statement...........................................   137
Stu Dalton, Electric Power Research Institute, Palo Alto, CA.....    49
    Prepared statement...........................................    70
Jay B. Stewart, attorney, Hance Scarborough Wright Woodward & 
  Weisbart, L.L.P., Austin, TX...................................    50
    Prepared statement...........................................   166


             CARBON CAPTURE AND SEQUESTRATION: AN OVERVIEW

                              ----------                              


                         TUESDAY, MARCH 6, 2007

                  House of Representatives,
            Subcommittee on Energy and Air Quality,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:06 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Rick 
Boucher (chairman) presiding.
    Members present: Representatives Melcanon, Barrow, Markey, 
Wynn, Doyle, Harman, Gonzalez, Inslee, Dingell, Hastert, Hall, 
Upton, Whitfield, Shimkus, Walden, Sullivan, Burgess, Matheson, 
and Barton.
    Staff present: Sue Sheridan, Laura Vaught, Lorie Schmidt, 
Bruce Harris, Chris Treanor, David McCarthy, Kurt Bilas, Tom 
Hassenboehler, and Peter Kielty

  OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

    Mr. Boucher. This morning the subcommittee continues its 
series of climate change hearings with an overview of carbon 
capture and storage methods. Our witnesses will discuss the 
state of technology development, the costs that are associated 
with the use of the technology, the status of research efforts 
to improve the technologies, and time frames for expected 
commercialization of the technologies. These are key 
considerations for the subcommittee as we prepare to draft 
climate change legislation.
    Coal is America's most abundant domestic fuel with reserves 
of 250 years within our borders. We have greater coal reserves 
than any other nation. Coal is also by a broad measure the 
Nation's least costly energy resource. Today coal accounts for 
51 percent of the fuel that is used for electricity generation 
and the Energy Information Administration predicts that by 2030 
coal's share of the electricity generation market will grow to 
57 percent. Given our large coal reserves and its lower cost in 
comparison with other fuels that are used by electric 
utilities, preservation of the ability of electric utilities to 
continue coal's use in a carbon-constrained economy is 
desirable. The carbon capture and sequestration methods we are 
focusing on today are the means by which that result can be 
achieved.
    In drafting climate change legislation, our goal will be to 
have a nation which makes a substantial contribution to 
resolution of the global problem while not dislocating any 
domestic economic sector. We should enable electric utilities 
that desire to use coal to have the continued ability to do so 
after the carbon control provisions that we will write become 
effective.
    The technologies for carbon capture and sequestration we 
will discuss this morning will be essential to our ability to 
meet that test. If carbon controls take effect before the 
capture and storage technologies are available, there could be 
a rapid switch from coal to other fuels, and that rapid switch 
could prove unbearable for the Nation's economy. Fuel switching 
away from coal would significantly increase electricity prices 
to the detriment of both residential and industrial electricity 
consumers. Fuel switching from coal would probably result in 
far greater uses for natural gas by electricity generators, 
severely straining our already constrained natural gas 
supplies. At the present time, one-half of homes in the Nation 
are heated with natural gas. Industries, notably including the 
chemical sector, rely on natural gas for chemical feed stocks 
and some are already leaving the United States because of the 
high and volatile pricing for natural gas at the present time. 
That flight of jobs would certainly worsen if fuel switching 
from coal to natural gas occurs, and many other natural-gas-
dependent industries would also suffer including farmers who 
use fertilizer manufactured in a natural-gas-intensive process. 
To avoid these problems, we must protect the ability of 
electric utilities to continue coal use. In a very real sense, 
therefore, the technologies that we are discussing today will 
be the enablers of a successful climate change program for the 
United States.
    The average coal-fired utility emits approximately 3 to 4 
million tons of carbon dioxide annually. While carbon storage 
projects are underway in research, demonstration and in limited 
commercial phases, none has attempted to store that much carbon 
dioxide. In addition, much of the work done to date is with the 
purpose of enhanced oil recovery. While that is a viable use 
for injected carbon, we also need to store large quantities of 
it underground indefinitely, and on that front, further 
research, development and demonstration is clearly called for.
    We need to learn more about how the carbon behaves once it 
is injected underground in large quantities. Are there seepage 
issues or groundwater concerns? What kind of regulatory regime 
do we need to have in place to permit carbon injection? Are 
there liability issues that are associated with these projects? 
Most importantly, when will we have the capture and storage 
technologies available for both reliable and widespread use? Is 
the current flow of research dollars to these projects 
sufficient? Would larger allocations of research monies speed 
the availability of the technologies?
    I want to welcome our witnesses this morning and thank them 
for sharing with us information regarding the status and 
expected future development of carbon capture and storage 
methods, and we very much look forward to their testimony.
     I am pleased to recognize the ranking Republican member of 
the Energy and Air Quality Subcommittee, the gentleman from 
Illinois, Mr. Hastert.

 OPENING STATEMENT OF HON. J. DENNIS HASTERT, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Hastert. Thank you, Chairman Boucher, for holding this 
hearing today. I want to recognize your work over the last few 
decades in trying to find environmentally friendly ways to use 
the huge coal reserves that we have under the surface of this 
Nation.
    I remember in 1992 when we took on kind of an oversight, 
where are we going to go on energy, and the conclusion in 1992 
was, well, we have enough natural gas; natural gas will be the 
end-all for all things. We found out that is not necessarily 
true. The supply isn't there. So we have to think of new ways, 
more inventive ways to use the resources we have in an 
environmentally friendly way.
    This is the first of three hearings this week so we are 
going to be busy looking at these issues. Carbon capture and 
sequestration is probably a good way to start off this week's 
hearing. Whether or not you agree with the science behind the 
claims of human-caused global warming, at the end of the day we 
are going to have to deal with the proposed real-world 
solutions. We cannot legislate the science. We can only try to 
understand its uncertainties and nuances in order to inform our 
decisionmaking. We can, however, propose policies to deal with 
the emissions suspected of contributing to global warming.
    Carbon capture and sequestration is put forward as one such 
solution. Carbon capture and sequestration is a new technology. 
It has never been attempted on the scale required to alter the 
climate-affecting emissions which accompany the generation of 
electricity. Initially it will be expensive. Although the price 
may drop as we gain experience, but in the short term, make no 
mistake, it will increase the price of electricity. That is why 
before we jump into anything, we need to know how much we are 
asking the American people to pay and what we will get in 
return. We cannot ask the American people to pay a heavy price 
in jobs and consumer costs in the name of solving global 
warming only to discover that there is almost no environmental 
benefit. This is exactly what the Europeans have done with the 
Kyoto Protocol, paying a high price and still not meeting their 
emissions targets and seeing almost no environmental benefit.
    Carbon capture and sequestration is usually discussed in 
the context of the burning of coal. I am a strong supporter of 
coal. The United States has the greatest coal reserves of any 
nation on the planet. My State of Illinois has a lot of that 
coal. So does Virginia, so does Kentucky, so does a place like 
Gillette, Wyoming, where they claim they have enough coal to 
supply our energy needs for centuries into the future of this 
Nation.
    Clean coal technology is good for the United States. It 
offers a secure source of domestic energy for our homes and our 
jobs. By increasing our use of coal through coal-to-liquids 
technology, for example, we can decrease our dependence on 
foreign sources of energy and no doubt, we need to expand its 
use in a way that increases the efficiency of these plants and 
decreases their environmental consequences. I also support the 
expanded use of renewables such as ethanol. These alternative 
fuels also increase our energy independence.
    We have two very good panels today. I look forward to 
hearing from the Department of Energy and the Environmental 
Protection Agency about the work they are doing on the carbon 
capture and sequestration. I believe our Government must lead 
the way on the development and deployment of these new 
technologies. I am also looking forward to the discussion of 
the various coal combustion technologies needed for carbon 
capture and sequestration. I want to learn more about what is 
coming in the form of new combustion technologies and also what 
can be done to make our current fleet of coal-fired power 
plants cleaner and more efficient. I also want to hear about 
the legal and regulatory issues associated with long-term 
storage of carbon dioxide underground. While the technology is 
important, in today's society the legal and regulatory 
structure could be just as important in determining whether 
technology is ever going to be widely deployed.
    Carbon capture and sequestration can get a lot of attention 
as an available solution to reduced carbon dioxide. However, 
there is still quite a bit of research and testing to do before 
these technologies are ready for large-scale commercial 
deployment. We should be mindful in any proposed legislation 
that we do not set up a system guaranteed to fail because we 
mandated technology that is not deployable. If we do, Americans 
will get all cost and no benefit.
    I want to make sure that whatever we do, we do not 
overburden consumers, chase industry overseas, lose jobs and 
see no appreciable reduction in global emissions. That would be 
a lose-lose situation. I want to see a situation where new 
technology as it becomes available is deployed so that 
Americans reap the benefits of both a safer environment, a 
better future and affordable electricity. That is win-win.
    Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Hastert, for an 
excellent statement.
    Pursuant to the rules of the committee, any Member who 
waives making an opening statement will have 3 minutes added to 
his time for asking questions of our witnesses.
    The Chair is now pleased to recognize the gentleman from 
Texas, Mr. Gonzalez, for 3 minutes.
    Mr. Gonzalez. I waive.
    Mr. Boucher. Mr. Gonzalez waives.
    Mr. Inslee for 3 minutes.
    Mr. Inslee. I will waive.
    Mr. Boucher. Mr. Inslee also waives.
    Mr. Doyle for 3 minutes.

   OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Doyle. Thank you, Mr. Chairman.
    I want to start my remarks with a review of a few things 
that I believe are absolute fact. One, global warming is real; 
two, man's actions have contributed to it; three, that it can 
be slowed and reversed; and finally, that it will take a real 
determined and comprehensive strategy through which American 
innovation is provided the tools and the environment necessary 
to succeed if we are ever going to fully address this threat.
    It is clear that carbon dioxide is one of the many 
contributors to global warming. As more continues to be pumped 
into our atmosphere, global warming grows worse. It is 
important that this committee and the American industry work 
together to craft a solution that is clearly defined, 
obtainable and allows our spirit of innovation to flourish. We 
have seen this begin with the Energy Policy Act and now it is 
time to redouble our efforts.
    There is no doubt that carbon sequestration is a very real 
and near-term technology that we can encourage here on this 
committee. By capturing the carbon dioxide that otherwise would 
have blown out of the smokestacks, we can today take one step 
towards our shared goal of eliminating the threat posed by 
global warming. The questions before us are: what are the 
technologies that are out there, what are the risks, what are 
their costs and how soon can they be deployed. We are beyond 
the point of asking if carbon dioxide has an impact. We must 
look at how we are going to manage, reduce and eventually 
eliminate that impact. This doesn't mean that we should simply 
pick winners and losers from the various methods of 
sequestration that are being deployed or currently being 
demonstrated. Instead, we should look at each for what they are 
and what they can deliver while also looking at the environment 
in which they will be deployed to ensure that obstacles to 
success are not already standing in their way. This is one 
piece of the greater puzzle and it is critical that we get this 
piece in place.
    I look forward to hearing from each of our panelists 
explain what successes they have had and what results they can 
clearly demonstrate. I am also interested in hearing what 
obstacles in current law may impede their progress as well as 
what incentives government should champion to encourage 
continued advancement in the field of carbon sequestration. 
This is clearly one place where government and industry can 
work hand and hand.
    Mr. Chairman, I yield back.
    Mr. Boucher. The Chair thanks the gentleman and recognizes 
the gentleman from Michigan, Mr. Upton, for 3 minutes.
    Mr. Upton. I am going to waive. Thank you.
    Mr. Boucher. The gentleman waives.
    Mr. Walden from Oregon for 3 minutes.
    Mr. Walden. I waive as well.
    Mr. Boucher. Mr. Walden waives.
    I am pleased now to recognize the chairman of the full 
committee, the gentleman from Michigan, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Mr. Chairman, thank you, and I want to commend 
you and thank you for calling this hearing and for the 
remarkable vigor with which you have been addressing the very 
serious questions which are the subject of today's hearing and 
related matters.
    Today, as we all know, we are continuing our series of 
hearings on climate change with an overview on the topic of 
carbon capture and sequestration, commonly referred to as CCS. 
CCS refers to the system of separating CO\2\ from either the 
fuel source, usually coal, or the flue gas that results from 
combustion and then storing that CO\2\ in an underground 
geologic formation. CCS will be a critical component of any 
policy that restricts and reduces carbon dioxide emissions due 
to the simple fact that coal is and will continue to be a major 
part of America's energy resource base. It is also extremely 
important to us for many reasons, not the least of which is the 
impact it will have on communities where this is a major part 
of the industrial base and the industrial activity.
    The United States has an estimated 250 years' worth of 
coal. According to the Energy Information Administration, coal 
provides fuel for 50 percent of our electrical generation needs 
today. We must, however, also recognize that coal-fired 
generation is a major source of CO\2\ emissions. The challenge 
we face then is how to continue to use this country's abundant 
coal supplies to meet our energy needs while at the same time 
limiting the amount of CO\2\ that we add to the atmosphere. I 
look forward to hearing from our experts today about how CCS 
can help us meet that challenge.
    Capturing CO\2\, transporting it and storing it to some 
same place in the ground or elsewhere is one of the basic 
components of CCS policy. The subcommittee's work today will 
focus on the challenge of capturing and storing CO\2\ because 
these areas present the greatest difficulty. But I must note 
that the transportation is not without challenges. The U.S. 
currently has some 1,500 miles of pipeline devoted to CO\2\ 
transport, mainly in Texas, where it is used for enhanced oil 
recovery. The amount of CO\2\ that would be needed to be 
sequestered under mandatory CO\2\-reduction policy would likely 
dwarf that capacity. We hope that we can explore this aspect of 
CCS at a later date.
    With regard to the capture of CO\2\, we have several 
excellent witnesses here today who can speak on the specific 
technology options, their state of readiness for commercial 
deployment and their costs, and I thank them for their presence 
and their assistance. I hope our witnesses will be able to 
inform us how a climate policy could take technology readiness 
into account. Can we achieve significant reduction in 
greenhouse gas emissions before carbon capture technologies are 
fully mature? Will we be able to retrofit existing coal 
generation facilities with any of these technologies or will 
they apply only to new plants?
    On the issue of sequestration, we also have distinguished 
witnesses who can inform us as to the availability of storage 
sites in the U.S., the capacity of such sites and the legal 
issues that arise from storing huge volumes of CO\2\ 
underground for long periods of time. To date, the committee 
has not spent a great amount of time studying carbon capture 
and sequestration but the issues raised by CCS are familiar to 
our work on hazardous waste and environmental contamination 
issues. How do we know that CO\2\ injected underground will 
stay there? Will it affect underground water resources? What do 
we need to know to assure the public that this is a safe way to 
proceed? I would also like our witnesses' response on who 
should manage these locations, who should hold title to the 
CO\2\ after it is captured? The Federal Government, the States, 
private entities?
    Another issue that I hope all witnesses will illuminate for 
us including our guests from EPA and the Department of Energy 
is the issue of costs associated with CCS. The Department of 
Energy currently estimates the cost of capturing and 
sequestration using current technologies is between $100 and 
$300 per ton of carbon emissions avoided. This is a rather wide 
range. It could make a significant difference in the 
effectiveness of CCS policy. What do we need to do to get 
better understanding of costs? Will costs come down as a result 
of technology maturation?
    I look forward to the testimony of our witnesses today. I 
thank them for their presence, and I thank you, Mr. Chairman, 
for your vigor and your diligence in addressing these 
questions.
    I yield back the balance of my time.
    Mr. Boucher. Thank you, Chairman Dingell.
    The gentleman from Illinois, Mr. Shimkus, for 3 minutes.
    Mr. Shimkus. Mr. Chairman, I will waive for questions.
    Mr. Boucher. The gentleman waives.
    That completes the opening statements from all Members 
present. Other statements from members of the subcommittee may 
be included in the record at this time.
    [The prepared statements of Messrs. Barton and Burgess 
follow:]

  Prepared Statement of Hon. Joe Barton, a Representative in Congress 
                        from the State of Texas

    Thank you, Chairman Boucher, for holding this hearing and 
thanks to our witnesses for sharing their expertise on this 
important topic.
    The stated purpose of these hearings is to produce 
legislation concerning global warming. Although I understand 
the political pressure to legislate on this issue, I hope we 
don't rush to judgment. This is a complex subject involving 
economics, the environment, energy, science and national 
security, and getting the balance right is critical.
    Long-term problems don't need short-term solutions. We can 
hit the gas and produce a bill, but legislating like it's a 
drag race will do what it always does--more harm than good. I'd 
rather be right than fast.
    I think we have agreed that any thoughtful legislation must 
ensure four things: that the lights stay on, that driving a car 
stays affordable, that natural gas prices stay low, and that we 
protect people's jobs. If we think we can achieve those goals 
without a continuing role for domestic fossil fuels, we're 
kidding ourselves.
    We need to keep promoting renewables, because of their 
benefits for clean air and energy security. But unless we want 
to abandon millions of jobs, we must also use our fossil 
resources until the next great energy source arrives to power 
our homes, cars, schools and factories. We struck that balance 
between fossil fuels and renewables in the Energy Policy Act of 
2005, and it was the right balance.
    Looking at domestic fossil fuels in the context of our own 
energy security means looking carefully at coal. We have 
hundreds of years worth of coal in the ground, and provides 
half our electricity. We're making great strides in cleaner-
coal technologies and, looking ahead, we need some that are 
even cleaner and more efficient than today's.
    One of those technologies is carbon capture and 
sequestration. I have supported this technology in the 
FutureGen program. In fact, two possible Future Gen sites are 
in Texas and two are in Illinois. I prefer the one in my 
district, but I'll support the program wherever it lands 
because no matter where it is, it will good for America.
    Other technologies such as integrated gasification combined 
cycle, supercritical combustion and oxy-fuel show promise. We 
have witnesses here today to detail the status of all three.
    I welcome the administration. DOE and EPA are working on 
the promise of a cleaner and more energy secure future.
    I am pleased that Jupiter Oxygen is here. I am told the 
Jupiter Oxygen technology is the only one that can allow for 
carbon capture on existing coal plants.
    I am also pleased to welcome Mr. Jay Stewart who works with 
the Texas FutureGen team on legal issues related to the long-
term storage of CO\2\. We should understand legal questions 
that may arise if facilities with carbon capture and 
sequestration spring up around the country.
    I also welcome the other witnesses and look forward to 
their testimony.
    Finally, I hope to hear a discussion of the costs of these 
technologies and related regulatory programs. We learned in a 
hearing last May before this subcommittee that carbon capture 
and sequestration can spike the cost of electricity produced 
from coal.
    At a hearing last month, we learned that a cap and trade 
program added 40 percent to the wholesale cost of electricity 
in Germany and that was, I believe, without any of these 
technologies. Combined, carbon capture and sequestration and a 
cap and trade program could lead to a real rate shock for 
electric consumers. High electricity costs will only drive 
manufacturers overseas, and American jobs along with them.
    Thank you, Mr. Chairman.
                              ----------                              


  Prepared Statement of Hon. Michael C. Burgess, a Representative in 
                    Congress from the State of Texas

    Thank you, Mr. Chairman for convening today's hearing on 
carbon capture and sequestration.
    As we've begun to debate the issue of global climate 
change, there has been a lot of discussion about carbon capture 
and sequestration and the potential promise that it holds for 
reducing the amount of carbon in our atmosphere.
    These discussions, however, have focused on the carbon 
capture portion of the equation, and seemed to assume that the 
sequestration technology is available.
    One of the things that I hope to learn during today's 
hearing is whether that assumption is well founded.
    There are several different possibilities for carbon 
storage: depleted oil wells, unmineable coal seams, injection 
into the ocean, or storage in saline solutions.
    Yet many of these are still in the initial stages of being 
tested. The world's first commercial deep saline carbon dioxide 
capture and storage project was started in Norway's North Sea 
during 2006. That's not that long-ago.
    I look forward to hearing from our witnesses on the status 
of carbon capture and sequestration technology.
    One final note before I yield back. Two of the final four 
sites selected for the location of FutureGen are located in my 
home State of Texas.
    I'm extremely supportive of FutureGen and am hopeful that 
the FutureGen Alliance will ultimately chose to site the plant 
in its logical place--the Lone Star State--but let's not forget 
that this is a demonstration project.
    A 10-year, $1 billion demonstration project. And in the 
end, is only expected to produce 275 Megawatts of electricity, 
as compared to the 600 Megawatts capacity of most commercial 
power plants.
    There is an enormous amount of time and money being spent 
to show that this technology is even possible. And I think that 
it's a sound investment in future technology.
    Now, I know that the most difficult part of this project is 
the hydrogen production component, but it still raises an 
important question: how far off in the future is the technology 
of carbon capture and sequestration and how expensive will it 
be?

                              ----------                              

    Mr. Boucher.We are now pleased to welcome our first panel 
of witnesses: Mr. Thomas Shope, representing the Department of 
Energy. Mr. Shope is the Principal Deputy Assistant Secretary 
for Fossil Energy. We welcome him. Mr. William Wehrum and Mr. 
Benjamin Grumbles represent the Environmental Protection 
Agency. Mr. Wehrum is the Acting Assistant Administrator in 
EPA's Office of Air and Radiation, and Mr. Grumbles is the 
Assistant Administrator for Water.
    We welcome each of our witnesses on the first panel, and 
without objection, your prepared written statements will be 
made a part of the record. We would welcome your oral summaries 
of approximately 5 minutes.
    Mr. Shope, we will be pleased to begin with you.

   STATEMENT OF THOMAS D. SHOPE, PRINCIPAL DEPUTY ASSISTANT 
    SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY, 
                         WASHINGTON, DC

    Mr. Shope. Thank you, Mr. Chairman, and members of the 
committee. It is my pleasure to appear before you today to 
testify on the Department of Energy's carbon sequestration 
program. The overarching goal of this program is to deliver 
practical lower-cost ways for our Nation to integrate large-
scale reductions of the greenhouse gas CO\2\ where none now 
exist.
    First, let me be clear about carbon capture. We can capture 
CO\2\ today. What we cannot do is capture the CO\2\ of 
combustion and maintain prices that we can afford for 
electricity and other energy-intense consumer products. What we 
do not yet understand fully, and I emphasize the word yet, is 
how to develop the capacity to initiate and maintain safe, 
large-scale geologic storage for hundreds and thousands of 
years. Finally, we need to develop a nationwide infrastructure 
to align the CO\2\ sources being captured with the available 
storage sites or sinks.
    The sequestration program of the Office of Fossil Energy 
addresses these questions. It began 10 years ago as a small-
scale investigation of technical viability. Then the 
administration made it a critical component of the President's 
technology initiatives to provide concrete means of dealing 
with concerns about climate change. Program investment to date 
is in excess of $300 million. In fiscal year 2008, the 
President has requested an additional $79 million. That 
represents a four-fold increase from the $18 million 
appropriated in fiscal year 2001. Today the program is 
dedicated to preparing America to reduce CO\2\ from fossil 
energy use without detriment to our energy security or economic 
well-being. It seeks to eliminate the harmful effects of using 
our most abundant and lowest cost energy, coal. It recognizes 
that coal is the backbone of our electric power supply which is 
the backbone of the economy. Today we are engaged in pioneering 
and world-class research, development and demonstration of 
technologies for affordable CO\2\ capture and for safe long-
term storage.
    The carbon sequestration program has two main parts: the 
core research and development element and the deployment and 
demonstration element. The core research element includes 
capture, sequestration, breakthrough concepts and the 
monitoring, mitigation and verification of CO\2\ in geologic 
storage. It also includes mitigation of non-CO\2\ greenhouse 
gases. The portfolio contains more than 70 projects designed to 
find solutions. Lowering the costs of capture is a critical 
driver of our efforts. Our focus is on pre- and post-combustion 
capture and oxycombustion, which produces a flue gas strain 
composed largely of CO\2\ and water vapor. It includes 
providing retrofit capability for pulverized-coal plants, 
currently in use and for those that are planned. Our overall 
goal is 90 percent capture and 99 percent storage permanence by 
2012 with no more than a 10 percent increase in the cost of 
energy services. We want to have ready by 2012 a portfolio of 
technologies capable of market penetration after 2012. 
Objectives to achieve this goal include post-combustion capture 
and a cost of power no more than 20 percent above that of a 
non-capture plant and pre-combustion capture for IGCC 
generation at no more than 10 percent above the non-capture 
plant.
    The second element of our program, our deployment and 
demonstration element, centers on the seven regional carbon 
sequestration partnerships. These partnerships involve more 
than 400 entities in 41 States, four Canadian provinces and 
three Indian Nations. Their mission is to develop sequestration 
capacity and infrastructure, and their work is critical to 
technical achievement and public acceptance of CO\2\ capture 
and storage. The partnerships have already assisted our 
National Energy Technology Lab in compiling the National Carbon 
Sequestration Atlas. These efforts have helped us identify all 
large-point sources of CO\2\ as well as what may be the biggest 
prize in carbon capture and storage, the vast potential 
geologic CO\2\ storage locations that exist. In this country 
alone, we have deep underground formations sufficient to store 
hundreds of years worth of CO\2\ emissions, not just from the 
power sector but from all sources of CO\2\. Current regional 
partnership activities also involve 11 projects dealing with 
terrestrial sequestration and 25 diverse field tests in 
geologic storage. As we move from characterization to 
validation, we look forward to expediting the demonstration of 
large-scale tests. Our large-scale testing phase will involve 
up to seven large-volume tests and could identify candidates 
for the class of new near-zero-emission power plants in the 
future modeled on FutureGen. FutureGen will integrate various 
technologies of capture and storage in the world's first-of-a-
kind coal-based power with near-zero emissions. It will deliver 
electric power, hydrogen fuel and other byproducts. It will 
also test subsequent advances from the core research effort, 
and most important, FutureGen will be the prototype for a line 
of zero-emission plants based on coal gasification here in the 
U.S. and around the world.
    In conclusion, our program is demonstrating that while 
there is no practical alternatives to continued use of fossil 
fuels in the foreseeable future, coal in particular, carbon 
capture and storage technologies coupled with our array of 
clean coal efforts will allow fossil-fuel use in a carbon-
constrained world without harming the environment and without 
constraining economic growth.
    Mr. Chairman, members of the committee, that concludes my 
spoken remarks.
    [The prepared statement of Mr. Shope appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Shope.
    Mr. Wehrum.

 STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, 
  OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION 
                     AGENCY, WASHINGTON, DC

    Mr. Wehrum. Good morning, Mr. Chairman, members of the 
subcommittee. Thanks for the opportunity to testify on behalf 
of EPA. My name is Bill Wehrum. I am the Acting Assistant 
Administrator for EPA's Air Office. With me this morning is Ben 
Grumbles, the EPA's Assistant Administrator for Water.
    As you know, the President and his administration are 
firmly committed to taking sensible action on climate change. 
The administration's policy is science-based, encouraging 
research breakthroughs that lead to technological innovation 
and harnesses the power of markets to commercially deploy those 
technologies. As my colleague from DOE explained, the 
administration is actively investigating the prospects for 
carbon dioxide capture from power plants and other industrial 
sources and long-term storage and geologic formations. Our 
testimony today will focus on EPA's role in ensuring the carbon 
capture and storage is developed and deployed in a manner that 
safeguards the environment. We are focusing that effort on two 
fronts, which I will explain.
    But before discussing each of these efforts, I would like 
to briefly discuss the role of coal in our Nation's energy 
future. As you know, coal is an essential fuel to achieve 
energy security and increase economic prosperity in the United 
States. Currently, about 50 percent of electricity in the 
United States is generated from coal and at current rates of 
consumption, U.S. coal reserves are large enough to meet our 
energy needs for more than 200 years. To achieve our goal of 
energy security, coal must continue to play a major role in the 
generation of electricity in this country. Carbon dioxide 
capture and storage can potentially make a significant 
contribution to reducing greenhouse gas emissions from coal-
fired electricity generation while allowing continued use of 
our ample coal reserves.
    To address the potential environmental impacts of coal-
fired power plants, EPA, DOE and others are exploring 
technological innovations that would allow coal to be burned 
more efficiently and with lower emissions. Recognizing the 
importance of advanced coal technology, EPA is already working 
to ensure that these new technologies are deployed in an 
environmentally responsible manner.
    EPA is examining how we can facilitate the use of advanced 
coal technologies through the efforts of a recently convened 
work group of private and public stakeholders. At the 
recommendation of the Clean Air Act Advisory Committee, EPA 
established the Advanced Coal Technology Work Group in January 
of this year to discuss and identify potential barriers and 
opportunities to create incentives under the Clean Air Act for 
the development and deployment of advanced coal technologies. 
The work group includes widely diverse participants. The work 
group is developing a set of recommendations that could be 
undertaken to accelerate the development and use of advanced 
coal technology. In its work to date, the work group has 
discussed a wide range of issues associated with commercial use 
of advanced coal technologies.
    With respect to carbon dioxide capture and storage, key 
issues identified by the work group include the availability 
and cost of capture technologies for new and existing 
pulverized coal and IGCC power plants, measures to accelerate 
the pace of carbon capture and storage, the siting of power 
plants including availability and location of pipeline 
capacity, monitoring and verification to ensure storage of 
carbon dioxide is effective, liability concerns associated with 
carbon capture and storage, legal issues involving property 
rights and other issues.
    EPA is also developing risk management strategies to ensure 
that carbon dioxide injection and long-term geologic storage 
are conducted in an environmentally responsible manner. The 
underground injection of carbon dioxide is subject to the 
Underground Injection Control program, or UIC program, of the 
Safe Drinking Water Act. In carrying out our responsibilities 
under the Safe Drinking Water Act, the EPA's goal is to ensure 
protective, effective storage of carbon dioxide injection in 
suitable geologic formations.
    EPA has more than 30 years of experience working with its 
State partners to implement the UIC program. There is a 
significant amount of expertise in transporting and injecting 
carbon dioxide, particularly in the oil and gas sector. 
Approximately 35 million tons of carbon dioxide are injected 
annually and in the Southwest United States, there is an 
extensive infrastructure to transport and inject carbon dioxide 
for enhanced oil and gas recovery. The knowledge gained from 
these activities is extremely useful but we still need to gain 
experience with integrated carbon dioxide capture and storage 
technologies on a commercial scale for coal-fired power plants.
    DOE's research efforts to integrate and demonstration 
carbon dioxide capture and storage will go a long way toward 
reducing costs and providing needed data. My DOE colleague's 
testimony lays out the Department's plans to develop this 
critical technology including implementation of field tests 
throughout the country in a variety of geologic settings and a 
smaller number of larger tests and ultimately commercial-scale 
projects such as FutureGen.
    To support these efforts, the EPA has developed UIC 
guidance that recommends treatment of injection wells 
associated with R&D projects as class V experimental technology 
wells which are covered under our existing regulations. Our 
goal is to provide guidance that facilitates permanence while 
encouraging environmentally responsible injection activities. 
Another goal of the guidance is to promote information exchange 
between project proponents and regulators which will eventually 
support the development of a long-term management strategy and 
answer public questions about the emerging technology. The 
guidance recommends a workable UIC permitting approach for the 
next several years while more data are gathered to determine 
the most appropriate management framework.
    Thank you once again for the opportunity to be here. Mr. 
Grumbles and myself will be happy to answer any questions you 
may have for us.
    [The prepared statement of Mr. Wehrum appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Wehrum. Mr. Grumbles, do you 
have a statement for us at this time?
    Mr. Grumbles. No.
    Mr. Boucher. All right. Thank you.
    I would like to thank both Mr. Shope and Mr. Wehrum for 
their testimony this morning.
    Mr. Shope, let me begin my questioning with you. You 
mentioned that you have a target date of 2012 in order to have 
determinations made by the DOE with regard to the adequacy of 
technology for CO\2\ storage. How confident are you that we 
will have that information by that date?
    Mr. Shope. I am very confident in the 2012 time frame that 
we will have at that period a portfolio of technologies that 
are available. The 2012 time frame again does not envision the 
wide-scale deployment at that time. That means we have the 
technology that is then available, that portfolio, and a 
portfolio that is available at a reasonable cost, the targets I 
had indicated to you, no more than a 20 percent cost increase 
for PC, or post-combustion capture of CO\2\, and a 10 percent 
cost increase for IGCC-type technologies, pre-combustion 
capture. But we are on the path to meet that 2012 portfolio.
    Mr. Boucher. What we are interested in is having a 
projected date when we can have the assurance that reliable 
geologic storage is available for the quantities of CO\2\ that 
will be emitted by the Nation's coal-fired power plants. I can 
say that my goal is to make sure that electric utilities under 
whatever carbon constraints we adopt have the ability to 
continue to use coal pretty much the same way they are using it 
today in those quantities, and my personal goal also is to 
protect the ability of coal to continue to grow as a percentage 
of the total fuel mix for electricity generation. So I am 
particularly very interested in making sure that we team the 
arrival of regulations with the availability of these 
technologies for commercial deployment.
    So when are we going to have that assurance? Is that 2012 
or is that some later date?
    Mr. Shope. Well, I wish I could provide exact dates, Mr. 
Chairman, but I will tell you that again we are on that path 
from the 2012 time frame, but in addition to that, that would 
allow us to have that portfolio technology available. That also 
marries up well, as I indicated in our testimony, our FutureGen 
project, which ties them together not only the sequestration 
opportunities but then IGCC capture, energy production with 
hydrogen co-production and the storage, marrying that all 
together. We would have in the 2012 time frame getting the 
first testing of our FutureGen plants. Down the road from that, 
it would be approximately 10 years before that technology is 
then widely available for commercial deployment and you could 
envision full-scale the technology of choice deployment in the 
2045 time frame.
    Mr. Boucher. So are you saying that it would be 10 years 
beyond 2012 before the technology would be available for wide-
scale deployment?
    Mr. Shope. That is correct.
    Mr. Boucher. OK. That is a longer time frame than others 
have suggested. Let me ask you this. How much money is now 
being devoted to your R&D efforts? You have seven regional 
partnerships. How much money is being devoted to those at the 
present time?
    Mr. Shope. Our 2008 request is for $79 million. To date we 
have already spent $300 million on the sequestration piece. 
Now, of course, that is a subset of our larger clean coal 
budget, and again, there is some overlap obviously between all 
the technologies that we are working on under the clean coal 
program are directly applicable and they are all driving 
towards the same goal, which is that zero-emissions power 
plant, carbon capture and storage. But in our sequestration 
piece alone, we have used $300 million to date. Again the 2007 
request is currently being discussed right now for our 
operating plans and will be submitted soon. Our 2008 request is 
$79 million.
    Mr. Boucher. And you are getting about $60 million in 2007. 
Is that right?
    Mr. Shope. Well, again, Mr. Chairman, those operating plans 
are being discussed right now at the Department in light of the 
continuing resolution.
    Mr. Boucher. What did you have in 2005?
    Mr. Shope. It was 60.
    Mr. Boucher. So it is roughly 60 presently and you are 
anticipating 80-plus for 2008.
    Mr. Shope. That is about right.
    Mr. Boucher. If more money were provided for this effort, 
could you accelerate your time frame for the arrival of these 
technologies with commercial reliability?
    Mr. Shope. Of course, I support the budget that we have 
that is on----
    Mr. Boucher. I understand that but----
    Mr. Shope. But in answer to the hypothetical question is 
yes, of course, there are some technology constraints, 
particularly in the testing area. We are engaging in our 25 
geologic tests looking to expedite our larger-scale tests. If 
we had additional funds, then we could develop--hypothetically 
speaking, if you were to double our program budget, we could 
reduce the amount of time for that full deployment, so the 
answer is yes.
    Mr. Boucher. Thank you, Mr. Shope. I assumed that was going 
to be the answer.
    My time has expired. I have some further questions which we 
will defer to a later time.
    I am now pleased to recognize for 5 minutes the gentleman 
from Illinois, Mr. Hastert.
    Mr. Hastert. Thank you, Mr. Chairman. I have a series of 
short questions, and if you could be as explicit in the answers 
as possible, we will get through them.
    First of all, back two decades ago when we needed to clean 
these plants up and you did the scrubbers and those types of 
things, that was technology that you put on top of old plants. 
Basically this technology means that you have to build new 
plants, right?
    Mr. Shope. Well, we are working on existing plant 
technology as well as far as capture goes, that is, post-
combustion capture on existing PC plants.
    Mr. Hastert. Well, let me lead into a sub-question off that 
then. You say you have a 12,000-megawatt plant. Isn't this 
stuff coming out so fast and so quick that it is really hard to 
capture all the CO\2\ coming out of the stacks?
    Mr. Shope. That is correct. Also, you have a much lower 
concentration of CO\2\ so you have a larger volume to process 
and it is expensive. That is correct. It is expensive to add on 
technology to existing plants.
    Mr. Hastert. When you carry out these studies, I know you 
are far enough into it, what effect do you think this has on 
retail electric prices? For instance, if you put a new plant in 
and you put it in the right base, what do you see the increase 
in prices roughly?
    Mr. Shope. Under our current scenario, for a PC plant, you 
are looking at a cost of electricity penalty anywhere from 40 
to 85 percent. Now, on an IGCC, a plant with hydrogen co-
production today, you are looking at a price penalty of 20 to 
55 percent. Our targets are to drive those obviously much 
lower.
    Mr. Hastert. So we could be hypothetically paying half 
again increase in the price of electricity, whatever our price 
may be.
    Mr. Shope. Based on current technology, that is correct.
    Mr. Hastert. I think you said this, but I want to make sure 
it is clear. Time-wise to have these plants in place, to have a 
plant in place would probably almost be 16 to 17 years. Is that 
what you are talking about?
    Mr. Shope. Approximately. That is correct. Now, when I 
mentioned the 2045 time frame, that would the technology of 
choice, full-scale deployment. That would be the out year. 
FutureGen will be coming online in 2012, 3 years of testing, 
about 10 years following that, you are looking at a 2025, 2026 
time frame for deployment.
    Mr. Hastert. I have a couple questions I want to ask about 
sequestration. I have limited time here but first of all, the 
science of this sequestration. You drive this gas deep into the 
ground, 5,000, 6,000, 7,000 feet and it is ingested by the 
chemicals, whether it is brine, whether it is existing coal 
beds, and absorbed. Is that correct?
    Mr. Shope. It stays in place, and it is important to note, 
sir, that it would be a liquid so when you put it down, you are 
putting a liquid down although we refer to it as gas. Under 
those pressures and depths, it becomes a liquid.
    Mr. Hastert. So it is liquid carbon dioxide but it is not 
frozen carbon dioxide? It is not dry ice, for instance?
    Mr. Shope. That is correct.
    Mr. Hastert. OK. Then what could happen? Today we are 
talking about Yucca Mountain where people want to make sure 
that that thing is absolutely safe for 10,000 or 20,000 or I 
don't know how many years, a lot of time. What happens now when 
this gas is down there? Is there any adverse effect that we 
have to worry about, liability issues, for instance?
    Mr. Shope. Well, there is always going to be concerns about 
liability but I would say first and foremost, the important 
measure is that it is CO\2\. It is not a hazardous substance. 
In fact, it is a commodity right now. We use CO\2\ in various 
processes from carbonation on out. The concerns of course would 
be what happens to it in those deep formations. Does it spread 
out, how far does it spread out, is there any leakage 
associated with it. These are all the things that we are 
looking at through our validation phase right now with our 25 
geologic tests that are going throughout the country in 
different formations, different geologic formations, different 
areas of the country. Those are the things that we are 
exploring right now.
    Mr. Hastert. One of the things that they say that you can 
take the CO\2\ out of the atmosphere. That is one of the 
technologies you are looking at. So you are taking this huge 
amount of just air and you are taking CO\2\ out of it, putting 
it in the ground. The byproduct of that is oxygen. Is that one 
of the things you use the fluidize or to burn, or what is 
happening?
    Mr. Shope. I am not sure I understand the question or have 
the scientific background. The director of our national lab 
happens to be here. I would let the director of our national 
lab answer that.
    Mr. Bower. Congressman, thank you for the question. When 
you take the CO\2\ out of the flue gas, it has already come 
through the combustion process, or if it high pressure from a 
gasifier, it is already part of the process. When you talk 
about the oxycombustion, you would actually separate oxygen off 
and put it through from the air, instead of pure air going into 
combustion, you shoot pure oxygen. So either way you are taking 
the CO\2\ at a high concentration. It doesn't make oxygen. It 
actually just is a separate component of the air. You take it, 
pressurize it, put it in the ground. At that depth you are 
below solid layers of rock. It is not a void it is going into 
but it is permeating with other rock down there so it is like 
putting it into a sponge more likely, and the chance of it 
going anywhere is part of what we are evaluating. It looks very 
solid right now that it is going to stay where it is. We just 
have to confirm some of those things as far as transport.
    Mr. Hastert. So the effluent from that process, there is 
absolutely no CO\2\ or hardly any CO\2\?
    Mr. Bower. The effluent from the flue gas or the gasifier 
stream, the CO\2\ is taken off. Whatever else is left will go 
into the atmosphere. If there is some nitrogen, it will be left 
off in the atmosphere. If there were some other elements, they 
would go off. We would clean out the sulfur obviously and all 
the other things that we are concerned about in our normal 
regulatory process.
    Mr. Hastert. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you, Mr. Hastert. And let me ask the 
director of the national lab if he would identify himself for 
our record, please.
    Mr. Bower. I am sorry, Mr. Chairman. My name is Carl Bower, 
director of National Energy Technology Laboratory.
    Mr. Boucher. Thank you very much.
    The gentleman from Massachusetts, Mr. Markey, is recognized 
for 8 minutes.
    Mr. Markey. Thank you, Mr. Chairman.
    Mr. Shope, the testimony submitted by the Natural Resources 
Defense Council witness who will be appearing on our panel, Mr. 
Hawkins, argues that we need to limit CO\2\ emissions through a 
cap and trade system and adopt a performance standard for 
emissions of CO\2\ from coal-burning plants in order to 
transform the economics of the coal utility industry so that 
instead of choosing to build a dirtier coal plant that releases 
carbon pollution into the air, it makes economic sense to build 
plants that do carbon capture and sequestration. Do you agree?
    Mr. Shope. Congressman, I am going to defer on the question 
just because again, my expertise is on the technology----
    Mr. Markey. Please don't defer. We have a deadline that is 
very closely approaching. Can you please give us an answer?
    Mr. Shope. Again, the focus of the Office of Fossil Energy 
is on the technology end of the program, regardless of the 
particular emissions strategy that you are going to pick, we 
all have a common technology goal and that is what-
    Mr. Markey. Do you think changing the economic structure 
here of the incentives for the coal industry would make a big 
difference in terms of telescoping the time frame it would take 
to get an affordable technology that the coal industry would in 
fact play?
    Mr. Shope. Again, Congressman, the problem that we see, we 
perceive it as a technology problem and there is a technology 
path forward that is needed.
    Mr. Markey. Your testimony says, sir, that the technology 
is already there.
    Mr. Shope. What I testified to was that we do capture 
carbon today through EOR. That is enhanced oil recovery. The 
problem is that those technologies have different goals, 
different motivations. In an EOR situation, you are capturing 
the carbon dioxide with the number one goal of pushing out the 
oil, enhancing the oil recovery.
    Mr. Markey. I appreciate that, but the basic technology 
already exists, sir?
    Mr. Shope. That is correct.
    Mr. Markey. And that is what your testimony indicates?
    Mr. Shope. That is.
    Mr. Markey. And I just think that it is one more example of 
the Bush administration avoiding the central question that 
America wants to know the answer to, which is whether or not 
they are going to use technology and a cap and trade system in 
order to accomplish the goal, and your testimony is not helpful 
towards getting the answer to that question.
    Mr. Wehrum and Mr. Grumbles, in the NRDC testimony, Mr. 
Hawkins suggests that operating a coal-burning plant with 
carbon capture and disposal can be done safely, ``if an 
effective regulatory regime is put in place to license and 
monitor operations of disposal sites.'' He further notes that 
EPA already has the authority to write such rules but that 
direction from Congress is needed to ensure they are written in 
a timely manner and suggests that this committee direct EPA to 
write rules governing large-scale carbon injection and 
sequestration facilities within the next 2 to 3 years. Would 
EPA support such legislation?
    Mr. Grumbles. Congressman, what we are focused on right now 
is in working together with the environmental community and the 
States and Department of Energy, is taking an adaptive 
management incremental step forward aggressively to first get 
guidance out. We have issued guidance regulating the injection 
of CO\2\ under class V UIC programs under the Safe Drinking 
Water Act under the experimental technology wells provision. We 
are also going to be convening workshops and bringing in----
    Mr. Markey. Would you support legislation to advance that 
goal, sir?
    Mr. Grumbles. My recommendation right now would be, we are 
on the best path working with Congress----
    Mr. Markey. So you are on a better path than legislation so 
right now you don't support legislation. Is that correct?
    Mr. Grumbles. I think as we learn more about this proven--
--
    Mr. Markey. How much more time do you need?
    Mr. Grumbles. Well, when I look at the aggressive roadmap 
that we are laying out----
    Mr. Markey. What is aggressive under the Bush 
administration?
    Mr. Grumbles. I would say when it comes to carbon 
sequestration, we have an aggressive roadmap and that is, it is 
going to take--we are just now issuing----
    Mr. Markey. All right. You are 6 years in so does that 
aggressiveness indicate that you will get an answer before the 
next President is elected?
    Mr. Grumbles. Well, I think the science drives the results 
and the technology is promising but it is unproven.
    Mr. Markey. Sir, science does not drive the decisions of 
President Bush and Vice President Cheney. Politics does. 
Ideology does. I am afraid that your evasiveness is just a 
continuation of----
    Mr. Grumbles. Congressman, I would respectfully disagree 
and just simply say----
    Mr. Markey. I would say that your testimony at that 
juncture on that subject is completely at variance with the 
facts.
    Does the other gentleman wish to answer?
    Mr. Wehrum. Thank you, Congressman. I will reiterate what 
my colleague said. We made a very crucial determination 
recently that is directly relevant to your question. We had to 
ask and answer whether we believe we have legal authority under 
the UIC program to regulate carbon injection and sequestration 
in geologic formations, and we determined the answer is yes and 
that was very important because what that allowed us to do is 
issue guidance, which has just been signed, that calls for the 
permitting of these activities under the program right now 
under an existing classification called class V. So what we are 
now committed to do is exactly what you described, which is 
develop a set of regulations specifically for CO\2\ injection 
and----
    Mr. Markey. And when will those regulations be coming out?
    Mr. Grumbles. What we are committed to is a management 
framework that looks at the long-term----
    Mr. Markey. Give me a timetable. How many months?
    Mr. Grumbles. Well, I think it depends on public dialog.
    Mr. Markey. July?
    Mr. Hall. Mr. Chairman, regular order, please.
    Mr. Markey. Can you get it done by July? Can you get it 
done by July?
    Mr. Grumbles. What we can get done by July is having 
informed debate and dialog with----
    Mr. Markey. That doesn't help us. Let me move on.
    Mr. Shope, some of the testimony that we received for 
today's hearing raises concerns about provisions of the 2005 
Energy Policy Act that provides significant subsides for coal 
plants that don't actually capture CO\2\ but merely have a 
carbon capture capability. It has been suggested that this 
provision of the law is not being implemented in a way that 
distinguishes between an ordinary integrated gas combined cycle 
plant and one that actually has been designed with early 
integration of carbon capture and sequestration in mind. There 
are also concerns that some of the language relating to loan 
guarantees allows loan guarantees for carbon sequestration 
optimized coal plants but fails to define what that means. What 
is the Department doing to ensure that these provisions of law 
are only used for plants that are actually being designed and 
built in anticipation of early adoption of a full carbon 
capture and sequestration capability so that we aren't 
subsidizing dirty plants with the provision designed to promote 
clean ones?
    Mr. Shope. Well, I would say, Congressman, that there is a 
technology path. You have to learn how to capture the carbon 
effectively. You can't immediately get to the end goal. It is a 
technology path forward and that is what the Department is 
working on. That is what our solicitations have given, the loan 
guarantees----
    Mr. Markey. If I were a utility executive and I built a 
standard pulverized-coal-burning plant but with a big open 
building attached to it that I claimed was designed to 
accommodate installation of carbon capture technologies, do I 
quality for the subsidy?
    Mr. Shope. Well, I would have to look at the particular.
    Mr. Markey. So maybe----
    Mr. Shope. Each of the projects----
    Mr. Markey. Saint Augustine used to say: Oh, Lord, make me 
chaste but not just yet. These utility executives are saying 
oh, Lord, make me carbon-free but not just yet; I am getting 
ready to be carbon-free but I will leave a space there, maybe 
in another 20 years. That is what Saint Augustine used to say 
about chastity.
    So we are going to need more specifics from each of you in 
terms of what the deadline is in order to accomplish these 
goals.
    I thank the chairman.
    Mr. Boucher. The Chair thanks the gentleman and is pleased 
now to recognize the gentleman from Texas, Mr. Barton, the 
ranking Republican member of the full committee, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman. I am delighted to be 
at this particular hearing. I know we have had it scheduled and 
postponed but I am still looking forward to the hearing where 
we actually try to talk about the science a little bit before 
we rush to judgment on all these proposed solutions. I am still 
not convinced that this is quite the earthshaking, earth-
changing problem that it is presented to be. But having said 
that, I think it is important to have a discussion of some 
commonsense carbon capture mechanisms, so I welcome this 
hearing.
    My first question is to Mr. Wehrum, who is the air and 
radiation representative from EPA. Can you tell me what the 
pollutants are that the Clean Air Act currently regulates?
    Mr. Wehrum. Yes, Congressman. We primarily regulate the six 
criteria pollutants. Most importantly for power generation, 
they include SO\2\ and NOx and particulates, I should add. We 
made a determination a couple years ago that those----
    Mr. Barton. Can you enumerate them? That is three of them. 
What are the other three?
    Mr. Wehrum. Lead--I knew you were going to put me on the 
spot here.
    Mr. Barton. Particulate matter is one.
    Mr. Wehrum. SO\2\, NOx----
    Mr. Barton. Mercury. You just added mercury.
    Mr. Wehrum. Well, we regulate mercury as an air toxic, not 
as a criteria pollutant. So the answer is, we actually regulate 
a wide, wide variety of pollutants.
    Mr. Barton. CO\2\ is not one of them, is it?
    Mr. Wehrum. No. We made a determination that CO\2\ is not a 
pollutant that we regulate.
    Mr. Barton. COs is not a pollutant. Now, why are these 
others regulated? Why do we regulate the ones that we regulate?
    Mr. Wehrum. Because the Clean Air Act directs us to do so.
    Mr. Barton. No, but why do we do that in the Clean Air Act? 
It is because they are harmful to public health, to individual 
health. People get sick. They have an adverse health reaction 
because of that if they are subjected to large amounts of 
whatever the pollutant is. But you don't have that with CO\2\, 
do you?
    Mr. Wehrum. Well, again, Congressman, we made a 
determination a couple years ago and now in fact the question 
is currently before the Supreme Court as to whether the Clean 
Air Act requires us or authorizes us to regulate CO\2\.
    Mr. Barton. No, that is a lawsuit by some of the radical 
environmentalists but the point of fact is, under current law 
we don't regulate CO\2\ because it is not a health hazardous.
    Mr. Markey. That is the State of Massachusetts you are 
talking about.
    Mr. Barton. I rest my case.
    Mr. Markey. It is Mitt Romney that brought the case.
    Mr. Barton. I think that is an important point. SO\2\ and 
mercury, lead are directly harmful to human health. CO\2\ is 
not. It is not. There is this theory that CO\2\ somehow over 
time is increasing the temperature and increased temperature 
does things to the climate that over time might be harmful to 
human habitation of the Earth. That is a theory. It is not a 
fact. It is also a fact that if we pick one of these carbon 
capture methods, the most benign estimate we have right now is 
a 50 percent increase in cost. Now, a 50 percent increase in 
cost is going to cost somebody their job. In fact, it is going 
to cost a lot of somebodies their job. That is a fact. I am 
just totally tied up in knots that our new Speaker wants a bill 
out of this committee by June 1. That is an artificial 
deadline. It is also in my opinion wildly unrealistic. The same 
people that are now pushing for a bill are some of the same 
people that were telling me when I was chairman not to even 
hold hearings on this issue because of how difficult it would 
be to find consensus.
    My second question on CO\2\ is, can any of our panelists 
tell us the volume, just the volume of CO\2\ that comes out of 
a smokestack that is using coal as a fuel source of the 
emissions? What percentage of those emissions coming out of a 
smokestack in the average plant in the United States is CO\2\?
    Mr. Shope. I can tell you on total, the total just by way 
of----
    Mr. Barton. I don't want a total number. I want a percent 
number. We hear all these tons and tons and tons. We never hear 
what the percentage is.
    Mr. Shope. On a PC, a pulverized-coal plant, you are 
looking at about 10 percent.
    Mr. Barton. Ten percent. Is that average?
    Mr. Shope. That is average for a pulverized-coal plant. 
That is correct.
    Mr. Barton. So one of the problems we have as you are going 
to capture it is, it is just not a high percentage of the 
smokestack.
    Mr. Shope. That is correct, Congressman. It is a very low 
concentration per volume of emissions.
    Mr. Barton. We also might want to put in the record, and I 
see my time has expired, that of the total percentage of the 
atmosphere, the number I have for CO\2\ is 0.03 of 1 percent, 
0.03 of 1 percent. It is very, very hard to imagine that 0.03 
of 1 percent of anything is causing some of these catastrophic 
problems that are credited. I am told that of the total 
greenhouse gases, 95 percent of all the greenhouse gas is water 
vapor and that 90 percent of that is created by the oceans.
    With that, I yield back, Mr. Chairman.
    Mr. Boucher. Thank you, Mr. Barton.
    The gentleman from Texas, Mr. Gonzalez, for 8 minutes.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. I was 
engaged here with Mr. Markey and it is always an interesting 
conversation but I didn't have the microphone on. But in 
essence he said blaming the oceans, it was nice to have an 
alternative to Ronald Reagan's trees. I think that is what he 
was saying.
    Anyway, let me ask Mr. Shope real quick, I was reading in 
the materials that were provided us and it said in 2005 the 
Intergovernmental Panel on Climate Change, the IPCC, estimated 
there were 128 operating gasification plants worldwide. How 
many of those are in the United States? I don't have the 
answer. I am really asking in good faith.
    Mr. Shope. Most of them operating are not IGCC.
    Mr. Gonzalez. In the United States, how many of the 128 
gasification plants identified by the panel on climate change 
are located in the United States? I mean, if you don't know, 
you don't know.
    Mr. Shope. There are two IGCC plants operating in the 
United States right now.
    Mr. Gonzalez. All right. And then they went to the next 
statement which address what you are saying. Integrated 
gasification combination cycle, IGCC, is a form of gasification 
and there are only four identified by the IPCC as existing 
worldwide, and you are saying that two of those are in the 
United States?
    Mr. Shope. There are two in commercial operation in the 
United States.
    Mr. Gonzalez. With the present technology, I look at these 
as kind of the Holy Grail of coal-fired plants. Would you 
agree?
    Mr. Shope. The next generation of them. You can have an 
IGCC plant that is air blown. What we are looking for, what the 
real prize would be an oxygen-blown IGCC plant with hydrogen 
co-production.
    Mr. Gonzalez. I guess I am getting to the overall plan that 
you have, but realistically, what is being built, licensed and 
regulated and permitted today in the United States as it 
relates to coal-fired plants? None of this, right? Not of what 
I just referred to.
    Mr. Shope. Under our CCPI program, there are plants that 
are being built now that are ready to take on that pathway, 
which is the IGCC pathway getting back towards our FutureGen 
plant, which would be again the culmination of all these 
technologies which would have electricity generation as with 
hydrogen co-production and sequestration, and that is----
    Mr. Gonzalez. What percentage of plants that are being 
built or in the planning stages or in the permitting stages 
would you say would meet the criteria that you were just 
outlining?
    Mr. Shope. The FutureGen-type plant with----
    Mr. Gonzalez. How many FutureGen-type plants do we have 
right now?
    Mr. Shope. There are none. That is why we are heavily 
engaged in that research because we are driving to that 
conclusion.
    Mr. Gonzalez. Who permits and licenses the building of 
these new plants, the ones that are on the drawing boards, the 
ones that are being proposed, the ones that are part of the 
initiative by any particular energy company. That would be the 
State, wouldn't it?
    Mr. Shope. Congressman, a wide variety of legal and 
regulatory approvals are needed to site and construct a power 
plant including, for instance, air permits that are necessary 
under the Clean Air Act.
    Mr. Gonzalez. All right, but primarily wouldn't you say it 
is a State regulatory commission entity that the process goes 
through, I mean, starts with and pretty much is dependent on 
getting the green light?
    Mr. Wehrum. Congressman, I can speak for the environmental 
side, and what I know is that getting an air permit for a new 
coal-fired power plant is one of the most critical approvals 
that is necessary and something we as an agency spend a lot of 
time and energy focusing on.
    Mr. Gonzalez. I actually have plenty of time if you guys 
want to discuss this. I think we need to deal with what you 
have on the table. No one here is espousing that we stop dead 
in its tracks the building of coal-fired plants. Is that 
correct?
    Mr. Shope. Again, the problem that we are getting at is 
that current plants, the technology, yes, we can capture that 
carbon dioxide but you are looking at almost up to 80 percent 
of a price penalty, and that is where the rubber meets the 
road. That is why the technology path forward is the solution 
to bringing those costs down so that it becomes more much of an 
occurrence so that the next time we have these percentages they 
would be much higher but it doesn't exist yet today at a 
reasonable cost.
    Mr. Gonzalez. Well, two things that we need to be working 
on, Congress and the administration, that we don't present 
unrealistic expectations. Nothing worse than dashed hopes 
because that really does equate to misrepresenting and 
misleading the American public, and that is my fear as we 
engage in this particular debate that we are on the fringes of 
this thing rather than trying to come to the middle and 
figuring out of course addressing the environmental needs and 
concerns and yet the economic realities out there of providing 
energy for the consumer, the citizen, the constituent. All I am 
saying is, we are identifying the technologies. Where are we 
now? If you really believe--and you may have to clarify this 
because I wasn't sure. DOE, the program on the initiatives the 
Federal Government is taking, one, to ensure 90 percent capture 
of CO\2\ from power plants to store 99 percent of the 
sequestered CO\2\ for over 100 years and add no more than 10 
percent to cost. That is the objective?
    Mr. Shope. That is correct.
    Mr. Gonzalez. And you would like to have all that in place 
for adoption or as we adopt it by 2012?
    Mr. Shope. That is correct. We want to have that portfolio 
available so that someone building a plant in 2012 would have 
those technologies available at those costs.
    Mr. Gonzalez. I am going to go back to where I started. In 
the interim, all the permitting, all the licensing, all the 
building really will not be meeting that goal. It may be 
somehow built in a way that it might accommodate it more easily 
but this is something truly that you won't have in place until 
2012 for adoption prospectively?
    Mr. Shope. That is correct. Now, I will state of course 
there is going to be incremental gains along the way. We are 
going to continue to gather the requisite data where the small-
scale are going to be coming to completion. We are looking to 
expedite large-scale testing. All that information will then be 
available for people who are building these plants along the 
way.
    Mr. Gonzalez. And I do thank you, and I thank the panel 
that will follow you. Unfortunately, I will only be here for 
about 45 minutes of it. They may have some strong disagreement 
with the timetable and the manner in which the administration 
is attempting to accomplish this. But thank you all for your 
testimony today.
    I yield back.
    Mr. Boucher. Thank you, Mr. Gonzalez.
    Mr. Walden from Oregon is now recognized for 8 minutes.
    Mr. Walden. Thank you, Mr. Chairman. I appreciate that.
    I know you all are looking principally at power plants and 
ways to reduce carbon emissions from power plant, but as I read 
through some of the literature, it appears there are other 
things that could be attempted and I wondered if either of your 
agencies are looking at things, especially involving America's 
forests or global forests. I know in my State, we had a fire a 
few year ago at the BMB complex, fire that the scientists now 
have estimated produced six times the level of carbon dioxide 
into the atmosphere as the entire State for that year, and 
there are other discussions about other facilities that emit 
carbon: cement production, rice paddies that produce methane. 
And then we have this whole issue of how this is a global 
problem with I think India and China planning to put 650 coal-
fired plants online in the next few years that will emit more 
carbon that the entire Kyoto Accords combined hope to reduce. 
Can you address some of these issues?
    Mr. Shope. Sure, I will take an initial stab at it. First 
you were talking about the forests. There are of course 
terrestrial sequestration as something we look at. It is a 
smaller part of our program yet it is an element. We have 11 
terrestrial projects that are ongoing right now. The reason the 
majority of our focus is on carbon capture and storage from 
power plants is just because that is the biggest chunk that we 
have to focus our efforts on, and I will say that all the 
technologies we are developing in this area certainly are 
applicable to all the other segments of industry, not just for 
coal power. Now, that is where our focus is, particularly on 
the capture side of that. We are spending an inordinate amount 
of effort on those but even in the storage end of things, those 
will directly be applicable to CO\2\ regardless of the source.
    Mr. Walden. Mr. Wehrum?
    Mr. Wehrum. And if I may, Congressman, the administration 
has a wide variety of programs that address many of the issues 
that you described and I will just touch on a couple of them 
without trying to be comprehensive. For instance, energy 
efficiency is a key piece of our domestic energy security 
strategy and the Energy Star program that EPA and DOE jointly 
implement is a great example of how much success we can have by 
focusing on reducing the demand for energy in the first 
instance as a way of managing power generation.
    Mr. Walden. Sure.
    Mr. Wehrum. Another good example, you mentioned methane and 
non-CO\2\ greenhouse gases. We have very successful domestic 
methane programs focused on oil and gas production and 
distribution, agricultural emissions, coal mines and a wide 
variety of other sources and we in fact are trying to leverage 
the success that we have had domestically to an international 
partnership group where we hope similar opportunities can be 
found throughout the world.
    Mr. Walden. Mr. Shope?
    Mr. Shope. That reminded me as well, speaking of the 
international partnerships, to address your question about 
internationally. The United States is the Chair of the Carbon 
Sequestration Leadership Forum. That is something the 
Department of Energy helped to get moving and is actively 
participating in now. We have 21 countries plus the European 
Commission that meet on a regular basis to look at these 
technologies, look at carbon capture and storage issues 
associated with them to make sure that they are widely deployed 
throughout the world, not just here in the United States.
    Mr. Walden. But I want to get back to this issue of forests 
because I think it is important, and I of course come from an 
area that has very productive forests, and global forests 
currently store just over half of the carbon residing in the 
terrestrial ecosystems. The total biosphere carbon pool is 
estimated at 2,190 petrograms. Of this, approximately 1,000 
petrograms is in forests. It is roughly 50 percent more carbon 
that now resides in the atmospheric pool and about 20 to 25 
percent of the carbon pool stored in the remaining accessible 
fossil fuels, and I guess the point is, as you read through 
some of the scientific literature, we are losing something on 
the order of 45 million acres of forests across the globe every 
year and yet forests seem to be one of the great carbon sinks 
we have, and I am just wondering why we are not focusing more 
on both forest health, fire prevention, managing for old-growth 
characteristics, the things that the scientists say will help 
remove carbon and produce oxygen in the atmosphere.
    Mr. Shope. Again, Congressman, we are spending some effort 
on that and our regional partnerships also each have an element 
and particularly the ones that would cover your State are 
certainly probably looking at that heavier. I could get you 
more information on that. I would be happy to do that. Again, 
the problem with terrestrial sequestration though is in the 
long geologic scale of things, it is a temporary holding so 
that is why we are really focusing on the long-term permanent 
storage issues, the deep saline reservoirs and formations, 
because that is securing that carbon dioxide through eternity.
    Mr. Walden. And I am not saying not to do that. Don't 
misread me at all. I am just saying it looks to me like as I 
read some of this literature there are some other opportunities 
out there that this Congress has addressed in some measure and 
not in others that could help reduce--I mean, if one forest 
fire in Oregon puts out six times the amount of carbon dioxide 
as the entire State's automobiles, manufacturing, you name it, 
for a year, it seems to me we could be doing a better job on 
that front.
    Mr. Shimkus. Would the gentleman yield on your forestry 
question?
    Mr. Walden. Sure.
    Mr. Shimkus. Because you said temporary. Can you explain 
the temporary nature of terrestrial carbon sequestration?
    Mr. Shope. We are talking over geologic time. The trees 
eventually are going to decay and rot and give off the CO\2\.
    Mr. Shimkus. And they give up what they have consumed, so 
you pay for it. The only reason why I mentioned this is, there 
is a big buzz now about zero carbon footprint. It is all the 
rage out in Hollywood. But they are not going to be there. 
First of all, their math is wrong. Secondly, that carbon will 
eventually get emitted.
    Mr. Walden. And if I could reclaim my time. U.S. forests 
currently offset about 12 percent of annual U.S. greenhouse gas 
emissions from all sectors.
    Mr. Shope. Absolutely. I am talking about geologic time as 
opposed to----
    Mr. Walden. Sure. And of course now we are seeing as 
temperatures are rising in Alaska and elsewhere, some of these 
stored carbons are now starting to come to light literally as 
the permafrost melts and so some of what has been stored is now 
being released and it is a real push-pull relationship. And so 
it is just an issue I think we need to address.
    The other question I want to get to, you mentioned this 
international organization you are involved in. Are China and 
India part of that?
    Mr. Shope. Yes, China and India are both active member of 
the CSLF.
    Mr. Walden. One of the disadvantages of being out in the 
west coast and on the Pacific Rim is the polluted air that is 
being generated in those countries comes right over us. There 
is another story today about it in the Oregonian. And I am just 
trying to figure out how come they get off apparently scot-free 
while a lot of us are trying to do the right thing for the 
environment. They are not under the Kyoto Accords, are they?
    Mr. Shope. That is correct.
    Mr. Walden. So we could in effect do incredible things here 
that we all do in the name of improving air quality, some of 
which we probably should continue to do, and meanwhile people 
who are competing against us economically are somehow free to 
go ahead and add carbon and other pollutants into the 
atmosphere and in effect even hurt the forest health in the 
Northwest. Is that right?
    Mr. Shope. That is correct and that is certainly a concern 
when we talk about fuel switching in this country because even 
if the United States were to stop emitting, certainly the 
developing nations are going to continue to use those fossil 
fuels that are available to them.
    Mr. Walden. So this is either a global issue or it is not.
    Thank you, Mr. Chairman.
    Mr. Boucher. Thank you, Mr. Walden.
    Mr. Inslee for 8 minutes.
    Mr. Inslee. Thank you.
    I didn't think it was possible but I think the 
administration has simultaneously spent way, way too little on 
carbon sequestration and way, way too much on carbon 
sequestration simultaneously, which is quite a feat, and the 
reason I say that is, is that this budget proposes to spend 
less than we spend in Iraq in 2 days on one of the largest 
national challenges we have in the entire U.S. economy which is 
to find a way to sequester carbon dioxide. You are spending 
about 379, we spent about 502 days in Iraq. This is not even 
close to cutting the mustard to this national challenge and I 
have to take issue with Mr. Barton. He said this is not a 
health impact. Tell it to the people who are getting infected 
by malaria with malaria increasing in Africa, moving up in 
elevation because of increasing exposure to these mosquitoes. 
People are dying today because of global warming. So we are not 
spending enough to get this job done but we are also spending 
way, way too much because your $379 million is a total waste of 
money because nobody is ever going to build one of these plants 
under your policies, because under your policies these plants 
can continue to put CO\2\ up the stack for nothing. They don't 
have to pay a dollar to do it because you are against a cap and 
trade system. And even though you waste my taxpayer's money for 
$370 million and you actually developed this technology, it 
will never be deployed because there is no reason to do it as 
long as somebody can build a dirty plant and put the CO\2\ up 
the stack.
    Now, I just want to give you a chance to respond to that. 
Why would anyone ever spend money, the 10 percent for the CGCC 
and the 20 percent you project on pulverized coal, why would 
anybody ever spend that if the Bush administration policies of 
allowing pollution for free would continue?
    Mr. Shope. Well, let me start by just suggesting that the 
technologies that we are talking about also bring efficiency 
along with them, that is, lower the cost. Aside from carbon 
capture and storage, they are lowering the cost of electricity. 
So I think that there is a market incentive to provide cost-
efficient, effective electricity and I believe that if the 
technology is there, it will be used, it will be deployed.
    Mr. Inslee. So what you are telling me is that the only 
justification for your technology is to the extent that it can 
improve efficiencies? Is that what you are telling me?
    Mr. Shope. No, I am telling you that the technologies that 
we are working on are going to lower the cost of carbon capture 
and storage and are going to increase the reliability of the 
technologies that will----
    Mr. Inslee. So what you are telling us if we do implement a 
cap and trade system, it will actually not cost the U.S. 
economy anything because you are going to develop efficiencies 
in the system and everything the President has been telling us, 
that a cap and trade system is going to wreck the U.S. economy, 
is a bunch of bunk? Is that what you are telling us?
    Mr. Shope. No, that certainly is not what I am telling you.
    Mr. Inslee. Well, which horse do you want to ride?
    Mr. Shope. I would like to ride the technology path 
forward.
    Mr. Inslee. Right, and I agree with that, and I agree with 
that horse which is not the one George Bush is riding right 
now. He is riding a horse that says we are too stupid to figure 
out how to sequester CO\2\ in an economically efficient way so 
that if we do a cap and trade system, it will wreck the U.S. 
economy. Now, what you are telling me is, you agree with me 
that there is a good likelihood that we can sequester CO\2\, 
have a cap and trade system, leave an environment for our kids 
and now wreck the U.S. economy. Is that what you are telling 
me?
    Mr. Shope. No, I am suggesting that the technology path 
forward regardless of the emission-reduction strategy that you 
choose, whether it is cap and trade or regulation or whatever 
in a carbon-constrained world, whatever the mechanism that we 
follow to get to that emissions-reduction strategy is dependent 
upon technology.
    Mr. Inslee. And I am not going to let you off this hook 
this easy. I just heard you tell me that you were going to 
develop efficiencies that would reduce the cost of these plants 
so that they could do carbon sequestration using their 
efficiencies and not cost any more money. Now, if that is true, 
the principal objection of the President of the United States 
to a cap and trade system that is going to cost Americans all 
this money and everybody is going to go bankrupt is bunk. Now, 
do you agree with that?
    Mr. Shope. No, I do not.
    Mr. Inslee. OK. Then apparently you agree that your 
previous statement that we are going to do this and increase 
efficiencies so there is no more cost is wrong. Is that what 
you are doing?
    Mr. Shope. I never said there would be no more costs. I 
said we are going to increase the efficiencies which would 
increase the cost of electricity----
    Mr. Inslee. Now you are back to telling me that these 
plants are going to cost more money if we do this.
    Mr. Shope. That is correct.
    Mr. Inslee. OK. And if they are going to cost more money, 
then my original statement is, nobody is ever going to do it 
unless we have a cap and trade system. Now you agree with that 
statement?
    Mr. Shope. Again, my comment to you is that we need to 
follow the technology. We need to get the technology developed. 
We need to lower the cost of that technology. We need to 
increase the reliability of those technologies to make them 
available.
    Mr. Inslee. By the way, I don't hold you personally 
responsible for the President's position. I was sort of using 
your language to articulate my position.
    I want to make sure we understand that when we are talking 
about carbon sequestration, we are not talking about a coal-to-
liquids technology, and I want you to clarify that because a 
lot of people in Congress think that if we do a coal-to-liquids 
plant, to use liquid fuel, for instance, in cars or even in 
various turbines, that that is going to be net CO\2\ neutral. I 
have been advised that although you can do some CO\2\ removal 
in the process, when you eventually end up burning the liquid 
in a coal-to-liquid transformation, you then release CO\2\ and 
you do not get any net CO\2\ benefits except very marginal 
ones. Is that the case?
    Mr. Shope. The technology for coal-to-liquids can be used. 
Gasification technology certainly can be used and that is the 
path forward that the administration is looking for.
    Mr. Inslee. Right. I want to make sure that we understand 
that the coal-to-liquid-fuel technology, not hydrogen, we are 
talking about some other non-hydrogen fuel, and people are 
talking about a massive increase in that industry in this 
country right now. That technology does not help us on CO\2\ 
because when you burn the gas, the non-hydrogen gas, you then 
release essentially the same equivalent amount of CO\2\ as you 
do from a gallon of gasoline. Isn't that the situation? And the 
reason I ask you this is I asked Governor Schweitzer about this 
last week and he agreed with me on this.
    Mr. Shope. Yes. Again, we need to separate the two issues. 
That is correct. When you are creating, making the coal-to-
liquid fuel, you can do that cleanly with gasification 
technologies. Once you have the fuel, it would be equivalent to 
petroleum products.
    Mr. Inslee. Now, the reason I point this out is, I think it 
is very important for Members of Congress to understand this 
fundamental distinction between a coal-to-hydrogen technology 
with sequestration, which we have been talking about this 
morning, which I believe has the capability of getting close to 
zero CO\2\, and I believe research in this area is important 
and critical and I support it. But a secondary distinct 
technology, which is coal-to-liquid fuels, which somehow gets 
wrapped up in the first one, which is entirely separately, that 
second technology has benefits of energy independence but does 
not have any benefits on CO\2\ emissions. Is that a fair 
statement?
    Mr. Shope. No, I would disagree with that.
    Mr. Inslee. Well, let me rephrase my question to see if we 
can get one you agree on. Compared to burning gasoline, 
compared to going from a gasoline-based transportation sector, 
for instance, to a coal-to-liquid gasification process, 
according to the best research, which is a DoD study--I can't 
find any DOE studies on this but a DoD study indicated there is 
about 2 to 3 percent reduction in the cycle production CO\2\. 
Is that your understanding?
    Mr. Shope. What I know is that if you are producing the 
coal-to-liquid fuels and using gasification for it, you are 
going to be much--that is a very clean technology just as the 
technology we have been discussing this morning and cleaner 
than any of the emissions that are given off during a normal--
--
    Mr. Inslee. Well, I will try to send you the DoD study. 
Their conclusion was, no net benefit.
    Thank you.
    Mr. Boucher. Thank you very much, Mr. Inslee.
    Mr. Hall for 5 minutes.
    Mr. Hall. Mr. Chairman, thank you, and I thank you, Mr. 
Shope for mentioning the word ``cost.'' That is a word they 
don't want to hear. That is the one thing that none of them 
that are pushing global warming now don't want to mention is 
cost and what is the cost that the world's greatest polluter, 
China, won't pay. What is the cost that Russia won't pay. What 
is the cost that Mexico won't pay, India won't pay. Those are 
necessary parts of solving all these major problems, and there 
is today is a major assault on energy all over this country, 
assault on fossil fuels, assault on coal and some of them are 
just trying to get some kind of an international award and I 
think, Mr. Shope, despite Mr. Markey's remarks that you are not 
helpful, I think what he really means is, you are not helpful 
to his testimony and I thank you for the testimony the three of 
you are giving.
    I want to ask this question, something that involves my 
State. As I understand it, current permit practice as taken by 
States such as my State, these current permit practices 
classify carbon capture and geologic sequestration as class V 
experimental technology wells, right? Has the EPA taken any 
further actions regarding classifying such wells as a subclass 
of class II or even a new classification altogether?
    Mr. Grumbles. Congressman, we have been working and I know 
in particular with State of Texas on a couple issues, the one 
you mentioned and also on the pass-the-salt initiative looking 
at ways of safe and acceptable ways to dispose of brine. We are 
looking at that. We also recognize that as we move forward with 
this new guidance under class V UIC program, a regulation under 
the Safe Drinking Water Act, that we want to work very closely 
with States and Texas in particular has shown leadership in 
using class II for enhanced oil recovery and also for a 
particular project under class V. So we are working with the 
State and I think we can learn a lot by working with all of the 
States on future regulatory approach to carbon sequestration 
using the UIC program.
    Mr. Hall. And we thank you for that.
    Does the EPA believe that the inclusion of non-enhanced oil 
recovery carbon capture and geologic sequestration wells under 
class I or class V of the UIC program would be appropriate?
    Mr. Grumbles. I heard you say class I.
    Mr. Hall. Yes. Would it be class II or would it be 
classified such as wells as a subclass of class II or as a new 
classification altogether?
    Mr. Grumbles. Well, we certainly want to take that very 
seriously. I don't have a specific answer to you other than to 
say that as we are issuing this guidance on the use of class V, 
we also want to work with the States on class II enhanced oil 
recovery. Congressman, we intend to have a process that 
involves the public and the States to help us decide what is 
the best long-term management strategy to help us move from the 
pilot stage of these carbon sequestration projects to longer-
term potential commercial application and I think the point you 
are making about looking at different types of classes under 
the UIC program is very important to keep our eyes open to 
regulatory flexibility.
    Mr. Hall. And you do these through partnering with industry 
and the carbon sequestration program?
    Mr. Grumbles. Yes, sir.
    Mr. Hall. Who are some of the major partners for the 
record?
    Mr. Grumbles. The first partner that I think of is the 
partner that EPA has a memorandum of agreement with, and that 
is the Interstate Oil and Gas Compact Commission, the 
associations, the agencies that regulate oil and gas but also 
some of the different industries as well as industry trade 
associations, Edison Electric, also the Groundwater Protection 
Council and also important partner are the non-governmental 
organizations including the environmental organizations.
    Mr. Hall. What is the current status of the FutureGen 
project and when do you anticipate it might break ground?
    Mr. Shope. Congressman, the FutureGen project is on path on 
our projected schedule. We are working on the NEPA requirements 
right now. We hope to issue the Record of Decision this summer. 
We are looking forward to site selection this fall and moving 
forward with construction would begin in approximately 2009 
after we finalize all the site selection and characterization 
and permitting work that is associated with it.
    Mr. Hall. I thank you.
    I yield back my time.
    Mr. Boucher. Thank you very much, Mr. Hall.
    The Chair will recognize Mr. Doyle for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman.
    Mr. Shope, the President's budget request for 2008 is 
seeking to take $257 million from the clean coal technology 
account and place $108 million of those funds into this pie-in-
the-sky FutureGen program. In fact this concept program is 
being funded at the expense of clean coal power initiatives and 
core fossil energy and R&D programs. Unlike the concept of 
FutureGen, these programs have the very real potential for 
making a major impact in the near term as well as the long 
term. At best, FutureGen is a high-risk initiative that is 
still years away from becoming a reality. If it becomes a 
reality at all, it will require continued appropriations from 
Congress as well as a real commitment from industry, a 
commitment that I believe is far from present today. By 
providing $108 million for FutureGen and canceling the 
remaining $149 million in the clean coal account, the 
administration is also reneging on previous commitments to 
existing clean coal power initiative projects and jeopardizing 
their success. This robbing Peter to pay Paul mentality that we 
have seen in this administration and this Department has got to 
stop. It isn't even so much that I am against FutureGen. What 
bothers me is that we steal money from accounts that have the 
potential to benefit us right now today and see deployment. We 
take the money right as we are getting close to deploying these 
new technologies and we shift that money into a project that is 
years and years down the road that we don't even know is going 
to happen.
    I think you answered the question I was going to ask, and 
that is in a perfect world where money wasn't the culprit and 
you could fund FutureGen but not by stealing the money off of 
the clean coal power initiative programs, what could you do and 
how could we have deployment sooner if money weren't the issue 
and you weren't shifting these funds like you do every year?
    Mr. Shope. Well, let me address first the pie-in-the-sky 
nature of FutureGen, which I would flatly reject. I think 
FutureGen is a very promising technology. There is plenty of 
industry support to go along with that. There is international 
support to go along with that. We have 12 alliance partners on 
the private side that are providing substantial dollars for the 
project.
    Mr. Doyle. If that is the case, why not fund it then? Why 
are you taking money out of the clean coal technology programs 
to fund it?
    Mr. Shore. The clean coal technology programs, any of the 
projects that were issued under the clean coal technology 
program are still ongoing. They have been funded. The remaining 
balance that is unused under that technology program has been 
moved forward to support our clean coal power initiative. Those 
are the same types of projects that we are talking about that 
are more in the near term that would lead up to the FutureGen 
project as well as FutureGen. It is again a technology path 
forward so we are looking at all the different time frames 
along the way. But those dollars are being used for clean coal 
research, and again, the President has made good on his promise 
to put in $2 billion over 10 years. We have delivered on that 
promise early and have used----
    Mr. Doyle. You are taking money out of programs that are--I 
will give you an example. Right in eastern Pennsylvania, the 
WMPI project, you almost pulled the plug on that. We had 
Secretary Bodman here a couple weeks ago and----
    Mr. Shope. That project was awarded under the CCPI program.
    Mr. Doyle. Yes, and then you pulled the plug on it, $100 
million interest-free loan which you pulled the plug on until 
we made an issue of it just 2 weeks ago and now it has been re-
examined and I understand the money has been restored. The 
situation that we have in the Department where money and clean 
coal technology programs are always the--you know, those are 
the monies that get taken first and put into these projects 
that are down the road. It is important if FutureGen is the 
technology down the road and I believe it can be, then we 
should be funding both of them. We shouldn't be stealing money 
from one program to fund these programs that are further down 
the road. There should be a commitment on this administration 
to say this is important to America and this is important to 
our future and we ought to put our money where our mouth is, 
and our complaint isn't so much the programs, is this constant 
robbing Peter to pay Paul that goes on. I know that is not your 
call in your Department. That is above your pay grade. But it 
is frustrating to hear people say how important this is to our 
country and then when it comes time to put our money where our 
mouth is, we don't fund the projects.
    I want to ask you another question. I understand that DOE 
is currently planning on conducting 25 field validation tests 
under its regional carbon sequestration partnership program. 
What if instead of doing that, large-volume tests like the type 
we really need to test this process were conducted in the seven 
regions involved in the partnerships? Would the validation test 
still be needed, and how will these projects help us understand 
sequestration in our country, and finally, will the NETL 
continue to have the lead in conducting these partnerships?
    Mr. Shope. Yes.
    Mr. Doyle. An answer I enjoy hearing.
    Mr. Shope. We need to walk before we can run, and that is 
why these geologic tests are so vitally important to us. The 25 
tests are important. We are going to gain important information 
from those tests, the validation of the modeling, again what 
happens to the CO\2\ once it is put into the ground, what 
happens under different geologic formations and that is why the 
real attractiveness of the regional partnership because it is 
going to be looking out throughout the United States including 
into Canada, what are our best potential for these larger-type 
sites. Once we have that information, then we will lead right 
into the larger-scale tests. In our 2008 budget, I think you 
probably have seen in there that we looking to expedite those 
large-scale tests. We want to get to them as much as anyone 
does but we want to do it in the right way. So are looking for 
in 2008 to start using dollars to lay the groundwork for those 
larger-scale tests.
    Mr. Doyle. And NETL will have the lead on that?
    Mr. Shope. Yes. NETL has the cooperative agreements, holds 
the cooperative agreements with the regional partnerships, and 
we are very proud of that fact.
    Mr. Doyle. Thank you, Mr. Shope.
    Mr. Boucher. Mr. Shimkus is recognized for 8 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. What is going to be 
fun is watching the Democrats give a consistent position on 
this because here they are saying go faster, faster than 
technologically available because that is what FutureGen is 
about is to prove sequestration. That is what this hearing is 
about. But then on Yucca Mountain they say oh, go slow, we need 
more time. We can't have it both ways. This is a very 
frustrating hearing for many of us.
    And I have to respond on the coal-to-liquid issues. I think 
Honda did a study in 2004 which says when you change from gas 
to diesel, there is a 30 percent reduction in carbon dioxide.
    And the other part of this debate is they would rather burn 
Arab carbons or Venezuelan carbons than U.S. carbons. I mean, 
that is kind of the premise of the debate. We are a carbon-
based economy and so the coal-to-liquid application, which is 
what--I don't want to speak for the chairman but I do on this--
that we are going to be pushing for is energy independence, 
cleaner, and also in particulate matter. So I hope we get some 
consistency across the board we move this issue. And it is very 
important because we do think we can sequester carbon, having 
FutureGen as successful, which I believe it will be, and then 
on the coal-to-liquid applications, then we can sequester the 
carbon in the coal-to-liquid production. So I am very excited 
about what the administration has been doing. You don't get 
enough credit.
    The President announced FutureGen in 2005 long before the 
change in Congress, long before--he keeps getting beat up on 
this global warming thing which Chairman Barton has issues with 
but FutureGen is designed to start addressing that, not just 
within the United States but it is a consortium. It addresses 
the for-profit entities because they are part of the FutureGen. 
They have buy-in. It addresses the international debate because 
you have foreign countries involved in FutureGen, and so if 
FutureGen is successful, it can then he shared to our 
competitors in India, to our competitors in China, to other 
countries that want to use the same, addressing an 
international concern, and if it is an international concern, 
that is why FutureGen has to continue and move forward. The 
funding issue, my understanding, the funding issue is primarily 
projects that have been completed or projects that no longer 
have an application. Yes, it is true. We want our cake and we 
want to eat it too. We want to go to zero carbon emissions but 
we still want low-cost power. Even in your evaluation, and I am 
glad you didn't take the bait on a lot of my colleagues, we are 
still saying a 10 percent increase by 2012 or maybe a 20 
percent increase. There is still going to be an increase in 
moving in this direction. So let us talk about the 
manufacturing base. Let us talk about jobs. If you have a 
foreign country that is not complying with these standards and 
having low-cost power, you just give them another reason to 
move overseas. Low-cost power is a critical component in this 
whole debate, and that is why it is important for us to 
continue to address this.
    Let me ask a question on FutureGen. FutureGen will 
sequester--and that is the reason why we have it--that is to 
permanently store in geological terms, which we talked about, a 
large portion of carbon dioxide emitted from the demonstration 
project. Could you describe for the committee the various 
technological uncertainties and the costs currently associated 
with the sequestration of carbon dioxide?
    Mr. Shope. Costs associated with the capture technology, 
the additional costs that are in there, again, we have to prove 
out the technology that we have today with increasing our 
turbines, costs associated with hydrogen membranes and 
developing the efficiency way of handling the gas streams that 
are involved within gasification and improving the technology 
along those lines from the capture standpoint, increasing our 
efficiency of those. On the storage end of things, we have to 
again examine what kind of measuring and monitoring and 
verification technology is available, enhance those tools that 
are available to us, take a good look at what will happen to 
the CO\2\ once it gets into the ground, the element of 
permanence, the element of seepage, where the CO\2\ could 
migrate to once it is underground. All these different elements 
have to be--we have to progress along the path in order to pull 
them all together for our FutureGen project.
    Mr. Shimkus. You said carbon dioxide was stored as in 
essence a liquid. Natural gas, does that turn in a liquid also 
at those levels?
    Mr. Shope. Under those pressures, then it would be in 
liquid formation.
    Mr. Shimkus. Because we obviously store natural gas in this 
country. We have done so for decades. If some type of 
regulatory program to govern carbon dioxide emissions is 
enacted, is there needed a uniform Federal program to govern 
carbon dioxide sequestration or could this be addressed by each 
State?
    Mr. Grumbles. Congressman, from an EPA perspective, and I 
am speaking on behalf of the water program, when we look at the 
carbon sequestration, right now where we are is that we have 
made the determination that the Safe Drinking Water Act 
provides regulatory framework based on what we know in using 
the Underground Injection Control program, and we think that 
the guidance that we are issuing will be extremely helpful in 
learning, providing information and also having the regulatory 
flexibility for States who are our partners in the UIC program 
to learn more and develop more information about these 
promising but unproven technologies. So we will see as we have 
workshops and have public and scientific input on the longer-
term future of the control program but we think the framework 
under the Safe Drinking Water Act is a good one.
    Mr. Shimkus. I like the way you said that: promising but 
unproven. So it is important for us to make sure it is proven 
before we mandate, and that is FutureGen. That is why we have 
it.
    With that, my time is close to expiring. I can't get in 
another question. I will yield back.
    Mr. Boucher. Thank you very much, Mr. Shimkus.
    The gentlewoman from California, Ms. Harman, for 5 minutes.
    Ms. Harman. I hail from Los Angeles where a little movie 
starring Vice President Al Gore just won an Oscar, and a lot of 
attention is now being paid to ``An Inconvenient Truth.'' I 
just would observe that the answers to an inconvenient truth 
are also inconvenient and we need to face up to that, and that 
is why I applaud you, Mr. Chairman, for holding this hearing on 
carbon capture and sequestration because I do think that coal 
is a big part of the answer and we have to face up to it and we 
have to understand what is good, what is bad, where we can push 
technology, what the environmental impacts are, et cetera. But 
I think we are going to have to move on carbon capture and 
sequestration of coal. We are going to have to do it. As 
inconvenient as it may be, as expensive as it may be, we are 
going to have to do it. So hopefully this committee, which does 
have the right jurisdiction, will learn a lot about this, and 
obviously some Members know a lot more about this than I do, 
and we will figure out the right path forward together, at 
least I hope and would believe we would.
    I just want to focus on a few real-life examples because 
maybe we can sort of come down to Earth and see how we are 
doing. I do know that in the next panel, which I am probably 
going to have to miss, we are going to hear about a coal 
gasification plant with carbon capture technology which is 
being designed for construction in Carson, California, which is 
just outside my Congressional district, and I would like to 
know more about it. If any of you know about that, please speak 
up.
    But what about the Wayburn project? That is something you 
all know about. Why don't you just assess it? How is it going? 
What problems have you encountered in construction and 
operation and what is the promise of the Wayburn project?
    Mr. Shope. Well, the Wayburn project is an enhanced oil 
recovery--basically an enhanced oil recovery project where in 
North Dakota, lignite is being gasified and the CO\2\ is being 
captured and shipped approximately 200 miles into Canada to be 
displaced into the Wayburn field to enhance oil recovery. 
Again, as I mentioned in my opening remarks, enhanced oil 
recovery has been going on for some time. However, the goals 
are somewhat different. In enhanced oil recovery, the main goal 
is to get additional oil out of the ground. The focus is not 
placed on permanence of the CO\2\ underground. So that being 
said, Wayburn presents us with an excellent opportunity to take 
a look at a field where they are putting in approximately a 
million tons a year of CO\2\ into these formations and we can 
use that for testing, for monitoring, measuring and 
verification. We are involved with that, that is, the 
Department of Energy is involved with that project in the sense 
of looking at some tools and techniques that we can use to 
measure and monitor the CO\2\ underground so it provides an 
excellent opportunity for laboratory essentially.
    Ms. Harman. And what are we learning? And I would welcome 
the EPA witnesses commenting on this too. And if you know 
anything about the Carson design and construction project in my 
last minute and 16 seconds, I would welcome your answer.
    Mr. Shope. Again, preliminarily from the Wayburn project--I 
will just address that and pass it on--there are very 
optimistic signs that CO\2\ can be stored permanently 
underground, and that is a very optimistic sign.
    Mr. Wehrum. I would just say I think our colleague from the 
Department of Energy adequately addressed Wayburn. We have 
caucused very quietly here. We are not familiar with the Carson 
project but we will be more than happy to answer questions on 
the record further with regard to that project.
    Ms. Harman. Well, I will appreciate that, and I know that 
the next panel of witnesses is more familiar but it is a 
collaboration between General Electric and BP and it is being 
built in southern California where there are a lot of cars and 
a huge demand for fuel.
    I think it may have some good lessons for us.
    Mr. Shope. Yes, they are producing CO\2\ for other 
applications. Again, a little bit of a change of focus than 
what we were talking about as far as FutureGen where our main 
focus is to make electricity along with hydrogen and their 
focus is producing CO\2\ for other purposes. So while there are 
certainly synergies, there are differences as well.
    Ms. Harman. But there will be sequestration, so I would 
welcome answers for the record, and if I have to miss the 
second panel, I will try to catch up with it.
    I thank you, Mr. Chairman, for exploring all of these 
issues, however inconvenient the answers may be. Thank you.
    Mr. Boucher. Thank you, Ms. Harman.
    Mr. Sullivan for 5 minutes.
    Mr. Sullivan. Thank you, Mr. Chairman. I appreciate 
everyone on the panel for being here today.
    Also, we are talking about a lot of complex environmental 
issues. The Democratic leadership and Speaker Nancy Pelosi says 
they want to get something done by I believe June. I would like 
to ask each of you, do you think we can address all these 
concerns adequately by June and address these complicated 
issues by June?
    Mr. Wehrum. I will just start by saying, I think as you 
well know, the administration's position is that mandatory 
measures are not appropriate at this time. We do believe, in 
response to many of the comments that have been made today, 
that we have an aggressive and a coherent strategy for dealing 
with the issues as we see them today that involves significant 
investment in basic research, significant investment in 
technology development, which is most of what we have talked 
about today. We are very, very active on the international 
front in a wide variety of forums and we are taking prudent 
actions domestically against the President's goal of an 18 
percent reduction in greenhouse gas intensity. So I believe the 
administration has a very focused and effective policy in place 
and we are happy to have the opportunity to talk about it 
today.
    Mr. Sullivan. What do you think, sir? Do you think June we 
can get it all done by then?
    Mr. Shope. I will agree with Mr. Wehrum's comments and 
leave it at that. From a technology standpoint, there are a lot 
of issues that are yet to be addressed and that is why we are 
again focusing our efforts on a technology basis.
    Mr. Sullivan. It would be difficult, wouldn't it?
    Mr. Shope. It would be difficult.
    Mr. Sullivan. And sir, I am sorry, I can't see very well.
    Mr. Grumbles. I would agree with Mr. Wehrum. What we are 
committed to within EPA is laying out a roadmap that involves 
science and public sector and the regulated community and the 
State groundwater protection officials and oil and gas 
regulators and identifying the most promising technologies and 
learning more and continuing to be committed to advancing 
carbon sequestration in particular and ensuring that it 
protects underground sources of drinking water and also helps 
make significant progress in confronting serious challenges in 
the environment.
    Mr. Sullivan. I appreciate those approaches, working 
through it, and it does take time, I know.
    I guess, Mr. Grumbles, this will be directed to you or 
anyone else that wants to add anything, but in 2006, it started 
in 2006, a project, I can't pronounce the project name but in 
Norway's North Sea is the world's first commercial deep saline 
carbon dioxide capture and storage project. What have we 
learned from this, if you know? Have Government subsidies been 
involved in this project, and what would it take to become 
economic?
    Mr. Grumbles. I think locally and globally we are all 
learning more and doing more to confront the serious challenge 
of global climate change. I know a lot of research, 
international research is being carried out. I know of the 
Norwegian North Sea research and development project. They have 
operated a geologic sequestration project successfully for over 
10 years, injecting millions of tons of CO\2\ deep in 
formations beneath the North Sea. The volumes though are still 
small, relatively small compared to what we can expect with 
full-scale implementation of geosequestration activities in the 
U.S. so I think the point for us is that we are all still very 
much on the learning curve internationally and domestically but 
we are optimistic just as the Intergovernmental Panel on 
Climate Changed recognized. We are optimistic about the 
technologies this approach of geosequestration compared to 
risks of other activities. We think the risks are not great but 
of course, we are committed to analyzing that risk and also the 
potential and promising technologies to manage 
geosequestration.
    Mr. Sullivan. I agree, we are on a learning curve, that is 
good, but it does show great promise, wouldn't you agree?
    Mr. Grumbles. I would.
    Mr. Sullivan. Also, sir, can you explain how the EPA's 30 
years of regulatory experience with the UIC program correlates 
with the States 30 years of regulating injection of CO\2\ in 
the subsurface for enhanced oil recovery? For instance, does 
EPA have any expertise regulating the disposal of acid gas or 
the storage of natural gas in the subsurface?
    Mr. Grumbles. Thank you, Congressman. I would say that the 
States, as you noted, have decades of experience with 
permitting the class II enhanced oil recovery wells. I think 
one of the areas where EPA can really step in and help though 
is when you recognize that no State currently has experience 
with long-term large-volume storage of CO\2\, for example, 
commercial sale geosequestration in the U.S., and because those 
activities are significantly different with respect to the 
risks they present to underground sources of drinking water and 
public health, we believe that a combined approach, a Federal 
and State approach, working together using the regulatory tools 
under the Safe Drinking Water Act is the way to go and it will 
be essential in developing a cogent management framework for 
the long-term success of these promising but unproven 
technologies.
    Mr. Sullivan. I think that is good, a combined approach but 
don't you think there are some States that have greater 
expertise and experience in this than the EPA? Wouldn't you 
agree with that?
    Mr. Grumbles. I would agree, for instance, we embrace the 
fact that the States, 34, 35 States are the primary 
implementers of the Underground Injection Control program under 
the Safe Drinking Water Act. They do so under the national 
standards that EPA sets so definitely there is opportunity for 
continued State leadership but we think it is very important 
from an EPA perspective to lay out an overall framework to help 
manage this area.
    Mr. Boucher. The gentleman's time has expired.
    Mr. Wynn from Maryland for 5 minutes.
    Mr. Wynn. Thank you, Mr. Chairman.
    Mr. Grumbles, you confirmed that EPA has authority under 
the Safe Drinking Water Act Underground Injection Control 
program over the injection of CO\2\. Is that correct?
    Mr. Grumbles. Yes.
    Mr. Wynn. Now, have you developed a regulatory concept with 
respect to how the Federal Government would regulate this 
injection to protect our consumers?
    Mr. Grumbles. Thank you, and that is the key question, and 
the answer is, yes, we are working on an overall management 
framework. The first and more critical step that Mr. Wehrum and 
I described was that the two offices, the Air Office and the 
Water Office, working together are issuing guidance to help 
oversee and maintain the success and safety for pilot projects, 
experimental projects under the class V Safe Drinking Water Act 
UIC program.
    Mr. Wynn. This guidance, does that rise to the level of 
absolute regulations or are these----
    Mr. Grumbles. It is guidance to the regulators using their 
authorities under the Safe Drinking Water Act so it is a 
regulatory framework. The goal though for anything that is 
experimental and early in terms of the promising but not yet 
proven technology stage is to provide some flexibility for the 
regulators to experiment and see what works on a small scale. 
We are committed to that.
    Mr. Wynn. All right. Thank you. You said that you favored a 
combined regulatory approach between the States and the Federal 
Government. How does that work?
    Mr. Grumbles. Our success over the years with the 
Underground Injection Control program of the Safe Drinking 
Water Act is that it works by EPA issuing overall guidance and 
regulatory framework and then having a process where States 
meet certain criteria and then are delegated the authority to 
run the program.
    Mr. Wynn. So EPA would set the minimum standards for the 
State? Is that basically the bottom line?
    Mr. Grumbles. We would set the basic standards under the 
Safe Drinking Water Act.
    Mr. Wynn. OK. Now, has there been any study of whether any 
other contaminants might travel with the CO\2\ as it is 
injected?
    Mr. Grumbles. Well, I know that there is a lot of research 
that is going on about the potential risks of CO\2\. I think 
one of the things that was important to me was that when the 
Intergovernmental Panel on Climate Change looked at the issue, 
the potential for carbon sequestration, geosequestration, they 
concluded that carbon sequestration offered minimal risk, that 
we all need to learn more about the potential for----
    Mr. Wynn. Minimal risk to drinking water specifically?
    Mr. Grumbles. That is correct. While everyone agrees 
further research is needed but the basic statement was is that 
they estimate CO\2\ could be trapped for millions of years and 
that formations are likely to retain over 99 percent of the 
injected carbon dioxide over 1,000 years.
    Mr. Wynn. But the length of actual testing is only about 2 
years? The longest we have actually tested this injection 
process in terms of the possibility of leaking is only 2 years, 
right?
    Mr. Grumbles. Well, it underscores the point that----
    Mr. Wynn. Well, is that true? We have only tested for 2 
years?
    Mr. Grumbles. Well, I am not sure what the 2-year----
    Mr. Wynn. Well, it says that this North Sea project has 
been in operation since 2005. Is there a test or an example 
that is longer than two----
    Mr. Grumbles. The North Sea example, my information 
indicates 1996, over 10 years they have been successfully----
    Mr. Wynn. Ten years?
    Mr. Shope. Yes, or 11 years. We have been following it for 
about 5 years but they have been injecting for about 11 years.
    Mr. Barton. Will the gentleman yield?
    Mr. Wynn. Yes.
    Mr. Barton. I don't know what kind of test you are talking 
about but they have been injecting CO\2\ for enhanced oil 
recovery for decades. I don't know that that is under the kind 
of the conditions the gentleman from Maryland wants to allude 
to in terms of specific tests but it has been done for decades 
in Texas, Colorado and New Mexico, I know.
    Mr. Wynn. Thank you.
     I yield back the balance of my time.
    Mr. Boucher. The Chair thanks the gentleman and recognizes 
Mr. Whitfield for 5 minutes.
    Mr. Whitfield. Thank you very much, Mr. Chairman, and thank 
you all for being with us today. I think it goes without saying 
that coal is going to by necessary continue to play a major 
role in the production of electricity in this country and today 
I guess it is producing around 52 percent of all the 
electricity we use in our country, and I think Mr. Shimkus 
pointed out an important point, and that is that with China and 
India and a lot of other developing countries continuing to 
build coal-fired plants and for the U.S. to start penalizing 
itself for doing that, making us less competitive in the 
worldwide economy is something that many of us will find 
unacceptable. So all of us are quite excited about the 
FutureGen process, Mr. Shope, and just for clarification, of 
course, it is a production of emission-free coal, sequester all 
the CO\2\ and produce hydrogen, and it is my understanding that 
in the U.S. now, sites have been reduced to four. Is that 
correct?
    Mr. Shope. That is correct.
    Mr. Whitfield. And when do you anticipate a final decision 
will be made on a site?
    Mr. Shope. We are undergoing the NEPA process right now and 
we hope to have that Record of Decision out this summer. That 
would lead us to making site selection this fall.
    Mr. Whitfield. And how many other countries are involved 
with the private sector in exploring the FutureGen possibility?
    Mr. Shope. The FutureGen, it is set up in a private 
alliance. There are the 12 companies that I mentioned 
previously. They are actually operating the FutureGen facility. 
The counties are involved in what is called the Government 
Steering Committee. Right now we have commitments from India 
that has already made contributions to the Government Steering 
Committee. The governments of South Korea, China and Japan have 
also expressed interest as well as some other governments that 
we are currently working with.
    Mr. Whitfield. And do you anticipate that a FutureGen 
project would ever be constructed in those countries?
    Mr. Shope. Well, that would certainly be the hope at the 
end of the day. That is why we are doing FutureGen, to get this 
technology out and in place, not just here in the U.S. but 
around the world so that again their global emissions are taken 
care of.
    Mr. Whitfield. But in your discussions with them, are you 
finding them really engaged in this, the other countries, or is 
it----
    Mr. Shope. Absolutely. This is not just a commitment. This 
is a financial commitment on behalf of these governments, $10 
million from each government just to be a part of the 
Government Steering Committee. That doesn't put them into the 
private FutureGen alliance that is actually operating the plant 
so they are paying $10 million just to be a part of the effort 
and to obtain as much information as they can and share with 
us, to have a front-row seat to the entire project. So yes, 
there is certainly significant interest.
    Mr. Whitfield. And Mr. Wehrum, you referred to the Supreme 
Court case on whether or not the EPA had authority to regulate 
CO\2\ emissions under the Clean Air Act. Is that correct?
    Mr. Wehrum. That is correct.
    Mr. Whitfield. When do you anticipate that decision will be 
made?
    Mr. Wehrum. The issues were briefed up late last year. Oral 
argument has already occurred and we are waiting for a decision 
from the court.
    Mr. Whitfield. Now, if you were in the rotary club in 
Hopkinsville, how would you explain for a layman the decision 
of the Federal Court of Appeals on that issue?
    Mr. Wehrum. Well, the DC circuit upheld our determination 
and each of the judges on the panel expressed a bit of a 
different view with one dissent of course but voted to uphold 
our decision. So our determination was based on a careful 
reading of the Clean Air Act and consideration of the relevant 
policy issues and our ultimate conclusion was, we don't believe 
we have authority under the Clean Air Act to regulate CO\2\ for 
its impact on global climate change.
    Mr. Whitfield. So it is your position that it would require 
legislation for you to be given authority to regulate CO\2\ 
emissions, correct?
    Mr. Wehrum. That is correct.
    Mr. Whitfield. Now, are any of you on the panel aware, of 
all the CO\2\ emissions throughout the world today, what 
percent of those emissions are manmade?
    Mr. Grumbles. We would be happy to dig into it and get back 
to you on the record. I don't have that information in front of 
me right now.
    Mr. Wehrum. Just to hazard a guess, about 3 percent.
    Mr. Whitfield. Three percent?
    Mr. Wehrum. But we would put something on the record for 
you to give you more----
    Mr. Whitfield. Well, I mean, I heard anywhere from 2 to 5 
percent, so of all the CO\2\ emissions that we are talking 
about, only a minute part is manmade, correct?
    Mr. Shope. That is correct.
    Mr. Whitfield. Thank you, Mr. Chairman.
    Mr. Boucher. The Chair thanks the gentleman and recognizes 
the gentleman from Illinois, Mr. Hastert, for a motion.
    Mr. Hastert. Mr. Chairman, I move that all Members have 5 
business days to submit written questions and ask that the 
panel would respond to those.
    Mr. Boucher. Without objection, so ordered.
    I want to say thank you to this panel of witnesses for your 
presence here today and for your answers to what have been 
probing questions from the members of this subcommittee to you. 
The information you have provided will be very helpful. There 
will be follow-up questions sent to you. I have some. I know 
that other Members do. And your attention to those and your 
timely response would also be appreciated.
    So with that, we will dismiss this panel and welcome to the 
table the second panel of witnesses for this afternoon.
    Our next panel has seven witnesses beginning with Mr. John 
Fees, who is the chief executive officer of the Babcock and 
Wilcox Company. Mr. David Hawkins is the director of the 
Climate Center for the National Resources Defense Council. 
Following Mr. Hawkins will be Mr. Edward Lowe, who is the 
general manager for Gasification Market Development for the 
General Electric Company. Dr. S. Julio Friedmann from the 
Carbon Management Program at the Lawrence Livermore National 
Laboratory. We have Mr. Mark Schoenfield, the senior vice 
president and general counsel for Jupiter Oxygen Corporation. 
Mr. Stu Dalton represents the Electric Power Research Institute 
on today's panel. And finally, we will hear from Mr. Jay 
Stewart, an attorney with the firm of Hance Scarborough Wright 
Woodward and Weisbart in Austin, Texas.
    The prepared written statements of all of the witnesses 
will be made a part of the record and we will welcome your oral 
summary and we would ask that you keep your oral summary to 
approximately 5 minutes.
    Mr. Fees, we will be happy to begin with you.

 STATEMENT OF JOHN A. FEES, CEO, THE BABCOCK & WILCOX COMPANY, 
                         LYNCHBURG, VA

    Mr. Fees. Thank you, Mr. Chairman, Mr. Hastert and members 
of the subcommittee, my name is John Fees and I am the chief 
executive officer of the Babcock and Wilcox Companies which 
employs over 20,000 people working on advanced energy solutions 
worldwide. I have a degree in industrial engineering and 
operations research from the University of Pittsburgh and a 
master's of engineering from George Washington University.
    Mr. Chairman, it is a particular pleasure to come before 
you representing the Babcock and Wilcox Companies with our 
headquarters in Southwest Virginia, Lynchburg specifically, 
where we employ nearly 2,500 employees and where my wife, Jill, 
and I have made our home for the last 28 years.
    Congressman Hastert, the Babcock and Wilcox Company also 
has the privilege of working with the University of Chicago at 
the Argonne National Lab as we develop advanced nuclear 
technologies for the future.
    Today, however, I am here to testify before you on 
combustion-based technology alternatives available to limit 
carbon dioxide emissions from electrical power plants. I am 
also here to ask Congress to ensure that any draft legislation 
on carbon capture promotes achievable solutions, allows the 
market to select technologies through competition and to set 
standards that will allow the emergence of improved 
technologies.
    B&W has a long history of providing technology solutions 
for efficient base load electrical generation throughout the 
United States and North America and around the globe. Babcock 
and Wilcox was founded in 1867 and the first utility plant in 
the United States had a boiler designed and supplied by B&W. 
B&W has literally written the book on steam, which is here, 
``Steam, Its Generation and Use for Power Generation.'' This is 
the longest continually published engineering textbook of its 
kind in the world, first published in 1875. In the 1950's, B&W 
became a major supplier of components for the Navy's fleet of 
nuclear-powered ships and submarines and we are the only United 
States manufacturer of the heavy components required for the 
emerging civilian nuclear power renaissance.
    B&W understands that we must provide realistic solutions to 
the climate challenge on a timely basis, and we are doing just 
that. Coal-fired and nuclear power plants provide over two-
thirds of all domestic-generated electricity and they are the 
foundation for our economic competitiveness, our energy 
security and a basis of our standard of living. With coal, B&W 
has been an environmental technology leader at the forefront of 
developing solutions for mercury, SOx and NOx emissions and 
particulates.
    In power generation, B&W has recently been awarded a number 
of new highly efficient supercritical coal-fired power plant 
projects in the United States and the first ultra-supercritical 
coal-fired power plant in the United States in many decades. 
These plants with their higher efficiencies enable the 
production of electricity at lower carbon intensity than older 
subcritical plants and ongoing efforts will deliver even higher 
performance in the future.
    B&W is also working on an array of potentially significant 
breakthroughs for carbon-friendly technologies. Some of these 
technologies could dramatically lower the cost of carbon 
capture and storage.
    B&W is working to commercialize oxy-coal combustion 
technology that inherently produces carbon dioxide with no 
needs for a separate capture technology. Oxygen combustion 
produces a concentrated stream of carbon dioxide that is ready 
for enhanced oil recovery or geological storage. We expect to 
deploy this technology as the first commercial-scale near-zero-
emission coal-fired plant with carbon storage in North America, 
and let me repeat that. It is the first commercial-scale, near-
zero-emission coal plant with carbon storage in North America 
and we are confident that oxy-combustion technology can provide 
the most cost-effective solution for many new power plants and 
for retrofitting some existing fossil-fired plants. The first 
wave of near-zero-emission coal plants will start operation 
around 2012 and improvements will inevitably follow and oxy-
coal will be among the first of these first-wave projects.
    There is a building consensus that Congress should 
establish practical emission targets and that CO\2\ reduction 
will be most effective if there are a portfolio of 
technologies. Congress should establish targets within the 
industry grasp and permit the market forces to work here.
    We believe that regulatory and technological obstacles to 
the long-term storage of carbon dioxide for electrical power 
plants could be the limiting factor in reducing carbon 
emissions. Legislation therefore should support the 
acceleration of R&D associated with carbon storage, clear 
policies regarding the legal ownership and liability of the 
injected CO\2\, and overcoming local concerns with large annual 
injections at storage sites.
    I thank you for the privilege to testify before the 
subcommittee, and I have also provided a written statement and 
ask that it be included in the record. Thank you.
    [The prepared statement of Mr. Fees appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you very much, Mr. Fees. We appreciate 
your testimony today, and also let me acknowledge how much we 
appreciate your presence in the western part of Virginia, not 
my congressional district but close enough. We are glad to have 
you here.
    Mr. Hawkins.

   STATEMENT OF DAVID G. HAWKINS, DIRECTOR, CLIMATE CENTER, 
       NATURAL RESOURCES DEFENSE COUNCIL, WASHINGTON, DC

    Mr. Hawkins. Thank you, Mr. Chairman.
    Four years ago, I testified in this room before this 
committee under then-Chairman Barton on the same topic and a 
lot has happened in the last 4 years, not as much as needs to 
happen but a lot has happened. First, we have an increasing 
awareness of the urgency to act on global warming. Second, we 
have a lot more knowledge about CO\2\ capture and disposal from 
coal-fired power plants. And third, the growth rate in new coal 
plants in the pipeline in the U.S. and globally has increased 
dramatically, and that is because coal is very abundant. Right 
now coal plants are being built somewhere in the world about 
ten large coal plants every month. Unfortunately, those ten 
coal plants are not equipped to capture their CO\2\, and to 
make coal use and climate protection compatible, we have to 
begin to capture CO\2\ for geologic disposal at new coal plants 
without further delay.
    Some of the statistics are pretty startling. The new coal 
plants that are forecast to be built just in the next 25 years, 
if they are not equipped with CO\2\ capture systems, will emit 
about 750 billion tons of CO\2\ during their operating life. 
That is about 30 percent more CO\2\ than had been released from 
all previous human use of coal just from a 25-year period of 
investments. If we don't apply CO\2\ capture and disposal to 
these coal plants, we are going to make protesting the climate 
very much more expensive, if not impossible.
    The good news is, we know enough today about how CO\2\ 
capture and disposal works in order to be able to apply it 
right now to plants that are being designed. Capture systems 
have been demonstrated at commercial scale for some coal 
processes and others are being developed, as Mr. Fees just 
testified. Experts appointed from our Government and others 
under the Intergovernmental Panel on Climate Change have 
conclude that based on existing experience, disposal operations 
can be conducted safely if we have an effective regulatory 
regime. That effective regulatory regime we believe should be 
carried out by EPA and we believe that if this committee 
presses on EPA to get the job done, it can be done quite 
quickly.
    Experts have also concluded that we can have confidence 
that if we properly select and operate a disposal site, that 
the CO\2\ that we put there will stay there. Storage capacity 
in the United States and globally is very substantial, likely 
enough to be able to accommodate all of the CO\2\ from 100 to 
200 years worth of global fossil power operation, depending on 
just how much fossil fuel we burn over the next 100 years or 
so. But policies to limit CO\2\ emissions and set performance 
standards are the key here. They are essential to promote a 
market reason to actually use CO\2\ capture and disposal 
technologies at the required scale and pace. Those policies we 
believe can and should be enacted in this Congress. Well-
designed measures can phase in CO\2\ capture and disposal on 
new coal plants with only very modest impacts on retail 
electricity prices.
    One approach I discuss in my testimony is a low-carbon-
generation obligation that would phase in a very small fraction 
of kilowatt hours initially from coal resources that would be 
equipped with CO\2\ capture and storage in order to meet a 
performance standard without specifying a particular 
technology. Combined with a cap and trade program, such an 
approach could result in quite rapid deployment of carbon 
capture and disposal and provide new American technology 
leadership while dramatically cutting emissions.
    So I would say that my key message here is that we really 
have to avoid building new coal plants without CO\2\ capture 
and disposal. There is no reason to delay that. There is no 
reason to build additional capacity without applying those 
techniques. We know how to do it. Cost reductions are going to 
be driven by learning from commercial experience. They are not 
going to be driven by R&D expenditures by the Federal 
Government.
    Finally, I just would say in closing that CO\2\ capture and 
disposal is an important tool but it is one of several tools 
available to cut global warming emissions. The fastest and 
cheapest method to attack global warming remains energy 
efficiency and increased reliance on renewable energy resources 
is another important tool.
    Thank you very much.
    [The prepared statement of Mr. Hawkins appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Hawkins.
    Mr. Lowe.

  STATEMENT OF EDWARD C. LOWE, GENERAL MANAGER, GASIFICATION 
              MARKET DEVELOPMENT, SCHENECTADY, NY

    Mr. Lowe. Good afternoon, Mr. Chairman and members of the 
committee. I am Edward Lowe, general manager of Gasification 
Market Development at GE Energy. GE appreciates the invitation 
to participate in this hearing.
    I would like to thank this committee for recognizing the 
need for cleaner coal in the 2005 Energy Policy Act. Three coal 
IGCC projects and a petroleum-coke hydrogen-to-power IGCC 
project were recently awarded investment tax credits. These 
projects are a vital first step to accelerating the deployment 
of IGCC and positioning coal as an economic fuel in a carbon-
constrained world.
    Today I will, one, discuss the differences between 
pulverized coal technology and IGCC; two, show that IGCC is 
proven and cleaner; and three, address why technology has not 
been rapidly deployed and what is needed for it to achieve its 
potential. The first slide, please.
    [Refer to slides beginning on page 133.]
    A diagram of a PC plant and an IGCC plant is shown on the 
screen. In PC plants, coal is ground and burned in a boiler. 
Pollutants such as particulates, sulfur dioxide and mercury are 
captured in large post-combustion pollution control systems. 
IGCC is fundamentally different than PC. It converts the coal 
into a high-pressure natural-gas-like fuel that is then burned 
in a gas turbine. Pre-combustion removal of pollutants in an 
IGCC plant is more efficient and less costly because only one 
one-hundredth the volume of gas needs to be treated compared to 
a PC plant.
    Next slide.
    [Slide shown.]
    IGCC is proven. GE technologies are used in over three 
gigawatts of IGCC plants around the world. IGCC is also cleaner 
than pulverized coal technology. GE's 630 megawatt IGCC plant 
will have 93 percent lower sulfur, 75 percent lower nitrogen 
oxides and 33 percent lower particulate emissions than the 
average of recently applied for and permitted PC plants plus it 
will consume 30 percent less water. You can turn off the 
screen.
    CO\2\ can also be removed pre-combustion with IGCC. 
According to a 2006 Department of Energy study, achieving 90 
percent capture in a bituminous coal plant with IGCC will have 
a 23 percent lower cost of electricity compared to a 
pulverized-coal plant using currently available technologies. 
With all of these advantages, it is fair to ask why isn't IGCC 
being widely deployed. First, an IGCC plant is currently 
estimated to be 20 to 25 percent more expensive than a PC 
plant. IGCC is beginning to move down the experience cost 
learning curve but more plants need to be built in the near 
term to accelerate the cost reduction.
    Second, IGCC's ability to cost-effectively capture carbon 
has no value in today's marketplace. In summary, carbon 
capture-ready IGCC is commercially available now. All of the 
key processes and equipment required for carbon capture in IGCC 
are being used in the chemical and refinery gasification 
applications today.
    For low-carbon coal power to be deployed, a national policy 
is also required. Without long-term clear, consistent policy 
direction that creates a market price for carbon, low-carbon 
coal technologies including IGCC will not be widely adopted.
    What is needed are, first, an expansion of current 
Government incentives to get the first 12 plants built, thus 
driving down the capital cost of IGCC, and second, a policy 
that includes a cap and trade program to establish a value for 
carbon.
    We hope that the information that we have provided today 
will give you confidence to move forward with legislation to 
address climate change and the role that coal can play in a 
carbon-constrained world.
    Thank you for the opportunity to address this committee.
    [The prepared statement of Mr. Lowe appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Lowe.
    Mr. Friedmann.

  STATEMENT OF S. JULIO FRIEDMANN, CARBON MANAGEMENT PROGRAM, 
     LAWRENCE LIVERMORE NATIONAL LABORATORY, LIVERMORE, CA

    Mr. Friedmann. Thank you, Mr. Chairman, Representative 
Hastert and members of the committee. I thank you for inviting 
me to testify today on the technical aspects of carbon capture 
and sequestration. I am pleased to be here in the capacity as 
the leader of the Carbon Management Program at the Lawrence 
Livermore National Laboratory.
    Carbon capture and sequestration can be a vital element of 
a comprehensive energy strategy that includes efficiency gains, 
conservation and carbon-free energy supplies such as renewable 
or nuclear power. It can also support environmentally sound 
development of domestic transportation fuels including 
biofuels, coal-to-liquids and hydrogen.
    To summarize my testimony upfront, opportunities for rapid 
deployment of geological sequestration exist in the United 
States today. There is enough technical knowledge to select a 
safe and effective storage site, to plan a large-scale 
injection, to monitor CO\2\ and to remediate and mitigate any 
problems that might arise such as well bore leakage. However, 
national deployment of commercial CCS poses technical 
challenges and concerns due to the operational scale. An 
aggressive research, development and deployment program could 
answer all key technical questions, especially those that could 
advise a regulatory and legal framework to protect the public 
without undue burden to industry.
    Carbon capture and sequestration has two components. The 
first is the separation and concentration of CO\2\ from point 
source flue gases like power plants. The other panelists in the 
previous panel talked about that. The second step is geological 
carbon sequestration, or geologic storage, which involves 
injection of CO\2\ into porous rock formations below the 
surface. I will focus my testimony on that.
    The most promising reservoirs are porous and permeable rock 
bodies at depth generally greater than 1 kilometer, where 
pressures and temperatures where CO\2\ to act like a dense 
liquid-like gas. The potential reservoirs include saline 
formations, depleted oil and gas fields, and unminable coal 
seams. Saline formations are likely sites for most geological 
sequestration because of broad distribution and large capacity. 
However, initial projects will probably start with depleted oil 
and gas fields due to the quality of existing data and the 
potential for economic return through enhanced oil recovery. 
Available pore space and suitable formations is a new natural 
resource, and I would like to repeat that: available pore space 
and suitable formations is a new natural resource. Once the 
CO\2\ is injected into the subsurface, it remains there 
indefinitely because of physical and chemical properties of the 
Earth's shallow crust. Four different mechanisms trap CO\2\ in 
place: physical trapping, capillary trapping, dissolution and 
mineral precipitation. What this means is that over time, CO\2\ 
sequestered in the crust becomes less mobile and more 
permanently bound into the rocks themselves.
    Geological disposal is very similar to oil and gas 
production, natural gas storage, hazardous waste disposal and 
enhanced oil recovery, as other members have mentioned. A key 
difference is the goal which is to keep CO\2\ in the ground and 
out of the atmosphere. Therefore, careful pre-injection site 
characterization and monitoring and verification programs are 
important to avoid hazards, to detect unexpected leakage from 
the formation and to properly credit effective storage.
    Today the U.S. emits annually 7 billion tons of carbon 
dioxide totaling 2.2 billion tons of this from large point 
sources, mostly coal power. The volumes of CO\2\ at depth 
represented by this mass exceed current U.S. oil and natural 
gas production combined. Just 1 billion tons of anything is 
more mass than all the human beings on this planet. It is the 
necessary scale of sequestration deployment that represents the 
challenges we face.
    The good news is that the U.S. appears to have more than 
enough capacity to deploy CCS at large scale. Conservative 
estimates are that the U.S. has over 2,000 billion tons, 2 
trillion tons of capacity, enough capacity to comfortably 
inject all of our current point source CO\2\ emissions for more 
than 100 years. Large sequestration resource occurs in the 
Midwest, in Texas, the intermountain West and substantial 
opportunities also exist in California, the Dakotas, Michigan 
and offshore the eastern United States. The costs of geological 
storage are much lower than the costs of capture and 
sequestration. Estimated costs of storage in the U.S. range 
from only one to 12 bucks a ton but in most cases range from 
about $5 to $8 a ton. This is roughly 10 percent of the cost of 
capture and separation. The cost of monitoring the CO\2\ is 
much lower than that, with estimates of about 25 cents to $1 
per ton. The cost of the geological assessment and site 
characterization are even less, estimated to be much less than 
one cent per ton.
    I was asked to comment on what we know about carbon 
sequestration as an option for addressing climate change, what 
we don't know, what work needs to be done and understanding 
those things we don't know. I won't have time to go into it, 
but from a technical basis, the potential for successful CCS 
deployment is only limited by the local geology.
    Thank you again for the opportunity to present.
    [The prepared statement of Mr. Friedmann appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Friedmann.
    Mr. Schoenfield.

   STATEMENT OF MARK K. SCHOENFIELD, SENIOR VICE PRESIDENT, 
  OPEERATIONS, JUPITOR OXYGEN CORPORTATION, SCHILLER PARK, IL

    Mr. Schoenfield. Thank you, Mr. Chairman, Mr. Hastert, 
members of the committee.
    Carbon capture requires technologies that can effectively, 
efficiently and economically actually capture carbon, keep our 
coal-fired power plants running and give us affordable power. I 
am the senior vice president of operations and general counsel 
of Jupiter Oxygen, a small energy technology company that is 
privately held, which has developed a particular oxy-fuel, that 
is, using oxygen without air, with coal or other fossil fuels, 
technology process that makes it both practical and cost-
effective for coal-fired power plants to be truly capture-ready 
now. It also can be used for retrofits, which makes it 
different than many of the other approaches that have been 
tried. The ability to retrofit the existing fleet of coal-fired 
power plants is essential for our economic and energy needs and 
our energy security, and although our focus may be coal, I just 
want to note that this technology also can address natural-gas-
fired plants which also emit CO\2\ and have NOx issues.
    The Jupiter oxy fuel combination technology uses pure 
oxygen as the combustion agent instead of air, which contains 
nitrogen. The resulting exhaust gas contains almost no NOx and 
concentrates the CO\2\ for efficient capture. In other words, 
you don't have to separate out from all that nitrogen in the 
air because air is 80 percent nitrogen. That makes it much more 
efficient and much less costly to do, and by having an 
undiluted high-flame-temperature process, you save fuel. At the 
same time, you can address the NOx, SOx, mercury and 
particulate issues effectively.
    Now, this process actually began in the 1990's in an 
aluminum recycling and manufacturing plant. Strictly it started 
out for fuel efficiency purposes. At that plant, however, what 
was learned was, in aluminum re-melting you cut your fuel usage 
by 70 percent by using this and therefore you have 70 percent 
CO\2\ avoidance because when you don't burn the fuel, you avoid 
making the CO\2\.
    Since 2001, Jupiter Oxygen has tested its technology and 
moved from industrial furnaces to power plants, working under 
research agreements with the National Energy Technology 
Laboratory. In 2002, we tested our technology in a steam 
boiler, making good steam sufficient to make electricity while 
firing both natural gas and coal, so we are talking about a 
technology that has been tested with actual firing in an up to 
half-a-megawatt size unit. This is not tabletop research. It is 
not a simulation. And what we found was, that you create fuel 
efficiencies, you burn less fuel, and then we combined our 
technology with an integrated pollutant removal technology 
called IPR, which kind of follows that name, developed by the 
National Energy Technology Lab itself at its Albany research 
center. Our technology with its fuel efficiencies and other 
benefits enables that system to perform in an economical and 
efficient manner to capture the CO\2\ and to do it in a cost-
effective way. This means that coal supplies can be used in an 
environmentally friendly fashion now and that we can use coal 
into the future.
    Now, the problem we have is that utilities are reluctant to 
anything and be first, so we have started a retrofit project 
with the Department of Energy to do about a 25-megawatt 
retrofit project which could be done now which would actually 
use oxy fuel firing and have a truly capture-ready plant 
because capture-ready ought to mean that you have all the 
equipment on it and all you got to do is hook up a pipeline and 
you are good to go with the CO\2\ if that is what we decide to 
do.
    The problem we have is that the administration's budget and 
the Department of Energy have not made this a priority. The 
administration's budget has nothing in it for retrofit of coal-
fired power plants, does not address oxy fuel combustion, and 
we need the continued support of Congress. You have passed 
section 1407 of the Energy Act of 2005 which authorized $100 
million of funding for undiluted, high-flame-temperature oxy 
fuel work and yet nothing has been appropriated under that. We 
need the funding. We are just a little company. We need funding 
from the Federal Government to bridge between the research that 
has been done and an R&D retrofit project which will provide 
the data so that utilities, the Government, consumers and 
everyone else can see what this technology combination can do 
for the American public.
    Thank you.
    [The prepared statement of Mr. Schoenfield appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Schoenfield.
    Mr. Dalton.

  STATEMENT OF STU DALTON, ELECTRIC POWER RESEARCH INSTITUTE, 
                         PALO ALTO, CA

    Mr. Dalton. Thank you, Mr. Chairman and members of the 
subcommittee. I am Stu Dalton. I am the director of generation 
for the Electric Power Research Institute headquartered in Palo 
Alto, California. EPRI appreciates the opportunity to provide 
testimony to the subcommittee on the topic of carbon capture 
and sequestration. We are a non-profit and collaborative R&D 
organization.
    I plan to make the following points in the testimony today. 
Carbon capture technologies can feasibly be integrated into 
virtually all types of new generation after the scale-up and 
storage is demonstrated. CO\2\ capture can be added to 
integrated gasification combined cycle to pulverized coal, and 
circulating fluidized bed combustion, and it can be 
incorporated in processes like oxy fuel combustion.
    Although CO\2\ capture appears technically feasible for all 
technologies, it represents substantial engineering challenges, 
requiring investments in R&D and in demonstrations, and it 
comes at considerable cost. Analysis by EPRI and the Coal 
Utilization Research Council suggests that once the substantial 
RD & D investments are made, the cost of capture and storage 
becomes manageable. Geologic storage has been proven effective 
by nature, and evidence suggests that depleted oil and gas 
reservoirs and similar capped sandstone formations as has been 
discussed containing saltwater and nonpotable water, have been 
capable of storing CO\2\ for millennia or longer. Licensing and 
regulatory requirements for these are uncertain, however.
    There is still much work to be done before CO\2\ storage 
can be implemented on a large scale enough to significantly 
reduce CO\2\ emissions into the atmosphere. Regarding CO\2\ 
capture, the technologies can feasibly be integrated into all 
types of power plants with integrated gasification, pulverized 
coal and fluidized bed and variance. We believe that several 
will need to be demonstrated at large scale and CO\2\ stored to 
prove the technology. For those building new plants, it is 
unclear which type of plant would be economically preferred if 
built to include CO\2\ capture. All may have relative 
competitive advantages under various scenarios based on 
available coal types, plant capacity, location and 
opportunities for byproduct sales.
    Although CO\2\ capture appears technically feasible for all 
these technologies, there are substantial challenges requiring 
scale-up in size and major investments. Analysis by EPRI and 
the Coal Utilization Research Council suggests that once these 
are made, the cost can come down to approximate the current 
cost of electricity in constant dollars. That is a long-term 
prospect. It is not today's situation.
    Where is it now? Post-combustion CO\2\ separation processes 
placed after the boiler in the power plant are currently used 
commercially in very small-scale food and beverage and chemical 
industries, literally to make the CO\2\ for soda pop, for 
freezing chickens and to make sodium bicarbonate. Those are 
actual installations. They are very small, much smaller than 
needed for power plants producing large-scale power. Current 
post-combustion processes are large energy consumers and could 
reduce the power plant electrical output by 30 percent.
    CO\2\ separation processes for IGCC plants are also used 
commercially in the oil and gas and chemical industries at a 
scale closer to that ultimately needed and they use less energy 
than current post-combustion processes, but their application 
necessitates development of modified systems with integrated 
CO\2\ capture. EPRI's most recent cost estimates suggest that 
for pulverized-coal plants, the addition of CO\2\ capture using 
the currently most developed technical option would add about 
60 to 80 percent to the wholesale cost of electricity in life 
cycle terms. That is not including any storage site monitoring, 
liability insurance, et cetera, which is unknown at this point. 
The current cost premium for CO\2\ capture in IGCC plants along 
with drying compression and storage is about 40 or 50 percent 
in our estimation. This is a lower cost percentage increase 
than for PC plants but we estimate that IGCC plants initially 
cost more than PC plants, as you have heard testimony. Thus, 
the bottom-line cost to consumers for power from IGCC plants 
today is likely to be comparable to PC plants with capture. The 
cost premiums listed vary depending on the coals and the 
physical chemical properties, desired plant size, CO\2\ capture 
process and degree of integration and plant elevation and the 
value of co-products. IGCC often shows economic advantages with 
bituminous coals such as in the State of Virginia, and PC often 
shows advantages to low-rank coals, as you can see in some of 
the western coals.
    EPRI stresses that no single advanced technology has clear-
cut economic advantages across all applications. The best 
strategy for meeting future needs while addressing climate 
change concerns and economic impact lies in developing several 
options to allow choice by the power producers.
    Let me just briefly mention a couple of the R&D----
    Mr. Boucher. Well, why don't we ask you those questions. 
You are about a minute over, and we do need to move forward, so 
I intend to ask you about R&D requirements going forward. That 
is question No. 3 I have listed here.
    [The prepared statement of Mr. Dalton appears at the 
conclusion of the hearing.]
    Mr. Stewart.

STATEMENT OF JAY B. STEWART, ATTORNEY, HANCE SCARBOROUGH WRIGHT 
              WOODWARD & WEISBART, LLP, AUSTIN, TX

    Mr. Stewart. Thank you, Mr. Chairman and members of the 
committee. Thank you for the opportunity to discuss with you 
today the State of Texas's experience with legal issues 
regarding injection and storage of carbon dioxide.
    For the record, my name is Jay Stewart. I am an attorney 
who practices regulatory law in Austin, Texas. As part of my 
practice, I represent entities and individuals before the 
Railroad Commission of Texas and the Texas Commission on 
Environmental Quality regarding oil and gas and injection 
activities. I have also been retained to work with the 
FutureGen Texas team regarding the State's efforts to site a 
clean-coal project in Texas.
    I come before you today to discuss the Texas experience 
with CO\2\ injection and the existing and prospective 
regulatory framework necessary to ensure successful and secure 
geologic sequestration of CO\2\. Evaluating and licensing CO\2\ 
injection in Texas has a regulatory track record that spans 
back more than 30 years. The prolific Permian basin in West 
Texas began utilizing CO\2\ injection as a recovery technology 
in 1973. Once the traditional extraction of oil and gas has 
exhausted itself, secondary and tertiary recovery technologies 
are used to extract the vast remaining reserves. Recent data 
indicates that up to 70 licensed enhanced oil recovery projects 
utilizing CO\2\ were in operation in the Permian basin of West 
Texas alone. Over 5,800 wells have reported injection of CO\2\ 
with a total injection of 25 million metric tons per year. It 
is estimated that more than 55 million barrels of annual crude 
oil production resulted from these enhanced recovery efforts. 
With more than 30 years of history of using CO\2\ as a 
commodity for oil recovery, these operations have a safety 
record of no major accidents.
    From a legal, regulatory and engineering standpoint, CO\2\ 
injection into geologic formations for productive use is 
nothing new in Texas. The developed regulatory framework exists 
to evaluate and judge each and every project. The Railroad 
Commission of Texas regulates injection of water and CO\2\ for 
enhanced oil recovery operations. It also has decades of 
evaluating and regulating the common practice of brine and oil 
and gas waste injection into geologic formations, ensuring that 
those formations are not productive of oil and gas and they do 
not contain usable groundwater. The Texas Commission on 
Environmental Quality regulates injection of non-hazardous 
waste, hazardous waste and experimental wells. Both these 
agencies have experienced staff that routinely judge the 
available technologies for injection and geologic evaluation. 
It is only after these experts have approved an injection 
project that a project license is allowed to proceed.
    Acknowledging the experience in oil and gas and geologic 
evaluation of both the State's regulators and its industry, 
Texas courts have consistently developed case law that clearly 
delineates the liability of the actors and the neighbors of 
these projects. Evaluation of legal liability rests primarily 
in the common law. Liability for negligence or malfeasance in 
the construction and operation of a facility utilized for 
capture and injection of CO\2\ would rest in traditional tort 
law causes of action. There is no liability forgiveness for bad 
actors that operate negligently. Legal challenges to the 
activity of injection, however, have been thoroughly 
adjudicated in Texas and those causes of actions are limited 
under the common law. Actions for trespass, nuisance and 
negligence are severely limited in Texas so long as the 
operator has a valid license from the State agency and that 
operator has acted in accordance with the license and 
applicable regulations. Texas has adjudicated the public policy 
implications of injection activities within its borders and has 
consistently ruled with the State agencies charged with 
enforcing those requirements.
    I have discussed the legal treatment of liability in Texas 
to the practice of injection of CO\2\ and its use under 
existing regulatory framework. Carbon sequestration intended to 
be permanent adds a significant new component to the legal 
analysis. Liability for the unlikely possibilities of release 
or migration of sequestered CO\2\ that could occur well beyond 
the time frames that are occasioned by present operations 
should be evaluated. Proper geologic and technical 
considerations are the first requirements to avoid possible 
liability for long-term events. Carbon sequestration into 
proven, confined geologic formations is paramount. Proposed 
storage of CO\2\ in depleted oil and gas formations, deep 
saline formations, salt caverns and unminable coal beds all 
have containment and absorption characteristics that minimize 
the possibilities of any release or migration. Before a license 
is granted, the operator must prove to the agency experts the 
radius of influence or plume that the injected material will 
form in the injection formation. The pressures of the injection 
and of the injection formation must be shown to be compatible 
with what is being injected and permanently stored. Thorough 
evaluation and study of the injection proposal and target 
formation is the first and foremost check on potential future 
liability of permanent geologic storage of carbon. As with any 
good legal analysis, the lawyer must then ask the question, 
``but what if''. In Texas, we answered this question by passing 
into law a transfer of ownership of the CO\2\ from the 
FutureGen facility to the State of Texas. Acknowledging the 
goal of permanence of carbon sequestration, the permanence of 
the State is the only entity that can provide the necessary 
notice and monitoring beyond what one could expect in a private 
entity's life span. The State is protected by the principles of 
sovereign immunity while it cares for the injected CO\2\, that 
is, by State law, its property and responsibility.
    Finally, I would like to add that many States including 
Texas through a task force of the Interstate Oil and Gas 
Compact Commission are very far along in developing a model 
legal and regulatory framework for the geologic storage of 
CO\2\. I understand that the IOGCC hopes to have published 
within a year a guidance document for States which includes 
this model framework.
    I have attached a legal brief discussing in more detail my 
testimony regarding applicable law and ask that it be entered 
into the record. Thank you, sir.
    [The prepared statement of Mr. Stewart appears at the 
conclusion of the hearing.]
    Mr. Boucher. Thank you, Mr. Stewart, and thanks to all of 
the witnesses for joining us here today.
    I am going to defer to Mr. Hastert for his questions. He 
has a very important meeting at 1:00 and I am going to 
recognize him first for 5 minutes.
    Mr. Hastert. I thank the chairman for his courtesy.
    Mr. Schoenfield, I listened to your testimony and I think 
maybe what I heard isn't what you meant. I just want to clarify 
that. You made a statement that says if you don't burn the 
fuel--I am kind of summarizing-- you don't produce the 
effluent. It is not the fuel, it is the combined air, right?
    Mr. Schoenfield. Well, whenever you burn fuel, even if you 
don't have air in there, you are going to produce CO\2\. That 
is why with even oxy fuel firing, you do produce CO\2\, 
Congressman Hastert. So it is the fuel reduction. In other 
words, there is a one-to-one relationship. If you don't burn 
the fuel, you are not going to make the CO\2\.
    Mr. Hastert. All right. Fine. Then let me go back on that. 
When you burn this fuel with oxygen, the next step is, how do 
you get the oxygen? Do you separate the oxygen from the air on 
site or----
    Mr. Schoenfield. We would recommend separating the air from 
the oxygen on site although there are pipelines that produce 
oxygen.
    Mr. Hastert. If you do it on site, then in a sense you 
sequester CO\2\ at the same time, right?
    Mr. Schoenfield. Well, air is 79 percent nitrogen, 21 
percent roughly of oxygen, so you are not sequestering the 
CO\2\. What you have is, you are separating it into oxygen and 
then you have a nitrogen byproduct which is actually salable in 
parts of the country as well.
    Mr. Hastert. What happens with the CO\2\ that is in there?
    Mr. Schoenfield. Well, you don't start out with CO\2\. The 
CO\2\ is a product of combustion, so----
    Mr. Hastert. So there is no CO\2\ in the air prior?
    Mr. Schoenfield. Well, you have some but the amount of 
CO\2\ in the air, parts per million, is very, very small, as 
has been discussed, so there is some CO\2\ in there but----
    Mr. Hastert. But it is not worth trying to segregate that?
    Mr. Schoenfield. It is not worth trying to segregate that, 
no.
    Mr. Hastert. OK. Now, when you burn this oxygen in these 
burners and you said you can retrofit, I would think if you 
burn something with air, that is one degree of burning and 
efficiency and heat. When you put pure oxygen in there, you are 
really kicking up the heat, aren't you?
    Mr. Schoenfield. Absolutely, sir.
    Mr. Hastert. Will that be a danger of melting these 
boilers? I mean, can you really retrofit these things?
    Mr. Schoenfield. We have done it successfully at that half-
megawatt level with a 1973 Keeler D boiler. What you have to do 
is, you have to shape the flame properly, make sure the space 
is proper, cut back the amount of fuel so that the amount of 
energy that enters the water walls is exactly the same amount 
of energy as there was with air firing.
    Mr. Hastert. So in a sense you are using less fuel and 
creating the same amount of energy?
    Mr. Schoenfield. Yes, sir.
    Mr. Hastert. Then when you do this, you are having air come 
in and you still have CO\2\, you go through that process. Do 
you get less CO\2\ than you would--what I am getting at, when 
you bring air in and you blow air in here and you burn the 
fire, you are really just burning the oxygen out of the air, 
right?
    Mr. Schoenfield. Yes, sir.
    Mr. Hastert. And all the rest of this effluent and a lot of 
the effluent is the mass of air which happens to be nitrogen 
and other things that are going up the stack and so if you are 
trying to get this CO\2\ out of there, you have a lot of air 
moving through and again the CO\2\ is a very small amount of 
what you are trying to extract from that stack of effluent. Is 
that correct?
    Mr. Schoenfield. Yes. With oxy fuel firing, you don't have 
to separate out the nitrogen at the end. The flue gas stream is 
approximately 20 to 25 percent of what it would be with air 
firing.
    Mr. Hastert. And so are you saying the efficiency there, 
you are still trying to get the CO\2\ out of the flue gas 
stream?
    Mr. Schoenfield. Well, you basically can compress it at 
that stage depending on the grade you need, whether you have to 
remove sulfur or other things for food processing or other 
requirements but basically you have a pretty relatively pure 
CO\2\ stream at that stage.
    Mr. Hastert. All right. That is helpful. Thank you.
    The gentleman from Texas, Mr. Stewart. When you inject 
CO\2\ into the ground whether it is an old coal mine, whether 
it is forest rock, whether it is saline solutions or saltwater, 
do you change the physical nature of the host in any way?
    Mr. Stewart. The CO\2\ is absorbed so yes, but also 
whatever you are injecting the CO\2\ into, it binds up the 
CO\2\ so it doesn't become a new substance. It is a combination 
of whatever the two----
    Mr. Hastert. Otherwise you are not creating saltwater into 
some kind of acid or something?
    Mr. Stewart. No, sir.
    Mr. Hastert. Thank you.
    Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Hastert.
    Mr. Dalton, let us go back to where we were with you. You 
wanted to talk about the research needs and I want to ask you 
about that. It has been suggested that something on the order 
of $11 billion might be required in research funding over 
approximately the next decade if we are to achieve within 
somewhat more than a decade reliable separation and storage 
technology. Is that the right number or is there a different 
number?
    Mr. Dalton. Thank you, Mr. Chairman. Mr. Chairman, I 
believe that number represents the portfolio of work that was 
outlined by the Coal Utilization Research Council and EPRI as a 
combined set of efforts, not just the CO\2\ capture and storage 
work, but that is a significant part of that. There are 
elements of that work that relate to almost every one of the 
technologies we have heard talked about here--combustion work, 
oxy-fuel, gasification and also the CO\2\ capture. It is 
putting the integrated system together that really makes it all 
work. In the written submission, I do have two graphics and 
they show both the efficiency increase with time against a 
series of time and cost decrease for both combustion 
technologies and for the gasification technologies. We believe 
both will improve with time and learning.
    Mr. Boucher. And you have numbers associated with the 
research requirements for that?
    Mr. Dalton. Yes, sir. There are numbers associated with 
each of the elements in the EPRI/Coal Utilization Research 
Council integrated plan.
    Mr. Boucher. Thank you.
    I would like to pose to the entire panel some questions 
regarding time frames upon which we can expect the arrival of 
reliable technologies both for separation for capture of CO\2\ 
and also as a separate matter for storage of CO\2\. Let me 
start with capture and talk about initially integrated 
gasification combined cycle.
    I understand, Mr. Lowe, that from your testimony you 
believe that technology to be available today. First of all, is 
it in fact available today? Second, at what cost in comparison 
to a pulverized-coal facility, and for purposes of that 
comparison, would this be using IGCC without the separation 
technology as compared to a pulverized-coal facility also 
without any sort of control technology for CO\2\?
    Mr. Lowe. OK. First of all, yes, this technology is 
available today with IGCC. There are 25 gasification facilities 
operating around the world that separate CO\2\ because that 
CO\2\ is valuable in a number of processes.
    Mr. Boucher. Well, what I am looking for immediately in the 
first set of questions is, just the availability of IGCC 
without CO\2\ capture added to it, and the cost of that in 
comparison to today's generation of pulverized-coal plants. I 
understand it is more costly.
    Mr. Lowe. Yes. As I indicated, the estimate today is that 
IGCC is approximately 20 to 25 percent more expensive in 
capital costs.
    Mr. Boucher. Now, how many IGCC units will have to be built 
before you have comparable costs for IGCC and pulverized coal? 
I understand after perhaps a dozen of these you reach that 
point. Is that accurate?
    Mr. Lowe. We would estimate that after a dozen of units you 
could end up shrinking that premium by at least half so it 
would be down to a maximum of 10 percent premium.
    Mr. Boucher. Now, how much does adding the carbon 
separation component increase the IGCC cost?
    Mr. Lowe. As I referenced in a DOE study that was done, the 
indication was that the cost of electricity, the cost coming 
out of the plant, would go up about 25 percent, and that was 
the same range that DOE referenced.
    Mr. Boucher. Mr. Fees, would you like to comment on your 
post-combustion separation technology where you take CO\2\ out 
of the flue gas?
    Mr. Fees. Well, I think there is two ways to think about 
this. One is with oxy firing. There is no separate separation 
technology. So what you have is, you have a pure stream of 
carbon dioxide that comes out the backside that is ready for 
injection and/or other purposes. So there isn't an incremental 
cost beyond the cost to deploy that technology.
    Mr. Boucher. And your technology is based on oxy firing?
    Mr. Fees. On oxy firing.
    Mr. Boucher. That is the same way that Mr. Schoenfield's 
technology is?
    Mr. Fees. It is different. We generate something that 
resembles ambient air and in ambient you have 20 percent oxygen 
and 80 percent of other things.
    Mr. Boucher. OK. Well, without diving into the technical 
differences, what is the cost of your oxy firing technology in 
comparison with the cost of IGCC with carbon separation? Can 
you make that comparison?
    Mr. Fees. Around 35 to 40 percent.
    Mr. Boucher. Yours is more costly than the IGCC with carbon 
separation?
    Mr. Fees. Yes. However, if you take a look at pulverized 
coal without oxygen firing with separation on the back end, 
there are a lot of studies that compare those in many ways and 
right now with the lack of development of commercial scale in 
either of those circumstances, right now looking at their 
future, it looks like about a wash.
    Mr. Boucher. Mr. Lowe, when will we see commercial 
availability of IGCC with carbon separation? When do you think 
that date arrives?
    Mr. Lowe. There was a question earlier by Ms. Harman from 
California regarding the BP project out in Carson, California, 
and this is a project that utilizes petroleum coke instead of 
coal and an IGCC process. The carbon is separated and the 
carbon will be put into a pipeline for use in enhanced oil 
recovery, and GE and BP have done initial design on that plan 
with an expected commercial operation date of 2011.
    Mr. Boucher. I am going to ask about storage in a second 
round of questions to this panel.
    I am now pleased to recognize for 5 minutes Mr. Hall.
    Mr. Hall. I yield to the former chairman of Energy and 
Commerce, showing my good judgment to Mr. Barton for my time.
    Mr. Barton. I normally wouldn't even mind but I am supposed 
to managing the OBJ bill on the floor right now, so I 
appreciate Mr. Hall's yielding to me.
    I have a confession to make before I get into my questions. 
It is going to hurt my reputation I know, especially with my 
friends in the environmental community, but I have long been a 
supporter of carbon capture in the form of the FutureGen 
project. I also happen to support the development of many of 
these technologies that you gentlemen are talking about today 
and I put my money where my mouth is back in the Energy Policy 
Act of 2005 and we made sure that we authorized, which is all a 
committee like ours can do, we can't appropriate but we 
authorized specific sums of money in the hundreds of millions 
and in some cases the billions of dollars to develop these 
technologies. So I am not quite the stick in the mud maybe that 
I am portrayed to be. I do think there ought to be a cost-
benefit test to this technology because that is ultimately what 
the ratepayers and the consumers have to pay.
    My first question goes to a statement that Mr. Dalton made. 
Does everybody on the panel generally accept that whichever 
these technologies we decide to adopt, that in the beginning 
there is going to be a substantial premium in terms of plant 
construction? The EPRI gentleman said 60 to 80 percent. Does 
everybody accept that it is going to cost more? Mr. Schoenfield 
is shaking his head no. Your retrofit technology won't cost 
more?
    Mr. Schoenfield. No, sir. I mean, the retrofit technology 
when we project, for example, at 400 megawatts, is $170 million 
to fully retrofit NOx, SOx, particulates, CO\2\, mercury, 
everything, and at $180 a kilowatt or $1,600 a kilowatt, you 
are talking about new plants at $640 million to $720 million so 
retrofitting is less.
    Mr. Barton. Your retrofit is about a 25 percent.
    Mr. Schoenfield. Right. On a new build plant against 
present technology which doesn't capture CO\2\, doesn't address 
the rest of the pollutants the same way, the projections we 
made with the Albany research group of the National Energy 
Technology Lab had us in the same ballpark as present costs, 
that is, around 1.7 cents a kilowatt production cost and about 
5.1 cents a kilowatt fully loaded and amortized capital costs.
    Mr. Barton. Well, the chairman indicated in his first round 
of questions, he was concerned about the cost. I too am 
concerned about the costs. I don't think this is a free lunch 
that we can technology our way to no cost increase to our rate 
consumers although I do think over time as the learning curve 
comes down that we can hopefully minimize that cost.
    Mr. Hawkins, we are glad to have you back. You are 
certainly one of the most distinguished leaders in the 
environmental community and also, in my opinion, one of the 
most commonsense ones, which may mean you are the only one that 
shows any common sense, but that is just a personal opinion of 
mine. Were you involved at all with the TXU proposal for the 
coal-fired power plants down in Texas?
    Mr. Hawkins. Yes, Mr. Barton.
    Mr. Barton. OK. What technology were they proposing to use 
in their plants?
    Mr. Hawkins. They proposed 11 plants initially, all of them 
using pulverized-coal technology.
    Mr. Barton. Some sort of, as I understood it, supercritical 
combustion cycle that would reduce emissions. Is that correct 
or incorrect?
    Mr. Hawkins. Some of them were proposed as supercritical 
units, which means a higher operating pressure and a slightly 
higher efficiency.
    Mr. Barton. But they did not propose the use of the Babcock 
and Wilcox IGCC. Is that correct?
    Mr. Hawkins. They didn't propose to use the Babcock and 
Wilcox oxy-fuel technology nor IGCC.
    Mr. Barton. Or the GE.
     So the environmental community just didn't believe that 
their plants would operate at the reduced emissions level. Is 
that fair to say?
    Mr. Hawkins. The opposition to those plants had to do with 
both the conventional pollutants as well as carbon dioxide and 
the modest reductions in carbon dioxide from a slightly more 
efficient plant still meant that you would be building a new 
plant that would have somewhere like 80 to 85 percent of the 
same plants that our grandfathers built and so that is not seen 
as acceptable progress.
    Mr. Barton. There is not a requirement that you build 
plants for laws that haven't been passed yet, is there?
    Mr. Hawkins. Well, in this area, Mr. Barton, the laws are 
lagging common sense and common sense in the business community 
are actually getting out ahead of the laws and we hope with the 
efforts of this committee that you will catch up soon.
    Mr. Barton. Well, I hope that we get a dose of common sense 
at some point in this process because I too am an industrial 
engineer and have a master's degree in various things like the 
Babcock and Wilcox gentleman. We were taught that you base 
decisions based on facts, not on theories, and it is yet to be 
proven to me that CO\2\ is the cause of all the catastrophic 
things that is has been accused of. As these hearings go 
forward, we will have a chance to get some of those scientists 
before us and hopefully get some of that information out on the 
table.
    My time has expired, Mr. Chairman. I appreciate your 
courtesy.
    Mr. Boucher. Thank you very much, Mr. Barton.
    Mr. Inslee for 5 minutes.
    Mr. Inslee. Mr. Barton had pointed out earlier that humans 
are responsible, I think he uses the figure of 5 percent of the 
total CO\2\ emissions into the atmosphere, and one of my 
colleagues asked me about that and I have heard numbers in that 
ballpark, and that seems like no big deal but I want to ask 
about that. That is a 5 percent increase over what would have 
happened had we not had an industrial revolution basically and 
5 percent doesn't sound like much but I was thinking, if I 
weigh 200 pounds, which is close, and I gain 5 percent weight a 
year, cumulative putting it into the atmosphere in my waist 
line, I would weigh over 400 pounds on 20 years. Now, I think 
that is kind of analogous to the situation we have here where 
we are headed to at least twice CO\2\ pre-industrial levels. 
That seems to be the target we are all trying to stop it at.
    Mr. Hawkins, is that sort of a fair metaphor to this 
discussion?
    Mr. Hawkins. Thank you, Congressman. Actually the 5 percent 
number is a very misleading number. The oceans and the 
terrestrial systems--trees--release CO\2\ into the atmosphere. 
That is correct. But that same CO\2\ is taken out of the 
atmosphere by the same sources. So until we started mining 
fossil fuels a couple of hundred years ago in significant 
quantities, the net emissions to the atmosphere were zero. Just 
as much goes in as comes out. So if the question is what are 
the actual net emissions to the atmosphere caused by human 
beings, it is 100 percent, sir.
    Mr. Inslee. And we are heading to double pre-industrial 
levels by the end of the century. Is that our best estimate?
    Mr. Hawkins. We are headed to double pre-industrial levels 
by about 2035 at the current pace.
    Mr. Inslee. And I am very glad you seven people--I compare 
you to the Mercury Seven astronauts. I think you are heroes in 
trying to figure out what to do about this because we have got 
to reduce levels by probably on the order of 70 to 80 percent 
to be able to get down to stop it. Even to stop it at double 
levels, we have got to that level of reduction. So this 
technology is incredibly important.
    I want to ask Mr. Fees and Mr. Lowe, I have this concern 
that we are going to allow what I will just call dirty-coal 
plants with no sequestration technology to be built in the next 
decade and lock ourselves in to another horrendous amount of 
CO\2\, and I am just wondering what you can advise us as to 
what we can realistically do to insist that we in the plants as 
they go forward to embrace this technology to not allow another 
50 years of dirty coal to get locked in. What can we do 
realistically in that regard?
    Mr. Lowe. What I think we need to do, as I indicated in my 
testimony, is without some kind of policy that ends up putting 
a value on carbon, that is exactly what is going to happen, and 
what we think is a very strong approach would be a cap and 
trade approach for CO\2\.
    Mr. Fees. I believe there is a timing issue in play. There 
is a timing issue of what is available in the technology and 
what can be done versus when we would like to get it deployed. 
If we start making short-term requirements, we might not have 
all the technology to get there and it may get into fuel-
switching issues on a local basis that may affect economies and 
may affect us nationally. If you take a look at the 
technologies that are being developed, I think they are all 
good. I think it would be a cheap marketing ploy for me to try 
to talk about IGCC versus pulverized coal because they both 
have a chance and they have an equal chance under where things 
are going, and we are going to invest in excess of $40 million 
of our money into R&D this year looking at how we can improve 
pulverized coal and how we can capture CO\2\ on the back end. 
And the thing that I am trying to get to there is, I think this 
body, it is very important that they have an unbiased approach 
relative to technology because I think it would limit what we 
might accomplish.
    Mr. Inslee. Mr. Friedmann, I want to ask you about sort of 
projections. You made some projections about cost, and I wrote 
down one figure, either 21 or 25 percent more with 
sequestration, but does that take into consideration some of 
the projected improvements in efficiencies? There is a company 
called RamGen out in Washington State that has a compression 
technology they have told me they think they can reduce capital 
costs by 30 percent and deal with some of the heat issues to 
actually put heat to use.
    Mr. Friedmann. I am actually familiar with RamGen and I am 
familiar with other novel compression strategies that people 
are trying. Those were not included in my cost estimates. 
Conventionally, the way that our community handles things is, 
we put capture the separation piece, transportation, 
construction of pipelines and shipping and the compression, all 
of those costs get integrated into what we call the capture 
half; and then there is the storage half when you basically go 
from the well head down, and those were the costs I had talked 
about.
    Mr. Inslee. Mr. Chairman, would you indulge me one more 
question? I am over my time.
    Mr. Boucher. Sure.
    Mr. Inslee. Thank you. I appreciate that.
    Could you give us some estimate of the existing coal plants 
where they are located today, what percentage of them have a 
good chance of having geology that would allow sequestration 
within whatever X miles we think transportation will work out? 
Is there any estimate you can give us today in that regard?
    Mr. Friedmann. It is very well documented that coal basins, 
which is where coal plants tend to be built, are highly 
prospective places to store CO\2\. The geology works well in 
terms of saline aquifers, depleted oil and gas fields and coal 
seams, and all of them occur generally in abundance where you 
have a lot of coal. So the chance of finding within, say, 150 
kilometers or 200 kilometers of a power plant a good 
sequestration site is extremely high.
    Mr. Inslee. Thank you.
    Mr. Boucher. Thank you very much.
    Mr. Hall for 5 minutes.
    Mr. Hall. Mr. Chairman, thank you.
    Mr. Dalton almost answered the question I have when he said 
all systems had to be put together if they are going to work, 
and Speaker Hastert entered into a little bit about the cost 
and of course you have to consider cost on everything because 
that is going to be the final determination as to what is 
selected and how well it works.
    But Mr. Schoenfield, you addressed the issue of oxy-fuel in 
your testimony and it has been kicked around here pretty well. 
I know this committee heard testimony last year from MIT, I 
believe it was a Dr. Katzer from MIT gave some testimony to 
Energy and Air Quality Subcommittee on clean coal technology. I 
don't know if you were here and heard his testimony or have 
read it, but he gave testimony about the relative cost of 
various clean coal technologies. Can you be more specific about 
the cost of oxy-fuel relative to other technologies that we 
would have to compare them with?
    Mr. Schoenfield. I am familiar with the testimony, 
Congressman. I have also spoken to Professor Katzer. I think 
the presentation at MIT had to do much like EPRI's with taking 
technologies that they consider more conventional levels and 
analyzing those, and I think their conclusion was that at this 
point there is not enough known to have a clear cost winner. So 
we have done our projections based on the testing today as I 
stated with those numbers and those I find it hard to compare 
because I am not sure what reliable numbers there are on some 
of these other technologies either, just like Professor Katzer 
stated in his testimony.
    Mr. Hall. Has DOE given any priority to having an actual 
retrofit with oxy-fuel on the grid so everybody can see how it 
really works?
    Mr. Schoenfield. No, sir, and it has been very frustrating 
since part of the technology is their own technology developed 
by their lab.
    Mr. Hall. In regard to their IPR system, explain why it 
works with your oxy-fuel technology.
    Mr. Schoenfield. Yes, sir. Because there is no nitrogen to 
separate out and because there is less fuel used and there is 
less CO\2\, their system can be smaller, more efficient, more 
economical. What it basically does is compress that CO\2\. It 
has a series of wet and dry heat exchangers to capture latent 
heat. It has filters to take out the mercury and sulfur and the 
particulate and in the end you get a CO\2\ stream that is as 
pure as you need it, depending on whether you are doing food 
processing, enhanced oil recovery or just plain old 
sequestration.
    Mr. Hall. I thank you.
    I yielded my time to Mr. Barton, and there are others to 
make some inquiries, and it is a little past noon so I will 
yield back my time, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Hall.
    Mr. Dingell for 5 minutes.
    Mr. Dingell. Thank you very much for your kindness.
    Gentlemen, as you have all observed in your testimony, 
there are a number of questions needing to be answered. The 
Department of Energy's witness has testified earlier that the 
goal of DOE's carbon sequestration program is for commercial 
deployment by 2012 of capture technologies that achieve 90 
percent CO\2\ capture at less than a 10 percent increase in the 
costs of the energy. Now, starting with Mr. Stewart, if you 
please, gentlemen, is that an achievable goal, yes or no?
    Mr. Stewart. Mr. Chairman, I can't opine on the technology 
because I am not that experienced with it but I can tell you in 
Texas, we have an established regulatory framework where we can 
today permit at least the FutureGen project for sequestration. 
That does not achieve your 90 percent goal, no, sir, but there 
is our experience and the regulatory framework and the 
experience of regulators does exist today to accomplish that.
    Mr. Dingell. Thank you.
    Mr. Dalton?
    Mr. Dalton. Technology can be built by that date but it 
will not have established the long-term storage and the safety 
of that storage at that point.
    Mr. Dingell. Alright.
    Our next witness?
    Mr. Schoenfield. Congressman, the retrofit project for oxy-
fuel technology that has been started can be completed in 18 to 
24 months. It will require about 6 to 12 months of data 
collection and then some dissemination of data, and assuming it 
works based on the projections and the testing to date, it 
would then be ready for deployment.
    Mr. Dingell. You said assuming it works.
    Mr. Schoenfield. Right. We are confident it will work, sir, 
but I can't sit here until it works to say for 100 percent 
certainty. I am 100 percent certain but I would say assuming 
because that is how it has been presented when we have 
conversations with the DOE.
    Mr. Dingell. Thank you.
    Our next witness, please, sir.
    Mr. Friedmann. The most outstanding questions associated 
with deployment of storage technology can be answered with a 
handful of large tests quickly. Currently, within the DOE's 
program, they are trying to accelerate some of those steps. 
That is one pathway towards doing that. I think there are many 
ways that one could accelerate the deployment of large tests to 
provide the information needed to operators and to regulators 
to develop standards.
    Mr. Dingell. Next witness, please, sir?
    Mr. Lowe. Yes. I think that as I indicated, carbon capture 
technology will be demonstrated in 2011 at Carson for IGCC and 
I think that it is entirely likely that we are going to see 
costs going down both for the capture of carbon and also the 
sequestering of it in something like saline aquifers going 
forward.
    Mr. Dingell. Thank you.
    Mr. Hawkins.
    Mr. Hawkins. Thank you, Mr. Chairman. The performance goals 
in the DOE program are already demonstrated. I mean, cost goals 
can be achieved but not by the DOE program alone. To achieve 
those costs, you need to engage the private sector. To do that, 
you need the power of emission limits to move this forward at a 
required pace.
    Mr. Dingell. Last witness, please.
    Mr. Fees. Yes, and if you take a look at it, we believe 
that what is underway at DOE will work. However, our concern is 
that it will not be enough, that the combustion technologies 
will be there much earlier and a broader-based deployment of 
the combustion technologies may be limited by the availability 
of storage, and that is our concern, that we may actually limit 
our ability to deploy new plants with the new technologies 
because we won't have anywhere to put the CO\2\.
    Mr. Dingell. Now, gentlemen, I have so little time. It is 
so very hard to do this and I have to verge on discourtesy 
here. If you would, please, yes or no to this question. Will it 
be possible to deploy the leading CO\2\ capture technologies in 
the U.S. at a cost that isn't significantly going to increase 
the retail price of electricity and if adoption of a carbon-
constraint policy is speeded up, will that help if we do that?
    If you please, Mr. Stewart?
    Mr. Stewart. It will increase the cost but a government 
policy from the Federal Government certainly would inspire and 
order industry to respond.
    Mr. Dingell. Next witness, please, sir?
    Mr. Dalton. I believe it will increase the cost but firm 
policies on storage particularly would help.
    Mr. Dingell. Sir?
    Mr. Schoenfield. Our projections are that the cost of 
capture can remain approximately the same as the cost of 
electricity today.
    Mr. Dingell. Same, sir, please?
    Mr. Friedmann. From a technical basis, the cost of storage 
will be a very small component of the total aggregate cost of 
electricity.
    Mr. Dingell. Next witness, please, sir?
    Mr. Lowe. Yes, there will be an increase initially in the 
cost of electricity but with a carbon policy, we are going to 
see a stimulation of new technologies coming forward that will 
end up reducing that cost.
    Mr. Dingell. Mr. Hawkins?
    Mr. Hawkins. Yes, the cost increase can be modest and yes, 
policies are needed to make it happen.
    Mr. Dingell. Sir?
    Mr. Fees. It will cost more. Our R&D objective is to try to 
limit that cost below 20 percent, and a policy would certainly 
stimulate more development in R&D.
    Mr. Dingell. Thank you, gentlemen.
    Mr. Chairman, I note that my time has expired. I have some 
more questions but I thank you for your courtesy.
    Mr. Boucher. Thank you, Chairman Dingell.
    Mr. Shimkus for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Mr. Schoenfield, just following up on the chairman's 
question, you are not including the capture and storage of 
CO\2\ in your no-net increase in cost, are you?
    Mr. Schoenfield. I am including the capture----
    Mr. Shimkus. But not storage?
    Mr. Schoenfield. But not storage or transport.
    Mr. Shimkus. Because there is going to be a cost increase. 
Everybody needs to get prepared for that, and the question is 
how much. Marginal? What is marginal? Twenty percent, 10 
percent? Those are things that will have to be addressed as we 
move this forward.
    Mr. Lowe, I appreciate this. I have been trying to 
understand, and I visited a lot of plants in pulverized coal 
and IGCC, but Mr. Schoenfield, your Jupiter oxygen would be 
kind of in between, would it not? It is retrofitting pulverized 
coal plants with oxygen to get a better return and the ability 
to capture the emittents and then sequester them. Is that 
correct?
    Mr. Schoenfield. That is correct.
    Mr. Shimkus. Can I ask, we addressed this in the EPAC bill 
in 2005 in section 1407. How are you using the funds that have 
been provided by Congress in your rollout here?
    Mr. Schoenfield. Well, so far, Congressman, we have 
received only the first $10,000 of 2005 money because since 
this is not a priority, it has been a very slow process to get 
through all the levels of paperwork and everything else. We 
have received none of the 2006 money yet.
    Mr. Shimkus. That is why I always talk to people who are 
coming to us for help because we are not really reliable 
partners in the funding stream in the world in capital risk and 
deployment, and I am sorry to hear that. We are trying to do 
our best to work with DOE. So DOE in essence hasn't been 
helpful with respect to the EPAC legislation in that section 
yet?
    Mr. Schoenfield. They have not made it a priority, and in 
that sense, that is correct.
    Mr. Shimkus. Maybe I can ask our chairman to help me 
readdress the Department of Energy on this section.
    Mr. Boucher. Yes. Well, let me just respond to the 
gentleman by saying that we had Mr. Shope here earlier and he 
did not talk about the loan guarantee provisions, which have 
been a major source of discouragement for some of the 
applicants but the gentleman is right in saying that full 
partnership with DOE is going to be necessary in order to 
achieve the goals we are discussing here today.
    Mr. Shimkus. Thank you.
    Mr. Hawkins, I think your organization has said you want 
IGCC with carbon sequestration. Is that correct?
    Mr. Hawkins. We want coal plants to meet CO\2\ performance 
standards that can be achieved with CO\2\ capture. We don't 
care what the technology is to turn coal into electricity.
    Mr. Shimkus. But you are really empowering this 
sequestration issue in this debate.
    Mr. Hawkins. We believe that continuing coal use makes it 
essential to do CO\2\ capture and storage.
    Mr. Shimkus. And you are still a supporter of using coal 
for electricity generation in this country, are you not?
    Mr. Hawkins. We think it is a fact of life that a lot of 
coal will be used for a long period of time.
    Mr. Shimkus. Do you also support nuclear power?
    Mr. Hawkins. Our position on nuclear power is that if there 
is a level playing field and we get rid of some of the 
subsidies in current law, if we address the waste issue and if 
we address the nuclear proliferation risks, then it should play 
a role.
    Mr. Shimkus. Wow. All right. Let me ask you about the 
permitting and transportation of carbon dioxide. Under what 
circumstances would you support or oppose any transportation or 
sequestration issues?
    Mr. Hawkins. We think that the regulatory system to cover 
transportation is already in place. Pipeline transportation 
regulations apply to existing commercial pipelines.
    Mr. Shimkus. Have you ever opposed transportation and 
siting of carbon dioxide sequestration projects in the country?
    Mr. Hawkins. No.
    Mr. Shimkus. Would you support an expedited process for 
permitting and siting?
    Mr. Hawkins. I think an expedited process may not be the 
best way to gain public confidence for a new technology. I 
think that a good process that involves the affected 
communities is the best way to get these technologies accepted.
    Mr. Shimkus. I am always vague in expediting because as I 
said earlier, we want to move quick but on some things we want 
to move slow. Now we are saying we need to move quick but we 
also hear that the Federal bureaucracy does not move quickly so 
once I figure out what expedited means and if we can do it in a 
timely and safe manner, then we may get a chance to visit it 
again. But I understand your concerns.
    Thank you, Mr. Chairman.
    Mr. Boucher. Thank you, Mr. Chairman.
    Mr. Markey for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman.
    Mr. Fees, Mr. Lowe, Mr. Schoenfield, all three of your 
companies have developed new technologies that you say would 
allow us to burn coal cleanly, capturing and disposing of the 
carbon pollution that currently gets released into the 
environment. If I were an electric utility CEO and I wanted you 
to build one of those plants today, could you build a 300-
megawatt plant for me right now?
    Mr. Fees. We are building a 300-megawatt oxy-fired plant 
and we are in cooperation with Saskatchewan Power doing that 
today. We have a third----
    Mr. Markey. I could buy one right now?
    Mr. Fees. Yes, sir.
    Mr. Markey. And how much would it cost me?
    Mr. Fees. It depends on the location and the coal and the 
development that is going on this summer.
    Mr. Markey. Can you give me a range?
    Mr. Fees. Not today.
    Mr. Markey. Three hundred-megawatt plant?
    Mr. Fees. Yes, we have a 300-megawatt plant.
    Mr. Markey. No, I am saying, but you couldn't give me any 
price at all?
    Mr. Fees. It depends on the location and the coal.
    Mr. Markey. Mr. Lowe?
    Mr. Lowe. Yes, we could build a 300-megawatt plant although 
with the economies of scale, we would encourage going to 
approximately 600 megawatts.
    Mr. Markey. And how much would it cost me?
    Mr. Lowe. Again, that is very specific to what you have for 
the location of the plant but right now approximately 20 
percent more than you have for pulverized-coal units.
    Mr. Markey. OK, good, and Mr. Schoenfield?
    Mr. Schoenfield. Congressman, we would need to complete 
that retrofit project before going up to 300 megawatts but the 
projected cost based on the testing that has been done and all 
the firing which are consistent for the process would indicate 
that the cost of that 300-megawatt plant would be approximately 
the same cost it would be to build it with conventional 
technology today.
    Mr. Markey. So you are saying a plain old pulverized-coal 
plant without any carbon capture or sequestration would be 
built for the same prices you could build me one of these new 
plants right now?
    Mr. Schoenfield. That is what has been projected based on 
the testing to date and the cost----
    Mr. Markey. Well, let me ask the other two gentlemen. Can 
you do that for me too? Could you build me the same plant for 
the price of a pulverized-coal plant no matter where I am?
    Mr. Fees. With carbon capture included for the same price?
    Mr. Markey. Without any carbon capture. He just said he 
could do it for me without carbon capture, same price with and 
without carbon capture.
    Mr. Fees. I can build a pulverized-coal plant and I do it 
every day.
    Mr. Markey. But can you do it for the same price you build 
one of the new plants that would capture the carbon?
    Mr. Fees. As I indicated earlier in my testimony, we 
thought that our oxy fire technology which we are doing today 
and can be back retrofit to existing pulverized-coal plants is 
about 35 to 40 percent more than the existing----
    Mr. Markey. So it is 35 to 40 percent?
    Mr. Fees. Which is about the same cost of IGCC, in our 
estimation.
    Mr. Markey. And Mr. Lowe?
    Mr. Lowe. Yes, I have indicated that it would be a premium 
versus what a non-carbon-capture plant is and IGCC with carbon 
capture would be about 20 percent.
    Mr. Markey. Twenty percent. OK. And how would that compare 
to the cost of building a modern combined cycle natural gas 
plant to produce the same 300 or 600 megawatts?
    Mr. Lowe. Any solid fuel coal plant is going to be 
substantially----
    Mr. Markey. Can you give me a percent range generally?
    Mr. Lowe. I would say that it is probably in the range of 
an additional 300 percent.
    Mr. Markey. Three hundred percent.
    Mr. Schoenfield?
    Mr. Schoenfield. I don't know that range offhand but the 
cost of the fuel difference makes a tremendous difference as 
well in the operating costs.
    Mr. Markey. Just give me a range.
    Mr. Schoenfield. I do not have the capital costs, 
Congressman, on that one.
    Mr. Markey. Mr. Fees?
    Mr. Fees. You need to look at the cost of the fuel because 
today they are----
    Mr. Markey. We are trying to make some decisions here so 
factor in what you think is reasonable and give us a price 
comparison.
    Mr. Fees. Right now today natural gas is not competitive in 
a lot of markets because of the price of fuel and on a 20-year 
levelized cost of electricity dollars per megawatt, pulverized 
coal with CO\2\ capture is 62 bucks.
    Mr. Markey. So you are saying for a CEO right now it is a 
rational decision to build a coal-fired plant with this new 
technology as opposed to a natural-gas plant?
    Mr. Fees. I think it is a rational decision to build 
existing technology as well as approach the new technology, 
yes, sir.
    Mr. Markey. Mr. Hawkins, you heard DOE's response to the 
questions that I posed earlier regarding the potential for 
utilities to exploit loopholes in the 2005 Energy Policy Act to 
get subsidies for coal plants that don't actually capture CO\2\ 
but are merely capture-capable or carbon capture- optimized. 
Did you find DOE's answers reassuring?
    Mr. Hawkins. No.
    Mr. Markey. What should we do about the loophole in the 
law?
    Mr. Hawkins. Well, I think in the appropriations bill, 
there should be specifications that limit the appropriations 
authorities to the top priority technologies which are those 
that actually do capture CO\2\.
    Mr. Markey. Mr. Hawkins, in your testimony you say policies 
to limit CO\2\ emissions and set performance standards are 
essential to drive the use of CCD at the required scale and 
pace, and then you say, however, a CO\2\ cap and trade program 
by itself may not result in deployment of CCD systems as 
rapidly as we need. What sort of performance standards do you 
envision in order to drive the deployment of carbon capture and 
sequestration technologies?
    Mr. Hawkins. Well, one that we think is quite interesting 
and is in a bill introduced in the other body, it is 309, is a 
performance obligation modeled on the renewable portfolio 
standards. It basically says that if you generate coal-fired 
power starting in 5 or 6 or 7 years from now, a certain small 
fraction of your total kilowatt hours need to come from coal 
plants that meet a performance standard.
    Mr. Markey. And what fraction----
    Mr. Boucher. The time of the gentleman has expired.
    The Chair is going to recognize at this time the gentleman 
from Texas, Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Fees, let me just be sure that I understand this 
correctly. If Mr. Markey's 300-megawatt plant is built today 
but it uses natural gas as a fuel, is carbon sequestration 
something that is going to happen at that natural-gas plant as 
well?
    Mr. Fees. We don't build natural-gas-fired plants so I 
can't really comment on how they would capture carbon but I 
would think the technologies that are being developed could be 
similarly applied.
    Mr. Burgess. Mr. Hawkins, is it necessary to capture the 
carbon from the natural-gas plant?
    Mr. Hawkins. Eventually it will. BP is proposing to do that 
at a plant that it operates in Scotland. It is going to send 
the CO\2\ under the North Sea to enhance oil recovery there.
    Mr. Burgess. Mr. Stewart, let me ask you, we had the Texas 
Railroad commissioner up here last week and he was talking 
about the FutureGen project if it were to come to Texas and he 
said Texas had passed a statute taking title to carbon dioxide 
for that sequestration project. Am I correct in that?
    Mr. Stewart. Yes, sir.
    Mr. Burgess. Now, why did Texas do that? Were there any 
other options available to the State other than simply taking 
title to the CO\2\?
    Mr. Stewart. Well, in the FutureGen process, there were 
multiple options promoted such as insurance and indemnification 
and taking title, and what the decision makers in Texas decided 
was, from a permanence standpoint, you need an entity that is 
going to outlast any private entity because of the monitoring 
and eventual care of the CO\2\ so they decided that a transfer 
once it has been captured of the CO\2\ to the State is the best 
management technique from a permanence standpoint.
    Mr. Burgess. Did they consider any other options?
    Mr. Stewart. We consider all of them actually, sir.
    Mr. Burgess. Are there any situations in which that model 
crafted by the State of Texas would not be applicable to CO\2\ 
capture where the State or the longest surviving Government 
entity were to take title to that CO\2\?
    Mr. Stewart. That is a public policy decision for each 
State or the Federal Government to make. We thought it was the 
most appropriate technique to ensure against long-term 
liability for the whole project.
    Mr. Burgess. Mr. Fees, is it possible to destroy carbon 
dioxide rather than to have to pump it back into the Earth?
    Mr. Fees. I am going to look at my R&D man behind me and 
see what he has to say. There is a tremendous amount of 
energy----
    Mr. Burgess. Well, the reason I ask is because our 
anesthesiologist at the hospital used to have this little gizmo 
that trapped CO\2\ in these rebreathing circuits and would 
eliminate the CO\2\ from the anesthesia machine but we can't do 
that----
    Mr. Fees. There is a tremendous amount of energy that gets 
put forth to create CO\2\ at the point of combustion so 
reversing that process is energy heavy. However, we are doing 
R&D where we are, for example, taking the enzyme that exists 
inside of your and my lungs and trying to engineer that enzyme 
in a wet condition that we can put flue gas through it and use 
the same technology that exists in our bodies to be able to 
capture that and to turn the CO\2\ into calcium carbonate and 
other things that may be friendly to be able to be used post 
combustion. But those things are way off and we are doing R&D 
that is directed in that end, but there are things that can be 
done.
    Mr. Burgess. Mr. Hawkins?
    Mr. Hawkins. Well, Mother Nature does this every day, Mr. 
Congressman. The problem is, we are putting CO\2\ into the air 
about a million times faster than Mother Nature can handle it.
    Mr. Burgess. Let me come back to that in just a minute if I 
could. I wanted to ask Dr. Friedmann, are there some parts of 
the country that are better for carbon dioxide sequestration 
than others?
    Mr. Friedmann. Yes.
    Mr. Burgess. Which areas are well suited and which are 
poorly suited?
    Mr. Friedmann. I described some of that in my testimony and 
some of that information is----
    Mr. Burgess. I apologize. We took all morning to save 
Medicare and I didn't think I could do it, but I did, so I 
apologize for being late.
    Mr. Friedmann. That is OK. Explicitly, I mean my written 
testimony too, but the Department of Energy has just put--the 
partnerships have put together an atlas that provides some 
useful information. From a technical basis in my own 
estimation, three places stand out right away: Illinois, Texas 
and the central and northern Rockies but there are actually 
many other places within the country which have a high capacity 
and they all look quite good for CO\2\ sequestration, and that 
resource is available there.
    Mr. Burgess. What makes an area of the country absolutely 
unsuitable for CO\2\ sequestration?
    Mr. Friedmann. Well, there are three things you need to 
have a project. You need injectivity, which means you can 
inject at a high rate; you need capacity, which means if you 
make 300 million tons of CO\2\ you can put it someplace, and 
you need effectiveness, meaning it has to stay in the crust a 
long time, and there are places in this country that lack those 
characteristics. So one example and one that is pertinent is in 
central Minnesota and Wisconsin, there is a rift basin that 
goes through the middle of those States that may have those 
characteristics but we don't know yet. The rest of those States 
lack those characteristics and could not serve. So the States 
of Minnesota and Wisconsin are trying to find out quickly 
whether they have that resource because they would like to be 
able to use it.
    Mr. Burgess. And how deep do you have to put the CO\2\?
    Mr. Friedmann. Bare minimum is something like 800 meters. A 
good rounding number is a kilometer, and the reason why is 
because otherwise the CO\2\ is not dense enough. It doesn't 
have sufficient density to stay in place a long time. You use a 
lot of poor volume and it has a strong buoyant force. So at 
typical crustal conditions, 800 meters to a kilometer.
    Mr. Burgess. Very good. Mr. Hawkins, let me just ask you a 
follow-up on the CO\2\ question. Many more areas in the country 
in the last 50 years, U.S. Fish and Wildlife and the U.S. 
Forest Service have gone to great lengths to reestablish 
grasslands and forest areas. Has this resulted in any 
accumulation of carbon in those grasslands or forests that 
would otherwise just simply have remained in the atmosphere?
    Mr. Boucher. Mr. Hawkins can answer this but this will be 
the last question.
    Mr. Hawkins. The answer is yes.
    Mr. Boucher. That was a very efficient answer.
    This has continued for quite a time today and I actually 
have meetings. There are additional questions I would like to 
ask. I am going to submit those in writing for response by this 
panel. So let me say thank you to each of the seven of you for 
the information you provided to us. You have been very patient 
today in awaiting your turn to testify, and the information you 
have offered here has been extraordinarily beneficial to us and 
we appreciate your assistance. We will have two more hearings 
on climate change this week and further hearings throughout 
this month and during the month of April and so for those who 
are interested, there will be no shortage of conversation on 
this entire range of issues.
    Mr. Markey. Mr. Chairman.
    Mr. Boucher. Yes, Mr. Markey?
    Mr. Markey. May I ask one question?
    Mr. Boucher. Mr. Markey, yes, for 30 seconds.
    Mr. Markey. OK. I thank the chairman.
    Just back and forth between Mr. Hawkins and Mr. Fees, that 
is under the contention that Mr. Fees made that his new 300-
megawatt commercial plant using his new technology is already 
commercially available. So my question is, why aren't people 
buying it?
     Why aren't people already investing in them and why aren't 
they avoiding, in other words, a cap and trade system and all 
the rest of the headaches? Why isn't the coal industry 
investing in right now if they are already available and they 
are, as you are saying, competitive with the alternative 
technology?
    Mr. Fees. We are moving that technology forward through an 
R&D to deployment phase and it will be deployed, operating and 
running in 2011. We are in discussions with other customers for 
the potential of applying the same technology whether it be 
retrofit against existing boiler locations or for new boiler 
locations in the United States. But to say that it is up and 
running and I can point to one that is operating today, that is 
not correct.
    Mr. Markey. I see. OK. That is a misunderstanding then.
    Mr. Hawkins?
    Mr. Boucher. Mr. Markey, thank you. Our time really has 
expired here today.
    Gentlemen, thank you very much, and this hearing stands 
adjourned.
    [Whereupon, at 1:45 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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