[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
     DEPARTMENT OF ENERGY OVERSIGHT: STATUS OF CLEAN COAL PROGRAMS

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


                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 11, 2014

                               __________

                           Serial No. 113-118


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado               PETER WELCH, Vermont
MIKE POMPEO, Kansas                  BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois             PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia         JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
              Subcommittee on Oversight and Investigations

                        TIM MURPHY, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
  Vice Chairman                        Ranking Member
MARSHA BLACKBURN, Tennessee          BRUCE L. BRALEY, Iowa
PHIL GINGREY, Georgia                BEN RAY LUJAN, New Mexico
STEVE SCALISE, Louisiana             JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
PETE OLSON, Texas                    KATHY CASTOR, Florida
CORY GARDNER, Colorado               PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
BILL JOHNSON, Ohio                   JOHN A. YARMUTH, Kentucky
BILLY LONG, Missouri                 GENE GREEN, Texas
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................     4
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. Fred Upton, a Representative in Congress from the state of 
  Michigan, prepared statement...................................    54
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, prepared statement....................    55

                               Witnesses

Julio Friedmann, Deputy Assistant Secretary for Clean Coal 
  Department of Energy, Accompanied by Scott Klara, Acting 
  Director for the National Energy Technology Laboratory, 
  Department of Energy...........................................     9
    Prepared statement...........................................    12
    Answers to submitted questions...............................    61

                           Submitted material

Majority memorandum..............................................    56



     DEPARTMENT OF ENERGY OVERSIGHT: STATUS OF CLEAN COAL PROGRAMS

                              ----------                              


                       TUESDAY, FEBRUARY 11, 2014

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:04 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Tim Murphy 
(chairman of the subcommittee) presiding.
    Members present: Representatives Murphy, Burgess, Gingrey, 
Scalise, Harper, Olson, Gardner, Griffith, Johnson, Long, 
Ellmers, Barton, Schakowsky, Butterfield, Castor, Tonko, and 
Waxman (ex officio).
    Staff present: Charlotte Baker, Press Secretary; Karen 
Christian, Chief Counsel, Oversight; Carrie-Lee Early, 
Detailee, Oversight; Brad Grantz, Policy Coordinator, Oversight 
and Investigations; Brittany Havens, Legislative Clerk; Mary 
Neumayr, Senior Energy Counsel; Sam Spector, Counsel, 
Oversight; Peter Spencer, Professional Staff Member, Oversight; 
Tom Wilbur, Digital Media Advisor; Phil Barnett, Staff 
Director; Brian Cohen, Staff Director, Oversight and 
Investigations, and Senior Policy Advisor; Kiren Gopal, 
Counsel; Hannah Green, Staff Assistant; Bruce Ho, Counsel; 
Elizabeth Letter, Press Secretary; and Alexandra Teitz, Senior 
Counsel, Environment and Economy.

   OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Murphy. Good morning. Welcome to a hearing of the 
Energy and Commerce Committee, subcommittee on Oversight and 
Investigations, this hearing on Department of Energy Oversight, 
Status of Clean Coal Programs. Today's hearing will review the 
status of these programs. This oversight, we have focused on 
the department's efforts to advance carbon capture and 
sequestration or CCS technologies at coal-based power plants.
    Legislation and regulation in this important area should 
and must be based on sound scientific and economic facts. Where 
are we? Where are we going? When can we get there? And how do 
we do it?
    Today's testimony, which builds on our oversight work from 
this past October when we heard from workers and local 
officials whose coal-dependent communities are suffering in 
part because of EPA policies will help us review exactly where 
DOE is today in its work on CCS.
    There are many questions about the current status of this 
technology. We are sure our panelists today will be able to 
shed some light on this. Answering these questions and 
gathering the underlying facts will help us understand how 
carbon capture technologies can work effectively and reliably 
on coal-powered plants. This testimony will also help the 
committee develop a clear and accurate record of what will be 
necessary, the innovation and operational experience, 
economics, the timeframes to develop commercially competitive 
CCS for coal-based power generation.
    The technical and economic issues DOE confronts are not 
everything that is needed to determine if CCS can work at a 
large level in our nation's electricity system. There are legal 
issues, regulatory issues, infrastructure issues. All must be 
addressed appropriately.
    Yet when looking at just the critical technical challenges 
to CCS or coal plants, challenges for which Congress has 
appropriated billions of dollars to DOE to address, we have a 
way to go on several levels.
    First, it has not yet been demonstrated that CCS systems 
will work reliably at full-scale coal power plants. It is not 
sufficient to rely upon paper estimates and laboratories or 
speculation from EPA lawyers about technological feasibility. 
Carbon dioxide capture and compression systems have to be 
integrated into actual, full-scale coal power plants and be 
shown to operate reliably over time while maintaining 
predictable and safe plant operations. It does not appear DOE 
will have complete answers about this for at least 6 to 10 
years, so we need an update.
    Second, the costs to produce electricity have come down by 
a large amount to make any successful demonstrated CCS systems 
commercially viable in open markets. The first generation CCS 
technology, because of increased capital and operating costs 
and decreased electricity produced, the electric grid has been 
estimated to increase the cost of electricity significantly.
    At a coal gasification facility, the cost of electricity 
may be increased by 40 percent, at a pulverized coal power 
plant by upwards of 80 percent. This is what DOE's own document 
tells us. Demonstrating full scale CCS is alone not sufficient 
to make it the standard for the nation's coal-based electricity 
generation.
    If coal power plants cost too much, nobody will build them. 
Energy costs will increase making it even more difficult for 
families and U.S. manufacturers to compete.
    Which brings me to the third point, the research 
development and innovative breakthroughs needed to produce 
economically viable CCS technologies for coal power will take 
operational experience and time, decades in fact. This is not 
my opinion. DOE's own R&D timetables make this point to us.
    Over the past 10 fiscal years, more than $7.6 billion have 
been appropriated to DOE for its clean coal programs. This 
spending reflects the confidence Congress has placed in DOE and 
the National Energy Technology Laboratory, or NETL, to help 
advance these technologies.
    Given the spending and given the current economic and 
regulatory landscape, oversight is necessary to ensure DOE's 
stewardship of these funds and goals for its research are 
effective.
    It is also necessary to make sure energy and environmental 
policies match the technological realities. We are all 
committed to clean air, period. But moreover, we must be 
committed to using North American energy resources rather than 
continuing our trillion dollar trade deficit with OPEC or $4 
trillion wars in the Mideast where we have to defend their oil 
fields.
    In this hearing, I hope we will get some straight answers 
so that we can establish what is truly the status and prospects 
of DOE's game plan for advancing coal power technologies. Our 
two witnesses this morning should be up to the task, highly 
qualified.
    Dr. Friedmann presently heads DOE's coal programs and has 
substantial experience working on energy projects at Lawrence 
Livermore National Laboratory, and Scott Klara, an authority on 
coal research from the National Energy Technology Laboratory 
understands the R&D challenges.
    We look forward to having you give us the plain facts, not 
Washington spin. At the end of the day, straight answers will 
help this committee determine whether DOE is up to the task of 
shepherding the innovation that may dramatically advance coal-
based power both in terms of efficiency and environmental 
goals.
    But I worry that in the rush by the administration to 
implement new standards and regulations on coal-based power 
generation, the prospects for success or technological 
advancements are at risk. All these are questions we hope you 
can address today.
    [The prepared statement of Mr. Murphy follows:]

                 Prepared statement of Hon. Tim Murphy

    Today's hearing will review the status of the Department of 
Energy's clean coal programs. This oversight will be focused on 
the department's efforts to advance carbon capture and 
sequestration, or CCS, technologies at coal-based power plants.
    Legislation and regulation in this important area should 
and must be based on sound scientific and economic facts. Where 
are we? Where are we going? When can we get there? How do we do 
it?
    Today's testimony, which builds on our oversight work from 
this past October when we heard from workers and local 
officials whose coal-dependent communities are suffering in 
part because of EPA policies--will help us review exactly where 
DOE is today in its work on CCS. There are many questions about 
the current status of this technology. Answering these 
questions, and gathering the underlying facts, will help us 
understand how carbon capture technologies can work effectively 
and reliably on coal power plants. The testimony will also help 
the committee develop a clear and accurate record of what will 
be necessary--the innovation, the operational experience, the 
economics, the timeframes--to develop commercially competitive 
CCS for coal-based power generation.
    The technical and economic issues DOE confronts are not 
everything that is needed to determine if CCS can work at a 
large level in our nation's electricity system. Various legal 
issues, regulatory issues, infrastructure issues all must be 
addressed appropriately.
    Yet when looking at just the critical technical challenges 
to CCS for coal plants--challenges for which Congress has 
appropriated billions of dollars to DOE to address--we have a 
way to go, on several levels.
    First, it has not yet been demonstrated that CCS systems 
will work reliably at full-scale coal power plants. It is not 
sufficient to rely upon paper estimates in laboratories or 
speculation from EPA lawyers about technological feasibility.
    Carbon dioxide capture and compression systems have to be 
integrated into actual, full-scale coal power plants and be 
shown to operate reliably over time, while maintaining 
predictable and safe plant operations. And it does not appear 
DOE will have complete answers about this for at least 6 to 10 
years.
    Second, the costs to produce electricity have to come down 
by a large amount to make any successfully demonstrated CCS 
systems commercially viable in the open market. The first 
generation CCS technology--because of increased capital and 
operating costs and decreased electricity produced for the 
electric grid--has been estimated to increase the cost of 
electricity significantly. At a coal gasification facility, the 
cost of electricity may be increased by 40 percent; at a 
pulverized coal power plant, by upwards of 80 percent. This is 
what DOE's own documents tell us.
    Demonstrating full scale CCS is alone not sufficient to 
make it the standard for the nation's coal based electricity 
generation. If coal power plants cost too much, nobody will 
build them.
    Energy costs will increase making it even more difficult 
for families and US manufacturers to compete.
    Which brings me to the third point: the research, 
development, and innovative breakthroughs needed to produce 
economically viable CCS technologies for coal power will take 
operational experience and time, decades in fact. This is not 
my opinion; DOE's own R&D timetables make this point.
    Over the past 10 fiscal years, more than $7.6 billion have 
been appropriated to DOE for its clean coal programs. This 
spending reflects the confidence Congress has placed in DOE and 
the National Energy Technology Laboratory, or NETL, to help 
advance these technologies.
    Given this spending, and given the current economic and 
regulatory landscape, oversight is necessary to ensure DOE's 
stewardship of these funds and goals for its research are 
effective. It is also necessary to make sure energy and 
environmental policies match the technological realities. We 
are all committed to clean air. Period. But moreover, we must 
be committed to using North American energy resources rather 
than continuing our trillion-dollar trade deficit with OPEC, or 
our $4 trillion wards in the Mid East where we have to defend 
their oil fields.
    In this hearing, I hope we will get some straight answers 
so that we can establish what is truly the status and prospects 
of DOE's game-plan for advancing coal power technologies. Our 
two witnesses this morning should be up to the task. Dr. 
Friedman presently heads DOE's coal programs and has 
substantial experience working on energy projects at Lawrence 
Livermore National Laboratory. And Scott Klara, an authority on 
coal research from the National Energy Technology Laboratory, 
understands the R&D challenges. I look to you to give us the 
plain facts, not Washington double-talk.
    At the end of the day, straight answers will help this 
committee determine whether DOE is up to the task of 
shepherding the innovation that may dramatically advance coal 
based power, both in terms of efficiency and environmental 
goals. But I worry that in the rush by this administration to 
implement new standards and regulations on coal based power 
generation, the prospects for successful technological 
advancement are at risk.
    #  #  #

    Mr. Murphy. And with that, I will now recognize Ms. 
Schakowsky, who is sitting in for Ms. DeGette for 5 minutes.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman. I appreciate our 
witnesses appearing today to tell us about the progress of 
DOE's important carbon capture and storage research development 
and demonstration work. I often say that this Congress has an 
opportunity to lead this country into the future with smart 
action that will curb emissions and prevent irreversible 
climate change, but our window to take action is rapidly 
closing.
    We know that the National Oceanic and Atmospheric 
Administration announced that 2013 was the fourth warmest year 
on record, and 9 of the 10 warmest years have occurred since 
2000. For decades, the world's scientists have presented policy 
makers with evidence that climate change is happening and that 
human activities are responsible. Those warnings have only 
grown stronger with time.
    The president of the National Academy of Sciences has 
explained that scientists are now as certain about human-caused 
climate change as they are that smoking cigarettes can cause 
cancer. We need to drastically reduce our carbon emissions and 
quickly. We need to make a commitment to clean and renewable 
sources that provide all of the jobs and energy benefits of 
fossil fuels without the public health and environmental costs.
    We also need to use the best technology available to reduce 
carbon emissions wherever we can. Carbon capture and storage or 
CCS is one of those technologies. CCS investments are proving 
that coal-fired power plants can capture a significant 
percentage of their carbon pollution and safely transport and 
inject it underground.
    The Kemper facility in Mississippi set to go online later 
this year will be the first commercial scale coal-fired CCS 
project, but it is not the only one. There are projects in 
California, Texas, and elsewhere including my home state of 
Illinois that have attracted billions of dollars in private 
financing. Those projects are demonstrating all the individual 
elements of advanced CCS systems, carbon capture, compression, 
transport, and sequestration technologies.
    In September, EPA proposed a rule requiring new coal-fired 
power plants to cut carbon pollution. To meet the proposed 
standards, new coal plants will have to use CCS technology to 
capture a portion of their carbon pollution. Opponents have 
argued that the EPA should not have a role in reducing carbon 
pollution from coal-fired plants and that CCS technology isn't 
available now.
    In fact, this committee passed a bill just last week 
essentially eliminating EPA's authority to regulate carbon 
pollution from coal plants.
    Today's hearing should provide some much needed facts about 
CCS and the economics of pollution controls. First there is a 
critical role for government to play. Right now, power plants 
can pollute without any adverse financial impact. There is no 
financial incentive for industry to develop and deploy 
pollution controls on a widespread basis.
    If EPA doesn't require responsible action, we have no 
chance of protecting public health and our planet over the long 
term. It is also important to recognize that CCS technologies 
are already available. All the component pieces of CCS have 
been used in industrial applications for a long time. 
Industrial facilities have separated carbon dioxide for several 
decades. Oil companies have transported carbon dioxide by 
pipeline and injected it underground for nearly 40 years.
    Existing DOE programs have helped apply those technologies 
in the power sector. Multiple demonstration projects have 
applied these technologies to coal plants. Several full-scale 
projects are under construction today, and many vendors are 
willing to sell CCS technologies right now.
    CCS is the only proven set of technologies that would allow 
us to cut carbon pollution while still using coal. I look 
forward to hearing from our DOE witnesses today about their 
important contributions to our nation's vital effort to cut 
carbon pollution. And I don't know if anyone would like the 
remaining time. I yield back. Thank you, Mr. Chairman.
    Mr. Murphy. Gentlelady yields back, and I now recognize Dr. 
Burgess for 5 minutes.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Well, thank you, Mr. Chairman, and this 
hearing is the perfect example of our constitutional 
obligation, the constitutional obligation that is required of 
this subcommittee. On behalf of the taxpayers of this country, 
we are required to do oversight. We are required to ask the 
questions and get the answers. Our committee authorizes the 
expenditure of money. The appropriators write the check. The 
agency cashes the check, and it is our obligation to ensure 
that that money has been spent appropriately for the benefit of 
the taxpayer of this country.
    Every program, every agency, should come under similar 
scrutiny. This is not partisan. It is not political. It is 
basic oversight and applying common sense principles to allow 
the government the opportunity to work more effectively and 
efficiently on behalf of the taxpayer.
    So for over a decade, the Department of Energy has been 
focused on assisting industry to develop ways to reduce carbon 
dioxide emissions, most notably although not exclusively, 
through the carbon capture and storage techniques. Research and 
development for these technologies has cost the federal 
government billions of dollars.
    So what did we get for the money we spent? Where does this 
technology stand? Are we nearing commercial viability? And if 
so, what is the timeline for your average generating plant to 
be able to acquire such technology?
    In Texas, many questions remain as to how carbon capture 
and storage will affect neighborhoods and the environment 
around generation plants. When pressurized carbon is injected 
deep into the earth, how does that affect the ground above? Are 
people's homes and businesses at risk from seismic activity 
should this carbon accidentally be released? Will the earth's 
surface around such sequestration attempts be changed due to 
the injection of emissions? The federal government must be 
honest and must be up front with the American people as to the 
potential pitfalls as well as the benefits to such technology.
    So over $7.5 billion has been appropriated over the last 
decade for the development of clean coal's technologies. We 
must have an accounting of every dollar and how the American 
taxpayer is better off by each dollar having been spent. Where 
has the money gone? What do we have to show for it? I hope 
these questions can be answered during today's hearing.
    With eight demonstration projects of carbon capture and 
storage technology beginning around the country, two in my home 
State of Texas, how many are close to actual operation? How 
many are producing electricity that consumers can use today? 
And if they are producing electricity that consumers can use 
today, what effect has that had on the price for the consumer?
    A lot is riding on this. The federal agency is setting 
regulations and standards based upon these demonstration 
projects. We need to know where they stand. So today's hearing 
is the kind of oversight this committee can do and should do. 
It is the kind of oversight that we do best. Asking questions 
as to how the authorizations passed by this committee are being 
utilized by the department and how the money the department 
received is being spent and ultimately how that benefits the 
taxpayer.
    I thank the chairman for the recognition. I will yield back 
the time.
    Mr. Murphy. Gentleman yields back. Now recognize Mr. Waxman 
for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. The subject 
of today's hearing is one that is vital for the future of coal 
and the climate, the development of carbon capture and storage, 
or CCS technologies. Investments that the Department of Energy 
is making in CCS will help industry produce cleaner power, help 
provide a market for coal as the world moves to cut carbon 
pollution, and help avoid a catastrophic degree of climate 
change.
    There is a long history of government investment driving 
private sector technological advances. Government investment 
led to the creation of the Internet, GPS positioning, and even 
Apple's voice assistant Siri. Google's Search algorithm was 
financed by a grant from the National Science Foundation.
    In the case of CCS, DOE is partnering with the coal 
industry and utilities to build next generation clean coal 
power plants, helping to create new jobs and control carbon 
emissions. Investing in CCS makes sense because our nation and 
the world must reduce our carbon emissions.
    My Republican colleagues accuse the president of waging a 
war on coal. In fact, the president is trying to create a 
future for coal. His administration has invested billions of 
dollars, more than any other administration, to develop clean 
coal technologies. It is the policies pursued by Republicans on 
this committee, not the president's policies, that are a real 
threat to coal.
    In fact, I am confident that the coal industry and 
Republican members from coal states will soon regret the day 
that they opposed the Waxman-Markey Climate Bill and the $60 
billion we proposed to invest in carbon capture and 
sequestration.
    Mr. Chairman, this committee is powerful. We have the 
authority to shape our Nation's environmental and energy laws. 
But there is one set of laws we cannot change. Those are the 
laws of nature. The greenhouse effect tells us that we will 
irrevocably change our atmosphere and cause catastrophic 
climate change if we continue to burn coal without developing a 
technology to capture its carbon emissions. That is not a 
bright future for coal or any of us.
    The DOE investments in CCS are under the spotlight now 
because of EPA's proposed new power plant rule, but these 
investments are crucially important and are starting to pay 
off. Later this year, Southern Company's Kemper County Energy 
Facility in Mississippi will begin operations and capture 67 
percent of its CO2 emissions. DOE's $270 million 
investment helped to make this plant a reality and attracted 
billions of dollars in private financing.
    Opponents of CCS say that technology used in Kemper's 
facility is too expensive. But the cost of virtually all new 
technologies decrease over time with experience, continued 
innovation, and economies of scale.
    We have seen that repeatedly under the Clean Air Act with 
scrubbers, NOx controls, and mercury controls. The expert 
witnesses today will tell us that they expect to see similar 
cost reductions with CCS technology.
    In contrast, the costs of climate disruption are only going 
to get worse, much worse, if we don't act now to cut carbon 
pollution. Our choice is a simple one. We can do nothing while 
coal plants continue to spew dangerous emissions into the air, 
endangering the welfare of our children and our planet. Or we 
can develop the new clean energy technologies of the future. 
The President and DOE Secretary Moniz have made the right 
choice, invest in CCS. Our choice should be to support them in 
this effort. Mr. Chairman, yield back my time.
    Mr. Murphy. Gentleman yields back. I would like to now 
introduce our panel today. Dr. Julio Friedmann is the Deputy 
Assistant Secretary for Clean Coal, Office of Fossil Energy at 
the Department of Energy. In this capacity, he is responsible 
for the DOE's research and development programs and advance of 
fossil energy systems, large demonstration projects, carbon 
capture utilization and storage, and clean coal deployment. 
Before assuming his current position, Friedmann was Chief 
Energy Technologist for Lawrence Livermore National Laboratory.
    Scott Klara is accompanying Dr. Friedmann today, and he is 
currently the acting director of the Department of Energy's 
National Energy Technology Laboratory where he is responsible 
for managing the day-to-day execution of all aspects of the 
lab's mission. He has 22 years of federal government experience 
with NETL and its predecessor organizations.
    I will now swear in the witnesses. You are aware the 
committee is holding an investigative hearing and when doing 
so, has the practice of taking testimony under oath. Do you 
have any objections to testifying under oath? Both witnesses 
say no, and the Chair then advises you that under the rules of 
the House and rules of the committee, you are entitled to be 
advised by counsel. Do you desire to be advised by counsel 
during testimony today? Both waive that.
    In that case, if you will please rise and raise your right 
hand, I will swear you in.
    [Witnesses sworn.]
    Mr. Murphy. Both witnesses answer in the affirmative, so 
you are now under oath and subject to the penalties set forth 
in Title 18, Section 1001 of the United States Code. You may 
now each give a 5-minute opening statement. Dr. Friedmann, we 
will begin with you.

 TESTIMONY OF JULIO FRIEDMANN, DEPUTY ASSISTANT SECRETARY FOR 
 CLEAN COAL DEPARTMENT OF ENERGY, ACCOMPANIED BY SCOTT KLARA, 
ACTING DIRECTOR FOR THE NATIONAL ENERGY TECHNOLOGY LABORATORY, 
                      DEPARTMENT OF ENERGY

    Mr. Friedmann. Thank you, Chairman Murphy, Ranking Member 
Schakowsky, Ranking Member Waxman, and other members of the 
subcommittee. Thank you for this opportunity to speak to you 
today. It is really an honor and a privilege.
    By way of introduction, I am the only Julio Friedmann you 
will ever meet and was recently appointed to be the Deputy 
Assistant Secretary for Clean Coal in the Office of Fossil 
Energy. This is my second time testifying before this 
committee, my first time in this role.
    Prior to that appointment, I served as the Chief Energy 
Technologist at Lawrence Livermore National Laboratory where I 
coordinated and managed energy research programs across 
laboratory. I have also worked in industry, 5 years at Exxon 
Mobil in Houston and in academia as part of the faculty of the 
University of Maryland.
    I am joined today by Mr. Scott Klara. He is the acting 
director of our National Energy Technology Laboratory, the only 
government-owned, government-operated laboratory with the sole 
mission on fossil energy. Mr. Klara is responsible for the 
execution and management of the program work here where he 
served the Nation for over 20 years following a 7-year stint in 
industry.
    We appreciate this opportunity to discuss the Department of 
Energy's coal research and development activities and carbon 
capture and storage in particular. It is worth noting that 
although I am the deputy assistant secretary for clean coal, 
carbon capture, and storage technology is not a coal technology 
per se. It is an environmental technology whose job is to 
reduce carbon dioxide emissions.
    It has special relevance and importance to the coal-powered 
systems in this country and in particular the existing and 
future coal fleets. In that context, the Department of Energy 
continues to play a leadership role in the development of clean 
coal technologies with our focus on carbon capture and storage.
    As part of this in December, the department released an $8 
billion draft loan guarantee solicitation to promote the early 
deployment of innovative fossil energy technologies in projects 
that reduce carbon emissions. This solicitation is added to the 
already $6 billion the Obama Administration is committed to 
clean coal technologies. This reflects the president's 
commitment, continued commitment, to an all-of-the-above 
strategy. And it embraces an energy mix of nuclear power, 
renewable energy sources, and fossil energy including clean 
coal.
    The clean coal research program is addressing the key 
challenges that confront the development and deployment of 
clean coal technologies. These include research and cost-
effective capture technologies, the development and 
demonstration of advanced coal conversion and environmental 
control technologies, and the safe and effective storage of 
carbon dioxide in deep geological formations including 
monitoring, verification, and accounting systems.
    To get there, we are pursuing three technical pathways for 
carbon capture: post-combustion, pre-combustion, and oxygen-
fired combustion or oxy-combustion. Research in these pathways 
is exploring a wide range of approaches that, coupled with 
advances in efficiency improvement and cost reduction, 
including the developments in gasifications, turbines, and 
advance combustion systems, will help provide a technology base 
for commercial deployment of CCS broadly.
    On the side of storage, we have pursued projects designed 
to develop innovative advanced technologies and protocols for 
the monitoring, verification, accounting of CO2 
storage in geological formations as well as simulating the 
behavior of geologically stored CO2.
    The regional carbon sequestration partnerships are an 
essential component of this effort and have successfully 
executed 19 small-to-large-scale CO2 injection 
projects nationwide including Texas, Alabama, Mississippi, 
Ohio, Montana, Michigan, and Illinois. The program is currently 
in the development phase during which large scale field testing 
involves at least one million tons of carbon dioxide per 
project implemented. Several of the large scale tests are 
currently underway, and one project has safely injected over 
three-and-a-half-million tons of carbon dioxide which continue 
to be monitored for safe and permanent storage.
    Right now, the crown jewels of our program are the eight 
major large CCS demonstrations deployed around the country. 
They are selected in part on three important bases: likelihood 
of technical success, likelihood of financial success, and 
covering a wide set of national needs. We have industrial and 
power projects, saline formation, and enhanced oil recovery 
projects, pre-, post-, and oxy-fired projects, and both new-
build plants and retrofits.
    The plants within our portfolio produce power, fertilizer, 
ethanol, and methanol. They are important advances in several 
aspects of these projects. For example, in east Texas, the Air 
Products and Chemicals, industrial CCS project is capturing 
CO2 from two steam-methane reformation units, 
basically hydrogen plants.
    The CO2 captured there is being used for 
enhanced oil recovery operations, and will pass one million 
tons of total injection this fall. As mentioned by several 
members, the construction of Kemper County's IGCC project by 
Southern Company is near completion as is the completion of the 
Archer Daniels Midland Industrial CCS Project in central 
Illinois.
    And just last month, FutureGen 2.0 moved closer to 
construction after the DOE approved the record of decision 
needed to go forward with continued work and spending.
    Since the inception of the carbon storage program, the 
Department of Energy has recognized that a number of 
utilization technologies could also play important mitigating 
roles.
    Aside from enhanced oil recovery though, the potential for 
these approaches is limited for a number of technical reasons 
including cost and market factors. In the meantime, enhanced 
oil recovery represents the most commercially attractive 
utilization option for CO2 storage and produces 
substantial quantities of oil while storing carbon dioxide in 
geological formations.
    There are currently six of those large eight projects which 
are employing CO2 enhanced oil recovery, two doing 
saline and aquifer storage projects across the U.S. As with the 
saline storage projects, the CO2 EOR projects are 
subject to rigorous monitoring, verification and accounting 
procedures to validate the storage of CO2 and verify 
their safety and effectiveness.
    To conclude, Mr. Chairman, CCS can play a critical role in 
mitigating CO2 emissions under many potential future 
carbon stabilization scenarios. Since challenges remain to 
commercial deployment of these technologies, it is the 
department's goal and the focus of our research efforts to 
spearhead the research and development that would not have 
occurred otherwise and has successfully leveraged private 
investments in advancing the readiness of these emerging clean 
coal technologies. Based on our, I believe, successful track 
record, I believe that our clean coal research program 
demonstrates that we can help meet the challenges associated 
with CCS deployment.
    With that, Mr. Chairman, I would be happy to answer any 
questions you and the subcommittee have. Thank you for your 
attention.
    [The prepared statement of Mr. Friedmann follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Mr. Murphy. Thank you. Mr. Klara, we understand you are 
here to answer questions but not to provide an individual 
statement. So thank you. So I will recognize myself first for 5 
minutes.
    Dr. Friedmann, thank you for that testimony. The DOE's 
fossil energy office is responsible for overseeing all of DOE's 
research and development and demonstration work for clean coal 
technologies. Am I correct on that?
    Mr. Friedmann. Yes, sir.
    Mr. Murphy. Thank you. And you are the person in charge of 
the clean coal work and report to the assistant secretary, 
correct?
    Mr. Friedmann. That is correct.
    Mr. Murphy. OK, the project and research evaluations 
funding recommendations come from your people, your team. Is 
that right too?
    Mr. Friedmann. Yes, in partnership with NETL.
    Mr. Murphy. And, Mr. Klara, quickly, I know and respect the 
National Energy Technology Laboratory, but for the record, NETL 
brings the science, the technical and engineering expertise to 
DOE's programs, and your people do the research and development 
and conduct day-to-day project management. Is that correct?
    Mr. Klara. Correct.
    Mr. Murphy. Make sure your microphone is on. Now, Dr. 
Friedmann, carbon capture and sequestration has never been 
implemented commercially yet on a full scale at functioning 
power plants. Is that correct?
    Mr. Friedmann. That is a moving definition, sir.
    Mr. Murphy. But so far. You are anticipating that it is 
going to happen, but it hasn't happened yet. Am I correct?
    Mr. Friedmann. No, again it is a moving definition.
    Mr. Murphy. What does that mean?
    Mr. Friedmann. For example, we have deployed carbon capture 
and storage at the Beulah Gasification Facility for over 30 
years and done carbon capture and storage from there for 
enhanced oil recovery for over 10 years. That produces high 
quality natural gas which goes into a pipeline that powers 
power plants.
    Mr. Murphy. All right, I am talking about commercial. Are 
those commercial plants, research plants?
    Mr. Friedmann. No, that plant has been in commercial 
operation for 30 years.
    Mr. Murphy. OK, I am talking about coal power plant.
    Mr. Friedmann. That is Burns North Dakota Lignite, sir. 
Yes, it is a coal plant.
    Mr. Murphy. Now, there presently are five coal powered 
demonstration projects as part of the DOE funding. Is that 
correct?
    Mr. Friedmann. Yes, five power projects.
    Mr. Murphy. One is FutureGen 2.0 which you refer to, and 
four are authorized under the Energy Policy Act of 2005. Is 
that correct?
    Mr. Friedmann. I am sorry. Can you say that again, please?
    Mr. Murphy. One is the FutureGen which----
    Mr. Friedmann. Yes.
    Mr. Murphy [continuing]. You mentioned, and four others are 
authorized under the Energy Policy Act of 2005.
    Mr. Friedmann. Yes, sir.
    Mr. Murphy. OK, now pursuant to the Energy Policy Act, the 
technologies of these power plants supported by DOE go well 
beyond the level of what is commercial service at coal power 
plants or has previously been successfully demonstrated on coal 
power plants. Is that correct?
    Mr. Friedmann. I would say that is fair.
    Mr. Murphy. OK, and the point of the current demonstrations 
according to your agency is to demonstrate that CCS can be 
integrated at commercial scale while maintaining reliable, 
predictable, and safe plant operations. Is that correct?
    Mr. Friedmann. Yes, sir.
    Mr. Murphy. Thank you. But DOE says it won't really know 
the result of these demonstration projects until they are 
completed and evaluated. Is that correct?
    Mr. Friedmann. The technical findings from these projects 
have been brought forward as the projects proceed. So again 
even though it is not a power project, I would point to the air 
products project in Texas which came online earlier this year, 
and the technical findings and results from that are already 
available. And as more come forward, more are available.
    Mr. Murphy. Now, I understand that reporting these 
demonstrations, according to your own project schedule, to take 
6 to 9 years----
    Mr. Friedmann. Yes.
    Mr. Murphy [continuing]. For many of these? OK, thank you. 
Mr. Klara, we have spoken about this before. NETL says that the 
CCS technologies in a current state of development are cost 
prohibitive for full commercial service. What is a realistic 
timeframe based on NETL's best estimates for a commercially 
viable technology successfully completing demonstration and 
coming to market?
    Mr. Klara. With our program, we divide our technology up 
into three development buckets. We call them first generation 
technology, second generation, and transformational. And with 
each one of those development horizons, the cost and 
performance gets better. The first generation technology are 
the technologies that you will find in our current 
demonstration program. And these technologies indeed can be 
commercially offered and commercially deployed. With any 
development, and I think Congressman Waxman referred to this 
relative to NOx and SOx control, that with any development that 
with a learning curve as well as continued development within 
the Office of Fossil Energy's Program, you can't expect those 
costs to go down and the performance to increase.
    Mr. Murphy. But your documents suggest it will take until 
after about the mid 2020s for second generation technologies 
and more than 20 years for what you call transformational 
technologies. Am I correct in what your documents say?
    Mr. Klara. The additional buckets of technology, second 
generation and transformational, will indeed take some more 
time to achieve.
    Mr. Murphy. So why do you believe that those estimates are 
realistic? What will take the time?
    Mr. Klara. I am not sure I understand when you say when do 
we believe.
    Mr. Murphy. Well that it is going to take to the mid 2020s 
or longer. Why do you believe those timeframes are needed?
    Mr. Klara. Well, with every bucket of our technologies, we 
are constantly evaluating the R&D portfolio every year looking 
at how developments are proceeding as well as the scope of the 
portfolio. Some projects drop out. Additional projects are 
brought in. And as part of that, we are constantly doing 
analysis to evaluate when and to what level we believe those 
technologies will achieve.
    Mr. Murphy. Do you also assess commercial viability in that 
process?
    Mr. Klara. We assess the cost and performance. We rely on 
industry and others to determine when it is viable.
    Mr. Murphy. OK, thank you. I see my time has expired. Mr. 
Klara, when you talk, if you could move that microphone closer 
to your face. Now recognize Ms. Schakowsky for 5 minutes.
    Ms. Schakowsky. I wanted to underscore something you said. 
You said that there is CCS technology in play used right now 
commercially and has been for several years. Is that true?
    Mr. Friedmann. Yes, it is. There is commercially available 
technology that can be sold by a wide number of vendors, U.S.-
based and international with the heavy of equipment 
manufacturing made in this country. Pursuant to the earlier 
conversation, most of those technologies have been applied to 
industrial facilities. For example, the Beulah site is a 
synthetic natural gas plant.
    But in point of fact, the same technologies have been 
demonstrated around the world in other coal-fired facilities.
    Ms. Schakowsky. And would that technology fit into bucket 
one? Is that what you are saying?
    Mr. Friedmann. Yes, first generation.
    Ms. Schakowsky. And to what extent does that reduce then 
the carbon pollution? I mean you are saying that we want to get 
to the third generation.
    Mr. Friedmann. Right, so that actually varies by site and 
by plant. Some of the plants, for example the Beulah one I 
mentioned before, basically acts as about a 50 percent 
decarbonization. Other plants we have seen, for example, the 
Air Products plant is essentially 90 percent decarbonization. 
We believe FutureGen will be effectively 100 percent 
decarbonization when it is active. But it depends on the 
technology. It depends on the plant. It depends on the type of 
coal used and has to be calculated as such.
    Ms. Schakowsky. I think what we are going to hear today is 
that somehow this technology is not ready for commercial use, 
that the production and the timeline is very long and that what 
the president is doing to regulate carbon pollution from new 
coal-fired power plants is not appropriate. Could you comment 
on the veracity of that argument?
    Mr. Friedmann. We see our role chiefly as enabling the 
reduction of cost and the improved performance of these 
technologies as they enter the market and to work with 
commercial industrial partners on the commercialization 
themselves. Our job is not the commercialization or the 
determination of economic viability. Our job is to support the 
technology and the development of that.
    Ms. Schakowsky. OK, am I correct that there are three basic 
steps in CCS, separately and compressing CO2, 
transporting it by pipeline and injecting it underground?
    Mr. Friedmann. Correct.
    Ms. Schakowsky. And, Dr. Friedmann, do we know how to 
separate and compress CO2 with current technology?
    Mr. Friedmann. Yes, we do.
    Ms. Schakowsky. And have we figured out how to transport 
CO2 by pipeline?
    Mr. Friedmann. Yes, ma'am.
    Ms. Schakowsky. And do we understand how to inject carbon 
into the ground? Is there enough viable storage underground to 
ensure that we can inject CO2 without constraints? 
And a safety question was raised as well.
    Mr. Friedmann. Yes, ma'am.
    Ms. Schakowsky. And so the basic building blocks are all 
technologically viable?
    Mr. Friedmann. The large-scale components of CCS have been 
shown and demonstrated. And that is an important technical 
finding.
    Ms. Schakowsky. OK, finally, Dr. Friedmann, are there 
companies today that will sell technology to power plant 
operators looking to implement CCS technology?
    Mr. Friedmann. Yes, ma'am, with a performance guarantee.
    Ms. Schakowsky. With?
    Mr. Friedmann. With a performance guarantee.
    Ms. Schakowsky. So it sounds as if CCS is both real and 
available. We also hear from the Republicans that CCS simply 
costs too much, but the history of large-scale technology 
development and the Clean Air Act in particular is full of 
examples of pollution control costs decreasing over time with 
continued innovation and economies of scale as technologies 
mature and become widespread, costs naturally come down. Would 
you anticipate that CCS costs will come down as the technology 
matures and is put in place in more locations?
    Mr. Friedmann. Indeed.
    Ms. Schakowsky. And why would that happen?
    Mr. Friedmann. As with all clean energy technologies, the 
value comes from deployment and cost reduction comes from 
deployment. Engineers learn things, and they come up with new 
ideas. We have seen this for many, many different kinds of 
technology deployment, but it has been clearly demonstrated for 
many energy technologies as well, from wind turbines to solar 
panels to coal gasifiers to many other kinds of technologies. 
And based on our thermodynamic assessments and based on our 
engineering assessments, we see multiple clear pathways to 
substantial cost production.
    Ms. Schakowsky. Thank you. It seems to me what we can't 
afford is the cost of carbon and other pollution from coal. And 
as Mr. Waxman said, what we are hoping for today is both to 
help the environment and coal. And I yield back.
    Mr. Murphy. Gentlelady yields back. Can you just clarify on 
her question? Were you referring to costs going down on current 
plants or future plants?
    Mr. Friedmann. Both.
    Mr. Murphy. OK, so current plants that have already made 
their investment will see their cost decline because they are 
saying they will make further investments. I just want to make 
sure on her question.
    Mr. Friedmann. Thank you for providing me the opportunity 
to clarify that. That is an excellent question. Any retrofit to 
an existing power plant will necessarily add cost, but the cost 
of abatement itself today is a certain price and will go down 
over time as more technology is developed and deployed.
    Mr. Murphy. Thank you. Now recognize the Chairman Emeritus 
of the Committee, Mr. Barton, an engineer himself.
    Mr. Barton. Well, thank you, Mr. Chair. I am not a 
registered professional engineer anymore. I used to be, but to 
the registered professional engineers, that is as it should be 
a sensitive issue. So I have been registered, but I am not at 
this time. But I was trained as an engineer and did practice as 
a registered professional engineer.
    I know that the purpose of this hearing is not on the 
legality of these standards, but I do just want to point out 
that in the Energy Policy Act in 2005, there is a section 
402(i) that very specifically says that these clean coal 
standards cannot be set on projects that are demonstration 
projects that are receiving assistance. It is explicit. The 
chairman and several others of us have sent a letter to the EPA 
and DOE on that. I mean to EPA, but that is a subject for a 
different issue.
    My generic question is pretty straightforward. All of these 
carbon capture sequestration technologies add cost to these 
coal plants. Could you all give the subcommittee kind of a 
baseline estimate of how much it adds to the cost? Does it 
double the cost? Does it increase it by 25 percent, 50 percent? 
What is the generic estimate?
    Mr. Friedmann. Thank you very much for your question. I am 
happy to provide that answer. It is a question that a great 
number of people are asking. First a quick caveat. Again that 
number, the precise number, will vary by plant whether it is 
subcritical or supercritical by coal rank, and by the kind of 
technology used.
    Typically we express these costs as a range. So for the 
first generation technology that Dr. Klara was mentioning 
earlier, we are looking at something on the order of $70 to $90 
a ton. In that context, that looks something like a 70 or 80 
percent increase on the wholesale price of electricity.
    For the second generation technologies, which we are 
developing, it is our strong expectation that that number will 
be roughly half. We will be looking at something like a $40 or 
$50 a ton cost.
    Mr. Barton. So the initial technology almost doubles the 
cost, and the next generation is going to add 25 percent to the 
cost. Is that fair?
    Mr. Friedmann. Again with respect to the wholesale price, 
yes. The retail price, of course, will vary by market. One of 
the points that I would like to make though, it is in fact a 
substantial percentage increase in the cost of electricity. But 
in part, that is because the current price of coal is so low 
that it represents a large percentage increase.
    Mr. Barton. Now, what has to happen to go from doubling to 
only increasing by 25 to 50 percent? What is the timeframe for 
that? And how many plants have to be built and how many more 
billions of dollars or hundreds of millions of dollars have to 
be spent?
    Mr. Friedmann. I am going to answer partly and then leave 
the rest of the answer to Mr. Klara for that. Again we have 
laid out a very clear road map for R&D programs, and we believe 
that we will hit the marks that we have laid out in terms of 
major milestones and deliverables. We are looking towards a 
second generation of demonstrations coming forward in the next 
few years. They would be completely deployed and the learnings 
provided back to the public about the middle of the next 
decade, 2022 to 2025 timeframe. And those second generation 
demonstrations would have substantially reduced costs. Mr. 
Klara.
    Mr. Klara. Yes, and I will just confirm what Dr. Friedmann 
said in terms of a 10 year or less timeframe to get to that 
second generation developmental efforts. Relative to costs to 
do that, our assumption for that is that we will have levels 
commensurate with what we have today going forward. And that is 
our basis in determining if and when we can hit those marks. 
And again the 10-year time horizon or less is the horizon we 
believe we are looking at right now for these.
    Mr. Barton. So 10 years is good. Now, all of these 
demonstration projects, I believe, so far are on capture and 
sequestration, but former Congressman Rick Boucher when he was 
on the committee and the subcommittee chairman of the Energy 
Subcommittee had a bill that he tried very hard to get me to 
cosponsor. I never was able to unfortunately, but I got him to 
put in that bill some language on conversion of CO2. 
I happen to think that it is going to be much more cost 
effective to convert CO2 as opposed to capture and 
sequester it. Is EPA or DOE doing any research right now on 
CO2 conversion as compared to capture and 
sequestration? And this will be my last question.
    Mr. Friedmann. Yes, sir. The good news is indeed we are. In 
addition to carbon capture and storage, we also do research in 
carbon utilization which includes using CO2 to make 
beneficial products or converting the CO2 into other 
substances or products themselves. Currently the majority of 
that effort is in enhanced oil recovery, which provides many 
benefits to the country including domestic secure fuel supply 
at low cost. There are other pathways to utilization which we 
are pursuing. There is a project actually in Texas, the 
Skyonics Project which we are piloting at about $110 million. 
That is going to convert carbon dioxide to basically mineral 
aggregate and cement admixtures.
    We are also looking at converting carbon dioxide into algae 
and then that algae into other useful products including animal 
feed on one end of the spectrum and possibly biofuels on the 
other. We have a project at the Polk Plant in Florida where we 
are doing that today.
    Mr. Barton. You were ready for that question. Thank you.
    Mr. Murphy. The gentleman's time has expired. Now recognize 
Mr. Waxman for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. Well that is what this 
hearing is all about, so I would expect you to be ready for all 
of our questions since this is the field in which you both work 
so carefully.
    Industry can pollute because it costs less to dump 
pollution than to pay to clean it up. Unfortunately dumping 
pollution is never really free. There are costs. The American 
people bear those costs and bad health, and our environment is 
also polluted. And we pay a price for that. So the Clean Air 
Act is one of the most successful environmental laws in the 
world, and one reason the Clean Air Act works so well is that 
it sets standards to drive technological innovation in 
pollution controls often called technology forcing standards.
    Currently there are no limits on carbon pollution from 
coal-fired power plants. These plants are allowed to emit 
unlimited carbon pollution into the atmosphere, and that is 
just what they do. EPA is proposing carbon pollution standards 
that would address this problem by requiring the new power 
plants, coal-burning power plants, to reduce carbon pollution 
by 30 to 50 percent through the use of partial carbon capture 
and sequestration technology or CCS.
    Dr. Friedmann, if we didn't have an EPA requirement, would 
you expect the power sector to use CCS at new coal-fired power 
plants?
    Mr. Friedmann. It is unlikely that they would deploy CCS 
technology in large part because they would not be able to get 
return on their investments through the public utilities 
commission process.
    Mr. Waxman. And they don't want to make an investment on 
something where their competitors aren't spending that money 
either. Isn't that correct?
    Mr. Friedmann. It is worth mentioning that I am not a 
utility executive, but that has been my experience.
    Mr. Waxman. Well, if you don't have this requirement, why 
spend the money? Why would a coal company or a power plant want 
to spend the money if they didn't have to if they could do it 
without having to spend the money and they can continue doing 
business as usual?
    In 2011, American Electric Power abandoned its plan to 
install full-scale CCS at the Mountaineer Plant because the 
company could not recover its costs in the absence of a 
government requirement. So without a mandate, we are not going 
to get carbon pollution controls on coal, and that is why EPA 
rules are so essential.
    Of course, government can also help industries develop the 
technology to meet pollution standards. There is a long history 
of government investment spurring private sector innovation in 
areas such as defense, technology, energy development. Even 
small government investments can produce big gains for the 
public and create huge new markets. Dr. Friedmann, isn't this 
what your office does? You invest in new technologies and work 
with the private sector to help clean up coal?
    Mr. Friedmann. Indeed it is. We spend our appropriations 
with the purpose of developing this technology, demonstrating 
its validity, and helping commercialize it in partnership with 
both utilities and heavy equipment manufacturers and other 
industrial partners.
    Mr. Waxman. Besides CCS, what are some examples of 
pollution control technologies for coal or coal efficiency 
technologies that DOE has invested in and helped bring to 
market?
    Mr. Friedmann. One example is the TRIG Gasifier. The 
transport gasifier was developed as a partnership between 
Southern Company and the Department of Energy over the past 30 
years. That is the core technology in the Kemper County 
demonstration, and we have helped bring that from pilot reactor 
scale up to large scale commercial demonstration.
    Another example is a coal drying technology. This was 
funded actually between 2000 and 2004 in North Dakota with the 
Coal Creek Plant in which the lignite drying was used to 
increase the efficiency of the power plant output and did so 
between two and four basis points on the plant.
    Mr. Waxman. So you had SCR and more efficient boilers. Is 
that right?
    Mr. Friedmann. SCR is another technology which 
desulfurization and de-NOx technology, mercury technologies, 
they are all technologies which the Department of Energy has 
supported over the years.
    Mr. Waxman. But we have a long record of DOE's investments 
and EPA standards that work hand in hand. For example, DOE 
funded the first U.S. demonstration of a technology, this SCR, 
the selective catalytic reduction, which was ultimately used to 
comply with EPA's NOx standards in the 1990s. The same is now 
true with CCS. DOE has helped develop the CCS technologies 
needed to reduce carbon pollution from new coal-fired power 
plants, and now EPA has proposed reasonable standards that will 
take advantage of these demonstrated technologies to reduce 
carbon emissions.
    Dr. Friedmann, what are the other advantages of these 
government investments? Do you think there will be a global 
market for American CCS technologies?
    Mr. Friedmann. Indeed we are already seeing that. We are 
seeing companies around the world, most notably in Japan and in 
China, which are interested in United States technology that is 
considered clean coal technology both because of high 
efficiency and because of potential for carbon capture.
    Mr. Waxman. So it is good for American business? We can 
export this?
    Mr. Murphy. The gentleman's time has expired.
    Mr. Waxman. Well, I want to at least go as long as my 
colleague.
    Mr. Friedmann. I think that would remain to be seen.
    Mr. Murphy. He went over 55 seconds, so----
    Mr. Waxman. So I think we ought to celebrate the ability of 
the new technologies to go along with the standards because it 
is going to be a win-win proposition. Thank you, Mr. Chairman, 
for your indulgence.
    Mr. Murphy. We will get the facts. You are welcome. I will 
now recognize Dr. Burgess for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman. Again, thanks to our 
witnesses for being here and being so thoughtful in your 
preparation and your answers. Can we talk just a little bit 
about the feasibility and what you have been able to 
demonstrate commercially? I mean, I get it that small projects 
may hint at the feasibility of doing this type of activity. But 
where do you think we stand as far as pushing at the commercial 
viability? Because after all, that is what I think the 
government investment was working toward, not just an 
interesting experiment but something that will actually work. 
So can you give us a sense of that feasibility versus 
commercial viability?
    Mr. Friedmann. Absolutely. Thank you for your question and 
again this is a core question which is asked of the CCS 
community regularly. I am happy to provide some clarification. 
As I mentioned before, this first generation CCS technology is 
commercially available today. You can call up a number of U.S. 
and international manufacturers, and they will sell you a unit 
at a large scale for capture of more than a million tons per 
year. In fact, a number of our large projects, for example, the 
Petro Nova Project in east Texas is run by NRG, in fact is 
using commercially available post-combustion capture technology 
unit. That procurement we expect to happen this year after they 
reach financial closure.
    Mr. Burgess. Now do you have any projection for the return 
on investment, say for that NRG project in east Texas?
    Mr. Friedmann. Thank you. I am very happy to answer that 
question. Again this is an important one, and it will take just 
a moment to answer so please bear with me. We consider it an 
important function of the Department of Energy and as a 
government public goods return to help fund the first-of-a-kind 
project. First-of-a-kind projects are not projects which a bank 
will finance ever. So typically we provide anywhere from 10 to 
30 percent of the cost share into a project to match the 
private capital do the rest.
    It is also our experience that the second-of-a-kind project 
is something the market takes on itself. In our communications 
with NRG so far, they have been very pleased with the return on 
investments they are going to get, granted given that 
government money that helped get the project over the top. In 
large part, that is because of the return on investment from 
enhanced oil recovery revenues. And they purchased a component, 
an equity into the field which are producing additional oil 
from the CO2 injections.
    The last thing I wanted to say on this is that they have 
also told us that they believe that what they have learned on 
the first project is sufficiently good that they can do a 
second project and get sizable returns on investment without 
government assistance.
    Mr. Burgess. And have they prepared for you then any sort 
of pro forma or any type of accounting where the taxpayer 
investment may be expected to return a yield in the future?
    Mr. Friedmann. One of the things that is important about 
the deployment of these technologies is that it spurs new 
business models. One of the things that we have seen is they 
are creating a new business model by aggregating and holding 
company projects like this one and the other to get those 
returns.
    Mr. Burgess. Yes, my time is going to run out, so I am 
going to need to interrupt you. I am not trying to be rude 
here, but you did, I think, reference into another question 
that some of this activity has been going on for what did you 
say, 30 years or 35 years in the commercial production of 
carbon for oil recovery? Is that correct?
    Mr. Friedmann. Yes, sir.
    Mr. Burgess. So at what point? It has been 30 or 35 years. 
At what point can we expect to see a return on investment if 
there is in fact a commercial application for recovered carbon 
dioxide?
    Mr. Friedmann. For most applications in the power sector, 
which is the area of greatest concern, I believe, to this 
committee, there is still a gap between how much you can sell 
CO2 for in post-combustion and how much you can--how 
much it costs to deploy. A typical CO2 off-take 
agreement for enhanced oil recovery is between $30 and $40 a 
ton. Typical post-combustion capture is between $40 and--I am 
sorry--is between $70 and $90 a ton. And you can't make that up 
on volume.
    Mr. Burgess. No, you can't.
    Mr. Friedmann. So that is part of the basis on which we 
continue to develop low cost technologies.
    Mr. Burgess. Again I am going to interrupt you because I 
need to go in another direction very quickly. I mean we are--in 
my home State of Texas, energy production is a big deal. There 
are some concerns surrounding a different type of energy 
technology and energy production with recent effects on seismic 
activity. Now, the head of the Texas Railroad Commission came 
and talked to us in 2005. He said the State of Texas was going 
to take title to the carbon that was being sequestered at one 
of the projects. How important is that that a state take that 
title to that compound? And then I guess the inference in that 
is the state would then have the liability that would not be 
borne by the industry.
    Mr. Friedmann. We continue to do work with the Bureau of 
Economic Geology, which is in close partnership with the 
Railroad Commission in Texas. We have a number of programs in 
our house which look at the potential risks associated with 
CO2 leakage, events like seismicity and how to 
manage those and monitor it well. The questions of long-term 
liability are ones which still remain open. There are many, 
many potential policy pathways to manage transfer of liability 
and these sorts of issues.
    At this point, I believe that mechanisms like the one you 
described were put in place in part to attract industry to find 
ways to make it more advantageous and more possible in a state 
such as yours and Texas to execute CCS projects.
    Mr. Burgess. Thank you. Thank you, Mr. Chairman.
    Mr. Murphy. The gentleman's time has expired. Now recognize 
the gentlelady from Florida, Ms. Castor, for 5 minutes.
    Ms. Castor. Well, good morning, and thank you, Mr. 
Chairman, for calling this Oversight hearing on the Department 
of Energy's clean coal initiatives. Last June, President Obama 
issued a climate action plan, correctly noting that we have a 
moral obligation to leave our children a planet that is not 
polluted or damaged.
    One way we can do that is through smart, clean technology 
investments like the kind that the Department of Energy is 
demonstrating with the next generation of power plants that 
employ carbon capture and storage. And I would like to find out 
from our witnesses how they believe their work fits in with the 
president's climate action plan and how the clean coal research 
program is helping to combat climate change and reduce 
emissions of harmful greenhouse gases.
    Dr. Friedman and Mr. Klara, coal constitutes a significant 
percentage of this country's carbon emissions, approximately 30 
percent. So logically cleaning up coal is essential to tackling 
climate change. Do you both agree with that statement?
    Mr. Friedmann. I am sorry. Could you make that statement 
again? I want to make sure I am answering correctly.
    Ms. Castor. Coal constitutes a significant percentage of 
the country's carbon emissions, approximately 30 percent. So 
logically cleaning up coal is essential to tackling climate 
change.
    Mr. Friedmann. There have been many economic analyses of a 
whole slate of clean energy technologies, and what has been the 
overwhelming conclusion of all of those studies is that if you 
take any clean energy technology option off the table, the cost 
of reducing CO2 emissions globally goes up. If you 
don't have an option like CCS, the total cost of managing 
climate change goes up. But that is true of all of the clean 
energy technologies.
    Ms. Castor. Mr. Klara?
    Mr. Klara. And I think it is important to note also that 
our technology set is not just about coal. Our technology set 
is about CO2. So if you look at the capture 
technology portfolio, most if not all of those technologies 
could work on natural gas, fire electricity, et cetera. If you 
look at the transport and storage component, a CO2 
molecule is a CO2 molecule.
    So the importance here is that the portfolio is truly a 
global portfolio that could impact future CO2 
emissions.
    Ms. Castor. Now, your testimony so far has illuminated that 
you have done substantial work on clean coal and carbon capture 
really probably more than most people appreciate that has been 
going on not just under the Obama Administration but under the 
Bush Administration before that.
    But now with the new climate action plan that is very 
broad-based and focused on a number of different strategies to 
reduce carbon pollution, Dr. Friedmann, how do the Department 
of Energy's carbon capture and storage investments fit in with 
the president's climate action plan?
    Mr. Friedmann. It is actually literally central to the 
plan. It is in the middle of the document that carbon capture 
and storage is an important part of the strategy, and the basis 
for that is what I described before. Removing any option 
actually ends up increasing the net cost of the body public.
    Ms. Castor. And are there any other coal technologies that 
can reduce carbon pollution as much as carbon capture and 
storage?
    Mr. Friedmann. There are many coal technologies that could 
improve the efficiency of coal conversion that could reduce the 
emissions some. In order to dramatically reduce CO2 
emissions, carbon capture and storage would be required.
    Ms. Castor. OK, if the Department of Energy and researchers 
and your industry partners are able to successfully develop and 
advance CCS technology portfolio for large-scale deployment by 
2020, what kind of impact do you think that could have on 
CO2 emissions and our climate?
    Mr. Friedmann. That ultimately really is a function of the 
rate of deployment, and the rate of deployment is contingent on 
many, many things. It is our hope to see increase in large-
scale deployment quickly so that, say by 2050, somewhere 
between 12 and 20 percent of U.S. emissions and 12 and 20 
percent of global emissions would be managed through carbon 
capture and storage.
    Ms. Castor. OK, well I am glad the Department of Energy is 
making these important investments because the dangers of 
climate change are real. The costs that face our communities 
all across this country are very significant, the costs to all 
Americans, the cost to businesses. We simply cannot put our 
head in the sand. Yet you see power plants today. They still 
have that business incentive to emit unlimited amounts of 
carbon into our atmosphere, and that means the rest of us will 
pay the price. So we have got to work on this together. It is 
important that we make smart, clean technological investments 
now. Otherwise, we will not only make climate change worse, but 
we will make it harder and more expensive to address the 
problem in the future. And we can't afford to ignore the 
crisis. This is America, and we can tackle this together. Thank 
you very much.
    Mr. Murphy. Thank you. The gentlelady's time has expired. 
Now recognize Dr. Gingrey for 5 minutes.
    Mr. Gingrey. Dr. Friedmann, you have been so accurate in 
answering all these questions. I am thinking about asking you 
your opinion on how much CO2 would be released into 
the operating room if you did a hysterectomy by robotic surgery 
versus the open convention method. I am just kidding, of 
course. I won't ask you that. You probably would have the 
answer to it.
    The first generation CCS project is currently on the way to 
full-scale demonstration do not all demonstrate the same 
technologies, do they?
    Mr. Friedmann. No, sir.
    Mr. Gingrey. What is the value of demonstrating different 
types of technologies?
    Mr. Friedmann. Let me start answering this and then leave 
Mr. Klara some time as well. Today on a thermodynamic basis and 
on a cost basis, all of the pathways look equally viable. Given 
that, it is hard to decide which technologies the market will 
select based on engineering and based on long-term cost 
reduction and viability. That is the basis on which we are 
pursuing pre, post and oxy-combustion pathways because on a 
thermodynamic limit basis and on an engineering improvement 
basis, they all look like they could be winners.
    Mr. Gingrey. Before we go to Mr. Klara, the second part of 
that question. Are the current technologies being demonstrated 
sufficient to answer all the technical questions about full-
scale operations of CCS for all types of coal plants using all 
types of coal?
    Mr. Friedmann. We would say the overwhelming majority of 
questions on the overwhelming majority of plants.
    Mr. Gingrey. Mr. Klara, did you want to comment on that?
    Mr. Klara. Yes, I would like to comment that relative to 
our portfolio of technologies that one size doesn't fit all. 
Sorry about that. Better? Relative to our portfolio that one 
size doesn't fit all. So a portfolio of technology is sometimes 
needed to get the widest deployment. And also too it is 
important, I think, in a portfolio to have multiple 
technologies essentially competing with one another.
    And so what that does is it tends to really be a forcing 
factor to drive the cost down substantially relative to these 
competing options.
    Mr. Gingrey. Let me go back to Dr. Friedmann. According to 
DOE's December 2010 CCS R&D and demonstration roadmap, there 
were seven CCS demonstration projects for coal power plants. 
Three of these plants were estimated to start up in 2014, three 
2015, and one in 2016. To date, only one project, Kemper 
County, Mississippi gasification project operated by the 
Southern Company, the great Southern Company headquartered in 
Atlanta, Georgia, is expected to start operations this year 
roughly on schedule. Two of the projects have been cancelled, 
and the remaining four projects are 2, 3, and 4 years behind 
schedule according to project summaries reviewed by our 
committee staff.
    First do you agree that some of these projects are 
significantly behind schedule? And secondly is it possible that 
we will see further delays or even abandonments before getting 
to the point of pushing the switch to start up operations given 
that four of the five projects are still only on paper? 
Construction has not commenced, and finance hasn't all been 
closed.
    Mr. Friedmann. Thank you. That is an excellent question, 
and I am happy to answer it. It is the nature of large projects 
that they take longer than expected, cost more than expected, 
and some of them don't make it. In this context, it is part of 
the reason why we are so committed to the portfolio of projects 
that we have.
    Sometimes things just get in the way, and you can't 
anticipate them. In that exact context, we are passionately 
committed to seeing all of those projects succeed, all eight of 
them. And right now, we are on a trajectory where all eight of 
those projects are headed for commercialization. And I want to 
just reiterate, I do not believe and I would not say that I am 
concerned about the delays. It is the nature of large projects, 
in particular getting the debt financing and the equity.
    Mr. Gingrey. Let me ask Mr. Klara to comment on that too as 
well, Dr. Friedmann.
    Mr. Klara. On the same topic?
    Mr. Gingrey. Yes, on the same topic, yes.
    Mr. Klara. Yes, it is a difficult environment right now 
relative to putting new plants in play, and that difficult 
environment has a couple factors to it. One is that it requires 
billions of dollars worth of financing to put a plant into play 
and financing is----
    Mr. Gingrey. OK, I am going to stop you because I have one 
last question that I want to get in and I don't want to run 
over time. Now, if that is the case, how has the Department of 
Energy been adjusting its timeframes and game plan to ensure 
that CCS technologies for coal-fired power plants are 
sufficiently demonstrated across the types of coal and various 
types of coal plants? Will you have all the answers by 2025, 
2030? And what happens if two or three of these coal projects 
are significantly stalled or indeed cancelled?
    Mr. Friedmann. Again we are still on track for what we 
think is the second generation of demonstrations by 2025, and 
that that is the timeframe in which the most important 
learnings will be needed. Even if one or two of the projects 
should unfortunately happen to fall apart, that would leave a 
gap in our understanding but would still provide a lot of 
information and a lot of technical findings around what is 
necessary to get projects off the ground and the likely 
performance of the technologies.
    Mr. Gingrey. My time has expired.
    Mr. Murphy. Thank you. The gentleman's time has expired. 
Now recognize Mr. Tonko for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. House Republicans have 
talked incessantly about the administration's supposed war on 
coal. This simply doesn't square with reality. The fact is the 
Obama administration has invested billions of dollars in 
projects with industry partners to advance technologies for 
coal-fired power generation.
    DOE's CCS investments along with the EPA's proposed carbon 
emission rules for electric plants will assure that coal has a 
way to remain viable even as we have to cut carbon pollution 
and avoid catastrophic climate change. That being said, Dr. 
Friedmann, how do you react to the allegations that the 
administration is waging this war on coal? You work with the 
coal industry on a regular basis. What is your relationship 
with the industry like?
    Mr. Friedmann. It is both my pleasure and my privilege to 
work with the coal industry, which contains some of the best 
minds and the best businesses in the United States. And I 
continue to believe that coal is actually a required part of a 
vibrant American economy and part of the future. In this 
context, the work we are doing on CCS is critical. It is a key 
pathway forward for a sustainable low-carbon energy future with 
an era of abundance of fossil energy that we live in today.
    Mr. Tonko. Thank you. And, Dr. Friedmann, how important do 
you think DOE's CCS investments are for the future of the coal 
industry?
    Mr. Friedmann. Again it is very hard to achieve climate 
change goals and deep emissions reductions in the fossil energy 
sector without CCS. Secretary Abraham in 2002 called it 
basically a cine qua non technology. It is a technology which 
we simply need to have.
    Mr. Tonko. And DOE invested some $270 million, I believe, 
in the Kemper facility.
    Mr. Friedmann. $270 million, sir.
    Mr. Tonko. Right.
    Mr. Friedmann. Yes.
    Mr. Tonko. In the Kemper facility that is set to come 
online later this year. How much private capital was added to 
that DOE initial investment?
    Mr. Friedmann. I believe at this point, it is up about $4.5 
billion total.
    Mr. Tonko. Four point five billion?
    Mr. Friedmann. Yes, sir.
    Mr. Tonko. Well, that is an immense investment to new coal 
spurred by DOE funds. And according to Southern Company 
subsidiary, Mississippi Power, the project is creating nearly 
12,000 direct and indirect construction jobs and will create 
over 1,000 direct and indirect permanent jobs.
    Dr. Friedmann, DOE has also invested $450 million in this 
Summit Texas Clean Energy Project. How much private financing 
was added to DOE's investment in that given project?
    Mr. Friedmann. OK, we have committed to Kemper--I am 
sorry--to Summit, it is a commitment. It has not yet been 
spent. But it is close to financial closing. It has not yet 
closed financially. It is our expectation that we will 
ultimately lever about $3 billion of foreign direct investment 
into that project.
    Mr. Tonko. And again according to the company, my 
information is that the project is expected to create up to 
2,000 direct construction jobs and 150 direct permanent jobs. 
So what do you think these projects tell us about the future of 
CCS? Are private financiers going to invest billions in 
projects like this if they don't see them as viable or 
profitable?
    Mr. Friedmann. Again a critical finding for the Department 
of Energy's work in all energy sectors is that we cannot 
attract investment in the first plant absent government 
support. Once the first plant is built and demonstrated and 
improvements are made in engineering, business model and 
financing, then the second project and the third project can 
get done by the private sector. Absent that initial federal 
investment, the project won't get built.
    Mr. Tonko. We are focusing on CCS today, but there are 
other ways to reduce carbon emissions through increasing the 
efficiency of coal-fired generation. And Representative Waxman, 
I believe, asked you a bit about that efficiency. What level of 
efficiency improvements are being targeted by your research 
program?
    Mr. Friedmann. We are basically looking to make for the 
most part incremental improvements in the efficiency. For 
people who aren't engineers, a one or two percent plant 
efficiency sounds small, but it is not. It is actually a big 
improvement on the output of the plant. Just a couple of basis 
points actually is big. For individual components of the 
program, for example sensors and control systems, advanced 
manufacturing, these sorts of things, for the most part can 
improve the existing fleet each a couple of percent.
    Mr. Tonko. I know that I have used up my 5 minutes. So with 
that, I will yield back, Mr. Chair.
    Mr. Murphy. Thank you. Just to clarify what you said, you 
said $270 million, is that what your----
    Mr. Friedmann. For the Southern Company Project, yes.
    Mr. Murphy. Energy. And I think there was also some 
investment tax credits, $130 million or so.
    Mr. Friedmann. So the $130 million of investment tax 
credits are set to lapse in May because of the delays 
associated with the project.
    Mr. Murphy. So they will not get that investment tax 
credit?
    Mr. Friedmann. We are still in discussions with the IRS, 
but at this point, no, they would not be eligible to receive 
those investment tax credits.
    Mr. Murphy. And just can you follow up. So the initial 
costs, I think, were $1 billion now. It is $4.5 to $5 billion 
talking about the plant costing?
    Mr. Friedmann. I think the original plant costs were more 
like $2 billion, but yes, there has been substantial increases 
in the cost of the plant.
    Mr. Murphy. Thank you. Thank you for clarifying that. Now I 
recognize Mr. Scalise for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
holding this hearing, and I want to thank our two guests for 
coming from the department. The 2010 report on interagency task 
force on carbon capture and storage. I believe that was both 
Department of Energy and EPA that put that report together. But 
it notes that existent CO2 capture technologies for 
coal-based power plants ``are not ready for widespread 
implementation primarily because they have not been 
demonstrated at the scale necessary to establish confidence for 
power plant application.'' And the DOE goal of developing 
systems that result in a less than 10 percent increase in the 
cost of energy by 2015 is still at a conceptual stage.
    So we had Kemper here before our committee talking about 
some of the challenges that they are facing in kind of being 
that first company to come out and do this. I think you all 
recognize that, you know, we still don't have a replicable 
model. It seems like there is a difference between Department 
of Energy and EPA on whether or not you have got one plant 
being built, how their experience is working, especially with 
the uniqueness of their location to energy sites where, if you 
can use that carbon capture to do enhanced oil recovery, which 
is definitely something that is important to our state in 
Louisiana, Texas, other states.
    But if you don't have that same proximity, then the 
viability isn't the same either, and do you all recognize that 
especially when you are looking at whether this facility is a 
replicable facility?
    Mr. Friedmann. So because it has been brought up twice, let 
me mention that Mr. Klara was an important contributor to the 
2010 report. I would be remiss if he didn't have a chance to at 
least speak to it. But to the pursuant of your question, the 
technical availability is independent of the economic 
viability. And we in fact have--you can deploy the same 
technology in Illinois where there is not enhanced oil recovery 
opportunities as you would deploy in Texas.
    The return on investment would vary, and part of the goal 
is to find ways and pathways that we can pursue to reduce the 
cost so much that the local increase in cost of electricity is 
as low as possible.
    Mr. Scalise. And I will let Mr. Klara give his answer 
first, and then I want to get into that, that increased cost of 
electricity because at the end of the day, consumers are 
concerned as people are out advancing new technologies, we all 
promote the advancement of new technologies. But you have also 
got to be concerned about the impact on consumers when they 
talk about whether or not it is going to increase their 
household electricity rates. That is their main concern, and 
clearly we are seeing increases in a number of these areas on 
the amount people pay for their household electricity. That 
affects lower income people most, and yet that is one piece of 
the equation that I am not sure if EPA is really that concerned 
about right now. But, Mr. Klara, if you want to go.
    Mr. Klara. The purpose of our demonstrations is indeed to 
get us over that hurdle of proving the technologies in a 
commercial scale, and you mentioned the cost issue. These 
projects are first of a kind, and, as Dr. Friedmann indicated, 
that is why the government investment is so important to get 
them up over that hurdle.
    And what we can speak of relative to cost, again going back 
to some earlier comments, would be the fact that our portfolio 
is designed to drive that cost down substantially in addition 
to these learning curves which these demonstrations are 
critical to get started.
    Mr. Scalise. Let me ask you. We know that at present none 
of the CCS technologies for coal-fired plant power generation 
has successfully completed demonstration. Is that correct?
    Mr. Friedmann. In this country, that is correct.
    Mr. Scalise. OK, we know that this will take upwards of 10 
years to establish. Is that correct?
    Mr. Friedmann. I don't think that is correct actually.
    Mr. Scalise. How long do you think it would be?
    Mr. Friedmann. Again we are already gathering learnings 
from our demonstrations as they are standing up. Kemper will be 
operational at the end of this year. That will be an important 
technical finding, and within sort of 2 or 3 years of 
operation, we should have a strong sense as to whether or not 
that plant is replicable in a viable option for the future.
    Mr. Scalise. Well, and I hope you would know that Southern 
Company, the owner of the Kemper plant, has said that this 
plant ``cannot be consistently replicated on a national 
level.'' Were you aware that they said that?
    Mr. Friedmann. Yes, sir. We have had those conversations 
with the CEO and the senior staff of Kemper and of Southern 
Company. That is exactly the basis on which we have a wide 
portfolio of plans.
    Mr. Scalise. Because they are the ones that are out there 
making this big investment. They are seeing that the costs are 
a lot more than anybody expected, and they are also recognizing 
the geographical limitations that you can't just--and if EPA 
wants to go and say OK, look, they were able to do it and they 
figured out a way to make it work, cost them a whole lot more 
than they were expecting, but they made it work, discounting 
the fact that the way they had to make it work was having this 
close proximity for EOR. Then they are going to go and say OK, 
well now everybody can do it and come up with some rules that 
literally shut down power plants or raise the cost so high that 
again you get to this problem that consumers then would have 10 
percent, 20 percent, maybe higher increases in their 
electricity rates.
    And I just hope that that would be a big part of the 
consideration too is the impact on consumers, especially poor 
people, when they are going to have to pay the bill.
    Mr. Friedmann. Thank you again for that question. We really 
do understand the issues that consumers and the power 
generators share about concern about cost.
    Mr. Scalise. I just hope EPA has that same concern, and I 
yield back the balance of my time.
    Mr. Murphy. Gentleman yields back, and now to the gentleman 
from Mississippi who represents the third district, the home of 
Kemper plant, which we hope he invites this committee to. Mr. 
Harper is recognized for 5 minutes.
    Mr. Harper. Thank you very much, Mr. Chairman. I appreciate 
the opportunity, and certainly we are enjoying watching that 
massive facility being built in Kemper County, and as you know 
that is in my district in Mississippi. But it is clear others 
around the world are watching to see how this goes forward. If, 
as EPA says, this has all been done before, what is it about 
Kemper that makes it so important to the future of clean coal 
technology in this country and around the world?
    Mr. Friedmann. Let me start by stating that there is just 
an immense body of evidence around the function, cost, likely 
future cost, and technology pathways, current performance and 
so forth for carbon capture and storage. That said, we have a 
special place in our hearts for the Kemper plant. In part 
because it is truly demonstrating a novel gasification 
technology, the TRIG gasifier at commercial scale, in part 
because it is testing a new business model, this co-location of 
mining, upgrading, and refining.
    Kemper is not just a power plant. It is basically a carbon 
refinery which sets out a number of products including ammonia, 
naphthenes, liquid fuels, as well as CO2 for 
enhanced oil recovery. That business model is every bit as 
important as the technical findings that we are going to get 
from this.
    Mr. Harper. Mr. Klara, anything you would like to add to 
those remarks?
    Mr. Klara. Well, I concur with that, but also just a couple 
comments on our demonstration program in general. My belief 
would be that none of these project developers, none of these 
companies came into this with their view of this is going to be 
a one-off, one-of-a-kind. And so a lot of business models 
certainly going into our demonstration program are indeed 
looking at replication of this technology at some point.
    Mr. Harper. And that replication you would view as just in 
the United States or worldwide?
    Mr. Klara. Well, if you look back to the history of things 
like criteria pollutants, NOx and SOx control that the United 
States showed technology leadership. And much of that 
technology is being deployed internationally. I would expect 
the same to occur with the development of carbon capture and 
storage.
    Mr. Harper. And then Mr. Friedmann.
    Mr. Friedmann. If I could add a little bit to that.
    Mr. Harper. Yes, please.
    Mr. Friedmann. Our conversations with Southern make clear 
that they very much see a Kemper 2.0 and a Kemper 3.0 and 
imagine some of those plants around the world where low-cost 
lignite is also available.
    Mr. Harper. OK, and as you said the Kemper project works in 
this particular situation in Mississippi because of the TRIG 
technology, which gasifies local lignite coal and uses the 
carbon to increase nearby oil production. Where else in the 
world is there this sort of potential where you have a 
generation source no one would otherwise use and the 
CO2 can be used for oil production?
    Mr. Friedmann. In the United States, we are looking all 
along the Gulf Coast, also in North Dakota in the lignite belt. 
Outside the United States, we are looking at Turkey. We are 
looking at inner Mongolia. We are looking at Kazakhstan. There 
are other places where there are a combination of resources in 
the form of lignite and enhanced oil recovery opportunities. 
Pakistan is another one where one could imagine building a 
plant like this and reaping the commercial benefits.
    Mr. Harper. You know, a few years ago, people were saying 
that there is nowhere near the capacity in enhanced oil 
recovery to take the output of the CO2 from a large 
part of the coal fleet. Now I am hearing some say that the 
capacity for EOR is growing substantially. But what is the 
potential for enhanced oil recovery in this country? And is 
there potential for this technology to grow particularly in 
light of recent advances in oil exploration and production?
    Mr. Friedmann. Thank you. That is an excellent question. It 
also gives me the opportunity to acknowledge the outstanding 
work of Advanced Resources International here in Virginia, 
which has done a lot of this analysis. Indeed detailed 
characterization and assessments of fields in the United States 
and worldwide shows a much higher opportunity for enhanced oil 
recovery than previously recognized in the United States, well 
north of 60 billion barrels of potential additional recovery. 
Beyond that, we are seeing advanced technology and practice in 
enhanced oil recovery, in particular, looking at residual oil 
zone production as a further multiplier, possibly two to three 
times that much in the United States, creating the opportunity 
for hundreds of billions of barrels around the world. In all 
those locations, the primary limiting step is the availability 
of carbon dioxide for EOR.
    Mr. Harper. Thank you both for being here, and, Mr. 
Chairman, I yield back the balance of my time.
    Mr. Murphy. Gentleman yields back. Now go to Mr. Olson of 
Texas for 5 minutes.
    Mr. Olson. I thank the chair, and welcome to Dr. Friedmann 
and Mr. Klara. Back home in Texas, we have a saying you 
probably have heard: ``Always put the horse before the cart.'' 
The research you all are doing with CCS is the horse that makes 
CCS viable in the free market. You are pulling the cart. 
Unfortunately EPA is using the research as a model for the 
entire country that CCS is viable. That is putting the cart 
before the horse. It is not viable.
    And, Dr. Friedmann, you testified with Ms. Schakowsky that 
your job is not to determine viability, just the science of it. 
I am glad to hear that. As she brought up, there are pockets of 
viability here in America for CCS. They are in Texas in my 
district outside of Houston. They are viable by using captured 
CO2 for enhanced oil recovery operations, EOR. EPA 
knows this.
    In the new plant rules' impact analysis, here is a quote 
from EPA's report. ``The opportunity to sell the captured 
CO2 for EOR, rather than paying directly for its 
long-term storage, strongly improves the overall economics.''
    I was pleased to hear you mention Petra Nova. That is the 
Parish power plant in Needville, Texas. I can see that power 
plant walking out on my front lawn. It is one of the largest 
ones in the country, as you know. Four natural gas generators 
of power, four coal generators of power with the natural gas, 
the fifth one, coming online quickly.
    The plant sits on top of an old oil field, very close to 
it. They are planning to capture CO2 to use it to 
get oil, but their situation is unique, and that is why it may 
be viable. There is another project in my district called 
Denbury Resources there in Alvin, Texas. In 2001, they bought 
the Jackson Dome in Mississippi. As my colleague to my left, 
Mr. Harper knows, that is the largest natural CO2 
deposit east of the Mississippi River. It is 98 percent pure 
CO2.
    With a massive pipeline infrastructure between their fires 
on the Gulf Coast, going up to New England, the eastern part of 
the United States, they have access to pipelines. They are 
shipping that CO2 from Mississippi down to Texas, 
the old Hastings Oil Field, and using that CO2 to 
get enhanced oil recovery operations.
    My question is, is it fair to say there are few situations 
like Parish and Denbury. Now, most states have little 
opportunity, no chance for enhanced oil recovery operations 
inside their borders.
    Mr. Friedmann. Thank you. I am happy to answer that 
question having spent happily 5 years living in Texas myself, I 
am sure you are familiar with the saying you don't want to be 
all hat, no cattle.
    Mr. Olson. Yes, sir.
    Mr. Friedmann. And we view our job in that context. CCS, in 
particular enhanced oil recovery, we view as the bridge to the 
bridge of the future. That if we are building a bridge through 
CCS deployment to a clean energy future, then EOR is an 
important bridge to that bridge. There are a couple of 
important benefits that come from EOR early deployment.
    The first of these is that you actually get to build the 
plant. That is the critical increment that leads to reduced 
costs widely. In order for us to see a viable future for CCS 
widely deployed, we believe that the cost must come down 
broadly. That means building plants and demonstrating how and 
learning how to reduce those costs. The EOR projects give us 
those first-of-a-kind opportunities to figure out how to do 
that.
    The second thing I would add is that there may be more of 
those opportunities than initially recognized. Per my last 
comments to Mr. Harper, it is looking like these residual oil 
zones are more broadly distributed than originally understood, 
and that provides more opportunity nationwide.
    We are also seeing projects like the Boundary Dam Project 
in Canada, which is a post-combustion capture project like 
Petra Nova's project where they are taking CO2 by 
pipeline to the Midale Field in Saskatchewan. And they have 
also learned enough from doing that first project that they are 
preparing to commit to a second project to do the same thing. 
Where those EOR opportunities exist, we believe it is critical 
to anchor early projects to reduce the total cost to the 
taxpayer, to increase the viability of the projects and to 
harvest the key learnings that we need to see CCS widely 
deployed.
    Mr. Olson. Yes, so it sounds like they are rare. You have 
to have some sort of confluence with power generation with some 
sort of structure near the power generation to get the 
CO2 to use for enhanced oil recovery operations. I 
am out of my time. I just want to invite you back to Texas. You 
know, you will have your term up in DOE next 4 years probably. 
Come back to The Woodlands. You know, ExxonMobil, your former 
company, has built a big research center up there. The one from 
Fairfax, Virginia is moving to Texas. So come on back. I yield 
back.
    Mr. Murphy. The gentleman yields back. Now recognize Mr. 
Griffith from Virginia for 5 minutes.
    Mr. Griffith. Thank you very much, Mr. Chairman. I do 
appreciate it. I have in my all-of-the-above policy, I have the 
four Ds, dig, drill, deregulate, and discover. Today's hearing 
obviously deals with discover. I do appreciate the work that 
you all are doing in trying to find ways that we can discover 
ways that we can continue to use coal because I come from a 
coal mining region in central Appalachia.
    That being said, I have been very excited about the work 
that has been done by Dr. Fan at Ohio State University in 
regard to chemical looping, and as I understand it, last time I 
talked to him, he hadn't yet gotten the keys to the facility in 
Wilsonville, Alabama, but he was expecting to get that soon.
    My question is, because I see that is so exciting because 
we end up with, I guess, whatever remnants are left over what 
is a very pure burning process of the coal ash and carbon 
dioxide. So we eliminate most of the cost of the capture. So 
let us assume for the sake of argument that it is successful, 
and we get to September and the experiment has worked as well 
as all of us could hope. What is next? Where do we go? And what 
does DOE do? And I appreciate NETL has been involved in this 
project and I appreciate that.
    But what do you all do next to try to encourage industry to 
go to an even larger project and actually build a plant that 
would use this technology that doesn't have to be near lignite 
alone or any particular type of coal but could be used anywhere 
in the United States or the world.
    Mr. Friedmann. Again, thank you for that question, and 
again because Mr. Klara's organization does so much of that, I 
will make sure he has time to answer in part. Chemical looping 
technology is an example of what we would call a second 
generation technology in these different buckets. The work that 
is going on in Ohio is very exciting. We have another chemical 
looping project as well with Austin in Connecticut. And in 
fact, we are in discussions right now with ARPA-E to take over 
that project and to see if we can't set it up at Wilsonville 
and give it a run.
    There are a series of technical challenges that come with 
association of scale-up demonstration and so forth. But I do 
want to mention that one of the interesting values of chemical 
looping is that it is actually a dual technology. It can be 
used on coal feed as well as on natural gas.
    Mr. Klara. And I would just like to add that we are doing 
everything we can to push that technology forward.
    Mr. Griffith. Well, and I guess my question is that 
assuming that it goes well, do you all think you are ready to 
step in and say OK, we will help fund this at some plant 
because we really need some help in the coal fields? And I see 
this as the light at the end of the tunnel. I don't see how it 
can possibly be done in less than 7 years, and that is with the 
government using the money that it has to take this discovery 
and make it real for people where we don't raise the cost of 
electricity to where people can't afford it and we continue to 
use the rich coal resources of central Appalachia.
    Mr. Klara. I began this job just 3 months ago, and in that 
context, we are considering exactly what pieces we need to 
build into our research portfolio. One thing that we have begun 
to realize is that we need second generation large pilot 
projects as the critical, technical undergirding of those next 
generation of large demonstrations. We are trying to put 
together the technical considerations and specifications in 
partnership with NETL to figure out what that will look like in 
terms of technical work, milestones, and costs so that we can 
bring forward those proposals in future budgets.
    Mr. Griffith. I appreciate that. I am concerned that we do 
have the cart before the horse, and I appreciate what you all 
are doing moving forward. But I do think that some of the 
regulations coming out of your sister agency, not you all, but 
out of your sister agency, are making it hard for people to 
survive in the coal industry when we see technology coming down 
the pike that may very well solve the problems that a lot of 
times we hear of people bringing up in regard to the use of 
coal.
    I would have to say in September of 2012 testimony before 
the Energy and Power Subcommittee, a representative from Austin 
who you mentioned earlier, a maker of CCS-related technology, 
said that it is unaware that any supplier of CCS technology is 
ready or able to offer commercial guarantees for full-scale 
systems of carbon capture. What does a technology supplier need 
to know to warrant and be ensured for its CCS technologies for 
use in a coal power plant?
    Mr. Friedmann. Thank you. Since that time, a number of 
those companies have actually do now offer performance 
guarantees. In part, that is because we have run these large 
scale pilots that they need to validate their technology. And 
more importantly they have had installation in some of these 
large-scale demonstrations. That helps provide the confidence 
along with other technology tools like advanced simulation to 
allow them to put a performance guarantee in a wrapper around 
those facilities.
    Mr. Griffith. All right, I appreciate that. Thank you very 
much. I yield back the remainder of my time, Mr. Chairman.
    Mr. Murphy. Mr. Johnson, you are now recognized for 5 
minutes.
    Mr. Johnson. Thank you, Mr. Chairman and gentlemen, thank 
you for being here with us today. I represent a part of our 
nation in eastern and southeastern Ohio that is very dependent 
upon the coal industry, both for the energy that we use and 
also for the livelihood for the people that work in the 
industry. So let me ask you a quick yes-or-no question to get 
started off right away. Do both of you believe that America can 
solve the technological concerns that the environmentalists 
have so that we can use and continue to use coal 
environmentally soundly? Just a quick----
    Mr. Friedmann. Unquestionably yes.
    Mr. Klara. Absolutely.
    Mr. Johnson. And do you believe that coal and the vast 
resources of coal that we have should comprise a significant 
part of our energy portfolio moving forward?
    Mr. Friedmann. Yes, I do.
    Mr. Klara. Yes.
    Mr. Johnson. OK, well thank you. Then let me get into some 
specific questions. In December 2010, the DOE and NETL issued a 
CCS research development and demonstration roadmap. Among the 
goals of that roadmap was that the DOE would develop 
technologies that can separate capture, transport, and store 
CO2 using either direct or indirect systems that 
result in a less than 10 percent increase in the cost of energy 
by 2015. When does DOE and NETL anticipate demonstrating CCS 
systems that result in less than 10 percent increase in the 
cost of energy compared with the non-CCS coal-powered plants?
    Mr. Friedmann. Thank you again for that question. The 
issues of cost is just forward in our minds, and we are doing 
everything we can to reduce it. In that context, we again see 
sort of a 2025 timeline for this second generation of 
technologies to lead to 10 or 15 or 20 percent cost of 
electricity increases that are retail cost.
    Mr. Johnson. OK, Mr. Klara, any comments?
    Mr. Klara. Correct, and I just say that relative to our 
technology portfolio, that those technologies are in our 
transformational bucket of technologies. And yes, the 2025 to 
2030 timeframe is the current pathway.
    Mr. Johnson. OK, your technology assessment published about 
a year ago suggests the three technologies which include 
sorbents and pre-combustion membranes that may help achieve the 
goal are only at the concept stage. Would you say that your 
plans of December 2010 are still on target?
    Mr. Friedmann. Yes, absolutely. In fact, we have seen great 
progress on a number of those which at the time were sort of 
leading technologies, things like advanced membranes, 
everything from oxygen separation membranes to CO2 
separation membranes. The money that we have invested has 
allowed those to go from sort of bench scale to small pilot 
testing and in one or two cases to large pilot testing. That is 
part of the pipeline and the pathway to that large scale 
commercialization.
    Mr. Johnson. OK.
    Mr. Klara. Yes.
    Mr. Johnson. Same thing? Over the past several years, the 
president's budget request for coal R&D funding has steadily 
declined from a request in fiscal year 2010 for $404 million to 
the most recent request in fiscal year 2014 for $277 million. 
Congress did not agree with these levels of funding and 
recently passed an omnibus appropriations bill increasing the 
funding by more than $100 million. So what does this say about 
your department's aggressive planning and the administration's 
priorities to advance coal technology if you are cutting 
funding for this work?
    Mr. Friedmann. Thank you again for that question. We 
recognize that the budget process is complicated, that there 
are many, many competing interests, and so we make our 
requests. And we make our recommendations to the secretary, and 
the secretary brings those to OMB and to the White House. And 
together they figure out what is in fact what they want to put 
into an omnibus budget.
    I would say that in general I think about these kinds of 
questions as a tradeoff with urgency. The more urgency one has, 
the more one is willing to spend on any particular issue.
    Mr. Johnson. I understand the budget process, and I realize 
there are conflicting priorities. But do you agree with the 
additional funding levels that Congress has appropriated?
    Mr. Friedmann. What I would say is that we have very clear 
ideas about how we would use that well.
    Mr. Johnson. Good, because that was my last question. And I 
am sorry. I got 15 seconds so let me get that one in. Would you 
please submit to this subcommittee how you plan to spend this 
additional funding?
    Mr. Friedmann. Yes, we will be happy to take that question 
for the record----
    Mr. Johnson. OK.
    Mr. Friedmann [continuing]. And to have follow up with 
additional meetings.
    Mr. Johnson. All right, thank you. Mr. Chairman, I yield 
back.
    Mr. Murphy. The gentleman yields back. I now recognize the 
gentlelady from North Carolina, Ms. Ellmers, for 5 minutes.
    Mrs. Ellmers. Thank you, Mr. Chairman. And thank you to our 
panel. Dr. Friedmann, as I understand it, without government 
subsidies, and I think you have already mentioned this, the CCS 
demonstrations for coal plants would not be going on. Is this 
correct?
    Mr. Friedmann. Yes, that is correct.
    Mrs. Ellmers. OK, can you briefly describe to me the 
taxpayers, how I could go home to my North Carolina taxpayers 
and explain to them what return they are getting for these 
subsidies and technology development?
    Mr. Friedmann. There is a handful benefits that come 
forward that I think are pretty clear. In the near term, we 
actually get advanced technology that can be used to underlie 
manufacturing in the United States. Another thing I would say 
is that we actually bring a lot of information back to the body 
public, scientific, technical engineering, and business 
information, economic information, which is used to make 
important investment decisions in the United States.
    I would add that our enhanced oil recovery projects provide 
two additional benefits. One of those is with additional secure 
U.S. oil supply. And the third is actually with the tax 
revenues from that. Something that is lost by many people is 
that the additional tax returns on enhanced oil recovery 
actually pay for all of the government investment in a span of 
7 to 8 years. After that, it is actually net revenue positive.
    Mrs. Ellmers. So in my understanding, and assuming that the 
success of the first generation technologies does take place, 
there really will not be wide commercial use of these things 
until the 2020s. Is that correct?
    Mr. Friedmann. For widespread commercial use, yes, that is 
correct.
    Mrs. Ellmers. For widespread. So is this why the DOE's 
fiscal year 2014 congressional budget states, and I am quoting, 
``in the case of electricity generation first generation CCS 
technology, cost is not expected to be low enough to achieve 
widespread deployment in this near term''?
    Mr. Friedmann. Yes.
    Mrs. Ellmers. Yes, OK. So now being that that is correct, 
at a coal gasification facility, the cost of electricity may be 
increased by 40 percent? Is this with the current carbon 
capture and compression technology, is this----
    Mr. Friedmann. For the first generation technologies, yes, 
that is correct.
    Mrs. Ellmers. So there will be a 40 percent increase?
    Mr. Friedmann. Where deployed.
    Mrs. Ellmers. Where deployed. And at a pulverized coal 
plant, this cost of electricity increases up to 80 percent?
    Mr. Friedmann. Yes, that is correct.
    Mrs. Ellmers. That is correct. What size commercial 
development for coal plants does DOE think is possible with 
current CCS technology given its highest costs?
    Mr. Friedmann. I am sorry. One more time. I just didn't get 
that.
    Mrs. Ellmers. What size commercial deployment for coal 
plants does DOE think is possible with current CCS technology 
given its high cost?
    Mr. Friedmann. At this point, it would be niche 
applications. There will be a couple of places in the country, 
as we heard from Mr. Olson----
    Mrs. Ellmers. OK.
    Mr. Friedmann [continuing]. Where you have the correct 
confluence of opportunity, resource, and revenue.
    Mrs. Ellmers. Just and there again, and I am probably just 
asking you to speculate on this. But how many would you say 
that would be? When you say niche, are we talking about a 
small--like one to five?
    Mr. Friedmann. Maybe a few dozen.
    Mrs. Ellmers. A few--OK, so 24----
    Mr. Friedmann. But I would not consider that widespread.
    Mrs. Ellmers [continuing]. Across the country about.
    Mr. Friedmann. Just kicking around numbers, sure.
    Mrs. Ellmers. OK, that is good, and I appreciate that. 
Thank you very much. Mr. Chairman, I yield back the remainder 
of my time.
    Mr. Murphy. Thank you. Now I recognize Mr. Long for 5 
minutes.
    Mr. Long. Thank you, Mr. Chairman, and thank you all for 
being here today and your patience so far. Mr. Klara, has the 
Department of Energy estimated how many billions of tons per 
year will need to be stored if the United States is to 
sequester a substantial portion of coal-based carbon dioxide?
    Mr. Klara. There are many estimates that are out there 
relative to what the future could be for CO2 
production.
    Mr. Long. Many estimates from the Department of Energy?
    Mr. Klara. We rely mainly on estimates from others. So for 
example the Intergovernmental Panel on Climate Change, the 
Electric Power Research Institute has looked at these.
    Mr. Long. Do you know a ballpark range on how many billions 
of tons they are talking about? Have you looked at any of that 
or not?
    Mr. Klara. Well, some of the estimates, and we could give 
you specifics for a record, question for the record. But some 
of the specifics would be looking at CCS having to handle 
potentially 20 percent or more of the reduction needed to get 
the CO2 stabilization. And yes, that could be in the 
range of a billion tons or more.
    Mr. Long. Billion or multiple billions?
    Mr. Klara. I would have to go back and look.
    Mr. Long. OK, if you wouldn't mind if you could get that 
for my staff, I would appreciate it.
    Mr. Klara. Yes.
    Mr. Long. And, Dr. Friedmann, I would like to draw your 
attention to this major CCS, which is carbon capture and 
sequestration demonstration projects, project locations, and 
cost share. This is a document that you all provided to the 
committee, is it not, in your packet?
    Mr. Klara. Yes, sir.
    Mr. Long. OK, I heard it recently mentioned that there are 
several capture and storage projects that are up and running 
now. There has been a lot of discussion on that here today. And 
yet from this graphic that you all provided, almost all these 
projects displayed have start dates that are a few years down 
the road, 2017, estimated start dated 2017, 2019, 2016, 2012, 
2017, 2014, and 2015 which are all, as I say, down the road. 
And according to a recent congressional research report on 
carbon capture and sequestration, the Department of Energy has 
spent approximately $6 billion on CCS since 2008, most of which 
came from the stimulus bill that was passed a few years ago. 
And according to the capture, transport, and inject industrial 
scale, quantities of CO2 solely for the purpose of 
carbon sequestration. Can you clarify one final time, I guess 
for the committee, why we are hearing different things in the 
sites and if you could cite any commercial scale carbon capture 
and sequestration projects that are currently now up and 
running generating electricity.
    Mr. Friedmann. Right, again so to clarify, there are a 
number of large-scale industrial facilities operating in the 
United States and around the world. There are 12 large projects 
which the Global CCS Institute recognizes. With respect to 
power generation, the closest fit is the Beulah, North Dakota 
plant which generates synthetic natural gas. That gas goes into 
the pipeline and is used to generate power. It is not a power 
plant per se. It is the synthetic natural gas facility.
    Mr. Long. It is a synthetic natural gas facility?
    Mr. Friedmann. Yes, it was built actually in the early 80s 
when there was an expectation that we would have decreased 
production of natural gas in the country and we needed to 
generate synthetic natural gas. That plant is----
    Mr. Long. They kind of missed their bet there, didn't they?
    Mr. Friedmann. One of the reasons why we do everything we 
do is that the future is opaque, and it is important to prepare 
as many options for the market as possible.
    Mr. Long. That is why I think that the private sector 
should be involved in more of this than the government, but I 
will stick with you, Dr. Friedmann. Does the Department of 
Energy intend to intervene to make sitting pipelines for 
distant carbon injection a more realistic option? I understand 
this has been a barrier to some utilities who want to pursue 
CCS projects.
    Mr. Friedmann. What I can say is that we have--so for any 
project that we have been involved in, we have supported the 
development and deployment of those pipelines. Where we see 
opportunities for regional networks to emerge that would help 
anchor CCS industries and large coal projects, we are keenly 
committed to seeing those pipelines come forward. One example 
of this is actually the support we have given to the FutureGen 
project in the FutureGen Alliance and their efforts to build a 
pipeline within Illinois.
    Mr. Long. OK, and, Mr. Chairman, I yield back and thank you 
all again for my time.
    Mr. Friedmann. Mr. Chairman, if I can clarify something for 
the record.
    Mr. Murphy. Yes.
    Mr. Friedmann. Thank you. This actually had to do with 
respect to Representative Ellmers' questions. She was asking 
about the price of capture. The answers which I gave were for a 
high fraction of capture, basically 90 or 95 percent capture. 
At small fractions of capture, say 50 percent capture, the 
actual integrated cost is much less. And that is relevant with 
respect to how you can deploy either modular units or smaller 
fractions of capture on the new or existing fleets.
    Mr. Murphy. Is that a reference to a question about the 40 
percent increase in costs?
    Mr. Friedmann. Yes, exactly.
    Mr. Murphy. Do you have the information, or can you provide 
it for this committee in addition to her question about what 
this breaks down to in a cost-per-megawatt generation and what 
this would then cost the average family? Do you have that 
information now, or is that something you can get to us?
    Mr. Friedmann. We prefer to bring that to you as a question 
for the record and give it back to the committee later. We have 
made many of those kinds of calculations. Again it is the 
excellent work of National Energy Technology and their 
assessment team have done that for a wide range of power 
plants, a wide range of technologies, and a wide range of fuel 
prices. We are happy to provide that to the committee.
    Mr. Murphy. That would help the committee and the families 
who are trying to pay attention to this and see what this 
means.
    Mr. Friedmann. Of course.
    Mr. Murphy. I now recognize Mr. Gardner for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman, and I thank the 
witnesses for joining us today. Mr. Klara, is it correct that 
successful development and deployment of second generation 
technologies are aware the Department of Energy expects the 
cost savings that may help make CCS for coal power competitive 
in the marketplace?
    Mr. Klara. I mentioned earlier, but we have three buckets 
of technologies that we are going after. First generation, 
which is the technologies deployed now. Second generation is 
what you are referencing, and then we have transformational 
technologies. And with second generation technologies, we are 
headed toward a reduction in cost as indicated by your remark.
    Mr. Gardner. And what is NETL's assessment of the readiness 
of the technologies most critical to driving down costs?
    Mr. Klara. Certainly when it comes to carbon capture and 
storage, capture is by far the key element to drive the cost 
down, and that is the majority of the focus of our research 
program.
    Mr. Gardner. Have any of these second generation 
technologies have been taken to the demonstration phase to 
validate they work at commercial scale in a coal-fired power 
plant?
    Mr. Klara. Not at this time, second----
    Mr. Gardner. Not at this time?
    Mr. Klara. Yes, so demonstration of those would be part of 
your planning.
    Mr. Gardner. Dr. Friedmann, about how much of DOE's $7.6 
billion over the past decade has been dedicated towards the 
second generation technologies?
    Mr. Friedmann. The overwhelming majority of the $7.6 
billion that we have dedicated so far is actually to the large-
scale commercial demonstrations. So, but in that context, to 
generate and develop the second demonstration technologies, as 
you said, we have put already several hundred millions of 
dollars into that research effort.
    Mr. Gardner. OK, and the information that I have says that 
we spent around $3 billion towards the second generation 
technologies. Would that be correct, of the $7.6 billion?
    Mr. Friedmann. No, I don't think that is correct actually.
    Mr. Gardner. OK, maybe we can get----
    Mr. Friedmann. We would be happy to clarify that. Yes, sir.
    Mr. Gardner. When do you expect demonstrations of these 
second generation technologies will be completed?
    Mr. Friedmann. The question is actually how quickly can we 
pilot them first. That is the critical lynchpin. Once they have 
been piloted at, say, that 20- to 50-megawatt scale, then the 
next step is commercial demonstration.
    Mr. Gardner. OK, and how long until pilot?
    Mr. Friedmann. One of those technologies is in fact being 
piloted now. For most of them, it is a question of how quickly 
can we put together the project.
    Mr. Gardner. OK, and so major scale, that is 20 to 50--what 
did you say 20 to 50?
    Mr. Friedmann. We are looking for--the soonest that we 
could get a second generation pilot up would be in 2015/2016 
kind of timeline for solicitation, maybe 2018 demonstration, 
and then large-scale demonstrations of those technologies 
between 2018 and 2025.
    Mr. Gardner. OK, and do you or Mr. Klara have an estimate 
for when those technologies will be available commercially, 
warrantable, insurable, fundable on the open market?
    Mr. Friedmann. For the second generation technologies, 
again, you need to have the large-scale pilots before they can 
get to a warranty stage.
    Mr. Gardner. And you said around 2022 would be about when 
they get to demonstration?
    Mr. Friedmann. You might be able to do things sooner than 
that. I would point actually to an existing program we have 
under our cross-cutting budget line which is the carbon capture 
simulation initiative in which we are trying to use advanced 
super-computing technology to accelerate the sureness by which 
companies can provide those kinds of performance guarantees.
    Mr. Gardner. So would it be safe to say that we are looking 
at, based on current cost estimates, commercially warrantable, 
insurable, and fundable on the open market, we are looking at 
around 2030 or so, maybe beyond that?
    Mr. Friedmann. Sooner than that, but 2020 to 2025 
timeframe, yes.
    Mr. Gardner. OK, can you describe in lay terms what the 
scale of cost savings will be expected for the so-called second 
generation technologies?
    Mr. Friedmann. To a first cut, we expect the cost to cut in 
half. We expect them to come in at something like $40 to $60 a 
ton for an integrated system.
    Mr. Gardner. And you are also working what you call 
transformational technologies. What would be the cost savings 
of these expected transformational technologies?
    Mr. Friedmann. Again, on a thermodynamic and an engineering 
basis, they can get maybe another $10, another $15 a ton 
cheaper. So something on the order of $30 a ton is probably 
about the limit of what you can reasonably expect.
    Mr. Gardner. And so when do you expect the demonstrations 
of those transformation technologies to be completed?
    Mr. Friedmann. Again we have laid out our road map, and we 
are hoping to see those deployed in the field by 2025.
    Mr. Gardner. OK, deployed in the field commercially?
    Mr. Friedmann. Yes.
    Mr. Gardner. OK, at what price of CO2 capture 
per ton or percentage of capture will the cost be low enough to 
put a system on a level playing field economically with 
traditional coal-fueled electrical power production?
    Mr. Friedmann. I honestly don't understand your question.
    Mr. Gardner. So basically at what, the price point, the 
break point of CO2 capture per ton or percentage of 
capture will the cost be low enough? Basically when will this 
be economic, low enough to put a system on a level playing 
field economically with traditional coal-fueled electrical 
power production?
    Mr. Friedmann. It is my contention that the second 
generation technologies are going to be the clean energy choice 
in terms of a competitive market in a variety of markets. In 
some markets, they won't be. In some markets, they will be. And 
the transformational technology would just increase the market 
share at that time.
    Mr. Gardner. But in terms of the cost, putting it on a 
level playing field from where we are today with costs from 
where you want to be with these new technologies cost. Do you 
have estimates? Have you produced estimates and that will 
produce estimates of when this break point will be?
    Mr. Friedmann. Again all environmental technologies add 
cost. So it is not appropriate nor do we for the purpose of 
policy decision compare the cost of carbon capture and storage 
with an unretrofitted plant or with a new build plant without 
it. We do that to demonstrate the delta, but a clean plant is 
not comparable to a Dickensian plant. They are different 
things.
    Mr. Gardner. OK, if you could supply any cost estimates 
that you have made, comparisons to the committee, that would be 
fantastic. And have any of your estimates changed in light of 
current market conditions?
    Mr. Friedmann. First of all, we are happy to provide those 
numbers. The market conditions are constantly changing. We 
actually try to bring that uncertainty into the way that we 
make our price calculations in terms of availability for labor, 
availability for materials, global markets for things, and so 
forth. In that context, as the market has changed, our 
estimates don't change as much as you might guess. Some of that 
information is baked into the way we do the calculations.
    Mr. Gardner. Thank you. And thank you, Mr. Chairman, for 
being generous of time.
    Mr. Murphy. Thank you, and although we are done, I am going 
to recognize Ms. Schakowsky for a quick clarifying question, 
comment, and then I will have a final clarifying question.
    Ms. Schakowsky. Thank you, Mr. Chairman. First, I want to 
say, Dr. Friedmann, you are one of the best witnesses that I 
have heard before this committee, and your answers are 
informative and concise and I think very fair. And I appreciate 
that. I hope I speak for the rest of the committee. When we 
talk about the cost of CCS and you estimate that, I just wanted 
to clarify, you aren't considering that at some point there may 
be a cost for carbon emissions. I know that the major oil 
companies have already built into their business plans that 
there may at some point in the not-too-distant future be some 
sort of perhaps a carbon tax, some sort of cost. So when you 
estimate the cost of this technology and applying it primarily 
we are talking about to coal today, you aren't taking into 
consideration any kind of cost for the pollution that these 
plants produce, are you?
    Mr. Friedmann. Let me take just a minute to answer that if 
I may.
    Ms. Schakowsky. OK.
    Mr. Friedmann. Again, thank you for the question and for 
your compliment. It was very nice of you to say so. Shell Oil 
Company has announced that they use a $50-a-ton estimate for 
carbon dioxide for any project that they put together. Other 
companies, most Fortune 500 companies have a similar kind of 
number which they keep in terms of how they assess risk in a 
carbon-constrained future.
    We do not actually use those numbers to estimate cost of 
capture. Those are straight-up technical calculations based on 
the facility, the technology, the rank of coal, et cetera. What 
we do is we think about deployment in the context of those 
costs. Cost of carbon is something which is actually outside of 
what the Department of Energy does, but we do believe that we 
are in a carbon-constrained world and that increasingly the 
cost of carbon dioxide emissions will be internalized into the 
cost of doing business.
    As that happens, it is our privilege and our pleasure and 
my passion to find ways to drop the cost so that that 
deployment of clean energy technology can be as widely 
successful as possible to create the brightest possible clean 
energy future for the United States.
    Ms. Schakowsky. Perfect ending as far as I am concerned. 
Thank you.
    Mr. Murphy. Thank you, and I have a clarifying question 
here too. So you mentioned about Kemper. They have that 
advantage of being able to use enhanced oil recovery from their 
plant. Different coal plants around the nation may not have 
that same advantage. And as you were preparing information for 
us, would you let us know what you believe the costs are for 
new plants or retrofitting old plants?
    Mr. Friedmann. Yes.
    Mr. Murphy. Give us some comparisons and having that public 
because we would like the companies themselves to be able to 
respond to those estimates if you would be able to get that for 
us.
    Mr. Friedmann. Yes, we would be happy to.
    Mr. Murphy. Thank you.
    Mr. Friedmann. Let me add that the availability of EOR 
doesn't affect the cost of the project. It affects the revenue, 
and so that of course affects the economics. But we try to keep 
the revenues and the benefits and the costs in separate 
categories for exactly that kind of comparison.
    Mr. Murphy. Thank you. And also for the sake of the 
American people, to help us translate that into what is going 
to be the cost for homeowners in order to make these kind of 
transitions as well as for businesses so we all share a concern 
that energy cost increasing means the impact upon 
manufacturing. We see that affecting some countries in the EU 
as well.
    So thank you, and I echo the comments of Ms. Schakowsky. 
Dr. Friedmann and Mr. Klara, you have been very informative. We 
appreciate just giving us the facts. That was very helpful and 
will help us move forward. So I want to thank both the 
witnesses that participated in today's hearing and remind 
members they have 10 business days to submit questions for the 
record, and I ask you to respond to questions promptly. And we 
will leave it at that. So with that again I thank the panel, 
and this hearing is adjourned.
    [Whereupon, at 12:03 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    This hearing continues the committee's ongoing oversight of 
the Department of Energy, and the status of its work to develop 
technologies that will help advance cleaner and more efficient 
electricity production from coal-based power generation.
    For several decades, Congress has entrusted DOE through 
appropriations and legislative direction to help advance the 
technologies that will dramatically improve how we use our 
abundant coal resources to the benefit of the American economy. 
With its vast scientific, technical, and engineering 
capabilities, DOE continues to have great potential for helping 
to promote cleaner, less expensive electricity production.
    DOE also plays a central role coordinating the nation's 
energy policy and is most directly responsible for ensuring 
America has a secure, affordable, diverse, and reliable energy 
supply.
    So our oversight of DOE should help illuminate two issues.
    One involves the agency's stewardship of the taxpayer 
funding Congress has provided the agency to pursue clean coal 
technologies. In addition to nearly $3.5 billion in Recovery 
Act funding, the agency has been provided an average of $350-
$400 million dollars annually over the past decade to pursue 
important answers about carbon capture and sequestration 
technologies for coal-based electricity generation.
    According to DOE's program plans, the purpose of this 
research is to develop workable and less expensive CCS 
technologies, and to introduce new efficiencies that will 
benefit any type of coal generation systems. But DOE's own 
plans expect this will take decades to prove. We have a 
responsibility on this committee to ensure the groundbreaking 
work we entrust DOE to pursue is on track and not sidetracked 
by rushed decision-making or shortsighted policy initiatives 
that threaten meaningful technological progress.
    Secondly, we also must work to spotlight how DOE is 
performing its role in the nation's energy policy making. Over 
the past five years, we have witnessed an onslaught of EPA 
rules and proposals that have significantly affected or 
threaten to affect the nation's ability to provide a diverse 
and abundant supply of electricity. At the same time, 
assumptions about the relative economic potential of various 
sources of energy have shifted over the past decade, with the 
newfound abundance of natural gas. This is raising new 
challenges and opportunities for an abundant energy future.
    It is not yet clear whether DOE is really in the driver's 
seat or taking a backseat to EPA on the policy or the 
technology matters that may have a direct impact on our 
national energy policy. So as we conduct our oversight, we 
should be mindful of and think about whether, in fact, DOE is 
truly up to the task, given existing authorities, for guiding 
policy and providing the research to support a secure energy 
future.

                                #  #  #

              Prepared statement of Hon. G.K. Butterfield

    Each year the science of climate change is reinforced. How 
much more proof is needed for my Republican colleagues to 
accept reality and acknowledge that humans contribute to 
climate change?
    The number and intensity of severe weather instances are 
increasing according to NOAA. Science continues to point out 
the human impact on severe weather. My constituents in eastern 
North Carolina were hard hit by Hurricanes Irene and Sandy. A 
15 year old girl in Goldsboro and a man taken in his home by a 
felled tree were amongst several North Carolinians who lost 
their lives.
    I would be remiss if I failed to mention the third largest 
coal spill in our nation's history which occurred in Eden, 
North Carolina on February 2nd. The spill jeopardizes the 
drinking water of North Carolinians and the ecosystem of the 
Dan River and Lake Gaston. We must keep in mind the impacts on 
those in close proximity to power plants and their coal ash 
ponds, many of which are in low-income communities and 
communities of color.
    The President's Climate Action Plan will help our nation 
reduce our contribution to climate change. It is a decisive 
step toward creating new energy jobs and being innovative 
instead of remaining complacent. I look forward to working with 
all stakeholders to find sensible and affordable ways to reduce 
climate change.

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