    [Senate Hearing 116-5]
    [From the U.S. Government Publishing Office]

                                                              S. Hrg. 116-5

      HEARING TO EXAMINE S. 383, THE UTILIZING SIGNIFICANT EMISSIONS WITH
    INNOVATIVE TECHNOLOGIES ACT, AND THE STATE OF CURRENT TECHNOLOGIES THAT
                    REDUCE, CAPTURE, AND USE CARBON DIOXIDE

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 27, 2019

                                   __________

      Printed for the use of the Committee on Environment and Public Works

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            Available via the World Wide Web: http://www.govinfo.gov

                        U.S. GOVERNMENT PUBLISHING OFFICE
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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                         ONE HUNDRED SIXTEENTH CONGRESS
                                 FIRST SESSION

                        JOHN BARRASSO, Wyoming, Chairman
    JAMES M. INHOFE, Oklahoma            THOMAS R. CARPER, Delaware, -
    SHELLEY MOORE CAPITO, West Virginia      Ranking Member
    KEVIN CRAMER, North Dakota           BENJAMIN L. CARDIN, Maryland
    MIKE BRAUN, Indiana                  BERNARD SANDERS, Vermont
    MIKE ROUNDS, South Dakota            SHELDON WHITEHOUSE, Rhode Island
    DAN SULLIVAN, Alaska                 JEFF MERKLEY, Oregon
    JOHN BOOZMAN, Arkansas               KIRSTEN GILLIBRAND, New York
    ROGER WICKER, Mississippi            CORY A. BOOKER, New Jersey
    RICHARD SHELBY, Alabama              EDWARD J. MARKEY, Massachusetts
    JONI ERNST, Iowa                     TAMMY DUCKWORTH, Illinois
                                         CHRIS VAN HOLLEN, Maryland

                  Richard M. Russell, Majority Staff Director
                  Mary Frances Repko, Minority Staff Director

                               C O N T E N T S

                                  ----------
                                                                       Page

                               FEBRUARY 27, 2019
                               OPENING STATEMENTS

    Barrasso, Hon. John, U.S. Senator from the State of Wyoming......     1
    Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     3
    Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
      Island.........................................................     5
    Moore, Hon. Shelley, U.S. Senator from the State of Virginia.....     6

                                   WITNESSES

    Sukut, Paul, General Manager and CEO, Basin Electric Power
      Cooperative....................................................     8
        Prepared statement...........................................    10
        Responses to additional questions from:
            Senator Barrasso.........................................    14
            Senator Whitehouse.......................................    15
    Oldham, Steve, CEO, Carbon Engineering...........................    17
        Prepared statement...........................................    19
        Responses to additional questions from:
            Senator Markey...........................................    29
            Senator Whitehouse.......................................    29
    Waltzer, Kurt, Managing Director, Clean Air Task Force...........    41
        Prepared statement...........................................    43
        Responses to additional questions from Senator Whitehouse        54

      HEARING TO EXAMINE S. 383, THE UTILIZING SIGNIFICANT EMISSIONS WITH
    INNOVATIVE TECHNOLOGIES ACT, AND THE STATE OF CURRENT TECHNOLOGIES THAT
                    REDUCE, CAPTURE, AND USE CARBON DIOXIDE

                                  ----------

                          WEDNESDAY, FEBRUARY 27, 2019

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10:05 a.m. in
    room 406, Dirksen Senate Building, Hon. John Barrasso (chairman
    of the committee) presiding.
        Present: Senators Barrasso, Carper, Inhofe, Capito, Braun,
    Rounds, Sullivan, Ernst, Cardin, Whitehouse, Merkley,
    Gillibrand, Booker, Markey, Duckworth, Van Hollen.

               OPENING STATEMENT OF HON. JOHN BARRASSO,
                 U.S. SENATOR FROM THE STATE OF WYOMING

        Senator Barrasso. Good morning. The committee will come to
    order.
        Today we are here to discuss Utilizing Significant
    Emissions with Innovative Technologies Act, or simply, the
    USEIT Act. The USEIT Act would encourage the commercial use of
    man-made carbon dioxide emissions.
        The bill supports the use of carbon capture technology,
    including direct air capture. The legislation also expedites
    permitting for carbon dioxide pipelines in order to move the
    carbon dioxide from where it is captured to where it is stored
    or used.
        For those of you who are not familiar with the USEIT Act,
    it is a practical, common-sense piece of legislation to turn
    carbon dioxide emissions into valuable products. We can use
    carbon dioxide to extra oil from wells that wouldn't otherwise
    be profitable through a process called enhanced oil recovery.
    We can capture carbon dioxide and use it to make building
    materials and carbon fiber. Captured carbon even can be used
    for medical purposes.
        Today we are going to hear testimony about other new and
    exciting developments in the area of carbon capture
    technologies. When we introduced the USEIT Act last year, we
    had a group of four Senators in support, including members of
    this committee, Senators Whitehouse and Senators Capito. And I
    would like to introduce into the record an article published in
    the National Journal last week entitled The Senate's Quite
    Climate Policy Deal Maker. You look great in that picture,
    Sheldon.
        [Laughter.]
        Senator Barrasso. The article praises Senator Whitehouse
    for ``finding incremental successes working with Republican
    colleagues.'' And I hope there is no objection to introducing
    this.
        Senator Whitehouse. I don't know. Does Senator Cardin have
    any objection?
        [Laughter.]
        Senator Whitehouse. Well, thank you, Chairman, that is kind
    of you.
        Senator Barrasso. The praise is well-deserved.
        This Congress, I want to again thank Senator Whitehouse and
    Senator Capito for their continued partnership as we work to
    get the USEIT Act to the President's desk. Support for the
    USEIT Act has now grown from an initial bipartisan group of
    four Senators to a larger group of 12 Senators, including seven
    of my colleagues on this committee. Along with Senators
    Whitehouse and Capito, I am pleased, this Congress, to have
    Ranking Member Carper, Senator Cramer, Senator Duckworth,
    Senator Rounds and Senator Inhofe as cosponsors of the USEIT
    Act.
        In addition, a bipartisan companion bill has been
    introduced in the House of Representatives.
        When we had a hearing on the USEIT Act last year, we heard
    testimony about the many ways carbon dioxide can be transformed
    from a useless by-product into a valuable commercial good.
    Interest in the USEIT Act has continued to grow since last
    year. This is in large part due to the bipartisan success we
    had with the FUTURE Act, which was signed into law a year ago.
    Senators Whitehouse, Capito and I led that legislative effort
    as well. The FUTURE Act extended and expanded the tax credit
    for using and storing carbon dioxide.
        The Clean Air Task Force called the FUTURE Act one of the
    most important bills for reducing global warming pollution in
    the last two decades. The extension and expansion of the so-
    called 45Q tax credit to the FUTURE Act has expended public
    interest about how we capture and use carbon dioxide.
        This Congress, I have continued to focus on ways to
    expedite and expand the use of carbon capture. That begins with
    the USEIT Act. Last Congress, we unanimously supported the
    legislation out of committee by a voice vote. This Congress, we
    want it signed into law. America should reduce emissions
    through innovation, not punishing government regulations. The
    USEIT Act advances that goal.
        This is also the approach we took with the bipartisan
    Nuclear Energy Innovation and Modernization Act. The bill will
    make sure America remains a leader in nuclear energy
    innovation. Nuclear power creates jobs and is critical if we
    are going to reduce our carbon dioxide emissions. President
    Trump signed the legislation into law earlier this year.
        Passage of the Nuclear Energy Innovation and Modernization
    Act was an important step forward. I look forward to continuing
    to work with members of this committee on both sides of the
    aisle to make additional progress in promoting nuclear energy
    technology, including exploring solutions to nuclear waste
    disposal issues.
        This committee has and should continue to lead on
    bipartisan and on common-sense solutions. Such solutions do not
    include, in my opinion, the Green New Deal, which I believe is
    unworkable and according to Doug Holtz-Eakin, the former
    director of the Congressional Budget Office, would cost between
    $51 trillion and $93 trillion dollars.
        My ideas do include the USEIT Act, as Axios recently
    reported, although the USEIT Act is not as high-profile or
    sweeping as the Green New Deal resolution, also unveiled on the
    same day. The bill takes a more direct, concrete aim at the
    root of climate change, emissions themselves. So when we work
    together, we have shown we can promote American leadership,
    grow our economy and lower our emissions.
        I would now like to recognize Ranking Member Carper, a
    cosponsor of the USEIT Act, for his opening statement.

              OPENING STATEMENT OF HON. THOMAS R. CARPER,
                U.S. SENATOR FROM THE STATE OF DELAWARE

        Senator Carper. Thanks, Mr. Chairman.
        Sheldon, I just note, that looking over your shoulder, in
    this article, that the headline says, the Senate's Quiet
    Climate Policy deal maker, Bernie, is looking over your
    shoulder. So for what it's worth.
        [Laughter.]
        Senator Carper. Mr. Chairman, thank you for convening this
    hearing today and for your leadership as we begin to examine
    one of the many ways we can work together to find solutions
    that we need to, and then craft legislation to support what I
    call win-win policies that address climate change while
    addressing job creation and fostering economic growth.
        In today's hearing, we are going to be focusing on
    technologies that reduce, capture, and use carbon dioxide as
    well as bipartisan legislation that supports them. Utilizing
    these significant innovations with innovative technology or
    USEIT is sponsored, as we know, by the Chairman, cosponsored by
    a bunch of us, including me. And let's start with the primary
    reason I believe we need to act, and that is, to address carbon
    dioxide emissions and climate change.
        The science behind climate change is settled, from our
    warming oceans to heat traps in our atmosphere. Climate change
    is real. It is happening, and human activities, such as burning
    fossil fuels, are greatly contributing to the problem.
    Scientists have also found direct links between climate change
    and recent extreme weather events such as the rash of
    devastating category 5 hurricanes that our Country has
    experienced, wildfires in the west, they are as big as my State
    of Delaware. Again, the science is clear from these extreme
    weather events, they are only going to get worse if we do
    nothing.
        It doesn't matter if you are from a coastal State or from a
    landlocked State. I have lived in both. If you care about
    public health or the environment, if you care about our economy
    and our national security, the reality of climate change is
    that every person living in our Country will eventually see or
    experience it. Most are already affected by it today. God knows
    that we are in Delaware.
        As I see it, we have a couple of options. We can take up
    this fight and get serious about addressing and adopting and
    adapting to climate change, or we can stick our heads in the
    sand and do nothing. Doing so I think threatens the future of
    our children and our grandchildren. I say we fight and we fight
    together, not with one another. Senator Barrasso's colleague,
    his wing man from Wyoming is Mike Enzi, who is a great guy. He
    is the author of the 80-20 rule that I oftentimes cite. I used
    to explain why Mike Enzi, a very conservative Republican, got
    so much accomplished by working with Ted Kennedy, the most
    liberal Democrat we had at the time. And Mike said that, ``Ted
    and I work on the 80-20 rule.'' I said, what is that, and he
    said, ``We agree on 80 percent of the stuff, we disagree on 20
    percent of the stuff, we focus on the 80 percent where we
    agree, and we'll turn to the other 20 percent some other
    time.'' I think the USEIT Act is just a great example of the
    80-20 rule. So we appreciate his wisdom.
        The fight, however, can also do some real good, can unleash
    American innovation and job opportunities, while putting the
    U.S. in the driver's seat of a global clean energy economy that
    would include this kind of technology. That won't be easy. We
    still need a comprehensive approach, every tool in our tool box
    to address this issue.
        To make that major shift toward a cleaner energy economy,
    R&D and our other Federal investments, tax incentives from our
    regulations and all our other policies that harness market
    forces are going to be on the table, too. Fortunately, we are
    not starting this fight from square one. Smart investments and
    regulations made by the Obama administration, and we can go
    back even as far as the George Herbert Walker Bush
    administration, results in dramatic increases in the deployment
    of energy efficiency, clean energy technology at a cheaper
    cost.
        As a result of these smart policies, more than 3 million
    people went to work today in clean energy energy jobs, while
    consumers pay less, not more, in energy costs now than they did
    a decade ago. Which proves yet again we can have a cleaner
    environment, better climate, and stronger economy.
        Despite these successes, much more is needed to stem the
    tide of climate change. We are going to hear today from our
    witnesses that major investments in carbon capture utilization
    and sequestration technologies are in demand. The USEIT Act
    helps make these investments through R&D and by lowering other
    barriers preventing the widespread development and deployment
    of CCUS. I am especially pleased to see that this year's
    version of the bill makes additional investments in direct air
    capture of carbon pollution. With the changes we have made, and
    again, I am happy to join our Chairman and colleagues and
    Sheldon in cosponsoring this USEIT Act.
        We want to assure the broad deployment of CCUS and other
    clean energy technologies. However, the U.S. must make bolder,
    bigger actions than the USEIT Act. And we must embrace broad
    climate policies, such as a price on carbon eventually to
    really move the needle on our climate change policies.
        With that said, this hearing is not the end. It is just the
    beginning. I look forward to working with the Chairman and all
    of our colleagues here to make sure that our Country is more
    secure, both economically and with respect to the threat of
    climate change. My hope is that we can do so in this Congress.
    This is a good place to start. Thanks so much.
        Senator Barrasso. Thank you, Senator Carper.
        I would like to give my two colleagues who have supported
    the USEIT Act since its initial introduction last year an
    opportunity to provide some remarks. Senator Whitehouse, would
    you like to say a few words?

                  OPENING OF HON. SHELDON WHITEHOUSE,
              U.S. SENATOR FROM THE STATE OF RHODE ISLAND

        Senator Whitehouse. I would be delighted to, Chairman.
    Thank you very much for your kind words and for your leadership
    on this.
        If we can get this bill passed, it will build on the
    success of the FUTURE Act, the 45Q Act, which we successfully
    got into the 2018 budget deal. And I want to thank our
    chairman, Senator Barrasso, and Senator Capito, for their
    leadership on the FUTURE Act. Pulling everybody together was a
    broad and unlikely coalition, but it worked, and the bill is in
    place.
        It will help solve the market failure of there being no
    revenue proposition for captured carbon. We gave it a revenue
    proposition, and the market has responded. Occidental Energy
    and Hoyt Energy have announced that they will pursue a project
    to capture CO2 from two ethanol plants supported by
    the 45Q Rule. Net Power, a novel natural gas electricity-
    generation technology that inherently captures all its
    CO2 emissions, has said it will use the credit to
    build its first commercial scale plant.
        So things are already moving. But nobody likes highways and
    roads more than Senator Inhofe, and this USEIT Act will
    basically allow for highways and roads for the CO2
    to get from the place where it is captured to the place where
    it can be either used or sequestered. At the moment, you can do
    things like they are doing up in Saskatchewan and you can
    capture carbon from the plants emissions and run it to, as the
    Chairman pointed out, enhanced oil recovery sites. But that
    limits the reach of this technology. And we need to expand it.
    The USEIT Act will help expand it.
        I want to thank Chairman Barrasso for his leadership on
    both of these bills. I appreciate it very much. I want to thank
    our ranking member, Senator Carper, for his very helpful
    contributions to this bill and his support of it. Senator
    Capito is again a key, lead player in this, and I appreciate
    and thank her. Senators Duckworth, Rounds and Cramer were in my
    notes to thank. But Chairman Barrasso mentioned that Senator
    Inhofe is a cosponsor as well. So I want to express my
    appreciation to him.
        We have had very good luck when we work with Senator Inhofe
    on pieces of legislation. We have a plastics bill that passed
    by unanimous consent with Senator Inhofe's support. We have the
    TSCA bill that passed Congress and has been a very strong,
    bipartisan environmental achievement, with not just Senator
    Inhofe's support, but his leadership. And Senator Inhofe is
    very often very active in making sure that infrastructure bills
    get done. We have had a few occasions where we have worked
    together to break various logjams in the Senate to keep
    infrastructure bills moving.
        I think that our colleagues look at a bill that has both
    Senator Whitehouse and Senator Inhofe cosponsoring it and
    think, well, there is probably room for me in that bill.
        [Laughter.]
        Senator Whitehouse. And that, combined with Senator
    Inhofe's immense legislative skills at getting things done, I
    think I would give him a particular welcome to this bill.
        So we have a big opportunity here. I do think that we have
    shown that pricing carbon works, that the market does need to
    accept that there is a real difference between carbon-intensive
    power and carbon-free power. And the quicker we can reflect
    that, the better we will respond to the climate crisis that is
    looming over us.
        So it is great to have this bipartisan opportunity. I have
    companies like AgCorp and BioProcessH20 and my home State of
    Rhode Island that are excited by these prospects.
        I will close by saying that some years ago, I won the very
    prestigious award of being the algae advocate of the year. I
    know you are all deeply jealous of that accomplishment by me.
    But one of the reasons I was the algae advocate of the year was
    because algae actually can get into the exhaust stream once
    CO2 gets captured, and it can be turned into a
    variety of products, from feed to makeup to human food products
    and so forth. So when we added carbon capture utilization and
    sequestration, a kind word to the algae folks.
        Thank you very much, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Whitehouse.
        Senator Capito, over to you.

            OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
              U.S. SENATOR FROM THE STATE OF WEST VIRGINIA

        Senator Capito. Thank you, Mr. Chairman. That is going to
    be a hard act to follow Captain Algae over there.
        [Laughter.]
        Senator Capito. But I am going to try. I do appreciate,
    certainly, Senator Whitehouse's leadership on this, when we
    introduced it last year, when we did 45Q, the FUTURE Act. It
    was amazing to see the different stakeholders in the room. And
    I want to thank the chairman and the ranking member for being
    here, and Senator Inhofe for joining on to our second try here.
        I want to thank the chairman, too, for prioritizing this
    bill early in our session. I really appreciate this. We did
    learn some things last year when we tried to move the bill
    forward. And this year, I am happy to say that one of my
    counterparts from West Virginia, David McKinley, has already
    introduced a counterpart for this in the House.
        So I think timely enactment of the USEIT Act is of essence.
    Because last year we did pass the FUTURE Act, as Senator
    Whitehouse said. The FUTURE Act expanded and improved the 45Q
    tax credit for the utilization, carbon capture and storage. I
    think it was a very substantive step.
        But we have had some headwinds with that that prevent that
    bipartisan achievement from having its full effect. First of
    all, the IRS has yet to provide revised guidance, helping us to
    utilize the credit. And just recently, Senators Whitehouse and
    Barrasso and I sent a letter earlier to the IRS leadership
    requesting that they expedite that guidance.
        The January 1, 2024, deadline for projects to begin
    construction is looming ever larger. And we know, and you all
    know certainly, and I know our panel will tell us, these are
    not inexpensive projects as you are moving forward. You are
    making enormous capital commitments along with a longevity.
    Predictability is absolutely critical.
        Second, there remains the lack of regulatory certainty from
    our Federal permitting agencies. That is where we know that
    this bill comes in, providing a clear playbook for securing the
    necessary permits. Senator Whitehouse talked about sort of the
    belts and suspenders aspect of this bill, and the associated
    infrastructure, like CO2 pipelines, will help
    sponsors know what they are getting into. And it will provide
    assurance that as they seek private investment that a project
    won't get lost in approval purgatory.
        This committee has heard substantive testimony about the
    cost overruns and delays that can result when project sponsors
    in any arena, and even the agencies themselves, don't know what
    the approval process actually looks like. So that is why timely
    enactment of the USEIT Act is so vital for making broad-based
    deployment of carbon capture utilization and storage
    technologies reality.
        As I am sure we will hear from our witnesses today, if the
    United States and the world are to bend the curve on
    atmospheric carbon dioxide, CCUS has to be a part of a policy
    and technological win and mix. CCUS will also serve to preserve
    employment in industries like coal and construction and
    manufacturing, and in the process, it will prevent major market
    disruptions that could kill jobs and significantly raise costs
    for energy and goods across our Nation.
        So I look forward to hearing from the panel. Again, thank
    you for bringing this bill up so quickly. It is an important
    policy and it has a lot of good, bipartisan cosponsors and
    interests. Thank you.
        Senator Barrasso. Thank you, Senator Capito. Senator
    Carper.
        Senator Carper. I was counting the number of times I heard
    the word bipartisan. I stopped counting at 20. And normally,
    you would hear a lot about fighting, how we don't get along, we
    don't work on anything together. And normally, at this part of
    our hearings, we stop and we join hands and sing Kum By Yah.
        [Laughter.]
        Senator Carper. And this might be one of those moments, if
    not right away, then maybe at the end of the hearing. But we
    are glad you are here to add to the spirit. Thank you.
        Senator Barrasso. Thank you, Senator Carper.
        I am pleased now to introduce our three witnesses, Paul
    Sukut, who is CEO and General Manager of Basin Electric Power
    Cooperative. Basin provides power to residents of nine States,
    including my home State of Wyoming. We are happy for your
    willingness to testify.
        We also have with us Mr. Steve Oldham, who is the CEO of
    Carbon Engineering, and Mr. Kurt Waltzer, who is the Managing
    Director of the Clean Air Task Force.
        So welcome. I invite all of you to testify. I want to
    remind the witnesses that your full written testimony will be
    included and made part of the official hearing record today. We
    ask that you try to keep your statement to within 5 minutes, so
    we will have some time for questions. I look forward to hearing
    from each of you. Would you like to begin, Mr. Sukut?

             STATEMENT OF PAUL SUKUT, GENERAL MANAGER AND
                 CEO, BASIN ELECTRIC POWER COOPERATIVE

        Mr. Sukut. Thank you, and good morning, Chairman Barrasso,
    Ranking Member Carper and members of the committee.
        As the Senator said, my name is Paul Sukut. I am the CEO
    and General Manager of Basin Electric Power Cooperative. We are
    headquartered in Bismarck, North Dakota. I have worked in the
    energy industry about 40 years, about 36 with Basin Electric,
    and really, I have served as CEO since 2014.
        I would like to thank you for the invitation to speak this
    morning about innovation in the utility industry and other
    efforts to reduce emissions, particularly carbon. Basin
    Electric is a generation and transmission cooperative that
    provides wholesale electricity to 141 rural electric
    cooperatives that serve 3 million customers across 9 States.
        We have a diverse generation portfolio, consisting of over
    6,000 megawatts of coal, natural gas, wind, recovered energy,
    nuclear and market purchase agreements. Our generation
    resources participate both in the MISO and SPP regional
    transmission organizations.
        Basin electric and its members have invested billions of
    dollars in capital in recent years to secure its fossil-based
    generation. I would refer the committee to my written testimony
    for additional details on our facilities. Basin Electric is
    actively engaged in assuring that these assets can continue to
    operate in a carbon-constrained future, and we strongly support
    common-sense carbon management regulation that recognizes
    improvements already made to existing plants, and sets a
    standard that is achievable with cost-effective technologies
    that can be applied to the facility itself and allows
    flexibility.
        As utilities make decades-long planning decisions, it is
    imperative to have certainty with respect to how regulations
    impact our facilities, and the associated costs just to run
    them. Looking further into the future, Basin Electric remains
    interested in developing solutions to innovate with respect to
    cost-effective clean coal technologies that capture, utilize
    and sequester CO2.
        Basin Electric is the host site for the Integrated Test
    Center located at our Dry Fork Station near Gillette, Wyoming.
    This test facility will provide space for researchers to turn
    CO2 into a marketable commodity.
        In addition to the Integrated Test Center, Basin has been
    involved with exploring the potential for near-zero emission
    Allam Cycle technology as an option for future power
    generation. Again, I would refer the committee members to my
    written testimony for details on this technology, our partners
    and its status.
        I would like to highlight for the committee a subsidiary of
    Basin Electric, the Dakota Gasification Company, which operates
    the Great Plains Synfuels Plant near Beulah, North Dakota. This
    one of a kind facility produces synthetic natural gas from
    lignite coal, and several fertilizer and chemical coal
    products. Notably, the facility is also one of the largest
    CO2 sequestration projects in the world, utilizing
    CO2 separated during the coal gasification process
    for enhanced oil recovery in Saskatchewan, Canada.
        I believe that the plant and the development of its
    products continue to demonstrate what a resource we have in our
    coal reserves, and what can happen with smart innovation. I
    hope this is the kind of progress that we will continue to see
    from the ITC and through other initiatives for value-added coal
    use and CO2 capture at the Federal and State levels.
        Finally, a lot of discussion on carbon capture tends to
    focus on the technological challenges of economically capturing
    CO2. But the other side of this equation is what you
    do with CO2 once it is captured. Recently, Basin
    Electric has participated with the Plains CO2
    Reduction Partnership in the Department of Energy's CarbonSAFE
    program, to investigate the geology in both North Dakota and
    Wyoming and ultimately develop a large-scale injection test
    well for CO2 sequestration. Developing a solution
    for captured CO2 will inevitably require additional
    build-out of pipeline infrastructure in order to come to
    fruition.
        For this reason, we support the Utilizing Significant
    Emissions with Innovative Technologies Act and its provisions
    to expedite guidance, permitting and construction of
    CO2 infrastructure. As a not-for-profit electric
    cooperative, Basin Electric has a fiduciary responsibility to
    its members to provide electric generation at the lowest
    possible cost.
        The question of carbon capture is not only one of a
    technology barrier, but an economic one as well. Many factors
    impacting the utility industry today make capital investments,
    such as new coal construction, cost prohibitive if not
    impossible.
        To this end, we appreciate the bipartisan support from the
    members of this committee for legislation such as the 45Q
    capture tax credit that was expanded last year, as well as the
    USEIT Act that provide further assistance to relieve the
    regulatory and financial barriers to carbon capture utilization
    and sequestration, as well as other novel technologies.
        In closing, Basin Electric has undergone a number of
    changes as the electric industry has evolved. But I believe we
    have a good story to tell with respect to CO2
    reduction, and are well-positioned to serve our members now and
    well into the future.
        Again, thank you for the opportunity to share my thoughts.
    I would be happy to answer any questions that the committee may
    have.
        [The prepared statement of Mr. Sukut follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you very much, Mr. Sukut.
        Mr. Oldham, welcome to the committee.

           STATEMENT OF STEVE OLDHAM, CEO, CARBON ENGINEERING

        Mr. Oldham. Thank you. Mr. Chairman, Ranking Member Carper,
    thank you very much for the opportunity to meet, and the other
    distinguished members of the committee, too. Thank you for your
    attention to this matter.
        Senator Carper. Mr. Chairman, could we have a translator,
    please?
        [Laughter.]
        Mr. Oldham. Is it my British accent? I will talk slowly.
        [Laughter.]
        Mr. Oldham. I am CEO of a company called Carbon
    Engineering. We are actually based in British Columbia, Canada.
    We are an innovative company. We are privately funded. And we
    have been focused on developing technologies that will allow
    the large-scale capture of atmospheric CO2.
        Why atmospheric CO2? Why do we focus on
    capturing that? I am a simple guy, I would like to do a simple
    metaphor to help you and everybody else understand. Think of
    your kid in the bathtub. Think of the bathtub as the
    atmosphere, and we fill the bath with water. We all know there
    is a safe level of water that you can put in there before your
    kind is under any threat whatsoever.
        Now put the taps on, and leave the taps running. So the
    taps running is the equivalent of CO2 emissions. We
    keep building more and more water in that bathtub. Eventually,
    it becomes a threat for the child and the bathtub. Eventually,
    it runs over the side of the bathtub and wrecks the whole
    house.
        So what do we do about that? The first and most obvious
    thing we do is we turn down the tap. And that is CO2
    emission control. It is absolutely essential that we turn down
    the tap.
        But every one of us knows that even if you turn the tap
    down so it is just dripping, it is just a matter of time before
    the bathtub fills and it overflows and it wrecks the house. So
    the other solution is to pull out the plug. And the plug allows
    you to rapidly drain the bathtub, and you can put the plug back
    in when it gets back to a safe level.
        That is negative emissions. That is direct air capture and
    that is what we do.
        Senator Carper. Could you explain that to me one more time,
    please?
        [Laughter.]
        Senator Carper. That was a great example. That is terrific.
        Mr. Oldham. Thank you.
        So our focus as a company has been to develop the tools
    that allow very large-scale capture of CO2 directly
    from the atmosphere. We have developed and demonstrated that
    technology, it has been working in British Columbia since 2015.
        We are now moving ahead with a plan to bring that
    technology into the United States with a variety of different
    partners. We have had inquiries from 38 U.S. States that would
    like to set up a facility within their State. And of course, we
    have recently received investment from some significant
    companies here in the United States, Occidental Petroleum and
    Chevron have become both shareholders and partners with Carbon
    Engineering in bringing our technology to market.
        The process is extremely safe. This is an example of a part
    of our process. When we capture the CO2 from the
    atmosphere, we make calcium carbonate. Calcium carbonate is
    what you guys would know as seashells. So just as our kids play
    safely on beaches with seashells all around them, this calcium
    carbonate here, which is made out of atmospheric
    CO2, this is negative emissions right here in my
    hand, is part of our process.
        Moving forward, our company is now ready to start building
    commercial-scale activities. It is critical that we have large
    scale here. The CO2 problem in the atmosphere is
    significant, and it has to be addressed at scale. So the
    interest of Occidental, the interest of Chevron, why are they
    interested? They like negative emissions, they want to focus on
    de-carbonization. The use of CO2 enhanced oil
    recovery is a very valuable opportunity. If you capture
    CO2 from the atmosphere and you put that
    CO2 underground in the process of EOR, you are
    putting more carbon underground than is contained in the crude
    that comes back up.
        So now you have a win-win. We have a continued source of
    jobs and prosperity associated with that crude. But you also
    have a negative emission.
        Third, what if you take that CO2 from the
    atmosphere, you combine it with hydrogen and you make a
    synthetic fuel? Now that synthetic fuel uses the CO2
    that was burned in the atmosphere already, you put it in your
    car, your vehicle, you drive that vehicle, the CO2
    is put back into the atmosphere, we collect it again and we
    make more fuel. So the opportunity to create a sustainable,
    low-carbon fuel which is compatible with every vehicle, every
    truck, every plane that exists today, is enabled by large-scale
    capture of atmospheric CO2.
        That is the reason why our friends at Chevron are
    interested in our business. They would like to de-carbonize
    their fuel by blending our fuel with their fossil fuel. It
    makes the fossil fuel more sustainable while achieving de-
    carbonization at the same time.
        Moving ahead as a company, the building of our plants is a
    critical activity, as the Senator pointed out earlier on. These
    are large capital projects, and investors in those projects
    look at the market, they look at the legislation that is on the
    books right now. 45Q has been an essential part of the
    economics of our plants, so thank you for your work and your
    leadership in bringing that in.
        The USEIT Act is also important. When we have the IPCC, we
    have the National Academy, we have the Royal Academy, the
    United Nations, all saying that negative emissions, capturing
    atmospheric CO2 is essential, it scares me that
    there are less than 200 people in the world today working on
    direct air capture. We need more people. We need more brilliant
    minds onto this. And the USEIT Act will enable that by
    providing funding for R&D.
        Here at Carbon Engineer, we need more competitors. We need
    more partners, we need more innovation. We hope your Act brings
    more people to the table, and we thank you for your leadership.
    Thank you.
        [The prepared statement of Mr. Oldham follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you very much for your testimony.
    Very, very interesting.
        Mr. Waltzer, please.

                  STATEMENT OF KURT WALTZER, MANAGING
                     DIRECTOR, CLEAN AIR TASK FORCE

        Mr. Waltzer. Senator Barrasso, Ranking Member Carper,
    members of the committee, I am here on behalf of Clean Air Task
    Force to express our support for the USEIT Act and urge its
    prompt enactment.
        The kinds of solutions proposed in this legislation is
    urgent. Supporting innovation and infrastructure development
    for carbon capture utilization and direct air capture as well
    as other types of technologies and policies is crucial, given
    the enormous challenges we are facing in addressing climate
    change. To address this Herculean challenge will require
    nothing less than fully de-carbonizing a $25 trillion global
    energy system at the same time that we expect a 40 percent
    increase in the world's energy demand.
        To accomplish this task, we need a portfolio of low-carbon
    technologies that are widely commercially available. Solar and
    wind will certainly play an important role in de-carbonization,
    but relying wholly on those technologies would be risky. In
    part, this is because generating 100 percent of electricity
    from just those sources will be significantly more expensive
    than a more balanced portfolio of low-carbon solutions,
    including nuclear and CCUS.
        But more broadly, our complex energy system has some
    sectors that are really not easily addressed or electrified.
    These include aircraft, other certain types of industrial
    processes. So in short, we really need multiple technology
    shots on goal.
        This is underscored in the de-carbonization scenarios
    studied by the Intergovernmental Panel on Climate Change where
    the vast majority of those scenarios included a substantial
    amount of CCUS, as well as direct air capture. We are also
    going to need a portfolio of policies, which includes policies
    that provide certainty to inventors and investors by setting
    clear targets through technology portfolio standards or
    emission limits.
        At the same time we need to also drive forward technology
    innovation policies, including research and development,
    support for commercial demonstrations, deployment incentives
    and support for infrastructure. We need all these tools in the
    tool kit if we are going to address this massive challenge.
        For CCUS and direct air capture, the 45Q incentive was an
    important bipartisan success supported by a broad range of
    stakeholders from environmental organizations, labor unions and
    industry. The USEIT Act is an important successor bill to that
    effort.
        If adopted, it will provide important, targeted support for
    early stage R&D for demonstrations in CO2 pipeline
    infrastructure development. The proposed direct air capture
    prize is an important addition to our current RD&D tool kit,
    and is based on a proven approach for leveraging private
    capital in service to technology problems.
        Supporting R&D for new products that utilize and
    efficiently store carbon will provide an important catalyst to
    an area that is already attracting early stage private
    investment and early commercialization in niche markets.
    Clarifying the eligibility of CO2 pipelines under
    the FAST Act, and developing regional task forces to promote
    local, State and Federal coordination will help move projects
    while preserving environmental protections needed to ensure
    responsible development.
        Again, these policies by themselves are not going to be
    sufficient to get us where we need to be. But they are
    necessary.
        We appreciate your leadership, Mr. Chairman, as well as
    that of the bill's cosponsors on championing these policies and
    on the bipartisan approach you have all taken in introducing
    this legislation as well as your commitment to maintaining that
    approach and addressing any future amendments. I appreciate the
    opportunity to testify and look forward to answering your
    questions.
        [The prepared statement of Mr. Waltzer follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you very much. We are going to
    proceed to a series of questions. I will start, Mr. Sukut, I
    would like to start with you.
        Basin Electric's leadership in carbon capture and
    utilization and sequestration is impressive. I think you are
    really to be commended for what you have been doing. Through
    initiatives like the Integrated Test Center in Gillette and
    Basin's Dry Fork Station, we are really proud to see Wyoming
    has already established itself as an innovation hub. Can you
    discuss why Wyoming and surrounding States are ideal, like
    yours, are ideal places to do carbon capture utilization and
    sequestration work?
        Mr. Sukut. I think we should point out the first thing is
    States like Wyoming, and of course North Dakota, have abundant
    oil, gas and coal resources, natural resources. And these
    resources are going to be a part of the energy future for this
    Country for a long time.
        But I think the most important thing to point out, and the
    most relevant thing this morning to talk a little bit about is
    actually the geology. Through the CarbonSAFE program, we have
    got some wells drilled, one of them only less than a quarter
    mile from Dry Fork Station. The geology looks very promising to
    infuse carbon. We have two sites in North Dakota that are
    virtually under some of our resources, our coal-based
    resources.
        So from that standpoint, I think we have an opportunity
    here, a great opportunity here to infuse and demonstrate that
    once we capture the carbon, we will be able to infuse it and
    store it in the ground. But I think one of the most important
    things, and I am so encouraged by sitting in front of you all
    for all the leadership that you have taken in trying to get us
    the legislation. I thank you for all that. Because the
    leadership really does make a difference for us.
        Senator Barrasso. Mr. Oldham, you can followup on that. But
    I really have been interested for a long time in direct air
    capture. I am pleased to see that public interest is now coming
    into the fore. This is something I read about years ago in The
    Economist, talking about the ways that they can be doing it and
    trying to make it more cost-effective. Clearly, the technology
    is there.
        Why do you think we are seeing an increased interest in
    direct air capture? Do you think the USEIT Act can actually
    help drive public sector interest in direct air capture?
        Mr. Oldham. Thank you. I see we even made a Dilbert cartoon
    in the last couple of weeks. So I guess direct air capture is
    really public domain now.
        [Laughter.]
        Mr. Oldham. So that is very good.
        I will answer the question two ways. First, I think in
    public conscience, the recent reports from the various
    scientific committees worldwide have raised awareness of the
    issue. So there is increasing recognition of need and equally,
    at the same time, the recognition that there are solutions out
    there like ours. We are not the only one. Having a need and a
    solution really drives interest.
        Economically, for sure, 45Q has made a big difference. It
    sent a very clear signal from this house that there is a desire
    to see innovation in this area. It helped close the economics
    for business cases that didn't close otherwise.
        For businesses like ours, the challenge is always the first
    couple of projects. There, the cost is higher, the schedule is
    longer, the perceived risk is higher. So having some support
    for those initial projects is just essential.
        So to my mind, that is a large part of it, helping us over
    the hump at the first few projects.
        Senator Barrasso. Good. And Mr. Waltzer, in terms of this
    45Q, and I am so pleased to see the Clean Air Task Force's
    recent report about the real impact that the 45Q tax credit
    could have on reducing emissions. We have worked hard to extend
    and expand that tax credit to support carbon capture efforts.
    So we want to make sure that that tax credit is used.
        If carbon capture projects are developed on a scale that
    you predict, is there a real need for supporting
    infrastructure, and how can the Federal Government support and
    expedite the development of that infrastructure that you talk
    of?
        Mr. Waltzer. Mr. Chairman, in short, the answer is yes,
    that is needed. What our study really showed was the economic
    potential of 45Q. But 45Q by itself perhaps will not get us
    there. In fact, we think more is needed.
        We think that just because of the way commercial contracts
    are set up today for developing pipelines, you can set up a
    contract between point A and point B with the amount of
    CO2 that is going to flow through, but you are not
    going to necessarily set up the interState pipelines that are
    necessary to connect all the little sources together to get
    them to where the markets are. Right now, the most developed
    market is enhanced oil recovery activity.
        So we are going to need the sort of support to develop that
    infrastructure and develop our national CO2
    pipelines. But we are also going to need the kind of solutions
    that are proposed in the USEIT Act that make the process of
    setting those pipelines efficient and effective, while
    maintaining our current environmental protection standards.
        Senator Barrasso. Thanks so very much. Senator Carper?
        Senator Carper. Thank you all for your testimony. I was
    especially interested in your example of the infant in the tub.
    I thought that was a great example. I wrote it down. I will use
    it often, never attribute it to you.
        [Laughter.]
        Senator Carper. Oh, I will, I will. Thank you, that was
    great.
        I have a couple of questions for the whole panel.
        Senator Barrasso. We don't need to start the clock. So we
    had a former member of this committee, Senator Joe Lieberman.
        Senator Carper. I remember, he just had his birthday last
    week.
        Senator Barrasso. And he said, well, here is something
    really smart. The first time he repeats it, he says, and I have
    heard Mr. Oldham say, dah, dah, dah, dah, dah. The next time he
    would say, I heard a wise man once say, dah, dah, dah, dah.
        [Laughter.]
        Senator Barrasso. And then the third time, he says, As I
    have said time and time again.
        [Laughter.]
        Senator Carper. We do this all the time.
        [Laughter.]
        Senator Carper. I am surprised there are not more cameras
    here.
        This is one for Mr. Waltzer. Again, thank you all for your
    testimony. Like you, Mr. Waltzer, I want to ensure that this
    legislation doesn't lead to other efforts to weaken the Clean
    Air Act. I also appreciate the Chairman's commitment about not
    using this bill as a vehicle to weaken the Clean Air Act, and
    want to thank him for accepting a number of changes that we
    recommended to last year's legislation, which we think makes
    this version better.
        My question, if I could, Mr. Waltzer, in your opinion is
    the Clean Air Act inhibiting progress in CCUS technology
    development or deployment?
        Mr. Waltzer. Mr. Chairman, Senator Carper, I want to make
    sure I understand your question. You are asking if the Clean
    Air Act is, can play a role in moving CCUS technology forward?
        Senator Carper. I will repeat the question. In your
    opinion, is the Clean Air Act inhibiting progress in its
    current form in CCUS technology development or deployment? Is
    it impeding work in this area?
        Mr. Waltzer. We have looked at this question from a legal
    and technical perspective, and in our view, we don't see any
    impediment. By the way, programs such as New Source Review
    would be applied when carbon capture equipment is installed on
    the power sector. So from our assessment, no, we don't see an
    impediment.
        Senator Carper. All right, good. As a followup, in 2009,
    Congress was debating a climate bill that amended the Clean Air
    Act. In the Senate climate bill, I worked with the late Senator
    Robert Byrd and other coal-State Senators to provide incentives
    for the deployment of CCUS. At the time, there were several
    CCUS projects in the works nationwide. Once the climate bill
    died, so did most of those projects.
        My question is, could the Clean Air Act and broader climate
    regulatory actions be helpful, maybe even critical, for the
    success of CCUS?
        Mr. Waltzer. Mr. Chairman, Senator Carper, in our view,
    having that kind of long-term certainty associated with
    planning horizons is absolutely crucial for power companies,
    for example, to plan to include and develop carbon capture and
    storage in their portfolios.
        As many of us have witnessed, more and more power companies
    are making commitments or laying out plans for de-carbonizing
    their systems. We don't see those plans coming to fruition
    unless there is a strong signal that is sent to allow that kind
    of investment to occur. What we will see in the interim is more
    investment in incremental resources that may reduce emissions.
    But we are not going to see the kind of large-scale energy
    system change that we think is needed, absent that kind of
    direction.
        Senator Carper. My next question, and I am going to ask it
    initially of Mr. Waltzer, then I will ask our other panelists
    to respond as well. That question is, would you take a couple
    of moments to talk further about why the development of today's
    carbon capture and sequestration technology is critical to help
    us meet our climate goals and also help us get closer to having
    direct air capture become a reality?
        Mr. Waltzer. Senator, I think today's legislation, as I
    noted, is an important component. We need all of the tools in
    the tool kit. We need the kind of innovative prize tools that
    are being proposed in this legislation to bring new commercial
    pilot scale projects to market. We need to be developing
    utilization technologies that create new uses.
        While those markets may not necessarily be large by
    themselves, they can have important catalytic effects. We have
    seen one company develop its first pilot project in India
    making baking soda, and based on that, they are developing
    their next generation of solvents for carbon capture. We think
    that moving this kind of legislation forward on a bipartisan
    basis also more broadly sends an important signal that
    technology innovation is increasingly being taken seriously,
    and that does have, as soft as it is, that has an actual impact
    on driving more interest in investment.
        Senator Carper. Good. Thanks for that. Mr. Oldham, any
    brief comments, please?
        Mr. Oldham. Yes. I think a recognition of the problem of
    increased carbon levels is critical. This house's recognition
    of that problem is critical. The funding that you put aside
    will, as I said earlier on, bring more brilliant minds into
    this business. I think that is essential.
        For me, it is about developing the tools. If we have the
    tools that allow us the flexibility to make choices, we now are
    able to make choices to address decarbonization. So any
    innovation that drives that, any funding mechanisms that drive
    an innovation will make a big difference.
        Senator Carper. Thanks. Mr. Sukut?
        Mr. Sukut. I basically agree with both the other two
    panelists, maybe in a different way. When I look at our
    facilities and how we get there. When we put iron in the
    ground, we put it in for 30 or 40 years. My sense is that sol,
    the USEIT Act gives us sort of the road map to get there, 45Q
    gives us the financial incentives to get there. That is so
    important.
        I mean, we recognize we are past the science now. We
    recognize the fact that we are in a carbon-constrained world,
    and how do we get there. So we need time, and we need some
    flexibility. I think Kurt mentioned the time element of this.
    From our perspective, those are kind of the two aspects of how
    we look at it, as I would look at it as a CEO of a utility.
        Senator Carper. Thank you all. Thanks.
        Senator Barrasso. Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        None of the three of you will appreciate this statement,
    but it is so refreshing to me that we can talk about climate
    without the normal, hysterical Hollywood references that are
    being made, that the world is coming to an end and such as
    that. Our world is not coming to an end, and climate has always
    changed and always will change. I don't think anyone will
    disagree with that.
        All right. Let me just mention a couple of things. First of
    all, the comments that were made by Senator Whitehouse. That is
    significant, because those three pieces of legislation that he
    mentioned, with the exception of the Defense Authorization Act,
    were the three biggest, most significant things passed that
    year. And it was a great partnership that did it, and it
    surprised a lot of people.
        Quite frankly, I didn't get on this bill until today,
    because I didn't want my appearance on this bill to chase off
    any of the others that were on this thing.
        [Laughter.]
        Senator Inhofe. So that is where I am. Now, I am the first
    to admit, my State of Oklahoma is an oil State. We have 150,000
    jobs with an average salary of $104,000. We contribute $24
    billion to the gross State product. It is nearly a quarter of
    the State's budget, that is spent in the oil and gas industry.
        Now, you think that is the reason I would be supportive of
    this. It is not. Those are good things. But when you look at
    the fact that, I have 20 kids and grandkids, and they are going
    to be around here a lot longer than I am. And we have to run
    this machine called America. And you can't do it without the
    use of fossil fuels. I think we now, this is kind of a
    recognition that that is a fact.
        Let me ask a question of you first, Mr. Oldham. In your
    testimony, you talk about the existing supply of CO2
    are primarily from geological sources and they are not enough.
    I would like to have you speak on the demand side of this.
        Mr. Oldham. Yes, sure. So today, I believe the figure is
    about 18 megatons of CO2 are used globally around
    the planet, of which my understanding is about 50 megatons are
    used for enhanced oil recovery. So enhanced oil recovery is
    actually the largest use of CO2 around the world
    today.
        Speculation and the market reports estimate that increasing
    the amount of CO2 up to even as high as 140 megatons
    per year is justified and can be used for EOR. So this is part
    of the reason why we have had some energy companies invest into
    our company and start working in partnership with us.
        Remember also, when you capture CO2 directly
    from the air, you have split the dependence on location. So we
    can build our plant just about anywhere. We no longer have to
    build a CO2 collection plant where the ethanol plant
    has to be, and then move the CO2 through a pipeline.
    By being able to do it by pulling CO2 directly from
    the air, you can do EOR and capture your CO2
    locally, and then use that CO2 for EOR and get
    negative emissions at the same time.
        Senator Inhofe. That is great. That offsets so many of the
    people who are trying to use this issue for political purposes,
    and they say you just have to do away with fossil fuels
    altogether. You do that, you can't do that we are talking about
    doing.
        I want to have one short question there to Mr. Sukut. I
    know this is addressed in the opening statement by our
    chairman. But in your testimony, you mentioned that your
    cooperative supports reform to other parts of the Clean Air
    Act, specifically the New Source Review. I would like to have
    you elaborate a little bit more, if you have more to say about
    that, the fact that we are looking at it.
        Mr. Sukut. I would be happy to, Senator. We, I think, more
    than anything, encourage the enactment or, it isn't that we
    don't, are not compliant with the New Source Review. I think
    the biggest problem that we have had in the past, we have had
    situations where, and I will use, actually I will give you a
    real-life situation, where we had one of our coal plants in
    North Dakota was going to put in some equipment to actually
    make it more efficient. And then at the same time, it would
    have generated 22 megawatts more of electricity. But we were
    impacted and not able to do it because of the NSR rules.
        Actually, if you had thought about it, it was going to
    reduce the amount of coal burned, we were going to increase the
    amount of electricity. But the rules were written such that we
    couldn't get that done. I think we just need more clarity,
    Senator, in terms of with the NSR rules. We need more clarity
    in terms of what we can and can't do.
        If we get a road map, we are going to be compliant and we
    are going to do it. But we just need clarity, because it really
    stopped us from, a, we could have generated more electricity,
    two, we could have burned less coal and we would have had less
    emissions. So it is kind of a double-edged sword. But if you
    will, that is sort of my comment in terms of the NSR rules.
        Senator Inhofe. That is good. I appreciate that.
        Mr. Waltzer, I do have a question for you, but it will have
    to be in the record, because I will not have time to get to it
    now. But I do want to ask Mr. Oldham, you heard me describe my
    State of Oklahoma, the number of jobs, the reliance we have,
    how important the fossil fuels are to our State of Oklahoma. I
    would like to ask you, what specifically, for a State like
    Oklahoma, what does carbon capture utilization sequester, CCUS,
    mean for my State of Oklahoma and how do these technologies
    help?
        Mr. Oldham. Sure. So that is probably a several-point
    answer, but I will try and be brief. I think the first thing is
    the ability to do further enhanced oil recovery, but in an
    environmentally safe way. Negative emissions and EOR combined
    is really a win-win. So that is No. 1. And of course, Wyoming
    has a good amount of EOR already.
        Second, I think it offers an opportunity for new industry.
    There are many, the Department of Energy publishes an atlas of
    sequestrationsites across the United States. Wyoming has a lot
    of potential sequestrationsites, saline aquifers, geological
    formations. So the opportunity to store CO2
    underground in a State like Wyoming and many other States is a
    very real opportunity.
        The third thing is the synthetic fuel. So by reducing the
    carbon intensity of fuel through blending, which of course the
    biofuel industry, the ethanol industry does today, it is a
    great way of helping de-carbonize the fossil fuels while
    continuing to enable the economy that is so essential. So I
    think those are the three main areas where I think we can
    benefit. What I have said to you here, sir, is also applicable
    for many other States across the United States.
        Senator Inhofe. OK. I appreciate that very much, appreciate
    the testimony very much. Thank you.
        Senator Barrasso. Thank you, Senator Inhofe. Senator
    Whitehouse.
        Senator Whitehouse. Thank you, Chairman. Let me just take a
    minute to ask unanimous consent that letters of support from
    The Nature Conservancy, the Audubon Society, a list of our
    many, many, many USEIT Act supporters, running from the AFL-CIO
    to the Wyoming Outdoor Council, alphabetically, and a series of
    statements from some of our supporters be put into the record.
        Senator Barrasso. What was the first one?
        Senator Whitehouse. AFL-CIO. A to W.
        Senator Barrasso. OK. I was looking where the Algae
    Association would fit in there.
        [The referenced information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Whitehouse. After AFL-CIO.
        [Laughter.]
        Senator Barrasso. Do you have the Algae Association?
        Senator Whitehouse. No, I have got to get them on that.
        [Laughter.]
        Senator Whitehouse. First of all, very basic question. Do
    any of you doubt that climate change is a serious matter
    requiring urgent attention by Congress?
        Mr. Waltzer. No.
        Mr. Sukut. No. I mean, I think we are past the science. I
    think we are to a point as a utility that we want to find ways
    to capture and sequester carbon.
        Mr. Oldham. No.
        Senator Whitehouse. And how important do you feel carbon
    pricing is as one of the solutions to the problem? In the top
    ten, in the top two, top one?
        Mr. Sukut. So maybe I will start with a comment and then
    you can followup with a question based on my comment. I think
    as a utility, we are really challenged or pressed to operate at
    the lowest possible cost that we can. I think technologically
    there are probably some solutions that might be a little bit,
    if you are referring to a carbon tax in its essence is maybe
    something a little bit cheaper than a carbon tax as far as
    being onerous to our end consumers.
        So I would encourage, as a utility, I would encourage the
    technological advances that we can make to capture carbon,
    because I think there are ways we can even do it cheaper there
    than through the carbon tax.
        Senator Whitehouse. Mr. Oldham.
        Mr. Oldham. Let me first apologize to Senator Inhofe. I got
    your State wrong. Please chalk that down to an ignorant
    foreigner.
        [Laughter.]
        Senator Barrasso. The Chairman loved your answers.
        [Laughter.]
        Mr. Oldham. Again, my apologies. So I think the question
    is, how do you incentivize the public to recognize a better
    product, and a better product in terms of de-carbonization is a
    product that has a lower carbon footprint.
        Often the way that works is a combination of public
    sentiment, but also government direction and regulation. So the
    mechanism of government direction I am not the expert on. I
    can't speak as to whether a carbon tax is the right answer or
    tax credits or positive incentive or a negative incentive. It
    is just not my area of expertise. But I think the signal is
    essential.
        Senator Whitehouse. The signal is essential.
        Mr. Oldham. Yes.
        Senator Whitehouse. Mr. Waltzer.
        Mr. Waltzer. I think there is ample evidence that a
    combination of a pull policy, something that has a clear signal
    that companies know they need to invest in order to meet a
    technology goal, an emissions reduction goal, or a carbon
    price, combined with innovation, has been a winning
    combination. We have seen that with deployment of sulfur
    dioxide scrubbers, there was a lot of R&D that went into that.
        And obviously a lot of tools in the Clean Air Act that
    pulled that technology forward. We have seen that with solar,
    for example, significant price drop between the early 1980's to
    say, 2010, almost 95 percent, driven by a combination of R&D,
    the kind of deployment incentives that we have now with 45Q and
    the renewable portfolio standards. These policies, given how
    short our timeframe is, given the need to develop technologies
    that are here, not just here but globally, we have to have both
    of those options on the table and move forward with them
    quickly.
        Senator Whitehouse. Let me ask a question specific to this
    technology. And it would be, what do you think the best case
    scenario is for the carbon capture industry, say by 2040? What
    could we expect in terms of potential carbon removal? And what
    in the way of getting there, to you, are the most exciting
    technical or other opportunities? What do you see as the great
    things that might open up? Let's go the other way this time, we
    will start with Waltzer, Oldham and Sukut.
        Mr. Waltzer. So by 2040, what we hope to see and what we
    think is possible is significant deployment of carbon capture
    utilization storage, not just in the U.S., but around the
    world. We think, as we have seen with technologies like Net
    Power, there can be substantial cost reductions on
    CO2, carbon capture at industrial facilities and
    power facilities. They are targeting $10 a ton if that happens,
    if you have a natural gas plant, if they can capture $10 a ton,
    that is a game changer.
        We also are really interested in the concept of zero carbon
    fuels, and carbon capture and storage can play an important
    role there. Hydrogen and ammonia, basically taking natural gas
    or forming it, sequestering it.
        Senator Whitehouse. I am down to 30 seconds and I have two
    more witnesses. So let me jump to Mr. Oldham. Sorry, Mr.
    Waltzer.
        Mr. Waltzer. No problem.
        Mr. Oldham. I would like to see a combination of successes.
    The first would be the continued prevalence of emission control
    through the types of activities that you have heard discussed
    here. The second would be a recognition that there are some
    industries that it is extremely challenging to de-carbonize,
    and instead, you set up a carbon offset program by doing
    something like direct air capture to reduce CO2.
        Senator Whitehouse. How big could this be?
        Mr. Oldham. How big?
        Senator Whitehouse. Yes. There are only 200 people working
    in this area right now. Could that be 200,000? Could that be
    20,000?
        Mr. Oldham. So each of our plants does about a megaton of
    CO2 capture per year. So a large number of plants is
    required to make a dent in this problem. I believe there is no
    reason why you can't roll out these plants worldwide. Our
    business model is to license our technology to any partner who
    is interested. So we would like to see literally hundreds of
    our plants put worldwide, because this is a global problem, it
    is everybody's problem.
        Senator Whitehouse. Well, my time is expired, so let me
    just leave a question for the record. Because I have truncated
    your answer and we ran out of time before you could have a
    chance, Mr. Sukut. So if you could, again, what are the coolest
    things that you think are out there in this industry? And what
    do you think the prospects are, and how can we help you achieve
    those best case prospects?
        Senator Barrasso. You would like written response to that?
        Senator Whitehouse. Yes. I think response to the record
    makes sense. We can go on with other colleagues who are
    waiting.
        Senator Barrasso. All right. Before heading to Senator
    Capito, I have a list of letters supporting this as well in
    alphabetical order, from the Carbon Utilization Research
    Council to the Western Governors Association. And without
    objection, we will submit these as well.
        [The referenced information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Senator Capito.
        Senator Capito. Thank you, Mr. Chairman.
        Mr. Sukut, you mentioned in your statements about research
    and development. We have talked about enhanced oil recovery as
    a use. Mr. Oldham talked about a new synthetic fuel that could
    be used with the recycling of the carbon. Is it your intention
    or is the intention--how advanced would you say the research is
    in this area in terms of other kinds of uses of carbon, and
    where do you see this in the next 10 to 15 years?
        Mr. Sukut. So just let me start by saying, I think we are
    probably, in the technology curve, we are probably back here a
    little bit. But let me say this. In taking a look at the
    Integrated Test Center in Wyoming that we have, we have the six
    participants now. I see a lot of excitement in some of the
    things they think they can do to extract and turn it into
    useable product, like a cement enhancer, ethanol. I think it
    could be limitless, especially with the timeframe that we have
    here in terms of years, saying to 2035 or 2040.
        Look what this Country did with sulfur. Thirty-five year
    ago, we were struggling with removing SO2 from the air. Today
    it is not tough at all to get to over 99 percent. All of our
    plants are able to do it, and they do it very routinely. So I
    think with a timeline like that, this Country has been able to
    do it before, and I think we can do it again with
    CO2.
        So I think it is limitless. I know I am not giving you as
    direct an answer as you want, but I really feel that.
        Senator Capito. Mr. Oldham, do you have any comments on
    that?
        Mr. Oldham. I think this technology is at different phases
    of implementation. Our technology is ready to go to market now.
        Senator Capito. Is this for the synthetic fuel?
        Mr. Oldham. No, well, for both. We have done it to capture
    CO2, and then you can make the synthetic fuel.
        Senator Capito. Right.
        Mr. Oldham. So it is ready to go to market now, because we
    use pieces of equipment from things like the clean power
    industry, the water treatment industry, the I&R industry. So in
    our case, we think, well, we know we are ready to go to market
    now, and the large energy companies that are working with us
    agree.
        But you can always improve the process. The sulfur example
    is a great example. It is an iterative process to make it
    better and better. But it is a spectrum. There are some
    technologies that are absolutely fully ready for implementation
    now.
        Senator Capito. So let me ask Mr. Sukut again, on the
    regulatory thing, do you agree that interState CO2
    pipelines would be more challenging than international
    pipelines? Apparently, we have had some issues in Wyoming and
    other places where we can't do interState carbon pipelines.
        Mr. Sukut. I think there are some challenges. We have seen
    some challenges with pipelines via some of the landowners and
    some of the other things that have happened in this Country. I
    think all you have to do is look at the natural gas market and
    see, there are pockets there where natural gas can go to eight
    bucks where Nymex is trading at two, just because of its
    infrastructure. There is a lot of natural gas out there.
        Senator Capito. Right.
        Mr. Sukut. So yes, I think that there are some issues. I
    think we could use some help with it. I think the USEIT Act is
    a huge step in that direction, I really do, and I applaud you,
    all of you, for taking that step, to be honest with you.
        Senator Capito. There has been a lot of pushback on
    pipelines. We are experiencing that in West Virginia right now,
    with the natural gas pipelines.
        In terms of, this is a little offshoot question, but in
    terms of the general public's perception of a carbon
    CO2 pipeline, does that present any other inherent
    dangers, besides a regular ethane, methane pipeline?
        Mr. Sukut. No, it doesn't at all. In fact, we have a
    CO2 pipeline in service. We have had it in service
    for 20 years.
        Senator Capito. Right.
        Mr. Sukut. We send CO2 every day to the Canadian
    oil fields. We add a sort of an odor, it is called mercaptan,
    it is added to natural gas.
        Senator Capito. To protect it. Yes.
        Mr. Sukut. Absolutely not, doesn't pose any kind of greater
    threat.
        Senator Capito. So I also have a large coal industry, as
    you all probably know, being from West Virginia. My interest
    here is obviously on the economic front, but on the
    environmental front as well. Globally, we know that a lot more
    countries are using coal in other areas to pull people out of
    poverty and bring up the economic viabilities.
        Are you finding globally that this technology is something
    that is--you mentioned you wanted to have plants all over the
    world. For the heavy coal-intense areas now, where are you
    seeing this acceptability?
        Mr. Oldham. It is a great question. So why people are
    interested in our technology is because we can offset the hard
    to de-carbonize industries that are essential for economy or
    essential for any other reasons, for jobs and so on. So our
    technology, because it sounds independent and does negative
    emissions in parallel with other industries, airline industry
    is another great example, really hard to de-carbonize, the coal
    industry, hard to de-carbonize.
        So by doing things like a negative emissions plant which
    can be located at any location, you can put them anywhere, you
    have another industry, but you allow that first industry to
    keep going, but you are still de-carbonizing it.
        Senator Capito. Thank you.
        Senator Barrasso. Thank you, Senator Capito. Senator
    Cardin? Oh, Senator Whitehouse, yes.
        Senator Whitehouse. When I gave my thank-yous to my
    cosponsors on this bill, Senator Duckworth was not in the room.
    She is now in the room, so I just want to add my gratitude
    personally to her for her support. Thank you.
        Senator Barrasso. Senator Cardin.
        Senator Cardin. Thank you, Mr. Chairman. I want to thank
    you and I want to thank Senator Whitehouse for working together
    to deal with a practical, bipartisan way to reduce carbon
    through carbon capture. To me, this is how we should be working
    to try to make progress wherever we can make progress. I thank
    you. It is science-driven decisionmaking.
        In my State of Maryland, the geological survey has been
    working on carbon capture and sequestration for many, many
    years. They are targeting entities such as unused gas wells,
    geologic rift zones and deep saline aquifers. So we are very
    much engaged in this process, because we think there is a major
    return.
        But I would also point out there is no one answer to
    dealing with the carbon issue. Senator Van Hollen and Senator
    Carper and I, and also Senator Gillibrand, represent the
    Chesapeake Bay watershed. So we understand, and Senator Capito
    who was here, is also part of that region.
        We recognize the challenge that we have in the Chesapeake
    Bay. So we look at carbon capture as one way of helping deal
    with the issue. We also look at our energy policy as an
    important point on dealing with carbon emissions. We look at
    farming practices, we look at shoreline development and dealing
    with storm runoff issues. All these are important.
        One area where we have been able to get bipartisan support
    is to restore wetlands. Wetlands are a natural way of capturing
    carbon. So as we lose wetlands, and we lose wetlands every
    year, we are making the carbon issue more severe in this
    Country.
        So when we got to the nutria eradication issue, which was a
    bipartisan effort, this committee was very much engaged in it,
    we were able, effectively, to eliminate the nutria population
    on the eastern shore, which has saved, literally, a large
    portion of Blackwater National Wildlife Refuge, it is saved
    today with wetlands because we got rid of the nutria
    population. That is helping on our carbon emissions.
        So my question to Mr. Waltzer is, do you agree that carbon
    capture is important, but we need to have a coordinated effort
    on so many different directions if we are going to make a
    consequential difference on the carbon emissions that are
    occurring today? What would your priorities be?
        Mr. Waltzer. Senator Cardin, I think there is no question
    that we have to have a broad set of technology tools available
    to us to de-carbonize our planet. Our priorities are pretty
    simple. We need to have a set of policies that drive innovation
    across renewables, carbon capture and nuclear.
        We need to make sure that those technologies get to the
    point where they are widely commercially available, to be not
    just used here in the U.S., but around the world. And that tool
    kit is going to be a combination of certainty that comes from
    technology portfolio standards or emission limits or carbon
    pricing combined with a robust set of innovation policies, like
    we are talking about today with the USEIT Act.
        It seems like a pretty simple formula. But it is a profound
    formula, and one that we need to move on on all fronts quickly
    if we are going to address this in a timeframe that matters.
        Senator Cardin. Another area that we were able to work in a
    bipartisan manner dealt with certain tax incentives for
    renewable energy sources. That also has a dramatic impact on
    reducing carbon emissions. I just mention the different areas
    that we need to work on in a coordinated way to deal with the
    realities of carbon pollution and what it is doing to our
    atmosphere and what it is doing to our environment.
        So on a scale of where we need to put our attention, where
    should we be placing our attentions?
        Mr. Waltzer. I think our priorities need to be focused on
    insuring that renewable energy continues to develop as a
    solution. Right now it is only providing less than 1 percent of
    the world's primary energy production. That is not enough. We
    can do much more. But we are currently getting over 80 percent
    of our primary energy production from fossil fuels. That is not
    likely to go away by mid-century. So we are going to need a
    robust application of carbon capture utilization and storage.
        And we get about 5 percent globally from nuclear power. We
    are beginning to see some evidence that that can get back to a
    place where it can play an important role in providing those
    solutions. And we need all of those tools in the tool kit. So I
    think we have to be ambitious and move forward on all fronts.
        Senator Cardin. Thank you. Thank you, Mr. Chairman.
        Senator Barrasso. Thank you so much. Senator Braun?
        Senator Braun. Thank you. Indiana is a State among others
    that is disproportionately dependent on coal, and most of our
    fossil fuel reserves are in coal. My opinion is, in the long
    run, the cleanest, least expensive fuel is going to win out in
    the marketplace. We are slowly transitioning.
        I want to direct these questions at Mr. Sukut, if you could
    start off. Is there anything on the horizon that can take coal
    and have it emit more cleanly? I would also like a comment
    about recapture on fossil fuels once you burn them. Is that
    basically the same? And does one have an advantage over the
    other?
        But we are closing coal plants down, probably starting out
    any new regeneration with natural gas. But just curious if
    there is anything on the horizon for a State like Indiana that
    is so dependent on coal, to fix it in the short run and then
    maybe lengthen the life of these plants in a clean way.
        Mr. Sukut. Thank you for the question, Senator. Yes, I
    think there is. I think there are some promising technologies
    out there that work. For example, Amine, and I am not a
    scientist, I am a finance CPA, so don't ask me any scientific
    questions here, because I can't answer them.
        But I do know this: the Amine process works, it does. I
    think the most important thing is, we really do kind of need an
    all of the above energy resources, inclusive of coal. If we can
    clean coal up, if we can take the CO2 out, we
    already know we can take sulfur, mercury, NOX out, it would
    operate a lot just like wind. You would have a clean source.
        Now, as time goes along, for example, in North Dakota, wind
    works very well for us. In fact, this year over 25 percent of
    the energy produced at Basin Electric is going to come from
    wind. Because wind works up in North Dakota, it really does.
    And as time goes along, new coal, as you know, Senator, has not
    come online for about 10 years. Dry Fork Station is one of the
    last ones that came on, and that was 2010.
        So if you think about it, the older coal plants, they will
    retire, and as they retire, you are going to see less and less
    coal. But I think what we do need to do is the newer plants
    continue to work on, for example, the Amine technology is one I
    can think of right off hand, to capture carbon and infuse it.
    Because we know we have ways to do that, and we have caverns
    that we know we can store it at.
        So from that standpoint, I would encourage that we continue
    to re-use that natural resource to the extent we can utilize
    those kinds of technologies.
        Senator Braun. Anything other than Amine that you can think
    of?
        Mr. Sukut. The science guys would be better at talking
    about this than I would.
        Senator Braun. Go ahead.
        Mr. Waltzer. I think it is important to note a couple of
    things with coal and CCUS. The first commercial demonstration
    of applying CCUS was done on a coal plant, the Petra Nova
    project, outside Houston. It is worth to note that project came
    in on time and on budget. It is very well managed, operating
    very well.
        More broadly, when we step back, we think about this issue
    as global. And we see a thousand gigawatts of coal plants in
    China, most are new and are going to be emitting for the next
    50 years. It is absolutely crucial to develop this technology
    so it can be applied, not just in the U.S., but around the
    world.
        The third point is, we have talked with power companies
    that have expressed an interest in using 45Q to move forward on
    projects. I think as Senator Capito alluded to, we are waiting
    for the starting gun to happen, when the Treasury will put out
    its guidance, and that can't happen too soon. We have that
    short window of commenced construction, which can be a
    challenge for power plants. But we do think that utilizing CCUS
    with coal plants is an important tool.
        Senator Braun. Thank you. Mr. Oldham?
        Mr. Oldham. Yes, thank you. One of the beauties of the
    technology that we have developed is the fact that it allows
    you to do purely negative emissions. Capture CO2
    from the atmosphere, bury it under the ground permanently, at a
    location that makes sense. And there are many, many locations
    across the United States.
        What that allows you to do is make a choice. You can
    continue to operate a coal plant and it can continue to have
    emissions. But at the same time you build one of our plants or
    a similar technology, to completely offset those emissions. So
    you have immediately gone carbon-neutral. But you haven't
    affected the economics of that plant and the industries that
    depend on it.
        So in my view, that is one of the critical reasons why
    direct air capture technology should be increased in funding.
    It gives you choices. You can continue with the airline
    industry, you can continue with the coal industry, but doing so
    in a carbon-neutral or even carbon-negative way.
        Mr. Sukut. One last technology that we have participated
    with, Allete, it is a Minnesota-based investor-owned, is the
    Allam cycle. And I referred to it in my written testimony.
    Actually, that is a coal-based, but is zero-emissions. The
    byproduct of that, it uses compressed CO2 to run a
    turbine. And really, the byproduct of that is water, so it is
    completely clean. But yet another technology that is on the
    horizon, and it is down the road a little way. We are trying to
    get to the demonstration stage with it.
        Senator Braun. Thank you.
        Senator Barrasso. Thank you, Senator Braun. Appreciate it.
        Senator Duckworth?
        Senator Duckworth. Thank you, Mr. Chairman. Gentlemen,
    welcome, and Mr. Sukut, a special welcome to you. Your daughter
    is one of my wonderful staff members, and I exploit her labor
    on a daily basis. She is quite wonderful, I am glad to have her
    on staff.
        Mr. Sukut. Thank you, Senator. We are very proud and thank
    you to, for employing her gainfully. We appreciate that.
        [Laughter.]
        Senator Duckworth. You are most welcome.
        Across Illinois and our Country, we are already
    experiencing the harmful effects of climate change. Growing
    seasons are changing, heat waves are increasing, extreme floods
    are becoming more frequent and severe. This all that we are
    talking about today.
        Simply put, climate change is no longer a threat. It is
    here, the climate has changed. I believe that we must seek
    solutions to cutting carbon pollution that strengthen our
    economy and advance new industries and create quality American
    jobs. The bipartisan USEIT Act, combined with the action
    Congress took last year that extended and reformed the 45Q tax
    credit, will help to make sure we accomplish these goals.
    Senator Whitehouse mentioned this. I look forward to working
    with my colleagues on this committee to advance and further
    improve this promising legislation.
        Mr. Waltzer, Illinois has some of the best saline storage
    locations in the Country. Last Congress, Chairman Barrasso and
    Senator Whitehouse worked with me on adding language to the
    USEIT Act that requires the Department of Energy to author a
    report to make recommendations to project developers on how
    best to use saline formation for carbon sequestration. Can you
    share why this report would be important to the future of
    permanent carbon sequestration?
        Mr. Waltzer. Absolutely, Senator Duckworth, for three
    reasons. First, given the scale of what we need to do in terms
    of eliminating carbon emissions on the planet, saline is going
    to be our biggest target. There is really no substitute. We
    need to move forward on enhanced oil recovery and utilization.
    But if we are really going to make the cuts we need to make,
    that is where we are going to store the carbon.
        Second, there are innovations that are occurring, for
    example, being able to produce water, particularly in arid
    areas. So it is not just a storage space, it is potentially a
    place where we can also develop useful products.
        And third, it is the resource that is most abundant. That
    is why ADM is doing that project in Illinois in saline, because
    there is some EOR potential, but it is completely dwarfed by
    the availability of saline resources. We have more saline
    resources in North America than we have EOR or any other
    target. So if we are not developing this resource and we are
    not being thoughtful, then we are putting ourselves at a
    significant disadvantage.
        Senator Duckworth. Thank you. So you mentioned ADM. They
    are one of the world's largest food processors, and this is a
    one of a kind project in Decatur, Illinois. It captures carbon
    dioxide, which is created as a by-product at a corn processing
    facility, and stores it safely almost a mile and a half
    underground in the Mount Simon Sandstone. A lot of attention is
    spent discussing on how CCUS can be applied to the power
    sector. I believe the USEIT Act will help spur industrial
    capture projects like the one in my back yard.
        Mr. Waltzer, you mentioned ADM's project. Can you talk a
    little bit about how decarbonizing projects like ADM can teach
    us lessons about how we can decarbonize the industrial sector?
        Mr. Waltzer. Absolutely. It is a very important project. It
    is a first of a kind. Industry is one of those hard to reach
    places in terms of decarbonizing. CCUS is almost certainly
    going to be necessary to decarbonize the industrial sector.
        Fortunately, there are plants like the ADM plant that are
    ready-made, in a sense. They have a low-cost CO2
    supply, they have pure CO2 streams, and there are
    many of these types of facilities, from ethanol, from hydrogen
    or ammonia production, other sources that we can quickly move
    forward on. And we expect 45Q to really move first in those
    areas.
        So we think it is both absolutely necessary and an area
    that we expect to see a fair amount of activity on in terms of
    utilizing incentives like 45Q and the USEIT Act.
        Senator Duckworth. Thank you.
        Mr. Sukut, I know you said that you are a finance guy and
    not a scientist, but I would think that a report that would
    come out of something like the USEIT Act, that would make
    recommendations to project developers on how best to use
    information for carbon sequestration would be something useful.
    Can you talk a little bit to that? In Illinois, for example,
    wind power has created 100,000 jobs in 10 years. I see that
    there is potential on the economic front for some great
    benefits here as well.
        Mr. Sukut. Absolutely, Senator. I think when we put iron in
    the ground, we put it in, as I said, for 30 or 40 years. To the
    extent that we can get more information and we can use it in
    terms of making sure that it is critical and can be used, and
    the fact that it gives us the information that we can go
    forward with, that is one of the most critical things in the
    utility industry, quite frankly.
        So I would think it is absolutely critical that we have
    information like this in the USEIT Act. So I would very
    strongly encourage it to be part of the Act.
        Senator Duckworth. Thank you. Mr. Oldham, I just have a
    minute left. Did you want to add anything to the discussion so
    far?
        Mr. Oldham. I think one of the things, you are absolutely
    correct, that renewable energy and the driver, that is a
    critical part of developing jobs. One of the key things to
    remember is the importance of not just reducing emissions but
    also reducing the CO2 already in the atmosphere.
    Senator Carper has an excellent bathtub analogy that I think he
    uses.
        [Laughter.]
        Senator Carper. I have been using it for years.
        Mr. Oldham. Continued focus on CO2 removal, and
    you are quite correct, saline aquifers are a fantastic place to
    store CO2, and Illinois a great place to do so.
        Senator Duckworth. Thank you. I yield back, Mr. Chairman.
        Senator Barrasso. Thank you so much. Senator Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman. You learn a lot
    in these hearings. I am not sure I was expecting to hear the
    exploitation of labor happening--I am just kidding.
        [Laughter.]
        Senator Sullivan. That is just a joke.
        But let me ask really all of you gentlemen, one of the
    issues, when we are all looking at the issue of bringing on new
    technologies in the energy space is our regulatory and
    permitting processes at the Federal level. One of the things
    that I have been very concerned about is the time it takes to
    deploy just basic infrastructure in our Country, whether it is
    roads or bridges or pipelines. And as all of you know, it takes
    forever, about 8 years on average, to permit a bridge in
    America, if you can believe that. Same with a pipeline.
    Highways, it is well over a decade.
        This is a problem that I say cuts across partisan issues. I
    had a bill las year we are going to reintroduce called the
    Rebuild America Now Act, which is looking at reforming the NEPA
    process, not to cut corners. But I don't think anyone thinks
    nine to 10 years to permit a pipeline is a good idea for our
    Country.
        What are the big areas of permitting roadblocks that you
    have seen in your experience, and how can we address it here in
    the Congress? I will open that up to any and all.
        Mr. Sukut. I can start, because this is sort of one of my
    things, too, quite frankly. So in some of the things with NEPA,
    one of the areas that we see a lot of roadblocks is the EA, or
    the environmental assessment or the EIA. Those things take
    months and months and months.
        Really, if we had some more certainty when we headed into
    them, and the rules that we could get over the hump. Because a
    lot of times, the actual work doesn't really take that long.
    But there is just so many regulations. And really, we are not
    trying to bypass the environmental assessment at all.
        Senator Sullivan. No.
        Mr. Sukut. That is not what we are trying to do. Please
    don't get that impression. But it takes so much time to get
    some of this done.
        So I will give you one example. We are not an RUS borrower
    any more. We used to be. We were putting in a 200-megawatt wind
    farm. We had to go through an environmental assessment. We
    finally went to outside financing, just because we couldn't get
    all of the work done because we had to do an EIS instead of an
    EA. It took us so long to get it done, I think the thing was
    fully depreciated by the time we got the go-ahead from RUS.
        Senator Sullivan. How many years did it take?
        Mr. Sukut. Well, we ran two and a half years. The wind farm
    was completed and we had run it two and a half years before we
    finally got the go-ahead, oh, you can go get the RUS money now.
    Well, too late, we had to do conventional financing.
        So yes, Senator, absolutely.
        Senator Sullivan. We want to work with all of you on this.
    Because again, the original idea NEPA and EIS was to make sure
    there was public input with the EISs. Well, the irony is now,
    the EISs now are in the thousands of pages. They cost millions
    of dollars. They stop development. And nobody reads them,
    because they are too big. So the idea of public input has been
    turned on its head. Usually an EIS comes out, it is several
    thousand pages and nobody has any idea what is in it and nobody
    reads it. I think we can do better as a Country.
        Mr. Sukut. That and it costs money.
        Senator Sullivan. It costs a lot of money and it stalls
    projects and jobs.
        Let me just ask one kind of final question. I think there
    is this really, really exciting area in the world of energy and
    technology, that relates to some of our traditional resources
    that we have and the marriage of technology.
        Let me just give you an example, natural gas. So our
    Country is now the largest producer of natural gas in the
    world. I happen to think that is a really good thing. We
    actually are the largest producer of oil in the world. I
    actually think that is a really good thing. We are actually the
    largest producer of renewables in the world. That is also a
    good thing. All of the above, energy.
        But in terms of gas, because it is low carbon, and when you
    burn it really high, you can actually almost zero out any
    emissions, the marriage of technology and a hundred to two
    hundred years of supply of natural gas in America creates
    enormous opportunities. Some of you might be familiar, I was
    out in the Silicon Valley area not too long ago. Bloom Energy
    is doing all kinds of really exciting work with natural gas and
    fuel cell opportunities.
        What do you see as some of the opportunities that relates
    to integrating some of our current, abundant resources, in
    particular I want to ask about natural gas, and technology, or
    renewables, for example. There is a lot of experiments going on
    with wind power and solar power. It is intermittent, and when
    you don't have the wind, you find up natural gas turbines that
    can create power generation. I think it is a very exciting area
    and I would love any of your views on that.
        Mr. Oldham. Just a quick comment. Our direct capture plants
    use natural gas. They can be powered by natural gas or
    renewable electricity or both. And the reasons are exactly what
    you say, it is a prevalent resource, it is effective.
        Senator Sullivan. Low carbon when you burn it high.
        Mr. Oldham. We also capture all of the CO2
    emissions from using natural gas and it becomes part of our
    product at the end of the day. So yes, I agree, natural gas is
    a tremendous resource.
        Senator Sullivan. So becoming the world's largest producer
    of natural gas in terms of jobs, energy security, national
    security, but also in terms of the environment in the future is
    pretty exciting, wouldn't you say?
        Mr. Oldham. Certainly when you combine it with a technology
    like ours, absolutely, yes.
        Mr. Waltzer. I would say that there is enormous potential
    to use low-cost gas to actually drive forward low carbon
    technologies. There is also a caution that we have to do that
    by managing things like upstream methane emissions and insuring
    the coal life cycle chain of the gas is truly low carbon.
        But a couple of areas on the technology side that are most
    interesting to us, anyway, we have talked before about the Net
    Power technology that is potentially a breakthrough technology
    to supply zero carbon power, fueled by natural gas, at very low
    cost. The other area that we think is particularly interesting
    is generation of hydrogen or ammonia from zero carbon gas. You
    can even repurpose conventional gas turbines to burn hydrogen
    or ammonia. They are looking at that in the Netherlands right
    now. But that can also apply to the industrial sector and the
    transportation sector.
        It does have enormous potential, but it also is going to
    require some diligence on all the elements that are necessary
    to insure it is truly low carbon.
        Senator Sullivan. Thank you. Thank you, Mr. Chairman.
        Senator Barrasso. Thank you very much. Senator Van Hollen.
        Senator Van Hollen. Thank you, Mr. Chairman, and thank all
    of you for being here today.
        I like this legislation, because it seems to be a
    bipartisan acknowledgment that we have to make public
    investments in order to reduce carbon pollution emissions, in
    order to address the risks of climate change. Do all of you
    gentlemen agree with that statement? Is that a yes? I see all
    of you nodding.
        Mr. Sukut. Yes.
        Mr. Oldham. Absolutely.
        Mr. Waltzer. Yes.
        Senator Van Hollen. All right. Now, as you have all
    testified, there are a number of ways to do that. We have tax
    credits in the area of solar, we have had tax credits in the
    area of wind. A number of us have bills that would put a price
    on carbon.
        I would like all of you, if you could, to respond to an
    article that was written in Forbes just a few years ago. It was
    by Jeffrey Rissman and Robbie Orvis. One of them is the Energy
    Innovations head of modeling and energy policy. The other is
    the Energy Innovations policy design projects manager. Here is
    what they said. ``While many technologies can reduce power
    sector emissions, carbon capture and storage has gained support
    in Congress. But it is the most expensive option available.''
        They go on to say, ``Our analysis shows coal plants
    equipped with CCS are nearly three times more expensive than
    on-shore wind power and more than twice as expensive as solar
    photovoltaics. Although these costs will decline with research
    and development, the potential for cost improvement is limited.
    Coal with CCS will always need significant subsidies to compete
    economically with wind and solar.''
        Now, the reason I support this legislation is I think that
    we are at a dangerous point and that we need to put all hands
    on deck. We need to turn off the faucets, as you said, Mr.
    Oldham, and pull out the plug. So I support this.
        But could you just discuss briefly the cost comparisons
    with respect to public subsidy, with respect to technologies,
    both today and what you see going forward?
        Mr. Oldham. Yes, I think that is a really challenging
    question, because it is a multi-faceted one.
        I think the way to look at it is to baseline what we think
    the cost of a ton of carbon is. And the cost of a ton of carbon
    has an impact in a variety of different ways. A large amount of
    carbon has a very significant cost.
        So for us, the way that we look at our business is to drive
    our cost per ton of carbon down as low as we can. We do so by
    using technology that exists today, measurable performance. And
    we have driven it down to around about $100 per ton.
        So the question then becomes, is that a reasonable cost per
    ton of carbon. Now, the carbon that I am talking about is
    atmospheric carbon. It is not emitted carbon. So emitted carbon
    is easier to capture, because it is more prevalent in the
    source. CO2 in the atmosphere, 400 parts per
    million. So my carbon is more expensive to capture, but it is
    also essential per the bathtub analogy we discussed earlier on.
        So for us, about $100 per ton of CO2. A few
    years ago, the National Academy of Scientists published a
    report that said the cost of a ton of carbon from the
    atmosphere would be about $600. We are now at $100. So your
    point about innovation driving down the cost point, it is
    already happening and it will continue.
        Mr. Waltzer. So in a limited way I agree with that
    statement. Reducing current generation technology through
    incremental improvements on the kind of technologies we are
    applying to coal plants today, I don't think they are going to
    get radically lower. But there are next generation technologies
    and carbon capture and storage that can take us to that golden
    zone of trying to be cost competitive with carbon-intensive
    alternatives.
        And so I think it is important to move forward to try and
    obtain that goal. The risk is if we don't do that, then we are
    relying on fewer technologies. We support significant
    deployment, additional significant deployment of renewables,
    but they are variable source technologies, and there is a point
    at which you have to over-build the system in order to pay for
    it, even if on an incremental basis they are cost effective.
        Senator Van Hollen. I am sorry to interrupt. Do you
    envision that you are going to require a significant public
    subsidy for the foreseeable future to address, to provide for
    carbon capture technology?
        Mr. Waltzer. I would say the kind of support that is needed
    to move the technology forward isn't that different than the
    kind of support that was needed to move wind and solar
    technologies down the cost curve. I don't think we really want
    any technology to be on a perpetual subsidy. We want them all
    to become as affordable as possible as soon as possible.
        Senator Van Hollen. Absolutely.
        But if I could, Mr. Sukut, you mentioned, I think in
    response to Senator Whitehouse, that the cost of doing this
    relative to a carbon fee, you saw this technology being a lower
    cost, if I understood your answer.
        Mr. Sukut. And I do, Senator. In fact, I would offer this
    up, I actually, again, I go back to our integrated test
    facility in Wyoming. One or two of those test guys are actually
    offering up that it would be less than $40 a ton, because I
    think it is, and I absolutely agree with it, it is cheaper to
    extract from the existing flue than it is from the air, it
    really is.
        So less than $40, in terms of our Dry Fork Station, I don't
    mean to be overly practical here, but that is such a new plant
    that it runs way cheaper and more efficiently also. So we have
    a lot more cost groom there in order to be able to still
    compete in the market. And the technology will improve a little
    bit. So I think they will come together some.
        But I think we have room to run those facilities, and if we
    can capture it in a way that is more economic, I think we have
    a good, good chance here to do this.
        Senator Van Hollen. I appreciate that. I see my time is
    out. It is that last part, if it is economical, right. That is
    the focus.
        Senator Barrasso. Senator Whitehouse.
        Senator Whitehouse. Mr. Chairman, if I could just interject
    one point on it. The way I see this is that, let's say
    hypothetically there were a $50 per ton carbon price. That puts
    a huge economic incentive into the hands of every entity that
    is paying that $50 per ton carbon price to instead pay $49 per
    ton to have the carbon removed, or $48 or $10, depending on
    whatever the price is.
        And the fact that we have this artificial failure to price
    carbon emissions in our marketplace I think is discouraging to
    this industry. If we went to a proper market system in which
    the externalities are in the price of the product, then
    anything cheaper than that becomes something that becomes
    quickly marketable. I don't consider that a subsidy. I consider
    the subsidy as not having that in the market system.
        So I just wanted to add that point, and I appreciate
    Senator Van Hollen's concern.
        Senator Barrasso. Senator Van Hollen.
        Senator Van Hollen. If I could just, I agree with Senator
    Whitehouse. Look, a price on carbon in my view is the most
    economic way to do this. Subsidies, or the flip side of it,
    right. Because on one hand, a price on carbon, you are letting
    the market set the price by requiring people to be more
    efficient. The other side is you provide subsidies for
    different kinds of technologies.
        I would prefer the market approach, because I think that
    allows all players to compete on a more even playing field.
    There are some different pieces of legislation to do that.
        But in the meantime, I support efforts like this. Thank
    you.
        Senator Barrasso. Well, thank you, Senator Van Hollen. Just
    to interject, Senators Whitehouse, Carper and Duckworth are all
    cosponsoring the legislation. If you would like to, that would
    make it four Republicans and four Democrats from this
    committee.
        Senator Van Hollen. I would be happy to do that.
        Senator Barrasso. Thank you so much. Senator Merkley.
        Senator Merkley. Thank you very much. I appreciate this
    conversation. I have felt that so much goal and gas is being
    burned around the world, that if we can find a way to extract
    carbon dioxide efficiently, economically, that it can make a
    big difference. We have to move quickly.
        I am struck by the fact that in the industrialized era, we
    have increased the amount of carbon dioxide in the atmosphere
    by 50 percent. And most of that has happened in my lifetime.
    And we are on an upward accelerating, an upward curve. So I
    think we have to explore every possible option.
        Meanwhile, though, I remain somewhat skeptical. Worth
    investing and exploring, but somewhat skeptical. And here is
    why I am skeptical. I think about Xcel Energy doing their
    request for proposals where they came back with proposals at
    two cents per kilowatt hour for wind, three cents for solar,
    both of which were below the cost of burning coal at an already
    depreciated coal plant.
        Now, the cost, whatever the cost, there is at least some
    cost, whether it is $100 or it can be driven down to $50 or
    $40. And a number of the technologies require a significant
    amount of extra energy inputs and extra water. I used to have,
    somewhere in my office, I think I could find it, a hockey puck
    made out of carbon dioxide that was captured by some technology
    some 10 years.
        Give me a sense of why I should be a little more
    optimistic, at least in power generation, that burning fossil
    fuels with carbon capture can compete when it is at cost to an
    industry that is already falling above the line, if you will,
    of where solar and wind are now, and they will continue to drop
    over the next 10 years as a still-evolving technology. Just a
    brief comment.
        Mr. Waltzer. Sure. Again, solar and wind are important
    technologies and we need them to be deployed globally. The
    reason why we need carbon capture and storage and a broader
    assortment of low-carbon technologies options is first. There
    is at some point a level where because of the variability and
    because we don't have seasonal storage, the levelized costs of
    electricity of those technologies really don't reflect the full
    system costs. They can get substantially larger if we are
    approaching 80 to 100 percent. So we need load-following
    technologies, in addition to those technologies.
        In addition, there are technologies that are in pilot
    development that are really rethinking the way of doing carbon
    capture. Net Power is one that is often cited, but it is part
    of a broader class of technologies that use CO2 as a
    fluid within the turbine. It is thermodynamically very
    different. They are targeting $10 a ton as the objective of
    that cost.
        Mr. Merkley. So I am going to have you stop there, simply
    because my time is so short. But this is exactly the way I look
    at it. It is worth exploring these future technologies. I again
    remain skeptical. The cost of battery storage is coming down.
    Demand response systems can help address the supply and demand.
        But there is another issue that I am concerned about. That
    is, we have extensive leakage in our gas pipeline system. A
    number of the stretches of the system have a 4 percent or more
    factor, at which point you have methane, which unburned, is far
    more potent as a heat trapping gas than is carbon dioxide. Over
    a period of 20 years, 80 times more heat trapped per pound.
        So I wrestle with whether it makes, even if you can get the
    carbon dioxide out of the smokestack where you are burning gas,
    are you sustaining a system in which leaky methane is doing a
    lot of damage? And that is a much harder problem, well, I won't
    say it is a hard problem, it is an additional big part of the
    picture. So should I not be worried about sustaining a system
    of pipelines that are leaking methane into the air?
        Mr. Waltzer. You should be worried about the fugitive
    methane emissions that are a significant source of greenhouse
    gas emissions. And those are controllable. We were strong
    supporters of the earlier Administration's rule to reduce
    methane emissions from both new sources, and we think it should
    have gone further to look at existing sources. We are working
    with, we worked with the government of Mexico and are working
    with Argentina and Colombia on developing exactly those kinds
    of rules and regulations to reduce methane emissions.
        But that is something we need to do irrespective of whether
    or not we use gas and the way that we are talking about for a
    low carbon source. That is just something that has to happen.
    If we do expand its use into those areas, we need to double
    ensure that those upstream methane emissions are managed. But
    it is not really an either-or, it is an and, in our view.
        Senator Merkley. My time is expiring. Thank you. Those are
    a couple of my concerns. I am also concerned that we need to
    look at every strategy to remove carbon. If, for example, the
    best dollar effect is in supporting modified agricultural
    practices that maybe produce improved crop yields and store
    carbon in the soil, let's look at that. If we are looking at
    forest practices that reduce the amount of forest fires and
    allow trees to grow and store more carbon, let's look at that.
    Let's look at this from every angle.
        Thank you all.
        Senator Barrasso. Senator Carper.
        Senator Carper. Thanks, Mr. Chairman. Before we close, I
    just want to mention one other thing. First of all, just thanks
    a lot for coming. Jim and I love music, and every now and then
    I like to work some lyrics into our hearings. One of those sets
    of lyrics is ``Hope in a Hopeless World.'' Great song, if you
    have never heard it. It is a great song.
        It actually kind of reminds me of this hearing, the hope. A
    lot of people don't see much hope for our world, but there is
    some hope. And you have given us some reasons to be hopeful.
        I hope we have given you some reasons to be hopeful, given
    the kind of bipartisan cooperation we have, led by our
    chairman, Sheldon and others on the committee.
        The other lyric I was reminded of today was, you have heard
    of doing a one hit wonder, there was this guy named Thomas
    Dolby who was a one hit wonder. But he had a great hit, the
    song was ``Blinded by Science.'' Maybe we can have a remake of
    the song, at least for our purposes, it could be ``Guided by
    Science,'' not blinded, but guided by science.
        What you are giving us is some areas where we can agree and
    provide some hope, and also be guided by science in a way that
    can do good things for our planet and create economic
    opportunity. That is the goal, the holy grail, that is the holy
    grail for me and I think it is for our Chairman and others.
        So we thank you. I would like to ask unanimous consent, Mr.
    Chairman, if I could, to submit for the record letters and
    documents related to the USEIT Act and the technologies we
    discussed today.
        Senator Barrasso. They will be accepted in alphabetical
    order, without objection.
        [The referenced information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Carper. Thank you so much. Thank you all.
        Senator Barrasso. No further questions. Thanks so much for
    being here. Some of the other members of the committee may
    actually put some written questions to you, so I hope that you
    will submit answers quickly. The committee hearing will be open
    for 2 weeks.
        I just really want to thank you for your testimony. It was
    very helpful. Senator Van Hollen, thank you for cosponsoring
    this wonderful, bipartisan piece of legislation. The hearing is
    adjourned.
        [Whereupon, at 1:48 p.m., the committee was adjourned.]

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