[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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               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:]
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    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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