[Senate Hearing 116-296]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 116-296

                  AN EXAMINATION OF THE DEPARTMENT OF 
    ENERGY'S CARBON CAPTURE, UTILIZATION, AND STORAGE PROGRAMS AND 
     TESTIMONY ON S. 1201, THE ENHANCING FOSSIL FUEL ENERGY CARBON 
                         TECHNOLOGY ACT OF 2019

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 16, 2019

                               __________





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                       Printed for the use of the
               Committee on Energy and Natural Resources

        Available via the World Wide Web: http://www.govinfo.gov 
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                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
37-308                   WASHINGTON : 2020
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       MARIA CANTWELL, Washington
STEVE DAINES, Montana                BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana              DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi        MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona              ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota

                      Brian Hughes, Staff Director
                     Kellie Donnelly, Chief Counsel
                      Jed Dearborn, Senior Counsel
                Sarah Venuto, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                      Renae Black, General Counsel  
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                            C O N T E N T S

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                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from 
  West Virginia..................................................     3
Hoeven, Hon. John, a U.S. Senator from North Dakota..............    13

                               WITNESSES

Winberg, Hon. Steven E., Assistant Secretary for Fossil Energy, 
  U.S. Department of Energy......................................    14
Friedmann, Dr. S. Julio, Senior Research Scholar, Center on 
  Global Energy Policy, Columbia University School of 
  International & Public Affairs.................................    21
Goff, Adam, Principal, 8 Rivers Capital, LLC.....................    29
Harju, John, Vice President for Strategic Partnerships, 
  University of North Dakota Energy & Environmental Research 
  Center.........................................................    38
Jackson, Richard, President, Low Carbon Ventures, Occidental 
  Petroleum......................................................    45
Lagano, Judith, Senior Vice President of Asset Management, NRG 
  Energy, Inc....................................................    51

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

BPC Action:
    Statement for the Record.....................................    12
Carbon Capture Coalition:
    Statement for the Record.....................................    10
Carbon Utilization Research Council:
    Letter for the Record........................................     5
Clean Air Task Force:
    Statement for the Record.....................................    11
Enviva Holdings, LP:
    Letter for the Record........................................   122
Friedmann, Dr. S. Julio:
    Opening Statement............................................    21
    Written Testimony............................................    23
    Responses to Questions for the Record........................    89
Goff, Adam:
    Opening Statement............................................    29
    Written Testimony............................................    31
    Responses to Questions for the Record........................    96
Harju, John:
    Opening Statement............................................    38
    Written Testimony............................................    41
    Responses to Questions for the Record........................   100
Hoeven, Hon. John:
    Opening Statement............................................    13
International Brotherhood of Boilermakers, Iron Ship Builders, 
  Blacksmiths, Forgers & Helpers:
    Letter for the Record........................................     8
Jackson, Richard:
    Opening Statement............................................    45
    Written Testimony............................................    47
    Responses to Questions for the Record........................   105
King, Jr., Hon. Angus S.:
    Chart titled ``Ice-core data before 1958. Mauna Loa data 
      after 1958.'' -- dated 5/11/19.............................    62
    Chart titled ``Composite Antarctic CO2 record (0-
      800 kyr before present) with current Mauna Loa readings''..    64
Lagano, Judith:
    Opening Statement............................................    51
    Written Testimony............................................    53
    Responses to Questions for the Record........................   111
LTC Action:
    Statement for the Record.....................................   151
Manchin III, Hon. Joe:
    Opening Statement............................................     3
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
National Wildlife Federation:
    Letter for the Record........................................   154
(The) Nature Conservancy:
    Letter for the Record........................................     7
Winberg, Hon. Steven E.:
    Opening Statement............................................    14
    Written Testimony............................................    16
    Responses to Questions for the Record........................    82

 
     AN EXAMINATION OF THE DEPARTMENT OF ENERGY'S CARBON CAPTURE, 
    UTILIZATION, AND STORAGE PROGRAMS AND TESTIMONY ON S. 1201, THE 
       ENHANCING FOSSIL FUEL ENERGY CARBON TECHNOLOGY ACT OF 2019

                              ----------                              


                         THURSDAY, MAY 16, 2019

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:01 a.m. in 
Room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

           OPENING STATEMENT OF HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    The Chairman. Good morning, everyone. The Committee will 
come to order.
    We have a full slate of witnesses this morning, so I want 
to get started here. We are beginning a hearing this morning on 
DOE's carbon capture, utilization, and storage programs, or 
CCUS. We are also considering S. 1201, the Enhancing Fossil 
Fuel Energy Carbon Technology Act, or the EFFECT, Act.
    Senator Manchin, I have already given you great credit for 
coming up with great acronyms. EFFECT is pretty good. We 
appreciate that. I am proud to cosponsor it.
    Senator Manchin. I am proud to have you.
    [Laughter.]
    The Chairman. This hearing is part of our Committee's 
ongoing discussion on clean energy innovation to address our 
changing climate.
    In March, the Committee examined the impact of climate 
change in the electricity sector, and in both February and 
April we discussed opportunities for energy innovation. In 
those hearings and others, our witnesses made clear to us that 
significant reductions in greenhouse gas emissions will be a 
major undertaking that will require an all-of-the-above 
approach.
    We are working on that approach now because we can see it. 
We can feel it. Climate change is with us every day, whether we 
like it or not, and whether or not we use the words climate 
change, it is there. Come to Alaska, I will show you 
diminishing sea ice, melting permafrost, more frequent extreme 
weather events, and rising sea levels. We are warming in the 
State of Alaska at twice the rate of the Lower 48, and many 
villages are threatened by coastal erosion, with some needing 
out-and-out relocation. Our Committee recognizes the threat of 
climate change, so we have been hard at work on practical, 
bipartisan solutions to increase deployment of clean and 
innovative energy technologies.
    In March, I introduced the Nuclear Energy Leadership Act 
along with 17 of my colleagues. And then earlier this week, we 
heard my American Mineral Security Act, and Senator Manchin's 
Rare Earth Element Advanced Coal Technologies, or REEACT. Both 
of these bills will help the U.S. rebuild its supply chain for 
clean energy technologies like electric vehicles (EVs), solar 
panels, and more.
    The bill that we are here to consider today, the EFFECT 
Act, focuses on increased deployment of carbon capture, 
utilization, and storage technology, again referred to as CCUS. 
It is a natural complement to our work last Congress to expand 
the 45Q tax credit and it presents a tremendous opportunity to 
reduce our emissions while maintaining the availability of 
reliable electricity generation resources. Our bipartisan bill 
will help us seize that opportunity by expanding and 
modernizing DOE's research and development programs in this 
field.
    We are seeing that CCUS technology can work. There are 18 
large-scale facilities in commercial operation around the world 
that are already capturing and storing tens of millions of tons 
of carbon dioxide per year. Here in the U.S., NRG's Petra Nova 
project, located onsite at a coal-fired power plant, has an 
annual carbon dioxide capture capacity of 1.4 million tons. 
That is equivalent to removing the daily emissions from 350,000 
cars.
    There are many other promising projects in development. 
Project Tundra, a proposed project at a coal-fired power plant 
in North Dakota, aims to store up to 3.6 million tons of carbon 
dioxide per year. And the NET Power facility in development 
near Houston will utilize a process called the Allam Cycle to 
produce electricity from natural gas using zero carbon 
emissions. These are just a few examples of projects around the 
globe. In order for CCUS to have any meaningful impact on 
global emissions, however, many more of these facilities need 
to be deployed.
    So today we are going to examine the state of CCUS 
technologies, the challenges of greater deployment, and how the 
Federal Government can be an effective partner to bring these 
technologies to market.
    We have a very distinguished panel before us today. We have 
Assistant Secretary Steven Winberg from the Department of 
Energy (DOE). We have Dr. Julio Friedmann, who is a Senior 
Research Scholar at the Center for Global Energy Policy at 
Columbia University; Mr. Adam Goff is the Principal and Policy 
Director at 8 Rivers Capital; Mr. John Harju is the Vice 
President for Strategic Partnerships at the University of North 
Dakota's Energy and Environmental Research Center; Mr. Richard 
Jackson is a Senior VP for Operations Support at Occidental 
Petroleum Company; and Mrs. Judith Lagano, who is the Senior 
Vice President for Asset Management at NRG Energy.
    So we have a great panel assembled for us this morning, and 
I am looking forward to hearing from them. But before we do, I 
will turn to my colleague and friend, Senator Manchin, for your 
comments.

              STATEMENT OF HON. JOE MANCHIN III, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Chairman Murkowski, and thank 
you so much for the gathering today to discuss carbon capture, 
utilization, and sequestration and the Enhancing Fossil Fuel 
Energy Carbon Technology, or the EFFECT Act.
    The Chairman. Gotta love it.
    Senator Manchin. I love it. It sounds good. We have to make 
it work now.
    I thank all of you for coming here and sharing your 
expertise with us, and we look forward to the hearing and hope 
you are going to have comprehensive answers to some of these 
difficult questions and challenges that we have.
    Earlier this year, Dr. Birol, of the non-partisan 
International Energy Agency, the IEA, told this Committee that 
CCUS should be the most critical technology in which we can 
invest. Likewise, in the models run by the U.N. 
Intergovernmental Panel on Climate Change for Stabilizing 
Emissions by 2050, many projected the need for carbon capture 
to achieve the below-two-degree-Celsius goal. The models 
without carbon capture show climate mitigation costs rising by 
138 percent.
    I really do think there is bipartisan agreement in Congress 
about the role CCUS will need to play in lowering the world's 
carbon emissions; but we have to put our money where our mouth 
is and enact strong policies that will help commercialize these 
technologies in the very near term. That is why I introduced 
the EFFECT Act last month with my dear friend, Chairman 
Murkowski, and a bipartisan group of Senators. It is a 
comprehensive bill that is aimed at enhancing research and 
development and, just as importantly, demonstration and 
deployment for each aspect of CCUS. That includes coal, natural 
gas technologies, utilization, storage, and even atmospheric 
CO2 removal.
    As we say in West Virginia, everything but the squeal. Have 
you all heard that saying? When you butcher the pig back home, 
I think in the hills of West Virginia, we eat everything but 
the squeal. Okay.
    Now let's take a step back and take a look at the global 
picture. The IEA recently issued a report showing energy 
consumption around the world grew by 2.3 percent in 2018, with 
fossil fuels meeting nearly 70 percent of that increased 
demand. The average age of a Chinese coal plant is 12 years. 
They are going to be running those plants for years to come 
whether we like it or not. That is backed up by predictions 
that under current policies, 51 percent of China's power and 57 
percent of India's power could come from coal in the next 20 to 
30 years.
    So if we acknowledge that fossil fuels are going to be part 
of the global energy mix--and we do call this the global 
climate, not the North American climate--for decades to come, 
then we need to figure out how to use them in the cleanest way 
we can.
    It is a fact that our country has the greatest resource of 
all, brilliant researchers and entrepreneurs. Let's give them 
the direction and the funding to do what they do best, because 
if we can lead in the CCUS space, then we can do a number of 
incredibly important things. First, we could maintain our 
affordable and reliable domestic energy supply. Second, we 
could export these technologies to those countries who show no 
sign of cutting off their use of fossil fuels and enable them 
to cut down on their emissions. Third, we can boost our economy 
with the utilization of CO2, something previously 
valueless, either for enhanced oil recovery (EOR) as we're 
seeing now or for use in cement products, fuel, or any number 
of industrial settings.
    Senator King has a good idea. It is a major bottling 
facility, and they use all the CO2 for the fizz.
    If we are thinking pragmatically, there should be no 
downside to supporting and accelerating CCUS deployment on a 
large scale, no matter where you are coming from on the 
political spectrum.
    I would also like to briefly touch on one aspect of the 
EFFECT Act that is unrelated to coal or natural gas, and that 
is carbon removal.
    Taking CO2 right out of the air is something 
that former Energy Secretary Ernie Moniz and other luminaries 
are looking at, as are oil companies like Occidental Petroleum, 
who we will hear from today. And we thank you for that.
    As I have said, we need to think of all the ways to skin 
this cat of that problem called climate change and aggressively 
pursue the options that can realistically help us meet our 
goal, and removing CO2 directly from the ambient air 
is one of those things. It can be something as technologically 
complex as direct air capture or something as simple as 
afforestation. This includes the RD&D program for large-scale 
atmospheric removal of CO2 which is the necessary 
companion to the RD&D for coal and natural gas technologies.
    It will round out the full suite of technologies needed in 
the carbon capture space. This is the moonshot, and we need to 
get behind it and do it now.
    We have a wide-ranging panel of witnesses before us today 
who can discuss CCUS from every perspective. I look forward to 
getting a status update and outlook from you all and hearing 
your feedback on the EFFECT Act, if you had a chance to look at 
it.
    Before I turn back to you, Madam Chairman, I would like to 
enter these letters and statements of support for the EFFECT 
Act into the record from the Carbon Utilization Research 
Council, The Nature Conservancy, the International Brotherhood 
of Boilermakers, the Carbon Capture Coalition, the Clean Air 
Task Force and BPC Action.
    Thank you, Madam Chair.
    The Chairman. They will be included as part of the record.
    [The information referred to follows:]

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    The Chairman. Thank you, Senator.
    Senator Hoeven, I understand you would like to do a little 
bit further introduction of Mr. Harju?

                STATEMENT OF HON. JOHN HOEVEN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Hoeven. I would, thank you, Madam Chairman and 
Ranking Member Manchin. I appreciate that very much.
    I know him extremely well and he is a great guy, so I could 
just brag on him without reading my notes, but then he has all 
these amazing accomplishments and they are way above my head so 
I have to read that part because otherwise I would totally 
screw it up. So I am going to read for a while. But he is a 
good friend. He is a good friend.
    [Laughter.]
    And he is really, really smart, Joe, you know, a smart guy.
    Senator Manchin. John, we have all the smart ones here 
today.
    Senator Hoeven. Yes, they look like it.
    So again, thanks to both of you and I do appreciate the 
opportunity to talk a little bit about John Harju.
    He is a University of North Dakota graduate, Vice President 
for Strategic Partnerships at the EERC, which is the Energy and 
Environmental Research Center. I think, Madam Chairman, I have 
had you out there, haven't I, to the EERC? They do amazing 
stuff. And he just brings a wealth of experience in CCUS 
technology. I am getting all excited because I remember when it 
was CCS and now it is CCUS. Utilization, I guess, got added in 
there. Was that new with the addition of the Ranking Member to 
this?
    Senator Manchin. Utilization, if we could utilize it better 
than sequester it----
    Senator Hoeven. Well, I will tell you what, you better tell 
King it is going to take a lot of bottles and a lot of fizz, if 
that is what we are----
    Senator Manchin. He is right.
    Senator Hoeven. One example of John's ability to 
collaborate is his efforts to grow the Plains CO2 
Reduction Partnership, PCOR, which is one of seven regional 
carbon sequestration partnerships awarded by the Department of 
Energy. Under his leadership, PCOR has grown to include more 
than 100 U.S. and Canadian stakeholders, and in that endeavor 
they secure a minimum of 20 percent cost share from all our 
non-federal partners.
    I should mention, too, that with the Dakota Gasification 
Plant, we are stripping CO2 off of the process 
whereby we convert coal to synthetic natural gas. We are 
sending that CO2 in a huge pipeline, compressed and 
liquified under real cold temperature. It goes to the Weyburn 
Oil Fields in Saskatchewan, Canada and it goes down a hole for 
tertiary recovery. They are doing that on a commercially 
successful basis right now which, of course, is what we have. 
That is what today is all about. That is where we have to get 
to. We can't just do it up in North Dakota and Saskatchewan, we 
have to do it all over the world, right? That is what today is 
all about.
    So this really reflects our all-of-the-above approach--in 
this case, CCUS technology, applying that technology to coal-
fired plants.
    I am going to want to talk particularly to the Honorable 
Steven Winberg about some projects we are working on. Project 
Tundra which is post combustion and the Allam Cycle which would 
be building a new plant. And we have John here to just keep you 
honest and make sure whatever you tell us is the straight 
stuff, because he really knows this stuff.
    I am teasing him obviously, but he is, I am not teasing 
about the fact that he is deeply, deeply immersed into this 
stuff, the way we have to be.
    It is not about getting to technological feasibility, you 
all can do it. It is about getting to commercial viability.
    So again, John, thanks for being here and for all your 
great work. But to all of you, thanks for being here and for 
your great work.
    Madam Chairman, thank you for your indulgence. I appreciate 
it very much.
    The Chairman. Thank you. We do appreciate not only the 
expertise that Mr. Harju brings but that all of you do. So we 
are looking forward to your testimony here this morning.
    Mr. Winberg, we will begin with you. I ask you all to try 
to limit your comments to about five minutes, and your full 
statements will be included as part of the record. Then we will 
have an opportunity for the back and forth afterwards.
    Mr. Winberg, welcome.

        STATEMENT OF HON. STEVEN E. WINBERG, ASSISTANT 
        SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Winberg. Thank you, Chairman Murkowski, Ranking Member 
Manchin and members of the Committee.
    With the Committee's ongoing support, we are backing up our 
commitment to CCUS with the R&D necessary to advance these 
technologies, improve our environmental footprint and advance 
U.S. world leadership in this critical area.
    With respect to S. 1201, the Enhancing Fossil Fuel Energy 
Carbon Technology Act of 2019, the Administration is currently 
reviewing this legislation. I look forward to answering any 
questions you may have on the legislation. As always, the 
Administration is ready to provide technical assistance, as 
needed, on this legislation, moving forward.
    The American taxpayer has invested nearly $4 billion in 
CCUS since 2010. We are approaching the point at which the 
American taxpayer will receive return on this investment.
    Just over the horizon, we see energy generation 
technologies that can deliver electricity with near-zero 
greenhouse gas emissions at some of the lowest costs in the 
world. We also see a robust enhanced oil recovery industry that 
can produce oil with 37 percent less CO2 emissions 
on a life-cycle basis.
    So far this fiscal year, the Fossil Energy Office of DOE 
has selected carbon capture technology projects totaling $24 
million; we've announced $30 million for front-end engineering 
and design studies for capture systems on both coal and natural 
gas plants; we've announced $20 million for a regional 
initiative to accelerate CCUS; and we plan to release a $30 
million Funding Opportunity Announcement (FOA) for large-scale 
CO2 storage projects through DOE's CarbonSAFE 
initiative that is focused on the development of geological 
storage sites for CO2. We've selected multiple 
projects, totaling $13 million, to develop innovative methods 
for converting CO2 into valuable products and 
chemicals through our Carbon Utilization program, and we've 
launched the Coal FIRST initiative to develop the coal plant of 
the future to provide secure, stable, reliable power with near-
zero emissions, including CO2. These plants will be 
flexible. They'll be innovative. They'll be resilient, small 
and transformative.
    Commercializing and deploying CCUS technologies is a 
realistic path to addressing CO2 on a large scale. 
Funding provided by Congress through the Fossil Energy Office 
has resulted in the commercial operation of the world's three 
largest CCUS demonstration projects--Petra Nova, Air Products 
and Archer Daniel Midland. These projects already have 
captured, utilized and stored almost nine million metric tons 
of CO2.
    Fossil Energy's robust CCUS R&D program has produced some 
impressive results like these demonstration projects, but the 
most significant hurdle is the cost associated with carbon 
capture which we aim to reduce by 50 percent to $30 a metric 
ton by 2030. This is a challenging goal but with Fossil 
Energy's R&D and the 45Q tax credit, we have the potential to 
reach that cost reduction target.
    One important element of Fossil Energy's R&D effort is 
direct air capture which is aimed at improving capture 
efficiency, reducing energy and capital cost and lowering water 
resource demands by leveraging our $4 billion investment on 
CCUS technologies.
    Fossil Energy is performing exploratory research in this 
area and currently has three direct air capture research 
projects. Fossil Energy's CO2 capture expertise 
creates an opportunity to work toward DAC commercialization, or 
Direct Air Capture.
    So we appreciate the Committee's interest, support, and 
commitment to provide DOE with the tools necessary to advance 
CCUS technologies, and I look forward to answering your 
questions.
    Thank you.
    [The prepared statement of Mr. Winberg follows:]

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    The Chairman. Thank you, Mr. Winberg.
    Dr. Friedmann, welcome.

 STATEMENT OF DR. S. JULIO FRIEDMANN, SENIOR RESEARCH SCHOLAR, 
 CENTER ON GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY SCHOOL OF 
                 INTERNATIONAL & PUBLIC AFFAIRS

    Dr. Friedmann. Chairman Murkowski, Ranking Member Manchin, 
members of the Committee, Senator Barrasso, Senators Hoeven, 
King and Cortez Masto, it's a real treat to be here. Thank you 
for inviting me to discuss the EFFECT Act and the DOE CCUS 
programs.
    I'm Dr. Julio Friedmann. I'm the Senior Research Scholar at 
Columbia's University Center on Global Energy Policy.
    It's an honor to appear before this Committee. Since my 
last Congressional testimony, the world has changed a lot. 
Analysis from the IPCC and dozens of other organizations 
conclude that CCUS is required; it's essential to achieve 
important climate targets, including two degrees, much less one 
and a half degrees. In fact, without CCUS most models do not 
converge on a solution at all. Those that do cost more than 
twice as much to reach the same target. That's why the Center 
for Global Energy Policy has launched the Carbon Management 
Research Initiative which I lead.
    The world of CCUS has also changed, even in a year. Today 
18 projects worldwide, including one in China, prevent 34 
million tons of CO2 from entering the air. The U.S. 
hosts eight of these facilities, the most of any country. More 
are on the way, in part, because of policies enacted by the 
House and Senate, notably the 45Q amendment under the Future 
Act. In short, you can't do CCUS without the U.S.
    Groups like the IEA, Global CCS Institute and others 
underscore how CCUS is an essential approach to support both 
economic growth and rapid deep decarbonization. Many countries 
have added CCUS to their climate and energy plans. This 
includes new projects in China, Norway and the Middle East and 
new policies imperatives in the U.K., the Netherlands and 
Canada. It should now be clear to all that CCUS is not some 
untested technology or green washing or license to pollute. 
Quite the opposite, it is an overt, committed pathway to deeply 
and quickly reducing greenhouse gas emissions in a cost-
effective way.
    From 2013-16, I served as Principal Deputy Assistant 
Secretary for the DOE's Office of Fossil Energy and had the 
great pleasure of working with the people there who Steve 
Winberg currently has the great pleasure of working with and 
managing.
    At the time we began to rethink our R&D portfolios driven 
by the profound shifts in U.S. and global energy markets. To 
respond to these shifts, we instituted changes in the R&D 
program in partnership with the National Energy Technology Lab 
in the great State of West Virginia: We decreased focus on coal 
gasification and increased focus on advanced power cycles, 
including things like NET Power's Allam Cycle; we shifted from 
broad geological assessments in the regional partnerships 
toward site specific focus for regions through the CarbonSAFE 
program; we helped launch and lead two cross-cutting R&D 
programs, the Supercritical CO2 and the SubTER 
initiatives; we began to explore issues and opportunities for 
applying CCUS to industrial facilities, not just power 
facilities; we scaled up our program on CO2 
conversion, and we issued the first grants on CO2 
removal and direct air capture. One of those grants to Carbon 
Engineering led to $68 million of private investment in the 
last year.
    It soon became clear, not only would these new efforts 
prove important, but that also additional programs with 
additional funding would be necessary. If this sounds familiar, 
it's because they're embodied in the framework of the EFFECT 
Act. Although basic research remains important, both the 
maturity of CCUS and the urgency of climate change require us 
to emphasize applied R&D, large pilots and ultimately 
demonstrations.
    My office was hampered by Congressional language which 
limited our ability to spend money based on fuel type. Both 
coal and gas are important parts of the U.S. energy system and 
biomass, increasingly, will be. All require carbon management 
and CCUS to serve broad public interests. In a carbon 
constrained world, in a carbon constrained economy, we have to 
emphasize our mission more than our fuels.
    The U.S. has substantially underinvested in advanced 
technology options for heavy industry, including ways to reduce 
carbon pollution. Heavy industries like steel, cement, 
refining, petrochemicals and others are essential to the U.S. 
economy; they also represent 21 percent of our emissions. A new 
innovation thrust would help create clean, muscular U.S. heavy 
industry.
    As I mentioned before, the CarbonSAFE program helps to 
identify and de-risk possible storage sites by providing site 
specific knowledge and data to potential operators. Already, 
CarbonSAFE has begun to unlock private capital investments and 
potential CCUS projects and more are on the way.
    Technology advancement, low cost, abundant clean power and 
the harsh mathematics of climate change urgency have revealed 
CO2 removal and CO2 recycling to be both 
viable and essential, including technologies of direct air 
capture, CO2 mineralization and converting 
CO2 to products like cement and fuels.
    All of these imperatives are represented in the EFFECT Act. 
I see it to be very similar to the SunShot Initiative which 
helped focused innovation on solar power and contributed 
substantially to cost reductions in those fields.
    That said, the EFFECT Act alone will not bring CCUS to 
market. Additional policies are needed to accelerate deployment 
and align markets. I've listed all of that in my full testimony 
and I look forward to your questions.
    Thank you very much.
    [The prepared statement of Dr. Friedmann follows:]

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    The Chairman. Thank you, Dr. Friedmann.
    Mr. Goff, welcome.

              STATEMENT OF ADAM GOFF, PRINCIPAL, 
                     8 RIVERS CAPITAL, LLC

    Mr. Goff. Thank you, Chairman Murkowski, Ranking Member 
Manchin and members of the Committee for the opportunity to 
discuss carbon capture innovation and the EFFECT Act.
    I will be discussing today a whole new method of carbon 
capture called the Allam Cycle, which was invented ten years 
ago by 8 Rivers, the innovation for and where I serve as Policy 
Director.
    8 Rivers created the company NET Power to commercialize the 
natural gas Allam Cycle which has garnered over $150 million in 
investment between its four partners: 8 Rivers, Exelon, 
McDermott and Oxy Low Carbon Ventures.
    NET Power built a successful 50-megawatt thermal plant and 
world class test facility in La Porte, Texas, that achieved 
combustor first fire in May 2018. The novel combustion and 
CO2 turbine were supplied by our technology partner, 
Toshiba. This technology is a paradigm shift, because it has 
the potential to sell power at a lower price than conventional 
power plants, while releasing zero emissions. Today, multiple 
300 megawatt-scale NET Power plants are in early stage 
development around the world.
    Here's how it works. The Allam Cycle burns natural gas or 
coal in pure oxygen, rather than in air. This creates a high 
purity stream of CO2 at 1150 degrees Celsius. This 
CO2 is supercritical and is used to drive the 
turbine instead of using steam. That CO2 is then 
ready to be sent to a pipeline at no additional cost.
    CO2 capture is inherent to the system, and 
selling CO2 is actually a key source of our revenue. 
These multiple revenue streams are what give NET Power a cost 
advantage. And by using the supercritical CO2, this 
cycle can reach the same efficiency as a conventional natural 
gas power plant all while achieving over 97 percent carbon 
capture and creating zero air pollutants.
    The Allam Cycle also partners well with renewables ensuring 
the constant availability of low-cost, dispatchable clean 
energy. We believe it will allow the world to meet its climate 
targets at a cost that can be afforded by all people.
    The Allam Cycle is a breakthrough technology, not just for 
the power sector, but also for the oil and gas, environmental 
and petrochemical sectors. It has the potential to lower the 
cost of electricity from fossil fuels while eliminating air 
emissions and capturing CO2 for sequestration, 
enhanced oil recovery and other forms of carbon utilization. It 
will co-produce other valuable gases, nitrogen and argon which 
support America's manufacturing sector.
    Each plank can also provide 150 megawatt-hours of energy 
storage, taking in excess renewable electricity and using it to 
create the pure oxygen this plan needs. That oxygen is then 
stored in tanks for later use when the sun sets or the wind 
slows.
    While the Allam Cycle is a major breakthrough, it mostly 
utilizes proven components. Many of these, like advanced nickel 
alloys, were developed with federal research dollars. The 
Office of Fossil Energy has also directly supported Allam Cycle 
development, most recently through the Coal FIRST program.
    NET Power also applauds the Committee for its introduction 
of the EFFECT Act. The legislation's focus on breakthrough 
carbon capture technologies, large-scale carbon sequestration 
and carbon utilization, is critical to the success of the 
entire carbon capture industry.
    We appreciate that it spans the full R&D spectrum from 
research to pilots demonstration, all of which we've learned 
from our experience are necessary to commercial novel 
technologies.
    Additionally, we thank Congress for its leadership in 
expanding the 45Q credit last year. These credits will 
accelerate the deployment of carbon capture technologies like 
NET Power, and they have made America the ideal location to 
demonstrate carbon capture projects.
    Globally, NET Power envisions a robust market for this 
technology because of its low-cost profile. Countries like 
China and India could build coal and gas Allam Cycle plants 
purely for the economics with the follow-on benefit of reducing 
local air pollution and cutting global carbon emissions.
    With innovative technologies like NET Power spreading 
beyond America's shores, we believe America--we believe clean 
energy can become affordable for the whole world.
    Thank you.
    [The prepared statement of Mr. Goff follows:]

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    The Chairman. Mr. Goff, thank you very much.
    Mr. Harju.

     STATEMENT OF JOHN HARJU, VICE PRESIDENT FOR STRATEGIC 
PARTNERSHIPS, UNIVERSITY OF NORTH DAKOTA ENERGY & ENVIRONMENTAL 
                        RESEARCH CENTER

    Mr. Harju. Good morning, Chairman Murkowski, Ranking Member 
Manchin and members of the Committee, and thanks to Senator 
Hoeven, now gone, for the kind introduction. I'm happy to 
provide a brief commentary today regarding what I call EERC, 
which stands for Energy & Environmental Research Center, a 
business unit of the University of North Dakota, and we're 
focused on providing practical solutions to the world's vexing 
energy and environmental challenges.
    We were initially founded in 1951 under the U.S. Bureau of 
Mines. Later we became one of the Department of Energy's five 
energy technology centers and since 1983 have been part of the 
University of North Dakota.
    Our mission has evolved considerably since that time, 
initially focused exclusively on coal utilization and at this 
point in time, focused on all forms of energy and the intended 
environmental challenges associated with their development and 
utilization.
    In the arena of CCUS, EERC has had the privilege of serving 
a very, very large number of partners across the entire CCUS 
value chain. These projects have included everything from broad 
reconnaissance-level assessments of storage opportunities to 
detailed assessments of prospective storage reservoirs and 
field validation of ongoing commercial scale CCUS projects, 
from cursory desktop evaluations of numerous capture 
technologies to pilot tests and ongoing field campaigns of 
their performance for full-scale deployment, also from paper 
studies of new-generation platforms such as the Allam Cycle to 
pilot testing and demonstration-scale field evaluations. So 
again, across the entire broad value chain of CCUS. These 
projects have benefited from ongoing, robust financial support 
via the Department of Energy's Fossil Energy Program.
    Way back in 2003, the Department launched a solicitation to 
establish a series of Regional Carbon Sequestration 
Partnerships and Senator Hoeven mentioned that earlier as well. 
But the focus at that point in time was to develop a regional 
inventory of sources and sinks. EERC's partnership there is 
called the PCOR partnership. And one of those first eye-opening 
things for a simple fellow like me was our region's emissions 
are inextricably linked to our economic activity. So whether 
that's the mining and manufacturing and industrial centers 
around the Great Lakes or in the Mississippi River Valley or 
the agribusinesses of Iowa, Minnesota, Nebraska or the Dakotas, 
or the oil and gas and coal-producing regions of the Northern 
Great Plains, each of these areas has an economic engine and 
each of those economic engines represent the primary emission 
of CO2.
    A key partner offered way back then that he doesn't see a 
carbon constrained world but rather a carbon managed world, and 
with that as a backdrop we set out to develop what we found to 
be economically viable, carbon management activities. Today, 
our partnership has growing interest with more than 120 
engaged, strategic partners.
    So in subsequent phases of work we led a series of four 
discrete field experiments, each of those inherently tied to 
one of those significant engines and opportunities. Concurrent 
efforts of my team in conjunction with numerous additional 
stakeholders and under the leadership of then-Governor Hoeven, 
our state established comprehensive geologic storage rules for 
carbon dioxide and later became the first and still the only 
state-granted primacy under the EPA's Class VI storage program.
    So the most recent phase of our effort has been focused on 
full commercial-scale validation of EOR-related storage at 
Denbury Resources' Bell Creek Field in southeastern Montana. 
CO2 is sourced from natural gas processing 
facilities in Wyoming, brought to the field and used in EOR.
    The field currently produces more than 7,000 barrels a day, 
that's up from a few hundred barrels a day at the time of 
implementation, and at full fruition the project will produce 
more than 40 million barrels of oil and permanently store more 
than 15 million tons of CO2. At this point more than 
six million tons of CO2 have been stored at that 
location.
    Gas processing facilities, such as that which are sourced 
for Bell Creek, really represent ``low-hanging fruit'' in terms 
of available and readily capturable CO2, but we 
don't see substantial opportunity to expand that because of 
either low concentrations of CO2 in that gas 
processing feedstock or because they're already being captured.
    Ethanol facilities also represent a substantial opportunity 
and we're fortunate enough to be working with Red Trail Ethanol 
in North Dakota on a facility, also focused on geologic storage 
of CO2.
    Senator Hoeven mentioned Project Tundra, another key effort 
in our area that we've been fortunate enough to be engaged in. 
That project, led by Minnkota Power Cooperative, is working to 
deploy a post-combustion capture system at Minnkota's Milton R. 
Young facility. That CO2 captured would be used and 
stored in regional oil fields for EOR and also that location is 
the host of one of the CarbonSAFE efforts that Mr. Winberg and 
Dr. Friedmann had mentioned.
    We see CarbonSAFE as a key compliment to the regional 
partnerships program. CarbonSAFE being one where we validate 
specific geologic storage sites of a minimum size and nature, 
but we see the regional partnerships as helping us develop and 
build out these compelling business cases that, I think, allow 
CO2 storage to become a substantial part of our 
economic framework.
    None of this work would have been possible without the 
foresight of this key Committee, your counterparts in the 
Appropriations Committee and the Department of Energy. Senate 
bill 1201 continues this critical recognition and support of 
the programs that drive our innovation.
    I'm particularly pleased with the bill's recognition of the 
regional carbon sequestration partnerships and CarbonSAFE 
efforts. We're currently preparing a key proposal to DOE that 
would expand our region to include the key energy State of 
Alaska and to broaden and complete our engagement with the 
State of Wyoming.
    Thank you very much for your time, and I look forward to 
your questions.
    [The prepared statement of Mr. Harju follows:]

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    The Chairman. Thank you, Mr. Harju, we appreciate that.
    Mr. Jackson, welcome.

 STATEMENT OF RICHARD JACKSON, PRESIDENT, LOW CARBON VENTURES, 
                      OCCIDENTAL PETROLEUM

    Mr. Jackson. Chairman Murkowski, Ranking Member Manchin, 
members and staff of the Senate Environment and Natural 
Resources Committee, thank you for the opportunity to testify.
    I appreciate your leadership on carbon capture and the 
EFFECT Act which Occidental is proud to support.
    My name is Richard Jackson, and I work as President at 
Occidental's Low Carbon Ventures. Occidental is one of the 
largest independent oil and gas companies in the United States. 
We have spent the last few years working with internal and 
external stakeholders to discuss climate change and solutions. 
I look forward to discussing those with you today.
    Low Carbon Ventures was formed in 2018 to enhance our 
business and reduce atmospheric greenhouse gas. Today our 
management is exploring an aspiration of becoming carbon 
neutral, accounting not only for our operational emissions but 
also for the emissions related to the use of our products. We 
seek to do this while continuing to grow our business.
    The significant driver is carbon capture and use, with the 
near-term ability to produce a carbon neutral barrel of oil. 
The technology we use will also help advance other commercial 
low carbon products and business opportunities.
    While we appreciate there are many different low carbon 
strategies for energy companies, at Occidental we are in a 
unique position as the world's largest consumer of 
CO2 which we have used for over 40 years in enhanced 
oil recovery or EOR operations. We sequester over one billion 
cubic feet of CO2 per day which is the emissions 
equivalent of four million passenger vehicles. Utilizing more 
man-made CO2 will allow us to grow this business 
while sequestering significantly more.
    As we look forward to meeting a lower carbon energy demand, 
our capability presents great potential. In fact, the 
International Energy Agency confirms that a barrel of oil 
produced using man-made CO2 has a significantly 
reduced carbon footprint compared to a conventional barrel.
    While we estimate we can, at Oxy we estimate we can reduce 
this further enabling us to produce a carbon neutral and even 
carbon negative barrel of oil. In short, we are increasing 
today's production, tomorrow's reserves and significantly 
decreasing our collective carbon impact.
    Currently CO2 EOR offers the most favorable 
economic approach to carbon capture. However, we believe the 
future will hold many other commercial uses for CO2, 
everything from making synthetic, low carbon fuels, to low 
carbon materials like cement and plastics. EOR can pave the way 
in the near-term, not only for carbon capture but also for 
critical CO2 pipeline infrastructure, that can help 
drive this innovation and commercializing of new products.
    Occidental is investing and partnering to advance these 
innovative uses of CO2. We believe these business-
driven solutions will have a meaningful and profound impact on 
reducing CO2 emissions, not only in the United 
States but across the globe.
    While we believe that carbon capture, utilization, and 
sequestration is a critical technology to meet many of our 
nation's priorities, we also believe it should complement other 
low carbon solutions. At Oxy we are focused on three: reducing 
the emissions from our own operational activities; energy 
efficiency; and, of course, carbon capture of use, both from 
industrial sources and also directly from the air.
    Oxy Low Carbon Ventures have found significant value in 
working with non-traditional allies to advance these goals and 
we have made three major announcements in the last year: With 
White Energy, a biofuels producer in Texas and Kansas, we're 
exploring options for capturing man-made CO2 from 
their ethanol facilities; Occidental invested with NET Power 
which joins us today which develops zero emission natural gas-
powered generation; we also invested in British Columbia-based 
Carbon Engineering which developed a technology that pulls 
CO2 from the atmosphere.
    Occidental is proud to be involved in key carbon reduction 
coalitions, including the Oil and Gas Climate Initiative and 
the Carbon Capture Coalition. Partnerships like these would not 
have been possible for us without the work of the Senate to 
expand and extend 45Q and the tax credit in 2018 making 
investment in carbon capture possible.
    As our CEO, Vicki Hollub, has said, partnerships with a 
variety of stakeholders is the most efficient and perhaps the 
only pathway to solving climate change risk. To that end, we 
ask Congressional leadership to help advance commercialization 
through large-scale CO2 transportation networks. 
Regional and then national large-scale CO2 pipeline 
networks act as the foundation for a CO2 economy, 
moving CO2 from emissions to commercial uses.
    We look forward to working with you to incentivize the 
build-out of a robust national CO2 transportation 
network.
    Thank you for the opportunity to speak with you today about 
an issue that our CEOs, our employees and I are very passionate 
about. I look forward to helping answer any questions that you 
may have.
    [The prepared statement of Mr. Jackson follows:]

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    The Chairman. Mr. Jackson, thank you very much, we 
appreciate that.
    Mrs. Lagano, thank you.

  STATEMENT OF JUDITH LAGANO, SENIOR VICE PRESIDENT OF ASSET 
                  MANAGEMENT, NRG ENERGY, INC.

    Mrs. Lagano. Thank you.
    Chairman Murkowski, Ranking Member Manchin, members of the 
Committee, I am honored to be here today testifying on CCUS and 
the role it can play in reducing greenhouse gas emissions. 
Thank you for your leadership on this issue, including the 
introduction of S. 1201, the EFFECT Act.
    My name is Judith Lagano and I'm Senior Vice President of 
Asset Management for NRG Energy, Inc., a large, publicly 
traded, competitive power company.
    At the outset, I'd like to provide some context of what it 
means to be competitive in the electricity sector. It means 
that NRG does not have captive ratepayers from whom we can 
recover costs or guaranteed returns. Our shareholders, not our 
customers, bear the risk tied to our power plants. We have to 
compete for our customers and we are proud of the services that 
we provide to them.
    Our company is also proud to be a leader in addressing 
climate change. We have established targets to reduce our 
carbon emissions 50 percent by 2030 and 90 percent by 2050. We 
are ahead on meeting these goals and we are making business 
decisions to meet them in an affordable and reliable way.
    This morning I want to focus on carbon capture, 
utilization, and storage, our perspective on Ranking Member 
Manchin's bill, the EFFECT Act, and NRG's experience at Petra 
Nova, the only commercial-scale CCUS project in the U.S. and 
the largest in the world.
    Petra Nova became operational on December 29th, 2016, on 
time and on budget. It captures CO2 from NRG's WA 
Parish power plant, located southwest of Houston, Texas. We use 
an amine-based, post-combustion technology to capture 90 
percent of the CO2 from a 240-megawatt equivalent 
slip stream of flue gas from a coal-fired unit at the plant. 
The captured CO2 is then compressed and transported 
81 miles via pipeline to the West Ranch Oil Field where it is 
injected to enhance oil recovery and ultimately sequestered in 
the oil field. As of the end of April 2019, the plant has 
delivered almost three million tons of captured CO2, 
equivalent to pulling almost 600,000 cars off the road for a 
year. From an engineering perspective, the project has been a 
great success.
    To help finance and achieve the technological goals of the 
project, NRG partnered with JX Nippon, a global oil and gas 
company, in a 50/50 joint venture. Additionally, Petra Nova 
formed a joint venture with Hilcorp Energy, a privately held 
oil and gas company to use enhanced oil recovery to increase 
oil production at the West Ranch Oil Field. The revenue 
generated by the sale of oil from that field is used in turn to 
service the project's debt and fund going forward cost. We are 
parties to the third partnership as well and one that is very 
important to this Committee.
    Petra Nova would not exist without support from the U.S. 
Department of Energy which provided $190 million cost share 
grant to defray the project's approximately $1 billion price 
tag. That support was made possible by Congress authorizing and 
funding programs very similar to those authorized in the EFFECT 
Act.
    As with any first of a kind effort, we have learned several 
lessons from Petra Nova. We have gained a valuable 
understanding of the challenges presented by scaling up to 
commercial scale, the impact of location specific 
considerations such as ambient temperature and the capital and 
operating costs, along with options to reduce or manage both.
    What we have learned has, of course, been shared with DOE 
and provides valuable insights for the next generation of CCUS 
projects. The EFFECT Act does a good job of providing the 
authorities needed for DOE to advance the next generation of 
CCUS through additional public-private partnerships.
    As the bill moves forward, we encourage the Committee to 
position the Federal Government as an active partner in making 
projects work from both an engineering and a business 
perspective. One way to strengthen these partnerships would be 
allowing DOE's Loan Program Office to refinance project debt. 
As technologies are proven, they become less risky which should 
allow for lower cost financing. This could provide a shot in 
the arm to projects that are demonstrating new technologies but 
also working to prove that they can operate profitably. I would 
also encourage this Committee to collaborate with the tax 
writing committees to ensure that the 45Q tax credit is 
implemented in a way that provides flexibility around 
eligibility for and the receipt of the credit.
    The EFFECT Act, in combination with other policies that I 
have mentioned, can help and will help to continue advancing 
commercial scale CCUS by facilitating technological 
improvements to drive capital and operating costs lower, the 
ability to sell CO2 for enhanced oil recovery and 
other uses at competitive prices and access to tax credits that 
can improve project economics.
    We applaud the Committee for remaining engaged, both on the 
challenge presented by climate change and on deploying the 
technologies needed to solve that challenge. At NRG, we are 
also committed to being a part of that solution.
    We thank you again for the opportunity to appear this 
morning and I'm happy to answer any questions that the 
Committee may have.
    [The prepared statement of Mrs. Lagano follows:]

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    The Chairman. Thank you, Mrs. Lagano. Thank you all for 
your testimony this morning.
    I am reminded as I listen to this that we have some of the 
most fun here in this Committee in terms of being able to be 
updated on what is happening with the technologies out there 
that are really making a difference. Not only making a 
difference from the access to energy, the affordability, but 
what we are doing to advance measures that truly are more 
clean.
    I don't know why it should be so revolutionary to think 
that this is all about management, but I have heard each of 
you--Dr. Friedmann, you articulated it very clearly; and Mr. 
Goff, you followed on it; and Mr. Harju said, we are not in a 
carbon constrained world, but rather a world of carbon 
management. And how we manage this in different ways is really 
starting to make a considerable difference.
    Whether it is the deployment with what you have out there 
at Petra Nova in Texas, what is coming on with Project Tundra, 
or what you are doing with NET Power, you all are managing 
carbon in different ways because you do not have the same 
assets in every location.
    Mrs. Lagano, you mentioned that the impact of location is 
key. I am curious about the ambient temperature. I hadn't 
thought about things like that. I think about where you have 
geologic areas underground that you can utilize but it is just, 
again, a reminder that managing is going to look different 
depending on where you are.
    We get this mindset back here in Washington that we can 
just check off a series of steps that you can take, and we are 
going to all be utilizing this same process and it is going to 
work everywhere. It just demonstrates that we are not the 
scientists and the engineers. You all are, and we need to be 
listening to you.
    So, Mrs. Lagano, you have identified some things that I 
think are important for us to keep in mind, the imperative of 
45Q and loan guarantees. Those are some of the things that we 
can help to facilitate. Oftentimes what we realize is that we, 
the government, are in the way of some of the important 
opportunities because we put regulatory impediments in your way 
and permitting issues in the way, so it's not just the economic 
challenges.
    So, you all have been working to really get things from 
beyond the drawing room, really, out to application. Mr. Goff, 
Mr. Harju, Mrs. Lagano, and Mr. Jackson as well at Oxy, what do 
we need to be doing to clear the path of impediments on the 
regulatory side, but also some of the economic challenges that 
you face that we can be helpful at the federal level? And I 
don't mean to limit it to just four of you, all can jump in, 
but please go ahead, whoever wants to jump.
    Mrs. Lagano?
    Mrs. Lagano. I'll start, yes, thank you.
    I think what we could do is that assisting technology 
providers to drive capital costs lower, right, as we do a 
project and we learn from, for example, NRG's experience 
scaling up. How can we use that for the next project to reduce 
cost and drive, ultimately, the cost of delivered 
CO2 down?
    The Chairman. How do you share that with others so that 
they gain the benefit of your taking the first step?
    Mrs. Lagano. Yeah so, in working closely with the DOE, we 
are providing information to them regularly about the 
challenges that we face and we solve. And we do that in a 
cooperative environment and a collaborative environment with 
the DOE so that the benefit of our experiences can be used for 
the next generation of technology, and frankly, to enhance our 
own existing project.
    The Chairman. Others? Mr. Jackson?
    Mr. Jackson. Thank you very much. I think I can speak to 
that, and I appreciate those comments.
    You know, for us, 45Q was certainly a significant step. I 
think not only the enhancements that were created out of 45Q, 
but the longevity created investible projects, both for 
technology and ultimately CCUS.
    I think we agree that R&D in the technology and especially 
from the capture can do a lot to promote the available low-cost 
supply of CO2 that we can ultimately use in a 
productive way.
    Beyond that, we think R&D around utilization is important. 
So today we talk mostly about enhanced oil recovery, but I 
think for this to collectively work, more utilization 
opportunities should exist.
    The Chairman. Outside of EOR?
    Mr. Jackson. Exactly.
    And ultimately what that does is create not only the 
source, but the sink, as we've described it, which enables 
infrastructure.
    And so, for us, we look today and we believe there are many 
commercial projects that are ready to go with available 
technology. We're looking at projects in the Midwest with 
ethanol, very low cost of capture and really the enabling 
source will be infrastructure.
    So again, lowering cost, increasing utilization, but 
ultimately creating this infrastructure for us, we see very 
near-term capabilities with CCUS at large scale.
    The Chairman. Others? Mr. Harju?
    Mr. Harju. Yes, thank you.
    I would certainly concur with appreciating remarks, but one 
thing that we see that under today's guidance the 45Q credit 
can be challenging for some to claim. And we're encouraged by 
the solicitation of comments that IRS has recently announced, 
and we're hopeful that some malleability in terms of the means 
by which one would document secure geologic storage can come to 
the table.
    The Chairman. Okay, good to know.
    Mr. Goff?
    Mr. Goff. Two things to add here.
    One, one of the reasons we think 45Q is such a critical 
incentive is it allows you to learn by doing and by building 
two or three of the same technology, you know, in a row, you 
really can drive down capital cost that allow you to build that 
without that incentive anywhere in the world.
    And then secondly, on Richard's point on infrastructure, 
the way we view the carbon capture industry, what's good for 
one technology is good for everyone else. Anytime someone 
builds a carbon pipeline or has a carbon offtake, that's 
somewhere where we look to develop a project. So anything that 
we can do to develop more carbon projects, to build more carbon 
pipelines. We currently have 5,000 miles of carbon pipelines. 
We need more. Then it helps us build projects on top of that 
and, you know, develop an entirely new industry around using 
carbon.
    The Chairman. Dr. Friedmann?
    Dr. Friedmann. Thank you.
    If I may add, first, quickly to underscore two of the 
points that have been made. One of them is, again, on this 
infrastructure issue. We could get about 40 million tons of 
carbon dioxide underground today if the pipelines existed, and 
they don't. Second is capital treatments. That's really 
essential. These are big capital projects, and it's hard to get 
your return on these things.
    But it doesn't just have to be something like the 45Q tax 
credits. There's ITCs. There's Economic Opportunity Zones. 
There's accelerated depreciation. There's lots of tools that 
could be used potentially to improve the capital profile of 
projects like this and help get more of them into market.
    The one I would add to that though is that we have a few 
bills already floating around Congress that can deal with some 
of these things. The USE IT Act is the most obvious of these in 
terms of helping to accelerate pipeline deployment. We have 
Senator Smith's Clean Energy Standard that was put on with 
Representative Lujan.
    Those are all things that can really substantively 
contribute to getting this technology to market. And it's 
entirely, in my mind, the costs and the technologies are 
already in a pretty good place. They certainly could be better, 
but it's really about finance now. These projects can't be 
financed readily, and that's where the policy support will 
prove most important.
    The Chairman. Thank you.
    Senator Manchin.
    Senator Manchin. I am going to defer to my ``carbonated'' 
friend, Senator King.
    Senator King. Thank you. I have an Armed Services Committee 
meeting coming up.
    I want to provide a visual coda to the Chair's very 
thoughtful introduction and that is, why are we here? I am 
going to have one that will show it a little bit better. But 
this is 10,000 years of CO2 in the atmosphere. It is 
a little hard to see because the hockey stick is so steep, but 
where we are is at the very top of the chart now.
    [The information referred to follows:]

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    Senator King. You can see we have gone from an average of 
about 240 parts per million 10,000 years ago to 415 last week.
    Here is another one that, I think, puts it in even more 
perspective. This is 800,000 years of CO2 in the 
atmosphere. And what it shows is yes, there are variations over 
time, but we're now, again, where the red arrow is, at a place 
that we haven't been for three million years.
    [The information referred to follows:]

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    Senator King. The last time we were at this level of 
carbon, the oceans were 60 feet higher and there were jungles 
in Alaska--that is why there is oil there.
    So we are really in a very dangerous place, literally. We 
have never been here before in terms of human history. So I 
just think it is important to--I am a visual learner--to see 
where we have been for 800,000 years and where we are now. And 
it really makes this hearing, I think, a very important hearing 
and I commend the Chair and the Co-Chair for bringing this 
forward.
    My question is, what is our target? I think one of you 
mentioned, several of you have mentioned, 24 metric tons and 
300 metric tons. How many metric tons of carbon are released 
every day or every week or every year in the world? I mean, we 
need to know. I need to get a feel of what the target is.
    Doctor?
    Dr. Friedmann. So if it's just CO2, right now 
we're emitting 34 billion tons of CO2 every year. To 
give you a sense of scale, one billion tons is twice the weight 
of all the human beings on earth. So we're emitting 70 times 
the mass of humanity every year in terms of CO2. 
When you add the other greenhouse gases, it's 53 gigatons of 
CO2 equivalent.
    Senator King. So that is the target.
    What this chart tells us is we could go to zero emissions 
tomorrow, and we are still in a hell of a mess. And we have to 
start talking about not only controlling emissions, which is 
urgent, but also pulling out what is already in the atmosphere. 
Is that technology at a place where it is becoming economically 
feasible?
    Dr. Friedmann. Yup, the National Academy has just wrote a 
very substantial report on this. It looked at all of the 
pathways for CO2 removal, including natural pathways 
like forests and----
    Senator King. Forestation?
    Dr. Friedmann. Bio energy with CCS, including ethanol and 
direct air capture and mineralization. They also looked at 
carbon storage as something that encourages or makes all of 
that possible.
    The short answer is given today's technology basket, the 
U.S. can't get there. So we need to expand and accelerate.
    Senator King. Therefore, R&D.
    Dr. Friedmann. Therefore, R&D on all of them. And they 
proposed a budget of about $900 billion a year across all of 
those technology pathways, in multiple agencies, including the 
Department of Energy in the Office of Fossil Energy and USDA.
    Senator King. You said $900 billion?
    Dr. Friedmann. I'm sorry, $900 million, my apologies. That 
was a mistake, please amend the record there. So less than $1 
billion a year.
    Senator King. But this is one of the most significant areas 
of research. It seems to me that this and energy storage are 
the two great challenges that we have to face.
    My second question is, and I think you answered this in 
your discussion of projects, can this be done economically? How 
many cents per kilowatt-hour does it add to the cost of the 
power that plants are producing? Is it one cent, two cents, 
three cents? I used to be in the energy business, and I think 
in terms of cents per kilowatt-hour.
    Mr. Goff. So for NET Power, we're a bit different because 
carbon capture is inherent in our system so we can't not 
capture it. And for us we don't think there's going to be any 
premium.
    Senator King. So your energy can be sold competitively with 
other garden variety natural gas plants or----
    Mr. Goff. At the same cost or lower.
    The thing that gives us an advantage is we don't only sell 
power. We're competing against power plants to make all that 
money selling power. We sell CO2. We sell Argon.
    Senator King. You have a second line of revenue.
    Mr. Goff. We've got four revenues, yes. Argon, nitrogen, 
CO2 and power.
    Senator King. Sir?
    Mr. Jackson. I just wanted to underscore the first four. I 
think when we looked at this from a strategic level we came to 
the same conclusion. We made, obviously, industrial capture 
holds tremendous promise for the world when you think about 
exporting technology and how do you impact this globally, I 
think, industrial capture can absolutely do that.
    But we realized to make significant impact on reduction of 
atmospheric greenhouse gas, direct air capture held tremendous 
promise. So we made an investment in carbon engineering, a 
direct air capture technology and we're excited about the 
viability of that technology.
    I think, the other thing I wanted to point out earlier, is 
I think this is a great example of partnership and we view it 
across value chains.
    So, you have the capture technology. You have the 
transportation component which we've talked a lot about.
    Yet the utilization and I think where you can come 
together, you know, a company like ours can work with NET Power 
or can work with carbon engineering in a direct air capture 
plant and we can find value. How do you finance it? How do you 
construct it? How do you put the business purpose together? And 
so, we're very excited about what we think is coming over the 
coming years on both sides of that solution.
    Senator King. Madam Chair, the only thing I would add is 
that this has to be international.
    The Chairman. Absolutely.
    Senator King. We have to. If we develop these technologies, 
they should be shared because we can do everything in the world 
here, but if it doesn't happen in India and China, we are not 
going to deal with this problem.
    So I appreciate very much your being here and hope you can 
continue to inform the Committee on this incredibly important 
subject.
    Thank you.
    The Chairman. Senator King, I will allow you a little bit 
of an extension of time if you want to ask that very pressing 
question about what are we doing with technology sharing?
    Somebody mentioned that China has one of the operating, or 
I don't know whether it is commercialized. It was you, Dr. 
Friedmann. You said here in the United States we have eight. 
China has one. What are we doing on technology sharing for 
this?
    Dr. Friedmann. I'll defer to Assistant Secretary Winberg, 
first.
    Mr. Winberg. So there are a number of efforts that the 
Department of Energy is engaged in.
    One is the Clean Energy Ministerial which is countries from 
all over the world. In fact, in a couple weeks, Secretary Perry 
will be attending that meeting up in Vancouver. There's also 
the Carbon Sequestration Leadership Forum. So there's a number 
of venues that we're working through to commercialize, to share 
technology, to share best practices, not only in capture, but 
also in the movement of CO2 and, of course, storage.
    Senator King. This may be the one place where we want the 
Chinese to steal intellectual property.
    [Laughter.]
    No.
    Mr. Winberg. Well, I don't know that I'd go that far, sir, 
but----
    Senator King. Just saying.
    Mr. Winberg. ----the Chinese are moving forward on this as 
well.
    But it takes a whole suite of technologies and, from 
capture technologies, reducing the cost is important. We've 
talked about direct air capture, very important, but there's, 
it's a concentration difference.
    What's coming out of a coal-fired or natural gas stack, 
coal-fired stack is 140,000 parts per million versus 400 parts 
per million in the air that we breathe.
    So the low hanging fruit is capturing the CO2 at 
the source, at the stack, if you will. But direct air capture 
can be utilized geographically, broadly. It's expensive. We are 
working on a number of technologies to bring that cost down. 
But it is a suite of technologies.
    Senator King. I would urge the Department to work as 
cooperatively as possible with the international partners. This 
is a worldwide problem, and it deserves a worldwide 
concentration of effort.
    Mr. Winberg. Yes, sir, we are.
    Dr. Friedmann. You may be pleased to know that the Clean 
Energy Ministerial is, in fact, an essential platform and the 
DOE is showing real leadership on pulling that together.
    The International Energy Agency is now the organizing 
secretariat for the CCUS mission and, in fact, Director Birol 
is passionately committed to that and has raised that to make 
it part of that Ministerial.
    In addition to that, there is a CCUS Knowledge Centre based 
out of Saskatchewan. They share the engineering data and 
geological data from the results of their project at Boundary 
Dam and Petra Nova is party to that, as are other projects.
    The International Energy Agency's Greenhouse Gas 
Secretariat publishes exhaustively on this topic and shares 
results widely through a network. And there are many bilateral 
agreements as well between the United States and Norway, the 
United States and Netherlands, United States and the United 
Kingdom and in China and Japan. This is work that's being done.
    When I served in government I learned, much to my dismay, 
that the U.S. didn't set policy in other countries.
    [Laughter.]
    And as a consequence, we really have to approach any 
country and any opportunity as a potential partnership and 
really trying to figure out how to meet them on their terms and 
understand where they live. India is in a very different place 
on this technology than the Netherlands, and we have to 
understand and conscious that if we want to make progress.
    One last word, we should be engaging the international 
financial community on this topic. We should be meeting in 
Davos. We should be raising it in those kinds of platforms as 
well.
    Senator King. Thank you.
    Thank you, Madam Chair.
    Mrs. Lagano. I'd actually like to add----
    The Chairman. These discussions are going on in the Arctic 
sphere, in the international forum and what we need to be 
thinking about in terms of financing.
    Dr. Friedmann. Both the Arctic Circle and----
    Senator King. Mr. Harju used a term that I don't think ever 
has been used in these halls before. He used the term malleable 
in the same sentence with IRS. I don't think that has ever been 
done.
    [Laughter.]
    The Chairman. Quotable.
    Mrs. Lagano.
    Mrs. Lagano. Yes, thank you.
    So I'd like to point out from Petra Nova's perspective CCUS 
is already an international effort with our partnerships 
between American companies and Japanese companies, JX Nippon, 
as well as lending from the Japanese bank, NEXI, and JBIC. And 
we agree that given the global effects of climate change that 
it is not only good business, but it's essential that this 
technology be exported.
    And at Petra Nova we have hosted hundreds of visitors from 
around the world that are interested in the technology that we 
deployed. So we think Petra Nova is an example of how this 
already is a very extensive international effort.
    The Chairman. Dr. Cassidy.
    Senator Cassidy. Hi, Mr. Winberg. I just came back from 
Louisiana with President Trump. We looked at Sempra sending so 
much natural gas around the world. If I can quote the 
President, ``Put a big, big, beautiful plant.''
    So it is clear that gas is going to play a major role, not 
just in our energy generation but that which is around the 
world.
    Now a lot of our CCUS seems to be focused upon coal, so 
what is DOE planning in terms of research to take CCUS and 
apply it to natural gas as opposed to coal?
    Mr. Winberg. Thank you.
    Virtually all of the technology, the capture technology, 
that we've been developing is equally applicable to natural 
gas.
    Senator Cassidy. But I am told the chemistry is different, 
so there are challenges with gas that is not present with coal.
    Mr. Winberg. There's some different constituents between 
coal and gas, in the coal and natural gas exhausts, but that 
can be accommodated for. It's also more dilute stream in 
natural gas.
    We are issuing a $30 million FOA for a feed study for 
carbon capture and that will be one for coal and one for 
natural gas. Also the National Carbon Capture Center that we 
run with Southern Company is installing a natural gas facility 
so that carbon capture technologies can be tested down there 
using natural gas. They could also be tested using coal.
    The other comment that I would make, or the other thought I 
have, is on the sequestration that a molecule of CO2 
from coal or gas doesn't really care whether how it's put into 
a pipeline or where it's sequestered. So, the activity that we 
have done in the area of sequestration subsurface 
characterization is equally applicable to natural gas.
    Senator Cassidy. Got it.
    So let me ask though, the knock on CCUS for coal is that it 
detracts from the energy production and/or raises the cost of 
operating the plant. What impact does carbon capture have upon 
the cost basis of the energy produced by a natural gas, say, 
combined cycle plant or a traditional plant, two different cost 
bases and/or what is the detraction from the overall energy 
output or the efficiency of energy production?
    Mr. Winberg. There's a capital cost and there's an 
operating cost associated with CCS on natural gas, not the case 
necessarily with an Allam Cycle, but with a conventional 
natural gas combined cycle, there is.
    But with the 45Q and the opportunity to capture that 
CO2 and then use it for enhanced oil recovery, 
there's a $35 per metric ton tax credit, and if it's 
sequestered in deep saline formation there's a $50 tax credit.
    In the EOR space we're quite confident----
    Senator Cassidy. So, wait a second. You are telling me that 
which would offset the cost.
    Mr. Winberg. Yes, sir.
    Senator Cassidy. But how much would be the cost and/or the 
decrease in efficiency if you apply this technology to natural 
gas? Do you see what I am saying? Because clearly there is a 
cost because you are telling me well, we need the 45Q and the 
$50, et cetera.
    Mr. Winberg. Probably about a 20 percent decrease in the 
efficiency of the natural gas combined cycle because of the 
parasitic power you need.
    Senator Cassidy. Okay. That is significant.
    Mr. Winberg. Yes, sir.
    Senator Cassidy. Do you need any additional authorization 
from this Committee to further the--because you mentioned that 
there is some of the same stuff you are doing for coal that can 
also be applied to natural gas--but do you need more resources 
to more robustly build this out?
    I just say this because, again, the U.S. feedstock is 
increasingly natural gas and as I see Sempra, Venture, 
Magnolia, Cheniere and others shipping this gas around the 
world and we share technology, that research wants to be 
furthered.
    Do you need this Committee to do more in terms of 
facilitating that research?
    Mr. Winberg. We could always use a little bit more money.
    [Laughter.]
    Senator Cassidy. You sound like my daughter.
    Mr. Winberg. But I think the portfolio of technologies that 
we have under development right now is adequate in both the 
coal and the natural gas space.
    One of the concerns or issues that has been raised by my 
fellow panel members is, of course, the infrastructure, perhaps 
not the domain of this Committee, but infrastructure to a 
CO2 pipeline infrastructure to be able to move the 
captured CO2 into those areas where it can best be 
used for enhanced oil recovery or for storage.
    Senator Cassidy. Now I am from Louisiana so we actually 
have that--Denbury has a pipe that goes down 190. That is 
pretty close. Now granted, it is coming from Jackson, 
Mississippi, but it is close to our industrial base. So it 
theoretically could be addressed----
    Mr. Winberg. Yes, sir.
    Senator Cassidy. ----with just a little bit of add-in.
    Mr. Winberg. There's about 5,000 miles of CO2 
pipeline currently in the United States. There's some estimates 
that we need anywhere from 10,000 to 30,000 miles if we're 
going to make significant reductions in CO2 
emissions from fossil energy sources.
    Senator Cassidy. Okay.
    Well, I am over time. I yield back. Thank you.
    The Chairman. Thank you, Senator Cassidy.
    Senator Manchin.
    Senator Manchin. Thank you, Madam Chairman.
    In a perfect world, which we do not have, people are taking 
one side or the other. I think there is an elimination 
mentality.
    You all can help us immensely, basically, to understand 
what we are dealing with. There are people, and I would say 
probably the scientists and experts, a lot like yourselves, who 
might be on the other side of the fence thinking that we should 
not be doing and talking about carbon capture because we should 
be moving to other fuels. So you wouldn't have to have carbon 
capture. There is that type of a thought process.
    You all are speaking on the reality in the terms of what is 
happening in the world. It is not just in America. It is called 
global climate. It is not called North American climate or the 
United States climate. They have to understand what is going 
on, and we have to do something about it to save the planet. I 
talk to people all the time about it. They say global climate.
    Well, in terms of biblical time spans, it is Old Testament, 
New Testament, it has always been climate change. But when you 
talk in scientific terms, as far as the last century, there is 
no doubt that humans, as I think Senator King's diagram there 
showed, humans have had a tremendous impact. And it is up to 
us.
    So I keep thinking we need carbon capture and 
sequestration. We are talking about 30,000 miles of pipeline on 
and on and on. Is there not feasible technology that can 
solidify carbon, solidify the waste stream? We have to take the 
gas as we turn it into liquid now. Can it not be solidified to 
be used in a different form so you don't have to transport it? 
I am thinking outside of that.
    Next, I would ask the question, if the clear air or clear, 
you know, we call it what, direct air capture? If that is put 
in the area near a power plant rather than retrofitting a power 
plant, trying to take clear stream carbon off and liquefying 
it, is that more cost-effective, or could it be? Is there any 
type of technology that has been experimented with?
    Anybody? Whoever? Dr. Friedmann, do you want to start? And 
then Mr. Jackson, come in.
    Dr. Friedmann. Yeah, so let me answer your last question 
first.
    Because you're dealing with a more dilute stream of 
CO2 from the air as compared to any other fluid 
stream--this is what Assistant Secretary Winberg mentioned--
direct air capture is always borne more expensive.
    Senator Manchin. Gotcha.
    Dr. Friedmann. Many people suggest that that means we 
should do CCS before direct air capture. I would say the 
opposite. This is a yes/and and not neither/or. We need to 
develop both of these technologies, because we need them both 
and we need them in spades.
    With respect to your other question about solidifying 
CO2, the near-term application for that is actually 
turning CO2 into cement and concrete.
    Senator Manchin. Yes, I know.
    Dr. Friedmann. And there's good technologies to do that now 
and those companies are scaling fast. It is possible to turn 
CO2 into carbon black which we use to make tires and 
that's a durable carbon into carbon nanotubes. There's, maybe, 
a dozen companies out there who are working on similar 
technologies.
    Senator Manchin. That is not through solidification or----
    Dr. Friedmann. Yeah, it's conversion basically, but it's 
turning into a solid building material and a solid feedstock, 
all of which is good.
    Senator Manchin. So that is all doable? That technology is 
there now?
    Dr. Friedmann. It's not--those technologies are not yet 
commercial. The cement and concrete is. The others need some 
help. And actually, it's part of the reason why a 
CO2 utilization line in the DOE's budget is so 
valuable.
    Senator Manchin. Okay.
    Mr. Jackson?
    Mr. Jackson. May I just, a few points?
    Senator Manchin. Sure.
    Mr. Jackson. You know, I think when we look at 
technologies, we view it over different time horizons and it 
is, it should be a competitive space to make great commercial 
technologies, low carbon technologies. And so I do think it 
takes all-of-the-above and we certainly support that.
    I think, when you look at an example of a direct air 
capture plant near a gas plant, there could be different time 
horizons. I think, you know, when you look at a technology like 
NET Power and envision CO2 infrastructure, I think 
you can look forward to placing, if you're going to place new, 
industrial centers anywhere in the world, it should be near 
utilization or infrastructure.
    I think the way you get to the products that you described 
is through available low-cost use. And I think, you know, 
there's obviously transportation costs that come on the back 
end of that product as well. And so oftentimes you need that 
infrastructure to get it to a point where their marketing 
capability and cost is low as well.
    Senator Manchin. Thank you.
    Mrs. Lagano, if I can?
    First of all, I want to thank you. I was able to come to--
and you all were so kind. I have been to Petra Nova, and I have 
seen what is feasible.
    I was concerned about the cost. And basically, with the 
Federal Government's help, DOE and everyone's help with that, 
it still makes it quite challenging. I was also concerned that, 
even with the enhanced oil recovery, it is still not a viable 
project financially.
    Mrs. Lagano. So, thank you.
    Senator Manchin. So I am concerned about that. Have we 
advanced and learned enough off of Petra Nova how to do it and 
make it more cost-effective? Because give me the oil recovery 
in the fields you have entered into before and after the 
injection.
    Mrs. Lagano. Yes, so thank you, Senator Manchin. It was a 
pleasure to have you. We're extremely proud of the project, and 
we love to have visitors come.
    Senator Manchin. Well, you should be. It is wonderful. And 
I will tell you, I would recommend if you have not been to 
Petra Nova, go see it. Go ahead.
    Mrs. Lagano. So oil recovery, enhanced oil recovery, is a 
very important part of the economics of Petra Nova in terms of 
the revenues that it generates.
    Senator Manchin. Cost.
    Mrs. Lagano. So there are a few revenue streams----
    Senator Manchin. How much did you enhance the field by, 
just explain that? How many barrels were you getting out of the 
field before you started injecting?
    Mrs. Lagano. So less than 100 barrels a day, perhaps.
    Senator Manchin. And where are you now?
    Mrs. Lagano. And multiples of that.
    Senator Manchin. I thought you were on 3,000 or 4,000 
barrels now?
    Mrs. Lagano. We're up from that.
    Senator Manchin. It is hard. You would think that would be 
economically beneficial.
    Mrs. Lagano. Yes, so no question that it's working and that 
is a focus of ours is to maximize the oil revenues from the 
fields.
    And one thing that's interesting about this project, when 
we talked about, Senator Murkowski talked about, what you learn 
from specific locations. So in this specific location we are in 
the Gulf Coast as opposed to the more conventional formations 
in geology of the Permian Basin where we see a lot of EOR. So 
we're learning very much every day about enhanced oil recovery 
in the Gulf Coast and solving the challenges that we encounter 
in that geology. That's an important learning experience 
because if we can optimize and maximize oil recovery in new 
formations, then it opens up the fields of potentially other 
areas where CCUS can----
    Senator Manchin. Just one final comment on that.
    How much resistance do you all run into when you talk about 
carbon capture?
    Dr. Birol told us the two things that basically could help 
decarbonize and start helping the global climate would be nukes 
and CCUS. The two fastest, quickest, most cost-effective things 
we can do to decarbonize rather than just total elimination, 
which they are not going to do and we know that. But speaking 
in terms of reality, how much push back are you getting talking 
to your friends and colleagues that maybe have another point of 
view in this?
    Mr. Goff?
    Mr. Goff. So our experience on this is we haven't faced 
nearly any resistance but there isn't nearly enough focus. I 
think people are used to focusing on technologies that have 
been around for longer. Solar and wind are----
    Senator Manchin. I am talking about the concept of the new 
green deal and the reality of what it takes to be green.
    Mr. Goff. Yeah, so we, I think with NET Power specifically, 
are confident that we're going to get there with our, you know, 
friends on the environmental side of things that carbon capture 
is necessary, but that certainly remains to be seen.
    The Chairman. Thank you, Senator Manchin.
    Senator Daines, we have had a great conversation here 
today.
    Senator Daines. I can see that.
    Chair Murkowski, Ranking Member Manchin, thank you for 
holding this very important hearing. As a co-sponsor of the 
EFFECT Act, I want to thank the Ranking Member. Senator 
Manchin, I want to thank you for your leadership in this area 
and highlight the need for more investment in CCUS.
    I think we have a great opportunity, not just investing in 
clean technology but also in our communities and these good-
paying jobs that coal power plants create, very important for 
Montana, for our country.
    As many in this Committee have heard me say before, the 
Colstrip Power Plant in Montana is one of the largest coal-
powered plants west of the Mississippi and one of the largest 
economic drivers in Montana. A tremendous source of jobs, of 
reliable low-cost energy, importantly, part of our tax base in 
Montana that is critical.
    I believe that it shares a lot of similarities to the Petra 
Nova site and is thus uniquely situated for further investment 
and innovation. Of course, Montana has more recoverable coal 
than any state in the United States. Colstrip, like Petra Nova, 
is a large-scale coal plant that with a new pipeline can gain 
access to a nearby active oil field. We are out in the 
proximity of the Bakken. There is also strong support from the 
community and interest from stakeholders to utilize the carbon 
from Colstrip for EOR activities.
    Mr. Winberg, the EFFECT Act creates additional investment 
opportunities in the DOE for carbon capture programs and 
demonstrations that I discussed with DOE before in this 
Committee, and I believe Montana is a perfect location for more 
investment by the Department of Energy.
    My question is, do I have your commitment that DOE will 
work with me, with the Colstrip community and the owners to 
find opportunities for investment in Colstrip like those 
created in the bipartisan EFFECT Act?
    Mr. Winberg. Yes, sir, you do have the commitment. In fact, 
the Department of Energy, the Fossil Energy Office, has been 
working with the Colstrip owners and operators. We've done two 
studies to date. One of those studies was to evaluate ways to 
improve the efficiency of the Colstrip power plant and, of 
course, when you improve the efficiency, you reduce emissions. 
So that's key. And also, the second study that we did evaluated 
CCS opportunity for, as you say, enhanced oil recovery and I 
believe that was to a southeast Montana oil field.
    So yes, you have my commitment. We're happy to work with 
Colstrip to see what opportunities there are to keep the plant 
open, reduce its emissions and provide a value stream for 
enhanced oil recovery.
    Senator Daines. Thank you. I appreciate that.
    Mrs. Lagano and Mr. Jackson, you have both have gone 
through the process of finding and attracting investors and 
securing DOE commitments. What are some of the steps that you 
took to secure the investment by DOE and outside partners and 
how might we replicate that in Montana?
    Mrs. Lagano. Yes, I'd love to start. So thank you, Senator 
Daines.
    So in Petra Nova's case, the steps, the very important 
steps. First off, starting with authorizing the program. Then 
second, funding the program. Then competing for the funds and 
winning. And then, doing our homework, homework on the 
technology and the options. Then formulating strategic partners 
and those are partners that have vested interests similar to 
yours or maybe different than yours, but they must have a 
vested interest in the success of the project. And then, 
execution, so project execution because we know with funds 
comes a responsibility to spend those funds and stay within 
budget and keep within schedule. So those are very important 
steps. Each one has to be done with precision and has to be 
done in a way in which the goal is to turn the funds into a 
successful project on time and on budget.
    Senator Daines. Thank you, Mrs. Lagano.
    Mr. Jackson?
    Mr. Jackson. Yes, thank you for the question.
    I think, yeah, I'm going to build upon the partnership. I 
think the DOE, other industries, even our peers have been 
essential in putting together commercial projects to look at 
and move forward. So I think 45Q is a tremendous step that gave 
confidence to investors, because we deployed capital that's 
beyond our corporation. So that's been important. I think now 
it's putting these projects together. It's making it happen and 
put it together.
    We do think technology--and we appreciate the initial 
question--technology on reducing cost of capture is important 
and will help scale this.
    And again, as we've mentioned before, infrastructure.
    The last comment I'll make with respect to new and 
different areas for CCUS, one opportunity that we found moving 
into this over the last year and based on our long history in 
enhanced oil recovery, is technical partnership.
    So we actually, part of the team that I lead, opened a 
group that does just that, where there may be an industrial 
source that does not have the capability to look at the 
technology around capture or sequestration and we believe it is 
a good business but it's also helpful for global CCUS to 
promote that capability beyond ourself.
    Senator Daines. Thank you.
    And just one follow-up. Are there any obstacles that you 
encountered as you moved through this process? Perhaps lessons 
learned you might share for a plant that is interested in a 
similar investment and how might the EFFECT Act help achieve 
that goal?
    Mr. Jackson. I do think the technology cost needs to 
continue to come down. So that's a very important initial 
hurdle.
    I think the investability of a project, meaning well 
understood application of 45Q tax credits across a business 
structure as we put together these projects, will be critical.
    So as we bring more projects to the table, that will really 
enable this to happen.
    Senator Daines. Mrs. Lagano?
    Mrs. Lagano. Yes, and I think on the R&D front what we 
learn in our application, for example, in the first of a kind, 
large scale you would imagine you'd have to build in some 
margin into that design because of uncertainty, no one has done 
it before. We engineer it. We study it. But, you know, until it 
actually is put in service, then we see how it actually 
performs.
    Once we know that, then with the next generation, the next 
application, perhaps we can take some of that margin away and 
drive the cost down that way. You know, for example, the 
absorber which is a 300-foot tower. It's a vessel onsite. It's 
the largest vessel onsite. It's a very important piece of 
equipment because that's where the amine, you know, extracts 
the carbon from the flue gas. So if you could drive that cost 
down 10 percent, 20 percent, that's a very important 
advancement such that the learning from the experience that we 
had, we can reduce that cost going forward of the overall 
capital cost. That's very meaningful.
    Senator Daines. Right. Thank you.
    Chair Murkowski, Ranking Member Manchin, again, I want to 
thank you both for your leadership in this area and Senator 
Manchin, particularly, thank you for getting out in front of 
this issue.
    It is very important, I know, for your state, for my state 
and for this country. Thank you.
    The Chairman. Thank you, Senator Daines.
    Senator Manchin, I know you are running off to another 
committee, but if you would like to----
    Senator Manchin. What we are concerned about, Mrs. Lagano, 
is the 45Q tax.
    Mrs. Lagano. Yes.
    Senator Manchin. Okay, 45Q tax credit, do you qualify for 
that?
    We talked and you said there were some concerns you had. We 
had to make some adjustments for some--like Petra Nova is 
already out there and running.
    Mrs. Lagano. That's right.
    Senator Manchin. And you are not financially viable right 
now if it was not for the commitment you all have made. Another 
company might just walk away from Petra Nova.
    Mrs. Lagano. So, and we're encouraged----
    Senator Manchin. Financially, I mean.
    Mrs. Lagano. Yes, and as was mentioned on the panel earlier 
that there is a request for comments on how the 45Q tax credits 
can be implemented in a way that provides flexibility for 
operating projects such as Petra Nova and other projects for 
eligibility for and receipt of the credit and how that could be 
monetized. We are working with and providing comments on that, 
because it is important for us to access that.
    Senator Manchin. Well, the deadline is 2024.
    Mrs. Lagano. Yes, it is, right, Senator.
    Senator Manchin. And we know that is not--we are looking at 
extensions on that, and I think we have talked about the 
extension.
    But if you don't qualify and don't get the 45Q tax credits, 
will it put you all in jeopardy at the plant?
    Mrs. Lagano. Well, it's an important net part of the 
economics of the plant and we expect to be able to get that, 
but we need to straighten out some of these administrative 
issues such that we can access and receive the credits.
    Senator Manchin. And you all are working with our staffs?
    Mrs. Lagano. Yes, yes, with Treasury, the IRS and the EPA.
    The Chairman. Thank you. Thank you, Senator Manchin.
    Senator Hoeven.
    Senator Hoeven. Thank you, Madam Chairman.
    Secretary Winberg, in North Dakota we have Red Trail Energy 
which is an ethanol plant that wants to capture CO2 
and put it down a hole to make it. I think they are looking 
primarily just at storage, not tertiary oil recovery, but to 
have low carbon fuel for the West Coast. So that is an example 
of renewable energy that wants to utilize carbon capture. Then 
we have Project Tundra which is an existing coal-fired plant 
adding back-end capture on CO2. They want to put 
CO2 down a hole actually for tertiary oil recovery, 
and they are partnering with oil companies to do that. Then we 
have Allam Cycle which wants to build a new plant to do carbon 
capture. In all cases we have the State of North Dakota that is 
putting up money to do it.
    Well, let me start here. In each case we have the companies 
themselves and a consortium of companies putting up a lot of 
money to do this. They can do it technologically. We have to 
get the commercial viability. The companies themselves are 
putting up a lot of money and not even individually, actually 
grouping together to put up money. The State of North Dakota, 
through the Lignite Energy Council, is putting up money. 
Private sector partner, state partner. What partner is missing 
from that equation? If you guessed Federal Government, that is 
the right guess.
    So we need you in these projects. Tell me which funds and 
how you are going to invest in these projects so we can get 
going, because we have been talking about carbon capture 
forever.
    I would like to actually--and you talked about some 
projects that are going. It seems to me we have to do some 
more. How do we get that going now so we are not just talking 
about it this year, we are doing more of it?
    Mr. Winberg. We've had a longstanding relationship with, 
the Department of Energy, had a longstanding relationship with 
EERC.
    With respect to Red Trail Energy, we have a funding 
opportunity notice that we released April 1st of 2019. It's 
titled, Regional Initiative to Accelerate CCUS Development. We 
typically don't advise private entities on whether or not they 
should bid. This is a competitive----
    Senator Hoeven. Of course.
    Mr. Winberg. ----notice and so, certainly they could bid on 
this and I know that EERC has a working relationship with----
    Senator Hoeven. Now which funding, which one of the funds 
is that, Secretary?
    Mr. Winberg. It's called the Regional Initiative to 
Accelerate CCUS Development.
    Senator Hoeven. Great. And that is now open and again, an 
open, fair, transparent, competitive bid, that is what we want.
    Mr. Winberg. Yes, sir.
    Senator Hoeven. But I just want to know we are going to 
get, our guys are going to get, a shot at it. And that is 
available now?
    Mr. Winberg. It is available. It closes on June 3rd.
    Senator Hoeven. Fantastic.
    Now tell me about for the Project Tundra, the back-end 
capture and for a new plant. Which funds? Where are you at in 
the process for those?
    Mr. Winberg. There's a $30 million FOA that has closed now 
and so, we're in a procurement sensitive period. I think you 
could talk to John Harju about whether they submitted a 
proposal or not.
    Senator Hoeven. Right.
    Mr. Winberg. But so, there's that.
    And we've also been very active with EERC on CarbonSAFE as 
well as the PCOR Partnership. So it's a longstanding 
relationship with millions of dollars that have gone into the 
State of North Dakota.
    Senator Hoeven. Well, that is----
    Mr. Winberg. And mostly because the State of North Dakota 
has been a good partner with the Department of Energy.
    Senator Hoeven. Yes. Well, and that is the key.
    I just want to know that you are getting it going. It 
sounds like you are. I appreciate it.
    But you know, we have been talking, there has been a lot of 
talk about this and I just think we have to do a lot more 
``do'' on it. I am very encouraged that you are getting these 
things going.
    John, are you--any thoughts in terms of how the process is? 
Is it moving along well now with DOE and the way it should be, 
and are we going to get to the ``do'' instead of just the talk?
    Mr. Harju. Yes, sir, I'm confident that we will.
    Senator Hoeven. Good, alright.
    Then the other question I have for you. Again, thank you, 
Secretary, I appreciate it.
    The other question I have for you is 48(a). We are trying 
to reconcile EPA regs and IRS regs when we put CO2 
down a hole for tertiary oil recovery, and we have had some 
challenges there. It is one thing to put CO2 down 
for geologic storage and we have the regulatory regime in North 
Dakota to do that, not only while they are doing it, but post, 
when they are no longer doing it. They pay into a trust fund 
and then the state, ultimately after ten years, takes 
responsibility. So that regime is there to handle geologic 
storage.
    But remember, we are trying to get to commercial viability 
so we can create a revenue stream that really helps these 
companies. To do that, they have to qualify on these wells, not 
only with EPA in terms of the geological storage of that 
CO2 as well as pushing the oil out, but then they 
also need to qualify for the tax credit with IRS and Treasury.
    Any thoughts, I mean, so that is legislation we are trying 
to move. I would think anybody interested in capturing 
CO2 would be all for it. But if somebody were 
interested in capturing CO2 but they really still 
were against fossil energy, they might not get on board. So any 
good advice on what we can do to reconcile those regulations 
either legislatively or through regulatory fiat so that these 
companies can capture that additional revenue stream?
    And if somebody else has a thought on that, I know I am a 
little past my time, with the indulgence of the Chair, if 
somebody else had a thought on that, I would sure appreciate it 
as well. I know Senator Gardner has immense patience, so he 
will be okay.
    Seriously, any help on that issue which, again, is very 
important when we are talking about trying to get to commercial 
viability. It is reducing costs, but it is also increasing 
revenue.
    Mr. Winberg. Right, and we've had some discussion about 45Q 
here. The IRS is working through the rules. The quicker that 
happens, of course, the quicker that a number of companies at 
this hearing can avail themselves of the 45Q tax credit.
    We've also had discussions about direct air capture. So if 
there is consideration about amending 45Q to allow smaller 
sizes for the direct air capture, that probably could be 
useful. I'm sure some of the panel members have other thoughts 
as well.
    Senator Hoeven. Any other thoughts on getting that in 
place?
    Dr. Friedmann. Yeah, two quick things.
    One of them to follow up Assistant Secretary Winberg's last 
comment. There's a new report put out by the Rhodium Group that 
proposes a set of discreet policy measures to support direct 
air capture deployment, including amendments to 45Q. They're 
very clear, very straightforward and easy to access.
    With respect to the question about how do we get more of 
this going, fundamentally? As I said earlier, really, I view 
this as a finance question as opposed to a cost question. And 
so, additional policies are valuable, and I made a handful of 
recommendations in my testimony.
    One thing that I think is important to recognize though, 
especially to those who stand opposed to deployment of carbon 
capture and storage, you have to build a partnership where 
monitoring is clear, robust and transparent. If the monitoring 
of CO2 storage is not clear, robust and transparent, 
people will have issues with that and will seek to disrupt 
projects.
    It has been our experience over the past 18 years that 
engaging communities, engaging stakeholders early, is essential 
to get there. There's, kind of, no substitute for that. And 
actually, EERC has been an exceptional example of the right way 
to go about doing that.
    And so, but I think that to recognize that if, especially, 
if you're going to be getting some kind of federal tax credit 
or something like that, if there's a public benefit that 
derives from this, then there needs to be representation of 
that to the public.
    Senator Hoeven. Right on, Doc. Well said. That is why we 
have invested incredible time and effort, in terms of both a 
legal and regulatory regime in our state, to do what you say so 
that it is accountable, not just at the company level, but 
people know the state is going to back it up, ultimately, so 
that it is done in an environmentally sound way. So I could not 
agree with you more.
    Anyone else? Yes?
    Mr. Harju. Senator, while you were out, I did take a moment 
to applaud your leadership as our Governor.
    Senator Hoeven. Wonderful, thank you.
    Mr. Harju. And putting forward those comprehensive--and 
signing them into law. But if you'll recall, you were actually 
a sponsor through the Industrial Commission of that 
comprehensive body of regulatory regime for geologic storage 
and a real champion of what turned into a long and onerous 
process of gaining primacy.
    Senator Hoeven. Yes.
    Mr. Harju. In particular, with respect to the 45Q program, 
I think there are extensions of time which Senator Manchin 
alluded to a little bit. I think there are also extensions 
regarding eligibility which Mrs. Lagano focused on a little 
bit.
    But also, on this notion of reporting requirements and how 
one certifies that storage, and I think where we're at today is 
it's a little bit clunky and we are pleased that IRS is seeking 
public comment there. But I would certainly hope that something 
like ISO or something like our comprehensive program in North 
Dakota would be an effective replacement for some of that more 
clunky regulatory oversight that we see today.
    Senator Hoeven. Thank you.
    Again, Madam Chairman, thank you for your indulgence. I 
know I went over my time, but I very much appreciate it.
    The Chairman. No, Senator Hoeven, this has been a very 
informative hearing and I think we have all gained a great 
deal.
    In fact, all of us have gone over our time, so it must mean 
that we are getting good information to the questions that we 
have asked. So I thank you for that.
    I wanted to just ask one more quick question to you, Mr. 
Harju.
    When we were talking about partnerships and all that you 
are doing there with Project Tundra, you mentioned the 
opportunity to expand the efforts that you are focused on with 
other partners and looking to Alaska. Would this be through the 
university or how do you structure that?
    Mr. Harju. Yes, thank you for the question, Senator 
Murkowski.
    So Secretary Winberg mentioned a regional initiative----
    The Chairman. Right.
    Mr. Harju. ----solicitation that is out right now.
    Thanks to Senator Hoeven's introduction to you and your 
introduction to some of your constituents, we're actively 
engaged in preparing a proposal that would broadly expand that 
nine state, four province region that we've been working on to 
include your state and what we see as some very interesting 
opportunities to not only build out this infrastructure and the 
approaches to doing CCUS projects but also to broadly increase 
that geologic or geographic footprint.
    Thank you.
    The Chairman. Well, I look forward to that.
    I think, again, there is so much that we can learn from one 
another. This regional approach, as you know, up North in 
Alaska, we have been utilizing EOR for our oil fields for 
decades now. And, you know, we feel that we have some good 
technologies in place there with the applications that we have, 
how we share that with others, and also how we can look to 
other utilizations. It was interesting to hear that we are not 
only looking at application, again, for purposes of enhanced 
oil recovery but you mentioned the prospects for cement and 
plastics and we are really thinking beyond today's application 
which, I think, is an important part of this discussion and 
just a reminder that this is all moving fast.
    While we might be a little frustrated that we are not 
seeing as much coming into commercialization as quickly as we 
would like because of the cost, because of the learning curve, 
learning these, the different applications in different areas. 
I think there can be a frustration and then you have colleagues 
like Senator King who are pointing to what we know our reality 
is with the levels of carbon that we are seeing and what do you 
do? What do you do?
    So there is a sense of urgency. We urge you to be more 
creative, more nimble, more malleable as you work to build out, 
what I think, are some very exciting opportunities for us.
    But as you are being creative, you also need to urge us to 
be responsive in what role and how the government can be a 
better partner in all of this.
    I think we recognize that we are not just there with a 
checkbook, but we are there to support levels of enhanced R&D. 
We are there to support financing opportunities through 
structures like the tax credits and like loan guarantees but 
also the whole necessity, because it truly is a necessity, for 
this partnering and not just partnering within the industry, 
not just partnering within this country, but partnering more 
broadly, more globally as we address what we know to be a 
global issue, a global problem.
    I thank you for what you have shared with the Committee. 
You have given us a lot to focus on as we think through our 
initiatives. So don't consider this input that you have 
provided today as just a one-off and then you go off and do 
your thing and you don't have any more back and forth with us. 
The whole purpose of this is that we can continue to learn from 
you.
    Thank you for your expertise, and thank you for sharing it 
with the Committee today.
    With that, we stand adjourned.
    [Whereupon, at 11:44 a.m. the hearing was adjourned.]

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