[Senate Hearing 117-569]
[From the U.S. Government Publishing Office]
S. Hrg. 117-569
EXAMINING THE DEVELOPMENT OF PROJECTS
AND IMPLEMENTATION OF POLICIES THAT
SUPPORT CARBON CAPTURE, UTILIZATION,
AND STORAGE (CCUS) TECHNOLOGIES
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
JULY 27, 2022
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Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
50-676 PDF WASHINGTON : 2023
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
THOMAS R. CARPER, Delaware, Chairman
BENJAMIN L. CARDIN, Maryland SHELLEY MOORE CAPITO, West
BERNARD SANDERS, Vermont Virginia,
SHELDON WHITEHOUSE, Rhode Island Ranking Member
JEFF MERKLEY, Oregon JAMES M. INHOFE, Oklahoma
EDWARD J. MARKEY, Massachusetts KEVIN CRAMER, North Dakota
TAMMY DUCKWORTH, Illinois CYNTHIA M. LUMMIS, Wyoming
DEBBIE STABENOW, Michigan RICHARD SHELBY, Alabama
MARK KELLY, Arizona JOHN BOOZMAN, Arkansas
ALEX PADILLA, California ROGER WICKER, Mississippi
DAN SULLIVAN, Alaska
JONI ERNST, Iowa
LINDSEY O. GRAHAM, South Carolina
Mary Frances Repko, Democratic Staff Director
Adam Tomlinson, Republican Staff Director
C O N T E N T S
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Page
JULY 27, 2022
OPENING STATEMENTS
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 1
Capito, Hon. Shelley Moore, U.S. Senator from the State of West
Virginia....................................................... 3
WITNESSES
Cassidy, Hon. Bill, M.D., U.S. Senator from the State of
Louisiana...................................................... 6
Prepared statement........................................... 8
Albritton, Jason, Director of Climate and Energy Policy, The
Nature Conservancy............................................. 9
Prepared statement........................................... 11
Responses to additional questions from Senator Carper........ 14
Response to an additional question from Senator Inhofe....... 15
Townsend, Brad, Vice President for Policy and Outreach, Center
for Climate and Energy Solutions............................... 16
Prepared statement........................................... 18
Responses to additional questions from:
Senator Carper........................................... 27
Senator Inhofe........................................... 28
Lanclos, M. Jason, P.E., Director, Louisiana Department of
Natural Resources, Technology Assessment Division, Louisiana
State Energy Office............................................ 30
Prepared statement........................................... 33
Responses to additional questions from:
Senator Carper........................................... 40
Senator Capito........................................... 41
Harju, John, Vice President for Strategic Partnerships, Energy
and Environmental Research Center, University of North Dakota.. 43
Prepared statement........................................... 45
Responses to additional questions from Senator Capito........ 52
Response to an additional question from Senator Inhofe....... 52
ADDITIONAL MATERIAL
Letter to Hon. Brenda Mallory, Chair, Council on Environmental
Quality, from Senator Capito et al., April 29, 2022............ 74
Letter to Senator Capito from Brenda Mallory, Chair, White House
Council on Environmental Quality, July 6, 2022................. 76
Letter to Senators Carper and Capito from the Portland Cement
Association, July 27, 2022..................................... 78
Statement for the Record, Carbon Capture Coalition, July 27, 2022 81
EXAMINING THE DEVELOPMENT OF PROJECTS AND IMPLEMENTATION OF POLICIES
THAT SUPPORT CARBON CAPTURE, UTILIZATION, AND STORAGE (CCUS)
TECHNOLOGIES
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WEDNESDAY, JULY 27, 2022
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The Committee, met, pursuant to notice, at 10:02 a.m. in
room G-50, Dirksen Senate Office Building, Hon. Thomas R.
Carper (Chairman of the Committee) presiding.
Present: Senators Carper, Capito, Cardin, Whitehouse,
Merkley, Kelly, Padilla, Cramer, Lummis, Boozman, and Ernst.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Let us now proceed with this morning's
hearing.
Again, I want to thank everybody who has made it, enabling
us to do that much business, thank you.
Let us turn now to today's hearing.
We are here today to discuss the potential for carbon
capture and storage to help us address climate change, create
American jobs, and support economic growth. My sincere thanks
to our Ranking Member, Senator Capito, and her staff for
requesting this hearing. It is a good idea and a timely
hearing. We are grateful for her suggestion and participation
in the hearing itself.
As all of us know, this Committee has a history of coming
together to advance solutions to some of our biggest
environmental and infrastructure challenges. I can think of no
greater challenge that we face today, as a planet and as a
Nation, than the climate crisis. We are reminded of that every
day.
The crisis is here now, and we are increasingly feeling its
impact, especially in the form of extreme weather events like
heat waves. Last weekend, roughly 85 million Americans from the
Southern Plains to the Northeast, 85 million, were under
excessive heat warnings and heat advisories. Just yesterday,
St. Louis broke its previous single day record for rainfall
from 1915. Today, much of the Pacific Northwest continues to
experience record breaking high temperatures, putting lives at
risk.
It is worth noting that extreme heat is the leading case of
weather related deaths in our country. The 20 most costly
extreme weather events last year alone resulted in the deaths
of almost 700 people in our country, according to data from the
National Oceanic and Atmospheric Administration, or NOAA.
Extreme heat is also exacerbating drought conditions across
much of the western United States, threatening critical sectors
of our economy like never before. This includes the
agricultural sector, which is important to all of our States,
and certainly to my State of Delaware.
According to the American Farm Bureau Federation, severe
drought in the West forced 40 percent of farmers to sell off
part of their cattle herds last year, 40 percent. This year,
farmers in California have been forced to cut back production
on produce such as cherries and almonds amidst the worst
drought in 1,200 years. That is years, not weeks, not months,
1,200 years.
The science is clear: Climate change is here, and these
costly extreme weather events are continuing to worsen. If we
fail to act now and support a clean energy transition, we do so
at our own peril. That is why it is incumbent upon us to
comprehensively address this issue, using all of the tools in
our toolbox.
Carbon capture, utilization, and storage, or CCUS, are
critical tools in reducing the amount of planet warming
greenhouse gases in our atmosphere and keeping global warming
below 1.5 degrees Celsius. Don't just take my word for it.
Analysis by the International Energy Agency, the United Nations
Intergovernmental Panel on Climate Change, and other respected
organizations say as much.
Last Congress, thanks to the leadership of our former
Chair, Senator John Barrasso, along with Senator Capito,
Senator Whitehouse, myself, and others on the Committee, we
enacted the Utilizing Significant Emissions with Innovative
Technologies Act. As you know, there is an acronym that goes
with that. It is called the USE IT Act. We worked together on
passing this bipartisan legislation to lower the regulatory
barriers preventing the widespread development and deployment
of carbon capture.
Today, the Biden administration's ongoing implementation of
the USE IT Act, coupled with new funding for carbon management
projects and Federal programs through the Bipartisan
Infrastructure Law, continue to support CCUS research and
deployment throughout our country. Just today, the Council on
Environmental Quality, known as CEQ, announced that it is
seeking nominations to head two new task forces required by the
USE IT Act. These task forces will provide input to inform the
responsible deployment of carbon capture, utilization, and
storage on Federal lands, the Outer Continental Shelf, as well
as non-Federal lands.
When we talk about responsible deployment of CCUS projects,
it is important to emphasize the key role that equity must play
here. I have been pleased to see that CEQ's guidance for carbon
capture projects has reiterated the need to develop robust
tribal consultation and stakeholder engagement plans, while
also encouraging agencies to prioritize environmental justice
in the development of best practices for CCUS efforts. Doing so
protects overburdened communities from the potential negative
impacts of these projects, and ultimately, helps ensure that
those most vulnerable to climate change benefit from our clean
energy investments.
Investing in carbon capture is necessary if we are going to
meet our climate goals and create economic opportunity at the
same time. Still, carbon capture alone is not enough to avoid a
future plagued by deadly heat waves, devastating storms, and
other extreme, climate related events like those that we are
experiencing right now.
We must also facilitate the widespread deployment of wind,
solar, nuclear, advanced nuclear, modular nuclear, hydrogen,
clean hydrogen, and other forms of energy. Together, these
technologies hold the key to saving our planet and creating
good paying jobs across our Nation. I hope more of our
colleagues engage in policy debates on how best to do so before
it is too late.
With that, let me thank our panel of witnesses for joining
us today. We look forward to hearing from you as part of
today's discussions.
Before doing so, let me turn to our Ranking Member, Senator
Capito, for her opening statement, and say once again, thank
you for suggesting that we have this hearing. This is a great
idea. Thank you.
Senator Capito.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you, Chairman Carper, and thank you
for calling today's hearing. I think it will be very
interesting.
This is a topic I am very passionate about, and I am glad
our Committee is having this hearing on carbon capture,
utilization, and storage, better known as CCUS.
I also want to thank our witnesses, and I see our fellow
Senator down there, all the way down there, in preparation for
introductions.
Despite what headlines suggest, climate change is an area
where we have found bipartisan solutions. Over the last few
years, the Committee has developed bipartisan legislation that
protects the interests and livelihoods of our constituents, no
matter where they live or where they work.
The EPW Committee has led the way in developing climate win
after climate win. From the Nuclear Energy Innovation and
Modernization Act in 2018 to the USE IT Act and AIM Act in
2020, to the climate title of the surface transportation bill
that was signed into law as part of the IIJA last year, we have
performed well here at EPW, both on the legislation in our
Committee and outside our jurisdiction. I want to recognize the
leadership of Chairman Carper and Senator Whitehouse in those
achievements.
When it comes to CCUS, we have secured passage of the
FUTURE Act that significantly expands the 45Q tax credit for
CCUS, enacted the previously mentioned USE IT Act to require
the Council on Environmental Quality to expedite the permitting
and development of projects, and enacted the SCALE Act to
support the transportation of carbon dioxide through additional
financing tools. These are all important pieces of legislation
now signed into law that are helping to enable a build out of
carbon capture technologies.
Groups from the Intergovernmental Panel, and the Chairman
quoted from them as well, Intergovernmental Panel on Climate
Change at the U.N. to the United States Department of Energy
have recognized that CCUS is an essential tool in reducing
carbon dioxide emissions. CCUS and other technologies, like
hydrogen and advanced nuclear, afford us an opportunity to
leverage private sector innovation in the next phase of
decarbonization. Significant further reductions in emissions
will come from private sector innovation, not top down
government mandates.
The Biden administration's support for CCUS us crucial to
deploying these technologies. In particular, I am encouraged
that the Administration has been actively working to implement
the USE IT Act. I commend CEQ for taking the recent step of
issuing draft guidance, along with a report issued last year,
but there is still so much more to do.
I wrote a letter, joined by several colleagues, to Chair
Brenda Mallory, asking that any final guidance issued by CEQ be
more explicit and detailed. While my staff has been informed
the interim guidance will not be updated based on comments
submitted, I urge CEQ to reconsider this decision. This CCUS
guidance needs to provide direction to Federal agencies that
will actually expedite project delivery, which was the intent
of Congress.
I also understand CEQ is finally starting the process to
convene the task forces that were established in the bipartisan
bill. I urge CEQ to move quickly to get a range of perspectives
on these task forces in order to provide needed feedback on
challenges and successes faced by these projects and on ways to
improve the permitting process.
In addition to the USE IT Act, I have been closely
following the implementation of CCUS provisions in the IIJA.
IIJA included the SCALE Act, a bill to support the build out of
infrastructure to transport carbon dioxide to locations where
it can be used in manufacturing or stored safely and securely
underground. Pipeline infrastructure is essential to
decarbonizing industrial clusters all around this country and
moving the carbon to where it can be safely stored or used in
products.
The Infrastructure Bill also includes important funding for
Class 6 wells, which is part of a program called the
Underground Injection Control Program at EPA. These wells are
used to inject carbon dioxide into deep rock formations for
permanent storage. The Class 6 permitting program can be
administered by EPA or by a State, once EPA has granted primacy
to the State.
Part of the IIJA funding for Class 6 wells was included to
help the agency process applications from States for primacy
and enable States to administer their own programs. Right now,
only two States have Class 6 carbon sequestration wells: North
Dakota and Wyoming. Other States are following suit.
Primacy is something that the State of West Virginia is
working on and something the State of Louisiana has been
working on as well, and I look forward to hearing more about
their experience.
In many States across the country, CCUS is on the cusp of a
revolutionary leap in deployment; however, I want to clarify
that the progress we are beginning to see should not be the
basis for more regulations or mandates. Practically speaking, a
heavy hand will stifle this nascent technology in the crib and
prevent the emissions reductions we have already see are
possible when the American economic engine is brought to bear
on a problem, even one as big as climate change. Requiring CCUS
also would not be lawful under the Clean Air Act's standard
setting provisions.
I look forward to hearing from our panel, again, thank you,
about what specific actions are being taken at the private,
State government, and Federal levels to advance deployment of
CCUS as well as what issues Congress should be focused on to
reduce and maximize the opportunities of this exciting
technology.
Thank you, Mr. Chairman, and I look forward to the panel.
Senator Carper. Thank you, and thanks again, Senator
Capito, for suggesting we hold this hearing today.
I was thinking earlier today that this is not a new idea. I
came here in 2021, after stepping down as Governor of Delaware,
and I remember well a conversation I had with another Senator
from West Virginia, who was actually born in North Carolina. At
the time, I was the only native West Virginian serving in the
Senate.
Robert Byrd, one of the things he mentioned to me when he
was trying to teach me how to preside over the Senate, one of
the things he mentioned was working on the ability to really
capture and sequester carbon dioxide. You have all heard the
old saying, somebody who has passed away, they are rolling over
in their grave. Well, Robert Byrd today is not rolling over in
his grave. He is cheering. He is cheering your good work and
recommendations.
Now I am turning over to our esteemed panel of witnesses.
We are going to hear from them in a minute in this order: First
will be Jason Albritton, the Director of the U.S. Climate and
Energy Policy at The Nature Conservancy.
Welcome.
Second, we are going to hear from Brad Townsend, Vice
President for Policy and Outreach for the Center for Climate
and Energy Solutions; and third, we will hear from Jason
Lanclos. Jason Lanclos is the Director of the Technology
Assessment Division of the State Energy Office of the Louisiana
Department of Natural Resources.
Last but not least, we will hear from John Harju. He is
Vice President for Strategic Partnerships at the Energy and
Environmental Research Center at the University of North
Dakota.
Again, to our witnesses, thank you all for your willingness
to appear before our Committee today.
Before our witnesses begin their testimony, we are going to
turn it over to our colleague, Senator Cramer, to introduce one
of our witnesses.
Senator Cramer, thanks so much for bringing in a good
witness for us. We look forward to hearing from John.
Senator Cramer. Thank you, Chairman Carper, Ranking Member
Capito, for having this important hearing on a topic that we
are all interested in. It is one of the times Senator
Whitehouse and I really get to dig in on the same side of
something.
CCUS is clearly a topic near and dear to North Dakota, as
is obvious by one of our witnesses. We have been at this for a
couple of decades. I was an economic development director when
a regional organization called PCOR was formed, and John Harju
was at the forefront then at EERC, and it is starting to bear
some fruit.
North Dakota has been implementing carbon capture,
utilization, and storage now for a while. Just last month,
Retro Energy, an ethanol producing company in western North
Dakota, started injecting CO2 in western North
Dakota, deep into our geology, removing nearly all of the
associated carbon emissions involved in the production of
ethanol at the plant.
Recently, Denbury Resources, you talked about the two
States, Senator Capito, that have Class 6 primacy, there is a
gas producing facility in Wyoming that pipes CO2 to
North Dakota for utilization for tertiary oil recovery.
Critical to helping all of this, of course, achieve their
accomplishments, is our witness today, John Harju, and the rest
of his team at the Energy and Environmental Resource Center at
the University of North Dakota, otherwise known as the EERC.
They are a premier research entity on all fossil fuels, as well
as renewable and alternative fuels, and have become a world
leader in the field of CCUS, consulting on projects, not only
in North Dakota, but throughout the country.
I want to reiterate a point and brag about them a little
bit. John and his team are not just consultants. They are
engineers who build and test components, they analyze core
samples, perform modeling, advocate for public policy at the
local, State, and Federal level, and help projects navigate the
bureaucracies. They do it all. Colleagues, whatever curiosities
you may have, you will not find a better resource than the
EERC.
John, in particular, is a familiar face from North Dakota
and has been an excellent resource and an important friend to
me and to my office. He serves as the Vice President for
Strategic Partnerships at the EERC and leads the Center's
efforts to build working relationships with industry,
government, and research entities globally in support of EERC's
mission to provide solutions to the world's energy and
environmental challenges.
I am just really grateful for his willingness to be here
today and for his good work and look forward to his testimony
and to answering our difficult questions.
Senator Carper. Thanks so much for the introduction of John
Harju.
I am now pleased to welcome and to recognize Senator
Cassidy, who is joining us today to introduce another one of
our witnesses that he knows from his home State of Louisiana.
Senator Cassidy, please proceed.
STATEMENT OF HON. BILL CASSIDY, M.D.,
U.S. SENATOR FROM THE STATE OF LOUISIANA
Senator Cassidy. Thank you, Mr. Chairman.
Thank you, Madam Ranking Member.
I am pleased to introduce Jason Lanclos. He serves as the
Director of the Louisiana Energy Office, Technology Assessment
Division, within the Louisiana Department of Natural Resources.
He serves on the State's Climate Task Force. He is with the
Carbon Capture Coalition and an Executive Board Member for the
National Association of State Energy Officials.
He will be discussing the implementation of policies
related to Class 6 primacy for carbon sequestration wells and
other policies to support carbon capture utilization and
storage.
The theme of your hearing is the balancing of economic
development with how we do address climate. For Louisiana, this
is an existential issue. The Chairman will relate to this.
Louisiana has lost the equivalent of the land mass of Delaware
to relative sea level rise. But at the same time, we are
America's energy coast, providing the chemicals, the plastics,
and the fuels that allow modernity to exist. And along the way,
these industries employ thousands of Louisianians, providing
them with a better living and a better future.
The relative sea level rise and the need to continue to
power our economy and to power the families that are creating
that economy is in balance in Louisiana, and no one can speak
to that tension and how to balance it better than Mr. Lanclos.
Thank you very much for having him. Thank you for allowing
me to speak. With that, I yield.
[The prepared statement of Senator Cassidy follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thank you so much. You mentioned the size
of land lost in Louisiana the size of Delaware. It is huge. I
think my recollection is, for every 100 minutes, Louisiana
loses another piece of land to the ocean the size of a football
field. Serious stuff, serious stuff. Thank you so much for
joining us and for introducing Jason.
Now, we are going to start our witness testimony.
Mr. Albritton, I am going to ask you, if you will, to
please proceed with your statement when you are ready.
Mr. Albritton.
STATEMENT OF JASON ALBRITTON, DIRECTOR OF CLIMATE AND ENERGY
POLICY, THE NATURE CONSERVANCY
Mr. Albritton. Good morning, Chairman Carper, Ranking
Member Capito, and members of the Committee. Thank you for the
opportunity to speak to you today.
As you said in the introduction, I work for The Nature
Conservancy, which is a global conservation organization. We
have chapters in all 50 U.S. States and 79 countries and
territories around the world. We are an organization that
relies on a science based approach and a collaborative
approach, and we believe that climate change poses a
significant threat to our communities, our economy, and to
nature itself.
Our best chance to limit the worst impacts of climate
change is to ensure that, by 2050, we have reached net zero
carbon emissions both in the United States and around the
world. And this will require significant decarbonization of our
global economy in less than 30 years.
In the United States, the transition to cleaner
technologies and a cleaner economy is already underway, yet we
need to significantly increase the pace of this transition.
Carbon management technologies, like carbon capture and storage
and direct air capture are important tools and can play a
critical role alongside reducing emissions and harnessing the
power of nature to capture carbon.
As both of you said in your opening statements, analysis by
the Intergovernmental Panel on Climate Change, the IPCC,
demonstrates the important role that carbon capture technology
can play in meeting climate goals. In the IPCC's most recent
report, six of the seven scenarios they evaluated required
carbon capture in order to limit warming to less than 2 degrees
Celsius.
Carbon capture is particularly important for reducing
emissions from the industrial sector, where it can contribute
nearly one-fifth of the emissions reductions needed to meet
targets under the Paris Agreement. Industrial processes, such
as the production of cement and steel, are central to modern
life, but often lack options to reduce their carbon emissions,
which is why carbon capture technologies can play such an
important role.
Direct air capture must also be a priority for development.
Even as we reduce our greenhouse gas emissions, we will likely
need large scale removal of carbon dioxide from the atmosphere
to limit global temperature rises to safe levels. This
technology, when combined with proven natural solutions, offers
a way to address legacy carbon pollution that has been building
in the atmosphere for more than a century.
The good news, as has already been mentioned, is that
Congress has taken important actions in recent years to spur
carbon management technologies. The USE IT Act, which this
Committee developed and advanced, passed, along with other
carbon capture provisions in the omnibus spending bill in 2020,
and then last year, the Bipartisan Infrastructure Investment
and Jobs Act doubled down by investing over $12 billion in
carbon management technologies and related infrastructure.
These investments really lay the foundation for rapid scaling
of carbon capture, utilization and storage, and direct air
capture. Quickly investing these funds and implementing the new
authorities that Congress has provided is absolutely essential.
We will also need additional economic incentives, such as
the 45Q tax credit that will play a key role in the widespread
commercialization and deployment of these technologies. A long
term extension of 45Q, coupled with enhancements such as
increased credit values for direct air capture and direct pay
options, are critical for building on the momentum that we are
already seeing. We urge Congress to pass these critical changes
to the 45Q credit.
Moving forward, increased attention should be placed on
delivering carbon capture projects and carbon utilization and
direct air capture projects on the ground and ensuring that
deployment is done in a quick, yet thoughtful and careful, way.
To achieve this, there are a couple of actions that we can
take.
One is what we would refer to as ``smart from the start''
land use planning, really considering the impacts up front to
expedite deployment. This will help ensure that CCUS is
deployed with as little impact as possible to natural lands,
cultural resources, recreation, and other conservation values.
Early engagement of communities is also essential to help
avoid unexpected conflicts that will lead to delays in project
delivery.
Finally, improved coordination among permitting authorities
will also enable more efficient approvals. Together, these
steps are critical for rapid and responsible deployment.
We must also seriously consider the concerns and potential
impacts to communities that have historically experienced the
worst impacts of pollution. Community input will help avoid
repeating the mistakes of the past and build the local support
that is absolutely essential to rapidly deploy these
technologies.
Finally, Federal agencies responsible for approving carbon
management projects will need adequate, sustained funding,
staffing, and resourcing for doing this community engagement
and permitting.
To wrap up, time is of the essence when it comes to climate
change. We must act now, using all of the solutions at our
disposal, including carbon capture, utilization and storage,
and direct air capture. Federal support, coupled with agency
coordination, thoughtful planning, and early, effective
stakeholder engagement will help ensure these solutions are
available at the scale and within the timeframe that we need.
We appreciate the bipartisan leadership on this issue in
this Committee and look forward to continuing to work with you
to advance these and other important climate solutions.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Albritton follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Mr. Albritton, thank you very much for
joining us and for your testimony. We look forward to asking
you some questions in just a couple of minutes.
Let us now turn to Mr. Townsend.
Mr. Townsend, please proceed. I think you are joining us
remotely. Is that correct?
Mr. Townsend. That is correct, sir.
Senator Carper. Where are you today?
Mr. Townsend. I am in Columbus, Ohio.
Senator Carper. Glad you could join us from Columbus, Ohio.
We would ask you to please proceed.
STATEMENT OF BRAD TOWNSEND, VICE PRESIDENT FOR POLICY AND
OUTREACH, CENTER FOR CLIMATE AND ENERGY SOLUTIONS
Mr. Townsend. Good morning, Chairman Carper, Ranking Member
Capito, honorable members of the Committee. Thank you for the
opportunity to speak with you today about the critical
importance of carbon capture, utilization, and storage, or
CCUS, in carbon dioxide removal technologies.
My name is Brad Townsend, and I am the Vice President for
Policy and Outreach at the Center for Climate and Energy
Solutions, or C2ES. We are a nonpartisan, nonprofit think tank
based in Arlington, Virginia, whose mission is to secure a safe
and stable climate by accelerating the global transition to net
zero greenhouse gas emissions and a thriving, just, and
resilient economy.
As the impacts of climate change continue to mount, with
extreme weather events affecting every region of the country,
we believe a technology inclusive approach that draws on all
available means to accelerate this transition will be needed to
avoid the worst impacts of a changing climate.
There are three key points I would like to make during the
course of this testimony. First, carbon capture, utilization,
and storage, as well as carbon removal technologies, must play
a crucial role in helping to decarbonize the global economy. It
is important to emphasize at the outset that these technologies
are not silver bullets. CCUS is a vital tool to mitigate
emissions, and carbon removal technologies hold considerable
promise for balancing emissions from particularly hard to abate
sectors. Neither technology will allow us to continue with
business as usual.
The deployment of these technologies will only succeed if
we rapidly reduce our dependence on fossil fuels and accelerate
the transition to zero carbon forms of energy. Still, in a
recent report, the International Energy Agency wrote,
``Reaching net zero will be virtually impossible without
CCUS.''
These technologies can cost effectively address emissions
from existing power and industrial facilities, help maintain
power sector reliability, and tackle hard to abate subsectors.
These technologies also provide a foundation for the
development of carbon removal technologies, which can help
lower long lived greenhouse gas concentrations.
Indeed, the National Academy of Sciences has estimated that
the U.S. will need to remove one gigaton of carbon dioxide per
year by 2050, equivalent to the energy related CO2
emissions from Texas and California combined. The work of the
Intergovernmental Panel on Climate Change, or IPCC, similarly
suggests that most pathways to limit global warming to 1.5
degrees Celsius will include the use of carbon dioxide removal.
Second, the United States can lead the world in the
development and deployment of these technologies, which would
support the competitiveness of domestic sectors like cement,
steel, and chemicals while creating opportunities to export new
technologies that can help the rest of the world decarbonize.
CCUS and carbon removal projects must build on a foundation
of early and continuous community engagement and meaningfully
address stakeholder concerns. Doing so can provide significant
economic benefits for communities, including job creation and
tax revenues.
A recent study estimated that carbon capture retrofits at
existing industrial and power facilities could create up to
64,000 jobs by 2035, and as many as 78,000 additional jobs by
2050. Large scale deployment of direct air capture could create
at least 300,000 new jobs nationwide across construction,
engineering, and equipment manufacturing sectors, while
supporting communities that have helped build the country and
developed skills in fossil fuel production to leverage those
competencies in a net zero future.
Third, we will need a comprehensive policy framework that
builds on recent legislative investments to support the entire
innovation ecosystem for CCUS and carbon removal. There are
three primary areas that Congress can focus on to support these
technologies.
First, make further upstream investments in innovation,
including research, development, and demonstration. Second,
enact downstream policies like the extension and expansion of
45Q that can help to create and grow markets for these
technologies. Third, facilitate enabling policies and
infrastructure that can provide a bridge to market for
promising technologies. All three areas of policy are
necessary.
Supporting technological innovations through RD&D spending
without creating market demand will strand new technologies in
the labs or at the demonstration phase, while providing market
incentives without the necessary enabling policies risks
letting deployment stall below its potential as projects run up
against non-market barriers.
Robust policy support across the entire innovation
ecosystem can help accelerate the development and deployment of
CCUS and carbon removal technologies and help the United States
meet both climate and economic objectives.
Thank you, Chairman Carper and Ranking Member Capito, for
hosting this hearing and for the opportunity to speak with you
today. I look forward to your questions.
[The prepared statement of Mr. Townsend follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thanks so much.
Are you familiar with the facility at Ohio State
University; I think it used to be called the Polar Research
Center? I want to say there are two renowned Ph.D.s, I think,
from West Virginia. I call them the Thompson twins. They have
led excursions to some of the highest mountains on the planet,
along the equator. Does that ring a bell with you?
Mr. Townsend. It does not, off the top of my head.
Senator Carper. Yes, I just received, earlier this year, a
publication, like a regular publication from Ohio State
University, where I was a Navy ROTC midshipman, and they had
their pictures on the front of it. Just a great story. A love
story, but also a great story about their courage and roots in
West Virginia and how they found their fame and fortune in
Columbus, Ohio.
OK, thank you.
Senator Whitehouse. Mr. Chairman, I have visited their lab.
Senator Carper. Have you really? Oh, good.
Senator Whitehouse. They have core samples from glaciers
that no longer exist.
Senator Carper. They are able to look back in time, like,
hundreds of thousands of years to see what the carbon levels
were all those years ago. It is amazing stuff. They did these
trips down to these mountains in their 80s. Just extraordinary
stuff, amazing people.
Mr. Lanclos is next.
I am told you pronounce your name Lan-close. Is that true?
Mr. Lanclos. Yes, sir. Actually, the ``s'' is silent, so it
is Lan-clo, but you did a fantastic job. I have heard many
different variations of it.
Senator Carper. I am half-right, good. Thank you, Mr.
Lanclos. Welcome.
STATEMENT OF M. JASON LANCLOS, P.E., DIRECTOR, LOUISIANA
DEPARTMENT OF NATURAL RESOURCES, TECHNOLOGY ASSESSMENT
DIVISION, LOUISIANA STATE ENERGY OFFICE
Mr. Lanclos. Chairman Carper, thank you so much for having
me today, and Ranking Member Capito, and members. This is just
an unbelievable opportunity to tell you a little bit about
Louisiana. I am thrilled to be here today.
I feel like a lot of the coastal talking points, Senator
Cassidy and Senator Carper, have a very good appreciation for
really, what we are facing in Louisiana, and you hit the nail
on the head. That was something I was going to say this
morning. We are losing land in Louisiana, and that statistic,
100 minutes, a football field size, it is astronomical what
Louisiana has lost in the last 20, 30, 40, 50 years. You look
at the maps, and we have seen significant changes.
I had the benefit of being able to work for the Coastal
Protection Restoration Authority prior to coming over to Energy
and really being at the forefront of what I would call really
big changes happening in Louisiana. It gave me just an
unbelievable appreciation for climate and for looking for
solutions of things that we needed to do to move Louisiana in
the right direction.
As Senator Cassidy mentioned, we have an unbelievable
manufacturing and refining base in Louisiana. We refine about a
fifth of the Nation's oil capacity, so these industries are
super important. They are weaved into the mix, but they are
also located along the coast, so it is very much of a working
coast. We have a lot of people who live in these areas that
have been impacted directly by climate change.
So when I came over in 2018 and sat down with Secretary
Harris, we had some very, very, what I would call, just in
depth discussions about things that we could do to move our
department forward, but also to start looking for solutions.
One of the things that we were working on when I was at
CPRA was called the verifiable carbon standard, more on the
ecological side of carbon management, and we took a step back,
and we said, there is really an opportunity for us to be able
to apply this to industry and to look at our emission profile.
What I mean by that is, when you look at our emission
profile, we have a very difficult emission profile to
decarbonize. And part of that is that of the 200 million, or
220 million metric tons, most of our emissions are about 60 or
65 percent are from our industrial base users. So some of these
industries, like ethanol and methanol, have a very pure stream
of CO2, but some of them also have a very mixed
stream of emission profile which causes, when you look at
carbon capture, it is a very expensive mechanism to capture. So
for us, we quickly realized that we needed to work with
industry to look for solutions.
So, CCUS has been something that we have put a lot of time
and energy into. We recognized that we had the staff in house.
When you look at our Office of Conservation, we have about 38
folks in that office. We have applied for regulatory primacy
with the Environmental Protection Agency. We are very close, we
feel, to getting primacy.
We will be the third State in the Nation to get regulatory
primacy. The reason that that is so important is that our
staff, we have a great group of geologists and engineers who
are very, very excited about working in carbon management. We
have actually hired an additional six people just to focus on
carbon management who are going to be working with these
industry and industrial operators to get their permits out of
the door. We prioritize resources, and we have made this
something as a major focus of our long term management of
emissions.
The thing that really put this in perspective and really
illustrated to us that it would be an unbelievable solution for
Louisiana is our Governor signed an executive order in August
2020 to create the Climate Initiatives Task Force. So you can
imagine, in a Gulf Coast State such as Louisiana, a climate
plan is something that was very innovative at the time.
I was the designee for our department on that task
force.And those conversations, as you can imagine, were not
always easy. You are meeting with a lot of stakeholders across
the board who have very different opinions on what the best
solutions for our long term management of emissions are.
For us, we felt comfortable as a department that the things
that we were pursuing, like hydrogen production and trying to
rapidly scale up hydrogen production, carbon management through
CCUS, offshore wind and solar, all of those things have to work
together.
At the end of the day, there is not a singular solution
that is going to solve all of our problems. We continue to go
back to looking at long term management of emissions.
CCUS has shown unbelievable promise. I am here today to
tell you that over the last several years, the first meeting
that we did, what we call our industry days, when we talked
about CCUS, we actually had to get some of our friends to come
to the meeting, because there wasn't a lot of interest.
Over the last 3 years, the interest is unprecedented. The
companies who want to do this and who want to look at this as a
long term solution, they are here, and they are telling us that
basically, the FUTURE Act that a lot of your members of this
Committee put forward and a lot of staff have worked so hard on
has really been a complete game changer to making this
something that is going to be a viable technology and solution
in the future.
I am here today to tell you that we are extremely excited
about the opportunities for CCUS in Louisiana. And there is
tremendous opportunity for us to work together.
I will leave you with the thought that the USE IT Act and
the other things that have been put forth by this Committee
that are actually getting Federal agencies to work together on
solutions have been instrumental in moving the needle forward.
And the more that we do that, and the more that we come up with
common solutions to move this forward and to handle our
emissions, I think that we are all going to win at the end of
the day.
Thank you so much for giving me the opportunity to tell you
a little bit about Louisiana, and I really appreciate being
here today and having that opportunity.
[The prepared statement of Mr. Lanclos follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Good. Mr. Lanclos, thanks so much.
That is a very sobering thought. We are going to be in this
hearing today for about 100 minutes. During that period of
time, another piece of land the size of a football field is
lost by the State of Louisiana. Very sobering. Thank you. We
can do something about it, and that is what we are here to
discuss today.
Finally, we are going to ask for Mr. Harju to deliver his
testimony.
Mr. Harju, great to see you, and thank you for joining us.
STATEMENT OF JOHN HARJU, VICE PRESIDENT FOR STRATEGIC
PARTNERSHIPS, ENERGY AND ENVIRONMENTAL RESEARCH CENTER,
UNIVERSITY OF NORTH DAKOTA
Mr. Harju. Thank you, Chairman Carper, Ranking Member
Capito, and members of the Committee, and Senator Cramer for
the kind words and introduction.
My name is John Harju. I am the Vice President for
Strategic Partnerships at the University of North Dakota's
Energy and Environmental Research Center. Thank you for the
invitation to provide testimony concerning current challenges
and opportunities in deploying carbon capture, utilization, and
storage technology, or CCUS.
The EERC is a business unit of the University of North
Dakota, and we are focused on practical solutions to the
world's vexing energy and environmental challenges. The EERC
was initially founded in 1951 as the Robertson Lignite Research
Laboratory under then President Truman and the United States
Bureau of Mines. With the creation of the United States
Department of Energy in 1977, we became one of the Nation's
five energy technology centers, and we have been part of the
University of North Dakota since 1983.
Our mission has evolved considerably over that time, from
one focused exclusively on the utilization of the low rank
coals that predominate our Nation's resources west of the
Mississippi River to one that focuses on all fossil fuels, as
well as renewables and alternatives and on the attendant
environmental challenges associated with development and
utilization of energy technology.
As global population continues to grow and nations with
underdeveloped economies strive to improve their citizens'
quality of life, the need for reliable, affordable energy only
grows. Given the limited ability of renewables alone to meet
growing energy demand in these coming decades, the continued
use of fossil fuels will be needed to maintain our standard of
living. The only way to meet the demand for more energy and
lower carbon intensity is with an all of the above energy
strategy, with a mix of resources, including oil, gas, coal,
nuclear, and renewables, such as wind and solar.
CCUS is a critical and versatile technology, and any
meaningful attempt to mitigate carbon accumulation in the
atmosphere and to reduce the carbon intensity of the American,
and in turn, the global economy.
In the arena of CCUS, the EERC has had the privilege of
serving not only the Department of Energy, but also more than
200 non-Federal partners across the entire CCUS value chain.
Our field experiments and commercial scale operations have
added to the wealth of knowledge regarding the full life cycle
of CCUS projects, from permitting to construction to operation,
and ultimately, to site closure. These projects were made
possible because of ongoing, robust financial support via the
Department of Energy's Fossil Energy, now Fossil Energy and
Carbon Management Program, and our more than 200 partners and
the States that we work with.
The DOE selected the EERC as one of the original seven
regional carbon sequestration partnerships in a region that
ultimately spans all or part of ten U.S. States and four
Canadian provinces. We call this the Plains CO2
Reduction Partnership, or the PCOR Partnership. Our current
goal is to use the knowledge and experience gained over these
previous decades to address the current challenges and to
accelerate commercial deployment.
Each of these areas within the PCOR Partnership has an
economic engine, and each of these economic engines represents
the primary emission of CO2. It was apparent, by
engaging our stakeholders, that with each of these economic
bases, there is significant opportunity to accelerate
deployment of CCUS technology and deploy it commercially.
To further the opportunity, we needed to develop
economically motivated carbon management strategies. Even
though we have economic drivers such as 45Q and low carbon fuel
standards, there are business cases and unprecedented interests
here in the United States and globally.
The economic drivers are really only one factor.
Comprehensive rules regarding the legal aspects, such as pore
space ownership and long term liability, as well as clearly
defined communication pathways and an ability to directly
interact with regulatory agents, are key tools in facilitating
commercial deployment.
To aid in this endeavor, North Dakota was the first State
to be granted primacy for the EPA's Class 6 Program. As of
today, only Wyoming has joined us with that primacy, as we
heard from Mr. Lanclos. We are hopeful that Louisiana will join
that exclusive club soon.
My team has been helping with a number of States as they
either contemplate or apply for that primacy, sharing our
experiences and achieving it. These States include Texas, West
Virginia, Alaska, Utah, Colorado, Louisiana, Nebraska, Montana,
and Kansas, and again, including Mr. Lanclos' team.
I can testify, commercialization is beginning. Real world
examples are numerous. An essential component is transporting
CO2 from where it is captured to where it is stored.
A pipeline is the most efficient way to do this. Pipelines for
CO2 have been operating in the U.S. since the 1970s
and have been shown to be safe. They pose manageable risk, and
they have an established legal and regulatory framework for
their construction and operation at both the State and Federal
levels.
Again, I thank you for your time today, and thank you for
the invitation to be with you.
[The prepared statement of Mr. Harju follows:]
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Senator Carper. We thank you. It was great of you to join
us.
In terms of the questioning today, we are going to start
off with Senator Whitehouse, Senator Capito, Senator Cardin,
Senator Cramer, myself, Senator Lummis. We will start off with
Sheldon, and then back to Senator Capito.
Senator Whitehouse. Thank you so much, Chairman. I have a
commitment in another committee.
Senator Carper. We know what that is like.
Senator Whitehouse. I appreciate you taking me out of turn.
It is really indisputable, right now, that we will overrun
our climate safety barriers, particularly at 1.5 degrees, and
because of that, we must be able to remove CO2 from
the atmosphere. Once you are out of the safety zone, going to
zero emissions doesn't help you any longer. You actually have
to claw back the excess legacy carbon dioxide to get to safety.
That, to me, is just a given as we forge a pathway to safety
here.
This is a pretty well established technology. I think the
Boundary Dam Project in Saskatchewan kicked off in 2014 and
proved the viability of carbon removal. Of course, they use it
for enhanced oil recovery, which, to me, is a very disfavored
use, because it plugs carbon back into the system after having
removed it. And I think direct air capture, as the witnesses
have mentioned, is absolutely essential, because again, you
don't get to a positive outcome if all you are doing is
stripping carbon dioxide out of carbon emitting smokestacks.
Direct air capture has to be an absolute priority in this work.
In that framework, we have done some good preliminary
efforts here in the Senate, good bipartisan preliminary efforts
here in the Senate, to solve the fundamental problem of this
industry, which is that it lacks revenue. It is really hard to
get innovation happening if there is no reward for the
innovation. If there is no revenue proposition at the end of
the day for the people who invest in, design, and build these
plants.
So we have done that through 45Q. We have done that using
public tax deductions as the revenue source, but obviously,
that is limited to the scope of the program. I hope to see it
continue to grow, but at the end of the day, it is still going
to be a limited program compared to having the market operate
the way it should.
I also have a CDR bill with Senator Coons that I hope will
be able to move pretty quickly, where the U.S. Government comes
in in its proprietary capacity as a buyer of carbon. Those are
two ways, by making the U.S. a customer and by providing tax
benefits, that we can begin to establish at least the framework
for a revenue proposition that gets us through some of the
early stage incubator moments that this industry needs.
At the end of the day, the real solution has to be carbon
pricing. Without that, you take away from the market the market
signal. I think that if you connect a carbon price to carbon
border adjustment, what you end up seeing is huge net value for
the American economy. Because the carbon border adjustment,
even if we do nothing and just pay the tariff, let's say, to
the EU when CBAM comes, let us just say we are losers, and we
don't keep up, and we just pay the tariff. On balance, we are
still winners because although we lose in the tariff exchange
with the EU, we gain an enormous amount, because the EU is also
tariffing China.
It is also tariffing India. It is tariffing other countries
where manufacturing takes place, and it is creating a price
differential that will cause a move of manufacturing to the
United States. And that is a win for the American economy. So
at the end of the day, if we don't get carbon pricing and
carbon border adjustment done, we are just whistling. We like
to talk big on innovation here, but you can't do innovation
while stifling the policies that give innovation its oxygen,
which is a revenue proposition.
If I could ask, in the seconds remaining, Mr. Albritton or
Mr. Townsend, to say a word on the importance of having a
robust, lasting market revenue proposition to support this
industry.
Because my time will run out, maybe if we do that as a
question for the record to all the witnesses. If you would like
to comment on what I have said, I would appreciate it. That
answer, in writing, will go into the record of this hearing,
and that way, I won't have to hold up my colleagues any longer.
Would that be all right?
Mr. Albritton. Yes, I would be happy to do that.
Senator Whitehouse. Great. Much appreciated. Thanks for
being here. We have a big bipartisan opportunity, and I look
forward to taking advantage of it. This Committee can forge
compromises that will make a big difference.
Senator Carper. Thanks for that tutorial. We look forward
to the responses from our witnesses.
With that, Senator Capito, your turn.
Senator Capito. Thank you, Mr. Chairman.
Mr. Lanclos, it is clear from your testimony that there are
a number of projects that are looking to locate in Louisiana
because of how Louisiana has translated its expertise in oil
and gas development into expertise on carbon capture and
storage. Are companies looking at geologic storage onshore and
offshore? How is that split?
Mr. Lanclos. Thank you, Senator Capito. At the present
time, the State has two pore space agreements, one with a major
hydrogen facility and another with a sustainable aviation fuels
facility that are both located on State land. Those were two of
the first pore space agreements that were done in the State,
very innovative agreements that have kind of set the standard
for going forward on how that is going to look.
We have interest in offshore. Right now, we are working
with our Federal family to try to look at how that permitting
structure is going and what agency is going to be leading it.
So right now, we have 3 miles offshore we can currently inject
carbon dioxide. We do not currently have any projects that are
looking specifically at doing that, other than right now, just
kind of saying that this might be a viable option.
We haven't done pore space agreements, but we have
interest, mostly, from our LNG facilities in western Louisiana
that are looking at doing offshore. But most of the interest, I
would say probably 90 percent, has been on onshore, in terms of
injections right now. But we are looking at long term
management of making offshore resource something that we can
put carbon dioxide into.
Senator Capito. Thank you. Could you also discuss what
having the proximity to conventional oil and gas operations
like refineries and petrochemical facilities affects the
economy of scale of CCUS? We know how expensive it is. Does
this proximity also provide you with a ready work force, since
there is a custom to working in the kinds of projects and
environment?
Mr. Lanclos. Absolutely. Our industrial corridor provides
what I would call an unprecedented opportunity, because most of
the source material is located in a geographical area where the
sinks are located. So investment and infrastructure will still
have to happen, but the piping distances aren't hundreds of
miles. We are talking about probably 10 or 20 miles, so that
helps tremendously when the pore space is located close to it.
As we are looking at decarbonizing with 62 or 63 percent of
our emissions coming from the industrial corridor and all of
our industry combined, it is very helpful for us to have these
sources located close to each other. So we are hoping that, as
we continue to roll projects out, that we can start getting
facilities into really the mindset to take carbon dioxide out
and potentially to bring hydrogen into those facilities to help
with long term management of emissions.
I think that, for us, that has been really strategic in
terms of how we are looking at projects. We have had a lot of
developers that have put information together that are looking
at really coupling sources across that whole corridor.
Senator Capito. Do you have any projects of enhanced oil
recovery using carbon net going on right now?
Mr. Lanclos. We do. My understanding is that we have three,
I think, two still being active, so one is in an agreement.
Most of the interest that we have seen in terms of CCUS has
been, I would say that probably 98 percent has been on
geological storage. So there are some opportunities, I think,
in the Haynesville Shale, where operators potentially have
looked at EOR, but the bulk of our interest is in geological
storage.
Senator Capito. Mr. Harju, congratulations on North Dakota
being the first State in the Nation to get the primacy on the
Class 6 wells, so well done. Thank you for mentioning our
State. I know we are interested in this.
How has that specifically helped your State, and is it
encouraging more additional project development? Has it
increased efficiency in moving projects along? What kind of
effects are you seeing since you were able to make this
achievement?
Mr. Harju. Thank you for the question, Senator Capito. Yes,
we have seen pretty substantial proliferation of project
proponents in the State. At this point, the State has already
issued three facility permits. We have our first commercial
project operating. We have about a half a dozen more permits
either with a decision pending or permit applications ready to
be filed. So these range from power generation to backside of
gas processing to ethanol facilities, and from facilities
bringing CO2 in from out of State.
Senator Capito. You mentioned you have one that is
presently working. Is that correct?
Mr. Harju. Yes.
Senator Capito. Could you describe that one, just for a
good example of how this is moving? Could you describe that one
for me?
Mr. Harju. Yes, Senator Capito. The first Class 6 well
operating in the State is associated with an ethanol producing
facility, namely the Red Trail ethanol facility near
Richardton, North Dakota. We also have a series of Class 2
wells where CO2, and both of these were mentioned by
Senator Cramer earlier, but Denbury Resources is injecting
CO2 into one of our most prolific formations in the
State for enhanced recovery. We expect many tens of millions of
tons of CO2 to be stored in conjunction with that
project.
Senator Capito. Did you have to build new pipelines to
carry the CO2?
Mr. Harju. Senator Capito, yes. The pipeline from Wyoming
into southwestern North Dakota was recently extended by about
125 miles from southeastern Montana, actually, from a project
that my team had worked closely with Denbury on since 2000,
well, Denbury's predecessor, Encore Oil and Gas, since 2005. So
we have been at this a very, very long time.
Senator Capito. Right, thank you.
Thank you, Mr. Chair.
Senator Carper. You are welcome. Thank you very much.
Senator Cardin, please.
Senator Cardin. Thank you, Mr. Chairman.
Let me thank all of our witnesses for this very important
hearing. I am very proud of the work being done in the State of
Maryland. The Maryland Legislature passed a pretty aggressive
plan to deal with carbon emissions, reducing greenhouse
emissions by 40 percent by the year 2030 and to reach 100
percent clean electricity by 2040.
I might say that is well ahead of the commitments that we
have made as a Nation in regard to the international climate
meetings.
We know there is not one particular way that we can reach
those targets, so CCUS is a very important part of the overall
strategies for Maryland and for our Nation in regard to carbon.
As we point out, there is no one tool. I just want to associate
myself with Senator Whitehouse's comments. A price on carbon
would not only accelerate CCUS; it would accelerate our ability
to reach our carbon goals.
I want to talk about a couple other issues here. In
Maryland, we have put a good deal of confidence in restoring
wetlands. Wetlands are a natural ability to sequester excess
carbon. To me, it is low hanging fruit. We have used our
dredged materials to restore Poplar Island and now Mid-Bay,
which we have been able to get a recognition of the economic
benefit, environmental benefit cost associated with traditional
locations for dredged sites. We have also now looked at using
dredged material in Blackwater to restore the wetlands in
Blackwater. And yes, it will have a plus advantage from the
point of view of the environment generally, but it will also
sequester carbon as part of this.
So, Mr. Albritton, let me just ask you, if I might, as we
look for ways to sequester carbon, shouldn't we look at ways in
which we can utilize restoration projects such as wetlands as a
way to assist us in reaching these goals?
Mr. Albritton. Absolutely. I think, as you pointed out, we
need all of the solutions, and natural solutions are a key part
of that. The Nature Conservancy's own research shows that up to
a fifth of our emission goals by 2030 can be achieved by these
natural solutions. That includes restoring our wetlands, better
management of our forests, reforestation, also agricultural
lands, storing more carbon in the soil. We see a lot of
opportunity here. These can complement the technological
solutions we are talking about today, but we definitely need
all of them, and it is a smart place to start.
Senator Cardin. I would also suggest an area that might be
a little more controversial. We should look at the NEPA process
and use that to establish the real cost associated with
transportation infrastructure, including its impact on climate.
That would be, I think, a good start also, using another tool
to help us reach these goals on carbon emissions.
In Maryland, we have also worked in conjunction with six
other States in regard to the Midwest Regional Carbon
Sequestration Partnership. Mr. Albritton, you may want to
comment on this as to how States can work together to advance
new technologies and knowledge and how the Federal Government
could encourage that type of cooperative efforts among our
States.
Mr. Albritton. I think that is absolutely critical when we
think about how we are going to transition to these cleaner
technologies. Transport of CO2 has come up a few
times. That inevitably crosses State lines in many instances,
so that coordination is critical. I think the Federal
Government can play an important role in trying to bring States
together and foster that collaboration.
One of the provisions in the USE IT Act that was already
mentioned is this idea of these task forces to look at some of
these issues and get regional input into how we can do that
better. So I think there are a lot of opportunities there, but
while State leadership is important, we have got to look beyond
one State, too, and how States can work together to advance
some of these technologies and some of these solutions.
Senator Cardin. Thank you.
Mr. Chairman, I think my point is this: We do need Federal
policies. They are critically important. We need our States to
innovate, as we have seen in Louisiana and other States. We
need regional compacts in order to work together in regions,
and we need the private sector helping us if we are going to be
able to reach our targets on carbon emissions.
I thank our witnesses for their contributions to this
debate.
Senator Carper. Senator Cardin, thank you for those
questions, and thank you for your leadership on these issues.
It is so important. You are so thoughtful, really, and
inclusive as we approach this challenge.
OK. I think, next, North Dakota.
Senator Cramer, thank you.
Senator Cramer. Thank you, Chairman Carper, again, and I
thank you, witnesses.
I want to add one point to the Denbury example that John
Harju talked about in response to Senator Capito's question,
especially since my friend from Wyoming is sitting right next
to me, that that example actually generates now net negative
carbon oil in North Dakota, as a result of injecting into old
wells. A very important point, I think, that we haven't brought
up yet.
There are so many things I want to get to, but Mr. Harju, I
want to ask you, Senator Whitehouse talked about a value
proposition, which we know he is talking about some sort of
profit opportunity in all of this.
With regard to the tax credit system, there are different
values. Not every credit is created equally. Not every carbon
reducing technology is created equally. Have you ever done an
analysis on the benefit of, say, a 45Q credit versus a credit
for, say, electric vehicles, for example, in terms of a dollar
per ton or a ton per dollar comparison?
Mr. Harju. Senator Cramer, yes, thank you for the question.
Actually, I was recently asked to give a comparative assessment
of a conceptualized $10,000 ton EV credit in terms of what that
would equate to a ton of carbon basis. My valuation gave me a
price of somewhere between $200 and $300 per ton of
CO2 avoided over the life of that vehicle. The
average vehicle, if you consider that they are going to run
somewhere in the neighborhood of about 120,000 miles, that they
will have a fuel efficiency of about 23 miles per gallon, a
gasoline fired vehicle will emit about 50 tons of
CO2 over its entire lifetime.
Electric vehicles are not zero, so considering that they
take their power from the grid, if you used just normalized
grid signatures, and the fact that there is a life cycle
associated with production of batteries and so on, they will
actually emit somewhere in the neighborhood of about 15 tons of
CO2 over the life of that vehicle, again, on a
normal life.
So, your net savings would be about 35 tons and at $10,000,
you are approaching $300 a ton there.
Senator Cramer. So, versus a 45Q, which is today?
Mr. Harju. Fifty dollars a ton for geologic storage, $35
for CO2 stored in conjunction with a----
Senator Cramer. So even if we went up to $80, it would
still be a bargain?
Mr. Harju. I think it would be a relative bargain.
Senator Cramer. Yes. I want to also follow up with
something Senator Capito asked you about, and that is, of
course, the primacy that North Dakota has, now Wyoming has, and
others are trying to get. Since you work across the country and
with the Federal Government, can you give us a little bit of a
comparison as to why is this primacy important to a State, what
is the benefit versus, say, States that don't have it, versus
say, the Federal Government's response to all of this?
Mr. Harju. Sure. Well, I think the proof is in the permits.
To the best of my knowledge, I believe the Federal Government
has issued one Class 6 permit. The State of North Dakota has
issued three, with several pending. We have only had that
primacy since 2017.
Senator Cramer. So, why is that, do you think? Why is the
State doing better than the Federal Government?
Mr. Harju. I think, in the case of States, they are much
more familiar with their local geology and the opportunities
that the State affords. Regardless of the permitting authority,
the Federal oversight is really on the wells themselves. So the
Class 6 Program really does not deal with pore space access and
some of the other ancillary things that are necessary for the
construction and operation of a CCUS site.
Our State actually passed comprehensive geologic storage
rules prior to the existence of the Class 6 Program, and
ultimately, needed to go secure that primacy, even though we
previously had fully comprehensive rules, including pore space
ownership, unitization provisions, et cetera.
Senator Cramer. How long does the permitting process take?
Mr. Harju. In the State of North Dakota, the average thus
far for each of those permits has been 7 months. My
recollection of the one Federal permit was on the order of 5 or
6 years in the State of Illinois.
Senator Cramer. Can you, in the remaining seconds, explain
how EOR actually functionally works, the amount of carbon
storage compared to the downstream emissions from oil produced?
Because that is part of the program that is most controversial.
Mr. Harju. Absolutely. Denbury has done a fairly extensive
analysis of their own operations. They estimate that roughly a
quarter of their operations, especially those that are
industrially sourced or anthropogenic CO2, that each
of those is a net carbon negative oil production operation.
So our own research at the Bell Creek Field in southeastern
Montana further verifies that long term secure geologic
storage. Our average stored volumes over the course of a
project suggests that it is going to be on the order of
approximately one-half ton of CO2 stored for each
barrel of oil produced.
Senator Cramer. Thank you.
Thank you, Mr. Chairman.
Senator Carper. Thank you.
We have been joined by Senator Kelly, and I am going to
recognize Senator Kelly, and then we will come right to you,
Senator Lummis, OK?
Senator Kelly, welcome.
Senator Kelly. Thank you, Mr. Chairman.
I ask for unanimous consent to change the temperature in
this room through the thermostat.
[Laughter.]
Senator Carper. I object.
Senator Kelly. I have heard of these things, and they work
pretty well.
Thank you.
Mr. Albritton, good morning, and thank you, all of you, for
testifying today. This question is for Mr. Albritton and Mr.
Lanclos.
I want to begin with the two of you.
As many of you know, I supported efforts to permanently
reauthorize the FAST 41 permitting process, which I believe is
a critical tool that helps large projects navigate the Federal
permitting process, which can be rather complex. It is
especially critical that the Federal permitting process doesn't
needlessly delay projects that can help us fight climate
change, which is why I am glad that the USE IT Act clarifies
that carbon capture, utilization, and storage, or CCUS,
projects are eligible for the FAST 41 process.
Mr. Albritton and Mr. Lanclos, can each of you speak to the
potential benefits associated with allowing carbon capture
projects to utilize the FAST 41 process?
Mr. Albritton. Sure. I think the FAST 41 process offers a
lot of opportunity for these types of projects. It was actually
legislation that I was deeply involved in when I was a staffer
on this Committee, and I see the value of what it can do,
because it encourages agencies to get together early and to
coordinate permitting instead of doing it sequentially.
I think that type of coordination, as I highlighted in my
testimony, can really help project approvals be much more
efficient so that we don't go agency by agency by agency, but
we kind of get together up front, figure out what the
requirements are, and then try to do that in the most efficient
and coordinated way possible.
Mr. Lanclos. Senator Kelly, thank you so much for your
question. I think that Mr. Harju really articulated the point
very well, that there haven't been many Class 6 permits that
have been filed in the United States thus far, so the numbers
are very, very small. If we proceed with what we are doing in
Louisiana, we think that that number could be in the
neighborhood of 25 to 30 permits in the next 2 to 3 years, so
rapidly changing how quickly we need to assess these permits.
Our big area of emphasis thus far has been, obviously, to
try to get regulatory primacy, because we feel like we have an
extensive staff who can really look at the geology and try to
make these decisions more quickly. In addition, we also have
the opportunity to get outside help to come in and bring this.
What FAST 41 brings to the table for us is exactly what was
articulated by Mr. Albritton; the Federal coordination and
agencies working together early and consulting with us and
working through these projects would help tremendously. Because
the workload is obviously going to change based on the level of
interest.
We really feel, to be able to make an impact and to get
these projects out of the door, developers and folks who are
doing these projects, they are very capitally intensive, and we
have to make sure that they have clarity in terms of how
quickly these permits can be turned around. We cannot afford to
review them in 5 and a half to 6 years. So focusing on
resources and making sure that folks are coordinating needs to
be first and foremost in this process.
Senator Kelly. Do you think OMB and the Council of
Environmental Quality have done enough to allow projects to
take advantage of this process?
Mr. Albritton. To my knowledge, I don't think a carbon
capture project has yet stepped forward to take advantage of
the FAST 41 process, and it is really on the project developers
to come forward and request to be part of that, so I think that
is something that is needed.
I do think the actions taken in response to the USE IT Act
by the Council on Environmental Quality, to issue guidance to
agencies to how to think about this is an important step
forward. Obviously, there is always more that can be done, but
that is a good start on this topic.
Mr. Lanclos. I think, in addition, I have heard that the
two task forces that they are talking about, in terms of
looking at offshore and onshore storage, I think that there is
going to be a lot of interest in terms of moving both of those
forward very quickly. I think that CEQ just leading that effort
and making sure that the right partners are in place, land
rights and pore space continues to be first and foremost when
we are looking at siting projects.
So obviously, we have a lot of State lands, but obviously,
when we start to look at offshore, we need to make sure that
resources are in place and we have a very clear understanding
of what the Federal process is for injecting carbon dioxide in
offshore waters.
Senator Kelly. Thank you. I appreciate that, and thanks
again for being here.
Mr. Chairman, I yield back the remaining 14 seconds.
Senator Carper. We are happy to have them back.
Senator Lummis.
Senator Lummis. Thank you, Mr. Chairman, and thank you,
Ranking Member Capito for hosting this hearing.
Senator Cramer and I have been sitting here, proud of our
two States and their leadership in carbon capture, utilization,
and storage. There has been a lot of forward thinking in your
State, mine, from policy leaders. The University of Wyoming
School of Energy Resources, the Wyoming Energy Authority have
been involved with you all in North Dakota, and you are making
real, genuine progress. Substantive goals are being met. Thank
you for that.
My first question is for Mr. Harju. Thank you for your
testimony. I understand, from Dr. Holly Krutka at the
University of Wyoming, that in a few days, we will be calling
you Dr. Harju. So congratulations on that.
I want to focus on one aspect of CCUS with my questions,
and that is geological storage. Mr. Harju, you mentioned in
your testimony one of the challenges to expanding geological
storage is the complicated legal and regulatory regime around
pore space ownership and long term stewardship. So can you talk
a little more about what North Dakota and Wyoming have done to
address these challenges, particularly around long term
stewardship?
Mr. Harju. Thank you for the question, Senator Lummis. Yes,
North Dakota and Wyoming have had a wonderful working
relationship for a long period of time. I am delighted to call
Dr. Krutka a friend and colleague. And our States have shared
our experiences over time, and copied one another's successes
and avoided one another's misses. Anyway, it has always been a
pleasure.
With respect to long term liability, North Dakota
established a long term liability trust fund because of
concerns that companies may not be around in perpetuity, and
the fact that a trust fund would be a reasonable way to manage
any long term stewardship associated with CCUS projects.
The way that this works in the State of North Dakota is
companies pay into this trust fund over the life of their
project. The fee is set administratively and based on,
essentially, you could almost contemplate it like a State run
insurance fund is the way I would look at it.
In North Dakota, after a 10 year post-closure monitoring
period where the site is carefully monitored at the expense of
the project developer and operator, the State is authorized to
take title to that injected CO2. I believe the
similar program in Wyoming has chosen a post-closure monitoring
period of 20 years as the default.
Senator Lummis. Thank for your explanation. I think this is
part of the example of the forward thinking that is going on in
expanding geologic storage, so good on you. Good on our States,
and I am proud of the work you are doing.
My next question is for all witnesses. Should the CEQ
support expediting CCUS permitting as a way to encourage and
support carbon capture?
Mr. Albritton. I think there are always opportunities to be
more efficient in permitting, and I think CEQ in its guidance
laid out some opportunities on how we can do that, by regional
approaches and other tools that they have. I think that has to
also be balanced with making sure we are doing thorough reviews
and getting strong community engagement in those reviews so
that we get good outcomes at the end of the process.
So I think we can achieve both, and I think that is the
right direction to go.
Mr. Lanclos. I agree very much with Mr. Albritton's
comments. I think that, again, that coordination and
communication both from all Federal agencies with the States is
absolutely essential to moving these projects forward. These
permits are extremely labor intensive. We understand that the
modeling and the geophysical aspects for a Class 6 is some of
the most extensive that is out there right now. So having folks
at the table working together is absolutely essential, so yes,
thank you very much.
Mr. Harju. I would concur. I would especially urge the
Federal Government to work toward a responsible means of
permitting and accessing Federal pore space. It is a really big
issue as you get to the west.
For instance, in Senator Lummis's State, roughly half of
the State is under Federal pore space ownership. Right now, I
do not see a means of accessing Federal pore space to do these
kinds of projects. So when we see Federal pore space on the map
in North Dakota, as we contemplate projects, we step away from
it, because we see it as more of a risk factor than an
opportunity.
Senator Lummis. Yes. Great point. Thank you all for your
testimony.
Yes, sir.
Mr. Townsend. If I may, sorry. Just sort of chiming in here
remotely. I think, just to underscore, I think this is an area
of real agreement. It is also certainly true that, in order to
meet climate goals and grow the economy, we have to be able to
build a wide range of clean energy and zero carbon
infrastructure, including CCUS infrastructure for transmission,
et cetera.
It is also true, I think, that a growing number of
organizations on both sides of the political spectrum
acknowledge that the system we have in place is not currently
working. And so the good work being done by folks, for example,
at the Federal Permitting Improvement Steering Council to
promote transparency and coordination in partnership with CEQ
is going to be really critical.
And it is our view that there are certainly opportunities
to improve the current system in ways that still protect the
vital community and environmental interests while also allowing
the country to build the infrastructure we need for the net
zero transition. Thank you.
Senator Lummis. Thank you, gentlemen. I appreciate your
testimony.
I yield back.
Senator Carper. Thank you, Senator Lummis.
We have been joined by Senator Ernst.
Great to see you again, second time today. Welcome. You are
a great, faithful attender of these hearings. We are grateful
for that.
Senator Ernst. Thank you, Mr. Chair. I really appreciate
it.
Thank you to our witnesses for being here today, as well.
Mr. Harju, biofuels have really enabled the U.S. to cut
emissions from the transportation sector for over a decade.
Between 2008 and 2020, the RFS saved nearly 1 billion metric
tons of carbon dioxide equivalent greenhouse gas emissions, and
it is only getting cleaner at this point.
Biofuel can further reduce greenhouse gas emissions with
carbon capture and sequestration technologies and on farm
conservation practices, which many of our Iowa farmers are
actively engaged in.
Mr. Harju, in your testimony, you mentioned a need for an
energy strategy to recognize the importance of the environment
through lowering carbon intensity, as well as our economic and
national security. Can you talk more about why CCUS is such a
key part to that all of the above energy strategy?
Mr. Harju. Absolutely. Thank you for the question, Senator
Ernst.
In fact, I will offer a quote from our Governor, Governor
Burgum. We can reach carbon neutrality in the State of North
Dakota by 2030 without a single mandate, without any additional
regulation, and we can get there through innovation and the
geology that we have. This has been a fundamental tenet of how
North Dakota will be a carbon manager.
Ironically, some of that carbon dioxide that we intend to
manage would actually be born in the State of Iowa, so one of
the project proponents and a client of my team is looking to
gather carbon dioxide from 30 different ethanol plants, many of
which are in your State, and move them up into the State of
North Dakota, picking up CO2 in South Dakota and the
State of Minnesota as well. So that really goes to that
importance of a pipeline system that would take carbon dioxide
from places that did not have geology that is favorable for
direct storage of CO2 to places that are.
Senator Ernst. I appreciate that. I am a farm kid, too, and
I am very familiar with the crossover between our energy and
our agricultural sector.
What is really exciting to me about the CCUS technology is
the ability to intertwine that carbon in that relationship. As
you stated, in your home State of Louisiana, Governor Edwards
has made carbon capture a priority for his administration.
Maybe describe a little more of that to me, if you would,
please, but how has Louisiana really been working with those
landowners to ensure them the support of those CO2,
and yes, this is for you, Mr. Lanclos, to ensure that broad
support for CO2 pipelines and avoid using eminent
domain? Because right now, that is an issue.
I know that through some of our farmland, our ag land, we
have experienced those that are using eminent domain, those
that are trying not to use eminent domain. So, if you could
just address that, that would be good. Thank you.
Mr. Lanclos. Absolutely, thank you so much, Senator Ernst,
for your question. About 3 years ago when we started with this
process, early engagement is absolutely critical. So, we have a
couple of associations, one, the Louisiana Landowners
Association, where we did a series of presentations. Our
executive council actually created a committee which brought in
landowners and folks who are actually using pipelines or
potentially were looking at permitting pipelines to really look
at ownership issues and look at siting.
So I think that that committee was instrumental in really
educating folks in terms of what these projects look like in
terms of what we would need. We are fortunate that we already
have a number of CO2 pipelines that traverse the
State. But obviously, there will be a need, as we move forward,
for more.
I think that early and often engagement is absolutely
essential in working with landowners so that they understand
that these projects are critical and what their overall intent
is doing in our State. We have continued to do that, and I
think that the committee has been very successful in really
educating folks about it.
Senator Ernst. I appreciate that. I think education is key
to everything and making sure that the folks engaging in the
project are well advised on how it will impact them, and of
course, our future with the new technologies that are coming
out.
I really appreciate the hearing today. Thank you to our
witnesses. Thank you so much. I really appreciate the input.
Thank you, Mr. Chair.
Senator Carper. Senator Ernst, thank you so much.
I think everyone else has had a chance now to ask at least
one round of questions. I have several questions of my own, and
then I am going to yield to Senator Capito, and see if anyone
else shows up to join us.
This has been a wonderful hearing so far. I knew it would
be, and you haven't disappointed. You haven't disappointed at
all.
The newest climate assessment report issued earlier this
year by the United Nations International Panel on Climate
Change is clear. Carbon capture, utilization, and storage
technologies are not the only answer to climate change, but it
must be part of the climate solutions. I am going to say it
again. Carbon capture, utilization, and storage technologies
are not the only answer to climate change, but must be part of
the climate solutions.
More specifically, the report suggests that to limit global
warming to 1.5 degrees Celsius by the end of this century, we
need global usage of carbon removal technologies like direct
air capture.
This will be a question, I think, I will ask for Mr.
Albritton, Mr. Townsend, and Mr. Lanclos. Your testimonies
identified the importance of CCUS in our battle against climate
change. Would each of the three of you please take a moment and
speak to the need for additional large Federal investments in
CCUS and other zero emitting technologies so that these
technologies are able to be deployed quickly into our economy?
In your answers, please discuss the cost to every American
and to U.S. businesses if we fail to make significant
investments in climate solutions this year.
Mr. Albritton, do you want to lead us off on that question,
please? Thank you.
Mr. Albritton. Sure, happy to. I think, as I highlighted in
my testimony, we have had a lot of progress, so that
Infrastructure Investment and Jobs Act invested 12 billion in
carbon management technologies. That is a strong foundation,
but we definitely need more. The 45Q tax credit, for example,
is an important additional policy to continue to drive
investment, and we need long term extension of that.
There are a range of other clean energy technologies, from
renewable energy to hydrogen that was discussed, that also need
that same type of Federal investment if we are going to see it
scale up, and we are going to have this transition happen in a
quick way.
I think there are clear economic benefits of doing that.
There is the economic costs that are avoided if we avoid those
impacts of climate change. You highlighted a number of them in
your opening statement, Senator Carper, that cost to
communities, to taxpayers, whether it is floods or wildfires,
that is a cost savings if we avoid this.
But these investments can create jobs and create jobs for
communities, and so I think it is important to realize that
there is an economic benefit of these types of investments that
we can realize, and if we don't make those investments, we are
leaving all of that on the table.
Senator Carper. All right, thank you.
Mr. Townsend.
Mr. Townsend. Thank you for the question, Chairman Carper.
I think, as Jason pointed out, the investments made as part of
the Bipartisan Infrastructure Law are a really crucial down
payment on the future of CCUS and carbon removal technologies.
There is more that we could be doing, in terms of RD&D,
including things like increasing the efficiency of separation
technologies, regeneration and reuse of materials used to
capture carbon dioxide, the potential of hybrid separation
systems. Utilization is going to be a really critical
opportunity on the research side to really expand markets for
these products.
I also want to pick up on the second part of your question,
which Jason also touched on, which is about the need for
broader investments in these technologies. There is a lot more
that we could be doing on the hydrogen front and more broadly,
as well.
You mentioned during your opening remarks some of the work
the NOAA has done on weather and extreme weather and climate
related events. We have already had more than nine events with
losses exceeding $1 billion this year in the United States,
which is greater than the average between the years 1980 and
2021. So we are already seeing the impacts of climate change.
These investments do pay a dividend in terms of reducing those
long term costs and impacts to communities.
But also there is the low carbon economic opportunity that
could be as great as $26 trillion, globally, by 2030. If we
want to take advantage of that opportunity and reduce the cost
of extreme weather, this is really the moment for policymakers
to take significant steps to invest in that future.
Senator Carper. Thank you, sir.
Mr. Lanclos.
Mr. Lanclos. Yes, sir. Chairman Carper, fantastic question,
because I think what we are seeing as well in working with DOE
and some of our other Federal partners, they are estimating
that we need in the trillions of dollars for decarbonization.
So every program that we put forward, we are going to develop
efficiencies. We are going to develop economies of scale.
Manufacturing is going to get better. We are going to get
better at producing hydrogen. We are going to become more
efficient.
But with CCUS, it is absolutely critical that we get the
cost down. I think that for us, we have done a lot of economic
analyses and understood that there are some challenges to get
there. The $50 per ton is fantastic, but a lot of industries
that are hard to decarbonize will need more funding to be able
to get those costs to where they are in a manner where they can
rapidly deploy this technology.
In Louisiana, where we have so many industrial emissions,
getting those costs down is going to be absolutely essential
because we want to make sure that these projects can be
beneficial in the long term, but also be financially viable.
Senator Carper. Thank you. I am going to hold my
questioning there and hand it back over to Senator Capito. I
have some more questions, but Senator Capito, please.
Senator Capito. Thank you, Mr. Chairman.
I would like, Mr. Lanclos, to follow up from where you left
there. To make the 45Q tax credit more beneficial and to be
able to deploy these technologies faster and make the projects
go faster, there has been some discussions of direct pay of the
tax credit. Do you think that that is something that we should
seriously look at? Do you have an opinion on that?
Mr. Lanclos. Thank you, Senator Capito. As I mentioned in
the earlier testimony, in terms of economic analyses, as we
were going through the process of looking at the cost per ton,
the 50 versus 85 when that was still in play, one of the
analyses that we saw showed that if we got to even $85 to $90
per ton, that potentially almost 90 percent of the industry in
the State of Louisiana could potentially utilize carbon
capture, utilization, and storage to where the economics would
make sense.
I think that for us, $50 is a tremendous start. It looks
at, probably, and brings about 48 percent of industry to the
table. But in addition, what gets left behind, I think, in the
conversation sometimes is some of the smaller operators and the
smaller industries that don't have a lot of tax liability and
don't potentially have as much use for tax liability, where
direct pay would be a lot more beneficial.
So I think that, for us, many of the companies that we have
spoken to have said that that could be an absolute game changer
in terms of if it is still $50 a ton, direct pay would be
tremendously beneficial to them getting deployment of CCUS
projects earlier rather than later.
Senator Capito. Thank you. Let me ask a question about,
there was some initial discussion, I think, in several of your
statements about communities that have been heavily impacted by
emissions. There has been some discussion in this Committee as
well as to how to help those communities.
In my view, I think that industrial use of carbon capture
is a tremendous way to help those communities, obviously, from
CO2 emissions. But isn't it also a way to, if carbon
capture is occurring at an industrial site, say, a refinery is
next door to a disadvantaged community who has been living
there forever, are there other pollutants that are removed as
you are cleaning up the carbon, are you cleaning up other
things as well? Is that the case?
Mr. Lanclos, I will go back to you.
Mr. Lanclos. Sure. So, Senator Capito, I have seen some
preliminary analysis that shows that carbon capture, even amine
based carbon capture, potentially significantly reduces
criteria pollutants, in addition to particulates. So we are
hoping that in the next several months that the funding
associated with these studies continues that really illustrates
that data, because at the end of the day, I think that there
are often associated things about carbon capture meaning that
they think that facilities will rapidly expand and that the
footprint and the operations will get larger.
I think that, for us, it is imperative that community
engagement includes that this actually just includes a pipeline
and an injection well that is taking carbon out of these
facilities and putting it into storage in geological
formations.
So I think that your point is very well received. The data
that we have seen is very encouraging, and we are really hoping
that these studies can really move forward that shows that
these community impacts can be positive if CCUS is employed in
these areas.
Senator Capito. Does anybody else have a comment on that,
from the panel?
Mr. Albritton.
Mr. Albritton. I would just say, it is important, I think
the criteria pollutant issue is a really important one to look
at. I don't think there is enough data out there right now, but
I think it is primary for research because, and I think that is
one of the key issues. Removing the carbon is great, and that
has a huge environmental benefit. We shouldn't discount that.
But many of these facilities have ongoing issues with other
air pollutants, and that just has to be part of the equation. I
think, if we make that part of the conversation about where we
deploy this technology, and importantly, get input from those
communities that live there as part of the process and
understand what their concerns are, I think that is also an
important part of this, to make sure we are addressing these
concerns.
Senator Capito. Thank you.
Senator Carper. The Council on Environmental Quality
recently issued CCUS guidance as directed by the USE IT Act
recognizing the climate change benefits from CCUS deployment,
as well as a possible public health and environmental impact,
especially for frontline communities. Some of our colleagues
have stated that CEQ's guidance does not adequately expedite
the deployment of CCUS projects and has suggested that
additional reforms are needed at a time when Federal agencies
are still developing best practices within existing permitting
processes to support the deployment of CCUS.
Mr. Albritton, how do you think the implementation of the
USE IT Act is going? Do you share CEQ's view that early public
engagement and the CCUS permitting process is likely to lead to
a more efficient approval process?
Mr. Albritton. I think important progress has been made on
implementation of the USE IT Act. We talked about a number of
the provisions there, that we are seeing progress, including
the guidance as well as the announcement this morning of
nominations for the task forces.
I do think that, and this was in my answer to Senator
Capito as well, that early engagement is really important in
making sure that impacted communities are at the table early in
the process. I think that is critical. I think the CEQ guidance
recognizes that. That is an important part, because if we don't
engage those communities early, that concern and the opposition
to these projects will build, and that will ultimately delay
deployment. And that doesn't serve any of our interests, so I
think that is a critical piece that we really have to focus on.
Senator Carper. Thank you. Just as a follow up, would more
resources for the Federal as well as State agencies to review
and to approve carbon management projects help expedite the
permitting process, and if so, why?
Mr. Albritton. Absolutely. Doing robust permitting, doing
good community engagement, it takes resources, and we have to
invest in that. I think we often think about investing in the
technology or investing in other aspects, but discount this
piece. But it is an important piece, and if we all share the
goal of rapid deployment of these technologies, this is one of
those places we have to put more funding into, and I think it
often is not in the same discussion. We have to make it.
The Princeton Net Zero America Analysis that was released
recently looked at carbon capture deployment, and they
estimated that by 2035, we need to invest nearly $13 billion in
stakeholder engagement, permitting, site assessment if we are
going to deploy these technologies at the scale that we need.
So I think that is a good indicator of why this is such an
important issue and why we need significant investment in this.
Senator Carper. All right. Thanks for that.
Mr. Townsend, if I could, I would like to address another
question to you. Direct air capture is one type of CCUS
technology that can remove existing CO2 from the
atmosphere, as we know. Direct air capture technology offers
virtually unlimited carbon dioxide removal potential, if cost
and other barriers can be overcome. This technology also has
important advantages in terms of siting flexibility and
scalability.
Mr. Townsend, would you take a moment, please, and describe
for us some of the benefits of direct air capture technology in
comparison to other carbon removal approaches? And what is
maybe the most important thing that Congress can do, that we in
this body could do in the near term to help direct air capture
technologies be quickly deployed and commercialized to scale?
Mr. Townsend. Thank you very much for the question, Senator
Carper. I think there are really two chief advantages of direct
air capture, and you touched on them, scalability and siting
flexibility. Not only is this technology deployable at really
significant scale, it can also be co-located in places where
there is either excess renewable power or even excess nuclear
capacity, as well.
I think the chief thing, the principal thing that Congress
could be doing at this point was already a part of the
conversation around the extension and expansion of the 45Q tax
credit, which would be adding the $180 per ton credit via 45Q,
which would really go a long way toward facilitating projects.
Additionally, some of the work that has been done around
hubs that works to capitalize on shared infrastructure are also
key. But really, the extension and expansion of 45Q, I think,
would be the most significant priority.
Senator Carper. OK.
Senator Capito, please, and then I have a couple more
questions as well.
Senator Capito. I don't have any further questions, Mr.
Chairman, but I do want to express my gratitude to you and to
the staff of the Committee for putting this together. I think
it is really refreshing to have a goal of cleaning the
environment and decarbonizing where we can both, from each side
of our aisles, because sometimes it would be very sensitive
subjects, we can work to find solutions, and I think that is
what we have heard today.
We have got some really good suggestions on ways that we
can improve this. And I am very excited about the future of
this. Thank you.
Senator Carper. I am excited, too. My colleagues, certainly
Senator Capito, has heard me quote Albert Einstein too many
times, but among the things he said was, in adversity, lies
opportunity. In adversity, lies opportunity.
People, my wife thinks I am too much of an optimist. I am
an optimist, and I have always been an optimist. But I think
there is a reason, as we face all this terrible climate crisis
going on around the world, there is a real opportunity here.
There is a real opportunity to take some of these ideas that we
are discussing today and prove them and go to work on it.
Not only address the climate crisis, but also provide for
economic opportunity, job creation, which for me is like, the
golden, not the golden rule, but it is exactly where I want us
to go.
OK. A couple more questions, if I can, and then we will
wrap it up.
Maybe I can move to a question for the entire panel. I
appreciate the perspectives the entire panel has shared with
us. We appreciate the perspectives that you all have shared
with us and the opportunities and some of the challenges for
carbon capture utilization and storage. I hope that this
dialogue can help inform thoughtful action to support the
future deployment of CCUS innovation and deployment.
I would just like each of you to take a minute or two and
tell us where you believe there is common ground among all of
you on this panel. Senator Capito and I always try to come back
to, where do we agree. There are plenty of areas where we can
disagree, but I always look for consensus among the panels,
especially one as good as this one.
If you all would just give us your thoughts, where do we
agree?
Let us start on my left. Go ahead, please.
Mr. Albritton. Sure. I think we have heard tons of
agreement on this panel, which is encouraging. I think a couple
of different areas that I have heard, one, I think the
continued Federal support and investment in these technologies,
whether it is the 45Q or other means, I think that is a pretty
shared perspective, because it will be vital to continue to
scale up these technologies in the years to come.
I also think that that idea of how do we better coordinate
as we try to deliver this, so that we are getting all of the
folks around the table, whether it is the State agencies, the
Federal agencies, or the outside stakeholders. I think that is
another shared priority, and I think we can do much more in
that space. That is an opportunity.
Mr. Lanclos. Chairman Carper, I think that at the end of
the day, for us and as the panel has expressed, there is hope
that we have solutions. I think that, for us, that is what is
most exciting. I think that, for a State like Louisiana, we
have gotten to the point where we have seen four and five
record storms that have happened per year in the last several
years. This gives folks an opportunity to say that, look, we
are working toward solutions. We are working together. Folks
are coming together to employ the best available technologies.
We are looking at things from a very comprehensive lens, and we
are thinking about our communities and making sure that they
remain a priority and that folks understand why we have to make
these investments.
I really appreciate your support and all your Committee
staff's support to really put this dynamic legislation together
to put 45Q in a position to really make an impactful change.
Senator Carper. All right, thank you.
Mr. Harju. Certainly, I can echo those comments. I would
say growing the 45Q values at least commensurate with the kind
of inflation we have seen. I know on capture projects that we
have on the cusp of implementation, we have seen prices of
steel up considerably. Total installed capital costs on one of
the projects we have been working on has gone from right around
$1 billion to almost $1.6 billion. So you see the effects of
the monumental inflation we are experiencing, and it would be
really nice to see that in the credit values as well.
I would urge anyone who can be helpful to help grow that
primacy club and extend it to our colleagues in Louisiana and
those other States who are eager to move forward with these
kinds of projects.
Finally, I would just implore everyone, let us focus on
emissions and carbon reductions, as opposed to on fuels
themselves. I see a lot of discriminatory action regarding the
sources of emissions as opposed to the things that we can do to
mitigate emissions.
Senator Carper. All right, one more. We have one more
witness.
Please.
Mr. Townsend. Yes. Thank you, Chairman Carper. Thanks
again, also, to you and to Senator Capito and your teams for
holding this hearing. It is incredibly important in this
moment. I would echo, among the panel there certainly seems to
be a lot of agreement, and that is a very encouraging thing to
see.
I think a few things stand out to me where there has been
some pretty clear consensus, including the fact that CCUS and
carbon removal technologies just have to be part of the
solution to address long term climate mitigation. Second, that
there are significant opportunities, economic opportunities to
deploy these technologies and benefits both domestically and
globally, presuming that there is early and continuous public
engagement in working with communities.
The last area where I heard a lot of agreement, I think,
which Mr. Harju just touched on, is policy is going to be
really important to help not just drive these technologies, but
really to attract the private sector investment that is going
to be necessary to deploy them at the scale and speed that is
needed. Thank you very much.
Senator Carper. Thank you, thank you very much.
We have a little time here. I want to say, if you prepare
for these hearings, and you prepare for probably much of your
life, actually, and the work that you do is just so important.
We have asked some questions, and my colleagues have asked
some very thoughtful questions, and you have provided
thoughtful responses. Each one of you, starting off with maybe
Mr. Albritton, is there a question that maybe you think could
have been asked, should have been asked, that you would like to
say, well, maybe you should have asked this one too, and here
are my thoughts?
Mr. Albritton, why don't you go first? I don't believe we
have asked every good question, so maybe you have another one.
Mr. Albritton. It is always tough to go first on this one.
I think we have covered a lot of the important issues around
this technology and the deployment.
I think one issue we haven't focused on as much, because
this hearing is about carbon capture, is how does carbon
capture fit in with all of the other solutions that we have to
deploy to address climate change. Clearly, it is an important
tool, but I think that is an important question moving forward,
and we have to look at this and a lot of different solutions if
we are going to really address this problem.
Senator Carper. Thank you.
Mr. Townsend, maybe one question you think we didn't ask
that we should have asked?
Mr. Townsend. Thank you. I think that I would be keenly
interested in further discussion around the work force needs,
in terms of the skills that are developed that has been touched
on, the fungibility of skills in traditional fossil, oil and
gas, and other sectors. I think really sort of building out a
deeper set of knowledge about what it is going to take to
facilitate and build the work force that we need to deploy
these technologies would be an interesting area of discussion.
Senator Carper. Good, thank you.
Mr. Lanclos.
Mr. Lanclos. Yes, sir. At the end of the day, I think for
us, one question would be as a State, we are advanced in our
primacy application. But I think it is important for States
that are considering it to understand what resources and what
is ahead of them in terms of how they can be successful in
getting primacy and deploying CCUS in their States.
We have been trying very hard to work with other States to
provide resources. I know Mr. Harju and his team have really
been a great resource for us, as well as Wyoming. They have
come to us and helped us with training. So I think that just
making sure that States understand the process and have all of
the associated resources for community engagement and also for
staff.
Because again, if we are successful in deploying CCUS and
we do get to a point where we have a multitude of permits that
get filed, that last thing that we want to have happen at the
end of the day is that there is a tremendous backlog. So making
sure that resources are in place and that we have a plan to be
able to move these projects forward and move these permits
forward is absolutely essential.
Senator Carper. Thank you.
Last, Mr. Harju, a question maybe we could have asked,
should have asked, that you would like to share with us?
Mr. Harju. Yes, I guess the one that I would think of is
regarding the linkage between energy security and carbon
management. In my opinion, you hear a lot about a carbon
constrained future.
We like to think about a carbon managed future. As you look
at the part of the world where we are from, economic activity
and carbon utilization and in turn, emissions, are inextricably
linked. Being able to effectively manage that carbon, I think,
is our real challenge and our real opportunity. I guess that
would be the one that I would focus on.
Senator Carper. OK, good.
Senator Capito, any last thoughts?
All right. One of the questions I like to ask people, I am
not going to ask you all, but one of the questions I ask people
is, what gives them joy in their work or in their life? You
know, more often than not, what people say is, I like helping
people; that gives me joy in my life. One of the best ways we
can help the people of this planet is to make sure we have a
planet in the years to come.
The people of this country want us very much to find ways
to work together to get stuff done, and this is about as
important as anything that we are working on. There is a great
opportunity for us to make real progress. I think it is an
encouraging time that we spent together.
I just really want to thank Senator Capito. This is a great
idea. I am so pleased that we were smart enough to say yes,
that is a good idea.
I want to thank your staff, I want to thank our staff on
the majority side, and everyone who has participated today.
It is clear that while we cannot meet our climate goals or
decarbonize certain sectors of our economy without carbon
capture, utilization, and storage technology, Congress must be
ready. We must be ready to support rapid and responsible
deployment and promote solutions that we just discussed here
today for the last couple of hours.
We have been here for a few hours now, and in the last, Mr.
Lanclos, in the last 2 hours, Louisiana has lost two more
football fields. I know it is a big State compared to mine, but
eventually you run out of football fields. We have got to
impart a sense of urgency for all of us.
Before we adjourn, a little bit of housekeeping. Senators
will be allowed to submit written questions for the record
through the close of business on Wednesday, August the 10th. We
will compile those questions and send them out to all of you.
We would ask that you try to reply to us by Wednesday, August
24th.
With that, with a deep sense of gratitude, this hearing is
adjourned. Thank you so much.
[Whereupon, at 11:52 a.m., the hearing was adjourned.]
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