Investing in Climate Change

Is Carbon Capture and Storage the Key to Battling Climate Change?


Imagine that you’re sweeping your kitchen floor, and there’s a rug in the center of the room. When you have a collection of dust, you lift up the corner of the rug and sweep it under.

That, in essence, is carbon capture and storage. Just replace “dust” with “carbon dioxide,” and “rug” with “hole in the ground.”

If only it were so simple.

Power companies are struggling to make carbon capture and storage pencil out. While new technologies show some promise, they’ll have to compete with increasingly cheap renewables and growing efficiencies. All will depend on stronger climate policies.

CCS: Yes or No?

Carbon capture and storage, also known as CCS, has been seen as a potential boon to the coal industry, as it allows coal use to continue without the massive release of carbon dioxide.

The industry itself has been lukewarm on CCS. “Carbon capture and sequestration is a pseudonym for, ‘No coal,'” Robert Murray, chief executive officer of Murray Energy Corporation, told Bloomberg News. “Carbon capture and sequestration is not practical, it is not economic and it should not be funded by the federal government.”

But serious climate thinkers are beginning to embrace it. Analysis by the UN’s Intergovernmental Panel on Climate Change (IPCC) includes many scenarios that require CCS to achieve carbon reduction goals. One supporter is Fatih Birol, Executive Director of the International Energy Agency (IEA). “Deployment of CCS will not be optional in implementing the Paris Agreement,” he wrote in a 2016 report.

Hard Road to CCS

The IEA notes that initial commitments to invest in CCS have not panned out as planned. “[E]arly CCS deployment proved to be more complex, expensive and politically challenging than anticipated,” according to the report. “Of the USD 30 billion in public funding announcements, only around USD 2.8 billion was actually invested in large-scale CCS projects between 2007 and 2014.”

Some of the highest-profile examples of the difficulties of CCS have been in the United States. The Edwardsport coal plant in Indiana, the Kemper coal plant in Mississippi, and the FutureGen plant in Illinois—all heavily subsidized by the federal government—all encountered technical problems, delays, and massive cost overruns.

Many of the failures of CCS have come from trying to solve two complicated and money-losing problems at the same time: gasifying coal and storing carbon.

The first step, gasification, involves heating coal under pressure, without oxygen, which releases gases in the coal. The gases are separated, with combustible ones like methane burned in a gas turbine. In the second step, the remaining carbon dioxide is pressurized and pumped into underground geologic formations.

An Easier Way?

There are two alternatives that may be easier.

First, Petra Nova in Texas is demonstrating the feasibility of post-combustion carbon capture, where carbon dioxide is removed from the exhaust of an existing coal plant.

Second, it may be more promising to give up on coal entirely and combine natural gas with CCS. Net Power is nearing completion on a 50 megawatt plant in Texas that will burn natural gas with pure oxygen instead of air, greatly reducing the volume of exhaust. It will use carbon dioxide as the working fluid, instead of water and steam. The only combustion products are water and pure CO2, ready for storage or use in industrial applications.


For CCS to work at all, there must be money in it. Without a price or cap on carbon, there is no business case.

But fossil-fuel supporters in the federal government have taken the position that no regulation is better than a low-carbon solution. Within the current regulatory environment, it’s difficult to see a path to policy support for CCS in Congress.

Meanwhile, cities and states committed to cutting carbon emissions have little incentive to help the industry find a solution. They are instead turning to renewables and efficiency to cut emissions, which are generally cheaper and lower risk than carbon capture and storage.

At the end of the day, without broad and long-lasting support at the federal level, investors are unlikely to be motivated to make the large investments needed to deploy CCS.

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