Episode Summary
One of the most contentious parts of the 2022 Inflation Reduction Act - the most ambitious climate spending bill in history - was the large pot of federal dollars that could now subsidize the nascent Carbon Capture and Storage (CCS) industry. The bill provides for the expansion of the 45Q tax credit, which now allocates up to $85 per metric ton of CO2 that is captured from a point source of emissions like power plants or factories, and then is injected deep underground for permanent storage. At this price point, the IRA provides - for the first time ever - a viable revenue stream for most CCS projects.
Proponents of CCS argue that CO2 reductions will need to happen faster than the world can dismantle its dependence on fossil fuels and thus investment in carbon management technologies need to start now. Opponents say that investments in CCS divert funding from lower cost decarbonization efforts, thus slowing net carbon reductions, and that they incentivize polluting industries to continue their operations.
In this episode, Climate Now has brought together four experts to examine the arguments both for and against CCS. Join us and our guests Charles F. Harvey (MIT), Kurt House (KoBold Metals), Sue Hovorka (UT Austin) and George Peridas (LLNL) for a moderated discussion about what role - if any - CCS should play in the path to global net zero.
“From a policy maker, government, and even a scientist standpoint, it's your duty to try and figure out what may go wrong and not trends to what seems to be the most attractive option at any given time. The market has proven many times that it needs guidance in order to deliver specific, desirable, human outcomes and that it cannot do that by itself, and we cannot count on scoring a home run and everything going smoothly between now and then.”
Key Discussion Topics:
What is CCS?
Does CCS work?
Is CCS a worthwhile investment and should it be a prioritized climate solution?
Chapters:
00:00 - Introduction and This Week in Climate News
8:52 - CCS Debate
Transcript
James Lawler: [00:00:00] I'm James Lawler, and this is Climate Now, a podcast that explores and explains the ideas, technologies and the solutions that we'll need to address the global climate emergency. So, today's episode is a very special one. We are focusing on the hotly debated topic of carbon capture and storage, also known as CCS.
So the goal of CCS is to reduce carbon dioxide emissions by capturing CO2 from large sources like power plants, industrial facilities, and others before it can be released into the atmosphere, then transporting it via pipeline and injecting it deep underground for permanent storage. So, those in favor argue that CCS is essential for meeting our climate goals, while its critics say that it distracts from transitioning away from fossil fuels and diverts resources that could be used in other ways to more rapidly decarbonize.
So, today you'll hear perspectives for and [00:01:00] against CCS in a moderated discussion between four people who know an awful lot about it.
But first, it's time for our new segment: This Week in Climate News.
Julio, it's great to have you for This Week in Climate News. Got a number of good stories this week to delve into, I think. What's new in your world, actually?
Julio Friedmann: What's new is the Department of Energy has announced $1.2 billion in grants for direct air capture hubs. This is something that has been coming for a long time.
It is a whole-of-government response within the DOE and across other branches of government. It's a major commitment, and it's something that came out of the Bipartisan Infrastructure Law.
They laid out the original sets of money to do this. It is a, a astonishing set of announcements: total awards, [00:02:00] spread across the United States, including Alaska, Wyoming coal country, coastal California, Florida, you name it. And the big two announcements were associated with CO2 removal in Texas and Louisiana. Those two recipients will get on the order of $500 million each to build large scale CO2 removal projects at the order of a million tons a year.
So this is the kind of thing that you need to really jumpstart that industry that is big and interesting news.
James Lawler: That's amazing.
Julio Friedmann: There's a specific thing I would like to call out on this. These awards were made under the Justice 40 provisions. 20% of the grade associated with the review had to do with community benefits, community engagement, environmental justice.
So this is putting into practice a lot of the environmental justice concerns and [00:03:00] opportunities that the administration has seen and that many people have sought.
James Lawler: Very, very interesting. Another story that we thought we would cover is the response to the EPA power plant regulation. And we, we've covered this before, but now, you know, major utilities have started to chime in, including EEI, which is Edison Electric Institute, and that is a group that represents investor-owned utilities.
I think it's the largest lobbying group in the utility space. And they are coming back to this EPA proposed rule in saying that capturing carbon emissions from power plants should not be implemented because the technologies are not ready.
And, you know, so it's irresponsible, basically. And, and it will, will, will force too high a cost onto rate payers, uh, for electricity. Not unexpected, but, but what do you make of, of that, of [00:04:00] that feedback?
Julio Friedmann: Sure. So, you should know that the Edison Electric Institute is not strictly or simply a lobbying organization.
They do a lot of things for the electricity industry. They really are a trade organization. They certainly do lobbying as well. And the story is in that context. I understand why they say the things they've said and where they're coming from. Frankly, this looks like a lot of the kind of pushback we've received from utilities in the past.
They fought back, uh, against the mercury rules using the same sensibility they fought back against sulfur scrubbing and NOx and particulate rules over the past decades using the same kind of logic. I know enough about carbon capture to know that it is adequately demonstrated. It is a different question as to whether utilities wanna see it as best system of emissions reduction or best available control technology.
Whether or not it will cost too much is, again, something we will need to see. Certainly, adding carbon capture adds [00:05:00] costs. That said, these- the whole point of doing this is that the cost will come down with redeployment. And we've already seen a dramatic cost reduction in carbon capture in the past 10 years, and we're gonna see it again in the next seven years.
So there's every reason to believe that this can be done with lower cost. One of the big risks here, you do need things like CO2 pipelines and CO2 storage sites in order to move the CO2 around. And if those don't get built, it will be very, very hard for the utilities to comply. That means that they're gonna be stuck either turning down their operations or blending in green hydrogen, both of which have consequences in terms of grid reliability, in terms of cost, and in terms of electricity demand.
So, we will see how this all plays out. What I do disagree with is the idea that carbon capture is not adequately demonstrated. It certainly is.
James Lawler: Very interesting. So our final story this week was, uh, a story in the [00:06:00] Wall Street Journal that was entitled “Wind Industry in Crisis as Problems Mount”. And this story reported that more than 10 offshore wind projects, which total around $33 billion in planned spending, have been delayed or scrapped for now in the US and Europe.
And the CEO of Equinor, in a- was quoted in an interview saying, “at the moment we're seeing the industry's first crisis”. These projects are massive, massive projects. So totaling around 12 gigawatts of power, which is enough, the article mentions, to power, you know, all Texas households and then some, just to put that into perspective, you know. And it suggests that this pushes the 2030 offshore wind targets out of reach.
That said, you know, industry executives also believe that this is really just a speed bump on the path to deployment. Julio, did you engage at all with this story?
Julio Friedmann: Yes. I like the way [00:07:00] that the Equinor CEO described it. It's the industry's first crisis, right? All of these technology pathways, as they scale, hit these kinds of challenges.
We actually saw that in solar when the solar market collapsed and a whole bunch of companies went out of business. That hasn't stopped the growth of solar, but it was a big crisis, and we're seeing similar things here with wind. It is true. The costs are going up. It is not inevitable cost reduction in renewables, the cost of wind is going up because of supply chains, permitting delays, all kinds of things.
And so, the fact that these projects are being mothballed, delayed, or scuppered is rational, right? And it does mean-
James Lawler: Yeah.
Julio Friedmann: -we may not reach our targets. The timetables' and targets' methodology doesn't include this kind of rationale. It doesn't include the fact that things get delayed, right? [00:08:00] Really, the question, though, is not, you know, will you hit this target in 2030?
Will you hit this target in 2033? Like, that's good enough, actually. And I do think we will eventually see these things getting built. In part, that will have to do with two things. One, the streamlining of permitting and permitting reform is a topic we're gonna come back to over and over again here. And the other is the build out of the infrastructure.
It's not like doing an onshore wind farm where you can already hook up to the grid. You have to add infrastructure offshore. You have to have onshore hookups. And some of that's been done in Europe pretty well, but now they're hitting the point where it's not gonna be easy to do anymore.
And in the US it's- we have never done it, really. We don't have these things.
James Lawler: We've barely started.
Julio Friedmann: We've barely started. And so building the offshore infrastructure is hard and expensive and complicated. So, the fact that that has delayed implementation should surprise no one. People expected to have these difficulties. Now we're seeing them.
James Lawler: Yeah.
[00:09:00] Now for our discussion, on one side of the table, we have George Peridas, who is energy program director for carbon management partnerships at the Lawrence Livermore National Lab in Livermore, California. He's joining us today from Greece. And we have Susan Hovorka, senior research scientist at the Bureau of Economic Geology at the Jackson School of Geosciences at the University of Texas, Austin.
Arguing on the other side, against CCS today, are Kurt House, who is CEO of KoBold Metals, and Charles Harvey, who is professor of civil and environmental engineering at MIT in Boston, Massachusetts. Kurt and Charlie co-authored an influential op-ed in the New York Times last year, which was entitled, “Every Dollar Spent On This Climate Technology is a Waste”, which was all about carbon capture and storage and the subsidies offered to it by the Inflation Reduction Act.
Our format today is that each side will have about 15 minutes to present their arguments, which will be followed by a more free flowing moderated discussion. So let's begin with just some brief introductions in terms of how each [00:10:00] of our participants today has worked in CCS.
So Kurt, thanks for being here. Just in a few words, if you wouldn't mind just telling everybody what your background in the space is. We'll quickly go around and then we'll launch into it.
Kurt House: Yeah, so Kurt House. So, today I am co-founder and CEO of a company called KoBold Metals, which is an AI-driven mineral exploration company that's exploring, exploring the planet with advanced scientific computing to find new deposits of nickel, lithium, copper, cobalt, things that are critical for the energy transition.
This company's about five years old. In a previous existence, I had about an 11-year career where I was focused in carbon capture and sequestration, both as an academic, as a graduate student, brief stint as a postdoc, and then, and then as an entrepreneur, building a company to try to do CCS, which I'll talk about a bit more as we go on.
James Lawler: Thank you Kurt. And Sue, how about you?
Susan Havorka: So, I'm a geologist. I'm from Austin, Texas. I've had a checkered career. I'm interested in how fluids move waste, high level [00:11:00] waste and contaminated site cleanups. And then, uh, I got captured by CCS as it developed, because, at first, I was a skeptic. I thought that maybe this was something that we didn't need to do and maybe it was in- more trouble than it was worth.
And so I've done a lot of field research, applied applications with big teams to do research in the field about how CCS works and how we can know what the options are.
James Lawler: And Charlie.
Charles Harvey: My name is Charles or Charlie Harvey. I'm a professor of environmental engineering at MIT. I got interested in CCS maybe about 15 years ago.
My background's in hydrogeology. I've shifted, and for reasons that Kurt and I will describe in great detail. And my research on carbon sequestration now is largely in managing peatlands to store it in natural ecosystems. But for years, I worked on CCS.
James Lawler: Great. And George.
George Peridas: My name is, uh, George Peridas. I'm a [00:12:00] mechanical engineer.
I come from Greece and I grew up watching the environment around me degrade. So I knew I always wanted to work in, in the field. So, after I finished my graduate studies in engineering, I thought, well, how do I apply this knowledge usefully? And that, before long, took me to Washington DC to work on climate change.
So I worked for the Natural Resource and Defense Council for 12 years, and I joined Lawrence Livermore Lab in 2019, just over four years ago. The journey has taken me to take a deep dive into carbon capture and storage, carbon dioxide removal. I wouldn't consider myself a, a pro-CCS individual. I consider myself a, a pro-climate mitigation guy, and that's where CCS comes in.
James Lawler: Terrific. Well, thank you all again for being here. So we're gonna start right in. So Charlie and Kurt, if you guys'd like to go for it.
Kurt House: I wanna start here by saying some nice things [00:13:00] about carbon capture and sequestration, CCS. This is not a discussion about whether or not CCS can be safe or whether it can be a permanent solution.
We agree that CCS can be a safe and permanent climate mitigation tool, for sure. I've been in climate tech since 2003 when I started my applied math earth science PhD at Harvard, and I immediately started working on CCS because it seemed so obviously critical at the time. Back then, over 50% of US electricity was produced from coal.
Coal's future seemed inevitable because it was by far the cheapest electricity source. Solving climate change, it really seemed, required finding a way to use cheap coal without putting the resultant CO2 into the air. In theory, we could scrub the carbon dioxide out of a smokestack and compress it for transport and storage and still be the cheapest source of electricity.
Doing those things roughly doubles [00:14:00] the plant's capital costs, while simultaneously reducing the power output by about 40%. Yet, 20 years ago, we thought even with those added costs, coal would be cheaper than renewable electricity. So what happened? Why were we so wrong? Well many reasons, but, to start, the cost of renewable energy plummeted, making CCS on power plants utterly uncompetitive today.
Coal-fired power without CCS is 2 to 3x more expensive than solar power with six hours of battery storage. Adding CCS to coal-fired power makes it hopelessly uncompetitive. In just 15 years, the cost of solar power has decreased by a factor of 20 and solar power production has increased globally by a factor of 70.
Wind power has grown almost as fast such that we're about to crack two terawatts of installed wind and solar power added since I started grad school, and I'm not that old, right? This is amazing. It's among, it's among the greatest technological and industrial feats of our [00:15:00] generation, giving us a clear path to large scale and low-cost decarbonization.
That is by electrifying everything from electric vehicles to heat pumps and powering all of that with renewable energy and nuclear power, we can decarbonize 80% of the world. CCS plays no role here because it's economically uncompetitive. So what's left for CCS? Well, there's a handful of industrial processes for which CCS is still discussed as a possible solution: ammonia, steel, and cement production.
Ammonia production is naturally well suited for CCS since standard ammonia synthesis inherently captures its CO2, that is to say, the capture part is free. And yet, even here, it's not clear that CCS will be the winning solution instead of getting the hydrogen needed for ammonia from natural gas, but we can get it by electrolyzing water into hydrogen and oxygen.
Today, I'd say it's a tossup as to whether by 2035, say, electrolysis beats standard ammonia synthesis plus CCS [00:16:00]. But even if CCS wins, the CO2 released from ammonia production is less than one half of 1% of global emissions. It's hardly critical.
Next up is steel and cement. These are often referred to as hard-to-decarbonize, which of course is synonymous with expensive to decarbonize. Along with ocean freight and aviation, these CO2 sources are the last 15%, the most expensive sources to mitigate that should be addressed last. A point that should be really obvious is that CO2 is fungible. The atmosphere doesn't care where a given molecule of CO2 comes from, but we shouldn't worry about mitigating the last 15% while our scarce dollars can be invested to reduce loads more CO2 per dollar by focusing on the cheap-to-decarbonize.
Nonetheless, whenever we do address cement and steel, CCS might not actually be the best solution. For instance, exciting new technologies may fully electrify steel manufacturing. I'm willing to bet even odds right now that by 2035, collective deployment of electrified steel will be 2x greater [00:17:00] than CCS on conventional blast furnaces.
So then last here, I'm gonna deal with the- what I think is actually the least attractive CCS option: cement. From one perspective, cement might seem like a great CO2 source because half of its CO2 comes from turning calcium carbonate into calcium oxide. I'll make two points.
Point one: the other half of cement CO2 comes from burning fossil fuel for process heat, and that can be addressed through hybrid heat pump systems cheaply. So we can halve cement’s CO2 footprint without any CCS. Second, C12 Energy designated cement to be the worst CCS candidate because capturing cement CO2 is incredibly expensive, while the value of cement itself is modest. Adding CCS more than triples the cement price. So just imagine those market dynamics, alright?
Twenty years ago, we thought CCS could address more than two thirds of emissions. Today the view is so different. Innovation has driven the cost of renewable power, electric vehicles, heat pumps, et cetera to be competitive with fossil fuel systems, dramatically shrinking CCS’ [00:18:00] potential from over 30 gigatons of CO2 per year to maybe a few gigatons for cement and ammonia.
Unfortunately, CCS is kept alive by targeted subsidies that require the production of CO2. I'll end with this key point: all climate subsidies should be technology-neutral so that the marginal dollars invested eliminates the maximum marginal quantity of CO2. For the next several decades, that means electrifying transportation and most other industrial processes while building a renewable and nuclear powered grid.
Once that is done once every car and every truck is an EV, once the grid is renewables and nuclear only, and once blast furnaces are replaced with electrolysis-driven steel manufacture, then, perhaps, we deploy CCS on cement kilns. And by the way, only after all of that is done should we spend any time or any money at all on directly getting CO2 out of the atmosphere.
James Lawler: Charlie.
Charles Harvey: Okay. I want to [00:19:00] consider why we're still talking about CCS in 2023 when we have less expensive options. I'll step through four reasons. First, obviously, the new subsidies. 15 years ago, we wouldn't have dreamt that the 45Q subsidy would've- be expanded to $60 per ton of CO2 used for enhanced oil recovery.
Now, both the infrastructure and the Inflation Reduction Acts target huge subsidies at CCS. These were the parts that got Joe Manchin's vote. You can't get these subsidies by just reducing greenhouse gas emissions. You need to produce the CO2. The second related reason we were talking about CCS now is that it leverages oil and gas production. To explain, let's consider not the projects on paper, but the 13 real projects operating now that are getting subsidies.
James Lawler: Charlie, just to clarify one, one quick point. The 13 operating companies, this is the 13 operating CCS projects?
Charles Harvey: In the US.
James Lawler: In the US?
Charles Harvey: Yeah. [00:20:00] Yeah. There's roughly an equal number in the rest of the world combined. So where did the ones in the US get their CO2? Two thirds of it is from natural gas reservoirs, and this is not CO2 from burning fossil fuels.
This is ancient CO2 that has already been sequestered underground for millions of years. It's pumped up with methane, then injected back underground. So there's nothing like the 45Q subsidy for simply leaving it underground in the first place. And this is the hard-to decarbonize sector right now where most subsidies go.
Now, where do these projects inject their CO2? 11 of the 13 projects use the CO2 for enhanced oil recovery, EOR. And this counts for 90% of subsidized injection. It's a good deal for oil companies. An average subsidy of about $30 per barrel of oil produced. So let's consider the largest project.
This is the Exxon Shute Creek LaBarge project that [00:21:00] began long before subsidies for fighting climate change. This project accounts for about one third of total CO2 sequestered each year in the US, and it's stored 120 megatons. It's the basis for Exxon's green advertising campaign, but it is an absolute greenhouse gas disaster.
The project withdraws gas from a reservoir that's 65% CO2 20% methane, and a small amount of helium. The helium and the methane are separated for sale. When the price of oil is high, the CO2 is used for EOR and to harvest the 45Q subsidy.
But when the price of oil is low, half the CO2 has been vented to the atmosphere, an amount larger than the methane produced, making this project worse than coal before you even account for fugitive methane or the CO2 produced from burning the natural gas and the oil that the subsidies incentivize. So the overall point here [00:22:00] is that there is money to be made from CCS subsidies to produce both natural gas and oil.
A third reason that we are still talking about CCS is that projections of growth are very optimistic. To understand this, let's consider the history of the International Energy Agency, IEA's projections. I'm going to try and paint a picture of a plot to help you visualize this. So, imagine a graph of CO2 injected per year, starting in the year 2000.
There's a thick black line along the bottom representing what has really happened, global CCS rising gradually to about 40 megatons per year now. Now, of course, if you counted the CO2 from burning the oil produced by the EOR, this line should be negative. But, but nevermind that for now. Now, let's step through the years, adding the projections as they come out each year- the past [00:23:00] predictions of the future.
What you see is wildly overestimated projections, marching forwards, always rocketing up year after year up to now, and now the projections remain optimistic. Now let's compare that to the IEA's projections of solar power generation. In this case, reality really has shot up fast as solar has exploded as an energy source.
But for nearly a decade, the IEA's projections proved much too low until the last years when their projections seemed to better extrapolate the current growth. So the odds are really small, that unbiased prediction would be wrong in the same direction so many times. So what's the bias? Well, it's a combination of things, but mainly it's the use of very optimistic models of CCS costs that are uninformed by many failed projects while, at the same time, overestimating the cost of, of renewables.
So the, the fourth and [00:24:00] final reason that I wanna discuss for why we're talking about CCS now is because of the promotion of academic programs and booster organizations that are funded by, by oil companies, as well as government programs that industry lobbied to create. And to explain, I thought I'd pick on my own institution, MIT, by taking a, a recent publication titled “Hard-to-Abate Sectors: The role of industrial carbon capture and storage (CCS) in emission mitigation”.
I'm taking this as an example. Like many other papers, it right upfront argues for the importance of sustained policies, subsidies, and uses an integrated assessment model to find that CCS is necessary for decarbonization. So what's the backstory here? Who, who supports this research?
Well, one author is an Exxon employee, the other three are MIT researchers employed by programs funded by oil companies. Exxon's [00:25:00] funding of the paper is acknowledged, and oddly, the paper itself is copyrighted by Exxon. So is there a conflict of interest here?
So first, let's consider six of Exxon's interests in subsidizing CCS. It funds enhanced oil recovery. It funds natural gas production. It increases fossil fuel consumption, that's the ener- energy penalty of CCS, the additional fuel required to separate, compress, and inject the CO2. It locks in fossil fuels because you need the CO2 to get the subsidies. Fossil fuel companies get big subsidies to build projects, even if they're never completed.
And lastly, CCS is now a public relations tool for fossil fuel companies. It's displaced climate denial. So Exxon's interests are all aligned, but MIT's interests are misaligned here. [00:26:00] For the MIT authors, on the one hand, they depend on Exxon for funding, but on the other hand, they would like to provide objective analysis of the best ways to fight climate change.
So this conflict underlies many publications from many in institutions that are cited in promotion of CCS. The problem is, is that there's no easy compromise. If government policy was directed to most economically reduce emissions, there would be little or any- if any CCS and time is running out. We need to do the smart things right now.
Right now, CCS is an indirect subsidy to oil companies. Arguments like, "we need to do all-of-the-above" or "we need to use every tool in the tool chest" don't hold water. We think that we need to do the things that make sense that are the best use of our resources to reduce greenhouse gas emissions.[00:27:00]
James Lawler: Thanks. We'll now hear from the other side of the fence.
George Peridas: I'll open it and set the context for why we think that we need CCS. So as a, as a scientist, I'm not allowed to have favorite children here, no, no prodigal sons in the, in the climate mitigation portfolio. I continue to be extremely alarmed about the pace that humanity is adopting and tackling climate change.
The early years of climate change were, I think, less noticeable and, and more benign. The, the feedback signals that we are getting each year or even each, each season from the planet keep trending, starker and starker. So the, the, the climate scientists are getting more alarming feedback signals from the planet than, than before.
So what, what does that leave us there? There's a huge body of scientists that studies the climate itself. That's the Intergovernmental Panel on Climate Change. Now, there, there are still some outliers who don't believe in their findings and they don't [00:28:00] believe in climate change. The same body of researchers has actually looked at what it takes to try and stabilize the climate, and they do equally in depth, equally exhaustively researched pieces of work that point to a, a shotgun approach or an all-of-the-above approach, as Charlie called it in, in tackling climate change.
And, unequivocally, these assessments include forms of, of CCS and so-called CDR, carbon dioxide removal. So, with this opportunity, I'd like to broaden the umbrella of what may qualify as CCS 'cause what we heard from, from Kurt and Charlie is, is a very mid-2000 view of, of CCS. The, the world has, has moved on. And I think there's much more utility to be squeezed out of that family of, of technologies today. So initially, I agree with Kurt completely, it was all about mitigating emissions from coal-fired electricity.
That was the, the main imperative in the [00:29:00] United States. We have moved on from that in no small part because of the shale gas revolution and the demise of, of coal mining and coal-fired electricity generation. That is not the case in other continents or in other countries of the world. So there, there is still a, a lesser but nonetheless ongoing imperative to reduce emissions.
These coal plants, they live for several decades and they're extremely carbon intensive. So even though in the US when you may have moved on and renewable energy has, has truly taken off, and gas is, is now the de facto base load alternative, there are still areas in the world, in Asia and, and elsewhere where, not only do we still have a very large coal electricity fleet, but we, we're still expanding that.
And these things don't live for two or three years. They live for decades and they have a, an unacceptably large emissions legacy. So what does CCS and CDR look like today? CCS is usually referred to as capturing CO2 [00:30:00] from large point sources. So steel, cement, power generation, petroleum refining, chemical production and so on.
CDR is really not that, that different. Carbon dioxide removal refers to decreasing atmospheric concentrations or content of CO2. So we find ways to remove a CO2, not just from a large point source, but also from the atmosphere. And you can do that a number of ways. You can, you can use engineered means and grab a CO2 using materials from the atmosphere, or you can let nature do part of the work.
And you let plants capture the CO2 as they grow. And then you take the CO2 from that biomass from those plants and you put it in secure storage. And, really, one of the distinctly common elements between CCS and and CDR, carbon dioxide removal, is geologic storage of, of CO2.
This is one of the [00:31:00] most permanent, if not the most permanent solutions for putting CO2 back where it came from. That's exactly what we got fossil fuels from, thousands of feet underground, and we released millions of years worth of them in the space of a century and a half. What the proposition is here is simply to reverse that trend and take CO2 from the atmosphere, put it back underground.
Why do we need to do it? So we are on the back foot when it comes to tackling climate change. We have been talking about it for too long, and the actions that we have taken in, in my view, are not commensurate with the urgency of the, of the problem. This means that every year counts, every 10th of a degree of warming counts, and it's not just the end state that matters here.
So, if we manage to get to a certain atmospheric concentration in 2050 by staying high then adopting a crash diet [00:32:00] in 2045, that is not equivalent in terms of a planetary outcome to having a more front loaded approach, which then tails off. Every year that the earth stays at elevated CO2 concentration counts.
And because carbon resides for a long time in the atmosphere, the cumulative warming and climate disruption that results, that residence time has a a negative effect on the climate. So, we need to be able to reduce emissions and reduce concentrations of the atmosphere as soon as possible.
That really does mean a portfolio approach. There's no unique solution here. And, as someone who's spent a long time looking at CCS and CDR, I'm not here to advocate that this should be the, the protagonist or the leading solution to climate change, but it needs to be one of them. There's a big difference between reducing emissions by 80% and [00:33:00] by a hundred percent and becoming truly carbon neutral.
And that last 20 or last 15% is always some of the, of the toughest territory to move in. So, as a scientist, I, I don't believe that there is room to focus on particular solutions. There is no getting away from the fact that we will need to deploy CCS and CDR to some extent. Are these the most elegant technologies or are they a deal?
No, I think there are several reasons why you would argue that you want to maximize your mitigation through other means. A renewable resource will always be preferable to something that is less efficient and still uses- potentially uses fossil energy and which has a, a bigger life cycle, which then has to be managed and, and financed.
Nonetheless, I think it completely makes economic sense, given the, the costs from climate change that we're facing, to [00:34:00] include CCS and CDR in the portfolio. The, the record of CCS projects today hasn't been blemish free, but I would argue that it's resoundingly successful. So you may argue that there were some blemishes in who took advantage of, of these early incentives, but the, the technological track record of these early projects has been very positive.
And from a, a safety point of view and from a demonstration of, of con- proof of concept point of view, these projects have been resounding successes. I think what we're about to see is massive growth and explosions in the number and types of projects that take advantage of the newly-instituted government subsidies.
These will not look like the coal-fired power plants of the past. They will look like direct air capture plants that scrub CO2 from the atmosphere. They [00:35:00] will look like plants that take advantage of waste biomass that is abundant in, in many states and in our nation. So I am fully anticipating and even witnessing a complete transformation in what CCS and, and CDR look like.
It is not the, the picture that occurred and Charlie painted from, from the early 2000s, and I think it has much, much broader utility.
James Lawler: Thanks, George. Sue.
Susan Havorka: So I really like renewables. I, I've always liked renewables. I- my neighbor had wind pumps, you know, collected them from West Texas and brought 'em to his yard, used to run all kinds of things.
I got my roof fixed and put solar on it. Renewables are fabulous. The discussion we're having is should CCS even be considered now. And I agree with George that, that Kurt and Charlie are bringing a lot of experience from the past couple decades, but I'm not sure it's looking forward to where we are right now.
I [00:36:00] think one of the places we should look is who wants to invest in CCS technologies now so that, to fact find about this, one could look at who's applied for a Class VI permit, which is being posted online.
James Lawler: I'm sorry to interrupt. Could you just explain what a Class VI permit is and why that's relevant?
Susan Havorka: Yes. In order to plan a CCS project, you have to be permitted. It's quite important that we all agree that this technology works, that it's permanent and that it's safe and part of the way we make it permanent and safe is because it has a rigorous permitting process that's now managed by the EPA and is being handed off to states who want to issue these permits at a local level.
Because there's the incentives that we were discussing, a very large number of, of entities have put in a significant amount of investment to obtain acreage that they can inject beneath. They have to make a negotiation with the landowner, [00:37:00] agree to a, a proper reimbursement for the use of the, the land. They have to collect a large amount of data at quite high expense.
So they've made a significant investment toward making an- a project for the future, which don't look at all like the projects that we were working on in the past. And I've been working on CCS at the same time Kurt and C12 were making progress and we were all struggling. I was working with projects that were very connected to, to, to oil companies and enhanced oil recovery for reasons- because there was no other way to fund them, that you had to do a piggyback operation on something that had a- an oil as its- part of its economic makeup.
We are, with the increase in the tax credits from the IRA that we were discussing, the amount of money that's available is, is large enough to op- to make many projects be viable. And they're really diverse. And most of the investors, they're looking at wind and solar, but they're also looking [00:38:00] at diversity.
They want to make sure- tell their investors that they have a plan, a viable plan, and they're making decisions to invest in CCS. So, Kurt's prediction of the future may be absolutely right, we never need it. But a lot of investors are, are disagreeing and putting their money into saying “I think we need this technology”.
I feel like the climate change problem is severe enough that we- now is a bad time to, to say “I'm writing this one off”. Now is not a good time to doom any technology, especially ones that our investors are showing big interest in by, by starting projects, the project starts are real. They're not vaporware and they're diverse.
They're not oil companies, they're everybody. A very diverse population of permittees are interested. Now, all of these are touched by oil in some way. The expertise comes mostly out of the oil and gas industry. These are the tools. [00:39:00] So people ask me, are you pure? And the answer is no. Very impure. I, I actually will work with anybody to mitigate climate change.
But, also, the net effect is that 92 million tons of CO2, my group has monitored in our work to see that the storage is permanent. So I feel kind of proud of achieving large volumes by using any strategy available, any technique available, any investment available, doing it globally, working with people everywhere, from every perspective. They, they need the power to make a local decision that, that makes sense to the way their financing is unfolding, their opportunity is unfolding.
So, keeping this tool in the kit as, as the IPCC has repeatedly put it in the kit, allows diverse stakeholders to make their own decisions about what technologies they want to adapt. I'd like to draw an analog with the last time we had a big problem, which was [00:40:00] in the middle of 1960s or so, we had a lot of damage to surface waters of the US and it led to the foundation of the EPA and the acts drive the EPA, including the Clean Water Act, the Safe Drinking Water Act.
And those said you can't pollute, you can't damage drinking waters of the US and set the standards for that. And companies made a number of different decisions about how to take those very large volumes of fluids that had a high economic cost to, to make these changes. And they, they made different choices. And Kurt may be right, but the fact that they- people have the choices will help them make these choices in a more aggressive way because they will, will make the choice that seems right. It works best, to them.
James Lawler: Great. Well, thank you. So one question I have, George, for you and Sue, it strikes me that, you know, climate scientists are- you know, tell us that we're in a burning building, right? Like we have the, the walls are on [00:41:00] fire, the roof is on fire, and we, we don't have unlimited resources, right?
We have a hundred dollars, let's say, or a thousand dollars. We can use the dollars in a finite number of ways. One way might be to purchase water or some fire retardant and to spray it on the building. Or another way might be to sort of develop a technology that, at a certain point, would be able to suck the oxygen out of the building and stop the fire that way, but it's not quite there.
Isn't it clear that when we say that, you know, we need a portfolio, we need a portfolio of solutions, I think that's, that's true, but it's only in a situation that doesn't have the level of urgency that we have. But where does that thinking fall short, I guess?
Susan Havorka: Are you thinking that CCS is the one that's not ready?
James Lawler: Yes.
Susan Havorka: So right now, maybe I'll stay local. My, my city, which is a very green city and does a lot of investing in wind and solar, a lot of rebates, but if I pull up what our grid is getting, yesterday we did it, it was 70% gas. [00:42:00] Oh, and we just built a new gas fired power plant. So in order to get to the future, we need to tear that thing down and install solar and we can't do it.
The City of Austin would do it if we knew how to do it. The city has will, would like to do it. We don't have a way to jump to a hundred percent renewables tomorrow, but we could do capture right now and pay for it. It would be imperfect. So we might need, we might need interim solutions and how long those interim solutions is uncertain.
I think it has to be worked on a case-by-case basis, but we might want to mitigate with CCS now using the equipment we have now.
George Peridas: Wait, could I chime in?
James Lawler: Go ahead.
George Peridas: The notion that there's a finite bucket of money to throw at climate change is simplistic and misleading, in my view. Governments have finite budgets and they have to choose where they channel their research dollars, but the real trick is to figure [00:43:00] out how to leverage the immensely larger investing power of the private sector and that's where governments have a big role to play.
James Lawler: Yeah.
George Peridas: Solving climate change is not an economic challenge. You know, report after report has outlined that we can do it at a very modest fraction of world or national GDP. It's a social challenge. It's a mindset challenge.
James Lawler: So Kurt and Charlie, something that I'm wondering if you could explain is, you know, George and, and Sue, I think both made the, made the point that we have a huge amount of existing power production infrastructure and many different kinds of, of facilities that emit CO2 today that have long lifespans that'll be with us for a long time.
And these are going to continue to emit. And we have technologies, you know, CCS technologies that are proven and we're all acknowledging here that this is a proven, safe technology. I think that's not something that we're really debating here. So why, then, is there not a role [00:44:00] for CCS in, sort of, the real world?
Kurt House: I'm exceptionally familiar with the retrofitting the installed base argument, because I made it for year, year after year after year as, as I built, built my company and, you know, talked about the fully addressable market, right? It was- and for- we look at point, point source emissions, power generation is the lion's share of point source emissions.
I really want to talk about the last 15% because that was a, a major focus of George's comments. Both George and Susan sort of said, oh, you know, Charlie and Kurt are right, but they're thinking, they're just looking backwards. They're thinking about CCS on power generation. Well, that's what you're talking about with the retrofit.
That is the lion's share of the retrofit installed base, right? And so the, the question becomes, and this, this is really the heart of the matter, which is the framework from which you evaluate these problems. I firmly believe the correct [00:45:00] framework is the highest marginal utility per marginal dollar of investment. It just means the most good stuff per dollar, right?
In any investment context, by doing it, you can get the most for the same amount of stuff, right? If you have some- if you can buy a hundred pounds of ground beef for $10 or a hundred pounds of ground beef for $20, clearly you should do the former because you get the same amount of ground beef for half the price, right?
And that is- ev- everyone sort of intuitively knows that, and markets do effectively do that really well, but in individual decisions are really hard because sometimes the costs are sort of hard to predict. The key question we have now is for the- we invest whatever money we invest over the next two decades, how does that money avoid the most cumulative long-term CO2 emissions?
And it is not the case that retrofitting existing power plants is the right answer over the next two [00:46:00] to three decades. Definitively, the right answer is continued massive deployment of, of electric vehicles, of renewable energy, of grid storage.
There's 10 PPAs signed in the last six months in the US for solar with six hours of battery at 3 cents a kilowatt hour, right? It's incredibly cost effective now, it's amazing. Gas cannot compete with that. It's amazing. It's really, really amazing. And so all the money focused there will, will avoid a huge amount of emissions, okay?
And, and we, we focus as much as we can on, on, on those problems. And the, the whole point, everything we spend on something much more expensive will end up having the net effect of putting more CO2 into the air because you're gonna, because you're, you're doing less with the same investment.
James Lawler: Now, Kurt, what to do then with the gas fired power plant that is currently providing power to the grid that Sue referred to, and so many others [00:47:00] like it in a world where there are PPAs being signed for this kind of power?
Kurt House: Like I mentioned in my opening remarks, just 15 or 16 years ago, coal was 54% of US electricity generation, 54%. This year it's going to be less than 19%. Think about that for a minute. It was 54% 15 years ago and now it's gonna be less than 19% this year.
It is incredible. It's totally amazing, right? Those- no one blew up those, those coal-fired power plants, there weren't eco terrorists going and chopping 'em down. The buildings still exist. What happened is they got massively out competed, uh, significantly by natural gas, right? Low-cost natural gas in North America, significantly undercut that.
James Lawler: Sue and George, I wanna flip just those two points back to you guys. So one, in terms of maximizing the utility of each dollar invested and what you think of that argument? And then two, [00:48:00] you know, Sue, maybe you could address the second point Kurt made about what's happened with coal and how a world where we can access this cheap level of solar plus storage, why shouldn't we just be doing that all day?
So maybe first the dollar piece?
George Peridas: The dramatic shift from coal to gas electricity in the US, in my view, is very indicative of market changes that we cannot anticipate and this is only one of them. There've been many other things. The, the economic downturn of 2008, covid, there is no way that today we can predict what the market is gonna do between now and, and mid-century when we're setting all these long-term climate goals for, from a private sector standpoint, from a entrepreneur and an investor standpoint, I think it's, it's good and natural to get excited about what's working and what's trending right.
From a policy maker, government, and even a scientist [00:49:00] standpoint, it's your duty to try and figure out what may go wrong and not trends to what seems to be the most attractive option at any given time. The market has proven many times that it needs guidance in order to deliver specific, desirable, human outcomes and that it cannot do that by itself, and we cannot count on scoring a home run and everything going smoothly between now and then.
I do agree that renewables do look attractive, and I'm delighted about that, but we cannot count on the fact that they will completely dominate the, the climate mitigation portfolio and render everything else useless. As a planner and as a, as a government and a policymaker, you need to be thinking, okay, what could go wrong and how can I be prepared for that?
James Lawler: Sue, please go ahead.
Susan Havorka: One of the topics that I'm not a specialist in any way is grid stability, which has been discussed heavily. I know it's debated intensely. I'm sure that Kurt will tell us that he has a plan to create this um, 200 percent renewable grid, [00:50:00] but a lot of people who run grids, they may be more conservative.
They may- they're very dubious and quite concerned, and that includes a significant portion of people who make policy. They value grid stability above all. They're concerned about assuring that the grid can provide power at all times. And, to them, that means that they need to have some trusted technologies in their portfolio, which means that they're going to use some carbon and that needs to be mitigated in order to reach climate goals.
So, if Kurt is right, we should all go with Kurt. But what if Kurt is not completely right? Because many people don't, are not in agreement that this is an absolutely clear pathway. So that's where we're discussing whether or not the risk of- that we can go to a hundred percent renewable- renewables fast enough is going to save us from climate change or whether we need to backstop it with lots of options, including readiness to pull emissions to- from down, from the atmosphere.
Should we ever do research on that? [00:51:00] I mean, we're not gonna do it today 'cause we're not emitting point sources, but whether we should invest some money, it takes decades to bring such a technology up.
If we decide that the overshoot is very bad and we need to get it out of the atmosphere, it would be a wise government to invest in, in preparing the technology.
Charles Harvey: One thing Sue said that I really agree with and like is that we should, we should think about how the Clean Water Act worked. That said, you just can't pollute and, and you're free to figure out how to do that.
I think it's pretty clear that if we had something like that for CO2 emissions, there would be almost no CCS. All these new projects that are announced now are there because the subsidies are targeted for injecting carbon dioxide.
James Lawler: And you're referring to a carbon tax?
Charles Harvey: Yeah, I think I, I think I probably am, you know, I know that's not politically possible.
It seems like the best we can do is to sort of figure out what a carbon [00:52:00] tax would do and, and you know, and create policies and subsidies to drive things that way.
James Lawler: Mm-hmm. And Sue, what do you think of that? 'Cause the carbon tax came to my mind as well when you, when you described the clean water situation.
How do you think about that?
Susan Havorka: Well, tragically our government is not something that we can just start a clean sheet of paper and write down what we ideally wanna do using the best physics available. We have to kind of work with tools we have in-hand. So I do agree that the current tool is not- 45Q is not a mature incentivizer that would achieve the goals the same way that Clean Water Act is.
You notice the Clean Water Act has a lot of parts and it's involv- involves a lot of mess that's applied in different places and, and still doesn't quite work, you know, so, so patience is necessary in our system, and I, I'm not sure that, that, that we could predict the future.
Kurt House: So, uh, Susan and I violently agree on the difficulty of predicting the future and the importance of, uh, [00:53:00] technology-neutral policies. The thing we're really critical about are policies that are quite distortive in picking very selective technologies. Technology-neutral policies come in two forms, either, either a tax or a subsidy based on producing the desired output however, however you do it, right?
So a subsidy for producing zero-carbon electricity or very low-carbon electricity, a substitute- a subsidy for producing zero-carbon cement, zero-carbon steel, right? The things that, that, that we actually need. So I either pay to produce the thing you actually want, which is those goods or services without any CO2 or tax the CO2.
Inherently, either one of those approaches is technology neutral in the sense that you're not picking the type of the method to do it, right? If we had a policy, if we had either one of those approaches, my, my assertion, and this is, this is the heart of the matter, our assertion is there would be almost no CCS because it does not compete on a level playing field even remotely closely.
And the, and this is why I focused my, the bulk of [00:54:00] my remarks not on power generation, 'cause that story is just done, it is just, it's so uncompetitive, it's, it's not even worth discussing. I focused my remarks on the hard-to-decarbonize steel and cement. The last 15% that I mentioned is aviation, ocean, freight, steel, and cement.
Those are the hardest, okay? Ocean and freight, definitely not gonna be done with point-source CO2 CCS, clearly. Steel, I'm now betting against CCS. I would for a long time, bet, have bet for it. I'm now betting against it. We'll see. And even cement, which is canonically the hardest thing to decarbonize, even there, it's so expensive relative to everything else.
Relative to subsidizing, subsidizing electric vehicles in developing countries, relative to so many other things, and relative to the value of cement itself that- I don't think, in a technology neutral context, you would have any of that. Right? So what's happening is, you're getting lots of, lots of little niche projects because the policies designed are [00:55:00] so dramatically weighted toward, toward doing something that's kind of silly.
Just pay people to inject CO2 almost regardless of, of, of where you're getting the CO2 in the first place, right?
Susan Havorka: No, no, Kurt, these are not niche projects. They're first-of-a-kind, but they're doing million- many millions of tons a year. They're not niche projects. We agree that it has to, there has to be an incentive.
It's cheapest to release to atmosphere, and I agree that 45Q may not be the most divinely inspired, elegant incentive, but it's the incentive we have to get the show on the road. I'll take it. I'll take the carbon outta the atmosphere now tomorrow by any means possible, now. Get it done.
George Peridas: The economic arguments that a cap and trade system or just setting a price and then letting the economy decide on how to mitigate an environmental problem, they're decades old and carbon tax, cap and trade, doesn't matter what you call it. The same idea is the same. Just set a price and [00:56:00] then everything else will fall into place.
Practice has shown repeatedly that there's a million reasons how the ideal market deviates from reality and how governments do need to intervene and guide it if they want to achieve a particular environmental outcome with some degree of certainty and of a certain magnitude. I think the jurisdictions that have gotten it right are the ones that have overlaid multiple policy instruments.
And California is, is one example, but there is a cap and trade system, but there are several sectoral policies that target what the government thinks are crucial sectors- are crucial technologies. There are many ways in which markets fail and yes, that, in theory, is less efficient to have this overlay of instruments, but that is how you safeguard from trip ups along the way, and that's how you prepare and have on the ready backup technologies that can help you get all the, all the way, uh, there.
We, we've seen time and time again that markets by themselves cannot deliver an outcome, let [00:57:00] alone for a problem, as, as huge and as complex as climate change.
James Lawler: Charlie?
Charles Harvey: Yeah. So there are three things I wanna say that fit into this. One is, we sound very theoretical and idealistic when we're talking about this. We're ignoring the politics.
We're all talking about, you know, sort of potential ideas, you know, maybe steel. None of those things exist now. It's- all of these different ideas are not what's happening. And yes, there's 20 million tons going in a year now. That's not much, right? But the politics point I really wanna make here, when I say politics, it's that the reason that we have these subsidies for CCS isn't because of thoughtful economic analysis.
It's pure politics. It's because that is what was necessary to get Joe Manchin's vote and you know, the- gets more, more funding from oil companies than any other senator. [00:58:00] It's- no one sat down and calculated the $60 for EOR
James Lawler: Charlie, isn't that a function of- I feel like this is one of the fault lines between the two sides here.
Like Sue, Sue and George might argue that that's just, that is the real world. There's no second reality that we can live in. That's the reality where you have Joe Manchins that need what they need and you set the price you can set to make the thing go. And that's what you're working with.
Charles Harvey: Right, so in the real world, if you give enough money to directly subsidize CCS projects, well, we'll take that money.
James Lawler: Mm-hmm.
Charles Harvey: I think our role as people studying this is to provide advice on how the money should be spent rationally, okay? And I think all four of us would agree, it sounds like we all do that EOR is not the best use of our, of our subsidies.
Susan Havorka: EOR is no longer, no longer can do what it could for us now.
Charles Harvey: Yeah, but it's- we just increased the subsidy for that to 60 [00:59:00] and, and that's what, that's what's going to happen.
Susan Havorka: But Charlie, the EPA hasn't received, uh, many applications for Subpart RR. That's the EOR credit. They're receiving the 45Q tax credits under Class VI, Class VI for saline only, is the new game in town.
On this part, on this fraction of the portfolio, what we learned about EOR and what we- the anxieties we've all discussed before are not relevant at the moment. The tax credit remains, but it's- the investors don't want it, which tells us a really important thing. This is not Joe Manchin's decision. This is being repeated.
It's political, but it's being made in boardrooms and it's being made by the city councils and it's being made all over the place by people making a various number of decisions, which are not in agreement, but driving it. So it's not a one decision.
Kurt House: Would either of you like to wager on whether, in the year 2030, say, more CO2 will be used for EOR or, or be putting in- or be put into non-petroleum-bearing strata?
Susan Havorka: I'll wager. Non [01:00:00] petroleum, I, I'll bet-
Charles Harvey: What are we gonna wager? I, I, I'm in on this.
Kurt House: Yeah-
Susan Havorka: Yeah.
Kurt House: I dunno, a fancy dinner in Austin. You live in Austin, right?
Susan Havorka: Carbon free dinner. We'll go to a low carbon restaurant, yeah. We'll find someplace off the grid.
Kurt House: Just be, it's in the year 2030.
Susan Havorka: Okay.
Kurt House: Okay? In that year, and we're talking just the United States, the total, total, total mass of CO2?
Susan Havorka: No, no.
Kurt House: Being used for EOR?
Susan Havorka: No, because the retro projects- because they're still in the, because the past- so, we're betting on different things. I'm gonna say now, you might- to cut off the tax dollars for a past subsidy is another political problem.
I think Joe Manchin will probably protect his people. So Exxon will keep doing La Barge, which is gonna- it's big.
Kurt House: And, and you think total, total non-petroleum bearing will be less than La Barge alone?
Susan Havorka: I don't know. I-
Kurt House: -by 2030
Susan Havorka: I'd have to do some math I'd, I'd actually, the data are available. I think it- I, I'll still take your bet.
Kurt House: That's pretty modest.
Susan Havorka: [01:01:00] 20- 2030 we got seven years. I think we'll beat La Barge a good bit.
Kurt House: Okay, great. So the way this, this is fun. I love this. Thank you for taking this on, Susan. So in the year 2030, within that calendar year, we're gonna add up the total mass of CO2 that's used in the United States in an- in EOR projects that is injected into mature oil fields.
We're gonna add up all the CO2 that is injected into non-petroleum-bearing strata and whichever one is greater, if EOR is greater, I win the wager and you buy me a nice dinner in Austin. And if more goes into non-petroleum-bearing strata, then I'll buy you a nice dinner in Austin.
James Lawler: And what kind of magnitudes are we talking about, just today? Like how, how much CO2 is, is used for EOR today?
Kurt House: It's about 40 million tons a year.
James Lawler: Okay. 40 million tons are injected under, underground.
Charles Harvey: Very little like, like one, 1.1 goes into non petroleum buried, right?
Kurt House: Yeah. Only Illinois.
Charles Harvey: There's one more little one now, Kurt, like Illinois. And Illinois is advertised as [01:02:00] one, they've never actually gotten close. That's, that's their potential, but they've failed to ever get even halfway.
Susan Havorka: For the captured CO2 going into saline only, I agree. The only cla- operating Class VI permit, which is what you'd have to have to do that is Illinois ADM project, but the APA has it, it's a very growing number, I think it's 120.
I think they've got some, dozens more administratively complete. Each one is some, is the average a million or two tons per year. Some of them are up to 10. Now, we won't get a hundred million ton projects or 104 million ton projects out of that. The, sum of them will not make, we know from the past is- as we've, that the, the failure of this is like restaurants.
You know, they, they don't all succeed. Some, some of them they don't exceed, not on technical ground, but the- the finance part, if there's more incentive, growing interest, there'll be a height because the finance will be more stable and more people will invest in them. If Kurt and Charlie are right and people think [01:03:00] that this is not- this is a shrinking field, the investment- investors will not step forward and more of those projects will fail.
So we're betting on uncertainty. We both, we don't know what investors will decide, whether Kurt's right or whether George and I are right. Investors will tell us what they're gonna decide. Boardrooms across the US are, are making these decisions. People who buy products have a say. I told Kurt that I'm taking them to a solar powered off the grid restaurant.
So I'm not sure there is such a thing in Austin, but I, I bet there- by 2030 there is, maybe I'll open one, you know, it'd probably be a marketing ploy-
Kurt House: I was gonna offer a steak. And I thought that would definitely, then I realize that'd definitely a bad- just fancy dinner, just fancy dinner.
James Lawler: Kurt, you've made the point that we can do renewables and storage in a, you know, economical, extremely cheap way.
It's cheaper than building new gas fired power plants. You've made that point?
Kurt House: Yeah.
James Lawler: And Sue, you've said, you know, that we're still building these things. We're still building natural gas-fired [01:04:00] power plants because we can't do solar and storage. So that seems like something we could, we could answer definitively.
Either we can, and it's economical or we can't, and it's not.
Susan Havorka: I'm not a grid specialist, but people, globally, are still building new fossil fired power plants. And there's a lot of new gas plants. Coal plants are on the way out. They're old, but gas fired power plants are in the stock, have to be dealt with.
And the issue of managing the grid is still discussed by people who are more expert than me and they haven't been willing to transfer the grid to wind and solar at a sufficiently fast clip.
James Lawler: And so Kurt, why is that, like in your view, we, if we have this, why aren't we using it?
Kurt House: We are, I mean, the world, the world added 200 gigawatts of solar last year.
James Lawler: But we're still building the other stuff, right?
We used more coal this year than ever before in the history of the human race.
Kurt House: Yeah, that's sort of true, but it's not, it's not quite right. So, we are still building- [01:05:00] China's still building a lot of coal. They're building less coal every year, and they're building more and more. So you have to look at the second derivatives.
So if, if you look at the curve of, of, of coal-installed capacity in China, it, it, it's been down, right?
James Lawler: It's slowing down. Mm-hmm.
Kurt House: Yeah. They, they built about, if I get my- 70 gigawatts of coal, they built about 90, 85 gigawatts of solar, something like that. And, and that was less- more solar and less coal. That's happening worldwide.
Charles Harvey: There's one thing hanging out there that I, I kind of wanted to come back to.
The notion that attaching CCS to a power plant is sort of the, the safe thing to do, that, that's really not the case. Attaching CCS to a power plant is an enormous endeavor. You know, the carbon capture and, and compression facility is just the power plant. It hasn't been done successfully much at all. I mean, we have a few exceptions like Petra Nova, but it's shut down.
It's failed a lot. There, [01:06:00] there isn't really a track record of doing this, but there is one thing that we know is the case that separates carbon capture sequestration from renewables and other things, and that is the energy penalty. And we already mentioned this, but we stopped talking about it.
And that is that it necessarily takes an enormous amount of energy to do. When we say the technology's mature, we already have the technology to sort of get pretty close to what you would hope for with thermodynamic limits. So we're not gonna beat that.
Susan Havorka: The thing I really wanna say, most of all, is it's not your choice.
It's the choice of a lot of people that they have to make choices and they will make smart choices depending on the market. You're talking about the market, worried about politics and the market perturbation. We always have that. It's something we have to live with. You're trying to influence the type of market perturbation maybe to favor more renewables, push renewables harder. And I'm saying-
Charles Harvey: I would like a level playing field and our contention is, with a level playing field, things wouldn't happen.
Susan Havorka: There's [01:07:00] more money, there's more money in the IRA, in the bill for renewables than there is for CCS by a lot. It's a- it's much more heavy in net national investment in renewables for- and I'm not fighting about that being a good idea.
But the question is, wh- should we zero out CCS? Do you wanna write it off?
Kurt House: The level- the point of the level playing field is then on a per-unit basis, the subsidy is the same, right? That's, that's, that would be the, the objective. If the choice is CCS or no CCS and nothing else, then that's not the point.
The, the, the question is, if, if you get three times as much carbon avoidance by using that subsidy somewhere else, then that's the thing I'm more interested in.
Susan Havorka: But the investors should get to decide, the technology should be available, but I think we have to hold firm to the options until, until we see how this resolves.
And holding firm means supporting the options for, for industries and consumers to make choices they wanna make. And we, so they need information about their options. [01:08:00] And so I, I'm for diversity, I remain all-of-the-above so that- to support people making their own smart choices.
Kurt House: James, if I may, I, I'd like to address a point that both Susan and George have made several times.
This is the assertion that we need an all-of-the-above strategy. This is the common sense notion that we shouldn't put all our eggs in one basket, that we should have a portfolio approach. And of course, all things equal, that's true. This idea has a meme quality to it in that it's simple to repeat and generally true.
It's surprising that such aphorisms form the basis and near totality of CCS advocacy, it amounts to saying specific technological criticisms have no place because we want to have all the options on the table. In his opening remarks, George said something like, as a scientist, I can't have favorite children.
I actually think that's a really weird statement. Science is fundamentally about distinguishing between good and bad ideas. Perhaps [01:09:00] more importantly, proponents of an all-of-the-above framework don't actually believe what they're saying. That is to say they don't actually want all options heavily invested in.
For instance, when George says he -that he takes a flashlight hiking as an analogy for wanting backup options, that makes sense because carrying a flashlight is easy and cheap. Uh, George doesn't, I assume, carry a large diesel generator with him hiking because that would be wildly expensive. So they're actually not embracing an all-of-the-above strategy.
Rather, they- like essentially all CCS advocates, they're using an all-the-above rhetoric because it's broadly appealing. It's a rhetorical technique to avoid the more difficult technical discussion. The right framework is maximum marginal utility. How do we avoid the most CO2 per unit of investment, which is the framework that people actually use.
Another example, my company is searching the globe for new sources of lithium, cobalt, nickel, and copper. [01:10:00] We are firmly not exploring asteroids, even though we know for sure that asteroids are chock full of these metals. Why? Because we know that mining asteroids will be orders of magnitude more expensive than staying on earth.
George Peridas: All-of-the-above is a misleading term. Neither Sue nor I support every idea under the sun that has been proposed to tackle climate change. Some of these ideas cannot be scaled sufficiently. Some just do not work. Some may have negative environmental consequences. She and I have devoted years of effort into geologic carbon storage, precisely because it works. It's safe, it's permanent, it is affordable, and it is available widely in many parts of the world.
And that should come as no surprise because it involves putting the carbon right back where it came from when we dug up the fossil fuels. Look, in the simplest terms, the question before us today is whether entrepreneurialism on its [01:11:00] own can solve climate change and it cannot. It is necessary, but it's not sufficient.
Kurt was about 10 years too early when he tried his hand at a carbon capture startup. He didn't have the patience to wait for the pieces to fall into place that make it broadly investible. Now, government has addressed several of these gaps that can help make carbon capture removal and, and storage a, a reality.
And that's the very same recipe that worked for renewable energy many years ago, and which enables entrepreneurs like Kurt to pursue profitable climate friendly projects in the market. But we have seen all too often how the market can flip and how quickly investor interest can wane. Markets and entrepreneurs alike can be fickle.
So someone needs to plan for the entirety of what's needed to become carbon neutral by mid-century. [01:12:00] And that also, unequivocally, involves returning carbon from the atmosphere to its original resting place.
James Lawler: Well, thank you all. It is not easy for anyone to publicly disagree, and you've given us all a lot to think about during this discussion.
So thank you, George Peridas, Sue Havorka, Kurt House, and Charlie Harvey for coming on the show and lending us your insight. We really appreciate it. Thank you.
That's it for this episode of the podcast. To learn more about the pros and cons of carbon capture and storage, you can check out our other podcast conversations on that topic at climatenow.com. You can also watch our videos on the subject. If you liked today's episode, please leave us a review, share this with your friends or colleagues, or tell us what you think at contact@climatenow.com.
You can also find us on Twitter or whatever that thing is called at We Are Climate Now. Thanks for listening and we hope you'll join us for our next conversation.[01:13:00]
Climate now is made possible in part by our science partners, like the Livermore Lab Foundation. The Livermore Lab Foundation supports climate research and carbon cleanup initiatives at the Lawrence Livermore National Lab, which is a Department of Energy applied science and research facility. More information on the foundation's climate work can be found at livermorelabfoundation.org.
Climate Now Debates: Carbon Capture and Storage