Lack of climate bill hinders carbon storage, fed agencies say

DOE is already spending billions of dollars to help speed commercial deployment of the technology, and incentives including loan guarantees and tax credits are also available for projects.

But the report warns the failure of Congress to approve legislation that mandates emissions limits is slowing progress. Climate legislation appears dead for the year — and possibly much longer — on Capitol Hill.

“The lack of comprehensive climate change legislation is the key barrier to CCS deployment. Without a carbon price and appropriate financial incentives for new technologies, there is no stable framework for investment in low-carbon technologies such as CCS,” the report states.

“Significant Federal incentives for early deployment of CCS are in place, including RD&D efforts to push CCS technology development, and market-pull mechanisms such as tax credits and loan guarantees. However, many of these projects are being planned by the private sector in anticipation of requirements to reduce GHG emissions, and the foremost economic challenge to these projects is ongoing policy uncertainty regarding the value of GHG emissions reductions,” it adds.

Coal-fired power plants provide half of U.S. electricity and are the largest single source of the country’s greenhouse gas emissions. Coal plants are also a major source of heat-trapping gases in China and elsewhere.

The report provides a suite of recommendations to help foster deployment — including as many as 10 commercial-scale demonstrations by 2016 — even in the absence of a sweeping emissions law.

They include: better federal coordination and a federal agency “roundtable” that would act as a single point of contact for developers; continued review of technologies and storage reservoirs; finalizing EPA rules for geologic sequestration wells by late 2010 and advancing other needed regulations; beginning development of CCS-related National Environmental Policy Act reviews as soon as possible and several others.

It also flags liability and long-term stewardship surrounding storage sites as key issues and recommends the Justice Department, EPA and other agencies work together to come up with options by late next year.

The report calls for considering several ideas, including “creation of an industry-financed trust fund to support long-term stewardship activities and compensate parties for various types and forms of losses or damages that occur after site closure.”