The idea of capturing carbon dioxide from coal plants, gas plants, and other industrial facilities and burying the pollution deep underground has always been a tantalizing possibility for tackling climate change. It just... never seems to go anywhere.

In the US, the technology has gotten a reputation as an awful boondoggle, especially after a major project to demonstrate coal with carbon capture in Kemper, Mississippi turned into a fiasco. Thanks to endless delays and overruns, Kemper now costs three times its original $2.2 billion price tag, leading many to write off the whole concept.

Yet despite Kemper’s woes, it might be time to give carbon capture and storage (CCS) a fresh look. There have been a few intriguing developments of late — including the recent successful opening of coal CCS at the Petra Nova project in Texas — that have made the idea seem a little less harebrained.

What’s more, CCS is garnering a surprising amount of support in Congress right now, with Democrats and Republicans working together to craft a pair of tax and finance bills that could help carbon capture spread more widely — not just for coal, but for gas plants, ethanol plants, steel plants, and other sources of pollution. These bills have backing from a diverse coalition, including coal giants like Peabody, who see CCS as a potential lifeline for the industry, as well as environmental groups like the Natural Resources Defense Council, who argue the technology could help with climate change.

“Carbon capture is one area where you could actually imagine cooperation on energy policy these next few years,” says Paul Bledsoe, a senior energy fellow at the Progressive Policy Institute. There’s also the prospect that President Trump could make CCS a priority of international climate talks, as some of his fossil-fuel allies are urging.

Now, CCS on its own isn’t enough to fix global warming, and small efforts to advance the tech are no substitute for a serious climate plan, which Trump doesn’t have. But it’s all relative. Energy experts think CCS could be a invaluable tool for cleaning up industries like cement and steel that make up one-fifth of global emissions. CCS could also prove useful for pulling CO2 out of the atmosphere. Even modest progress would be welcome news in the decades-long battle to keep the Earth from heating up.

That said, there are no guarantees. While the CCS bills have wide backing, from liberals like Sen. Sheldon Whitehouse (D-RI) to conservatives like Senate Majority Leader Mitch McConnell (R-KY), they also face serious opposition — and Congress often struggles to pass even basic legislation. Meanwhile, Trump is floating an austere budget that could end up gutting key CCS research programs. And, of course, the technology could still fail even with federal support. It’s often disappointed in the past. So let’s take a look.

Carbon capture is making strides — but still faces two huge hurdles

Carbon capture has been around for decades in the US, mostly for niche uses. There are a handful of small natural gas processing plants and fertilizer plants that capture the CO2 they emit and sell it to oil firms. Those companies, in turn, pipe the compressed CO2 down into older oil wells to dissolve and dislodge oil deposits that are otherwise hard to access. (This can be done in a way that the CO2 stays trapped underground.)

This process is known as “enhanced oil recovery,” and it currently accounts for about 2 percent of America’s oil production, mainly in Texas’s Permian Basin. It’s also been the main financial incentive for pursuing carbon capture technology to date.

In the 2000s, Congress and the Department of Energy began spending more money on carbon capture research to try to apply this technique to bigger fossil-fuel power plants and industrial facilities. The logic was twofold: In the short term, more carbon capture would enable more enhanced oil recovery. In the long term, companies could move past oil and instead bury their CO2 permanently underground in saline aquifers and other geological repositories, thus helping with climate change.

But carbon capture isn’t easy to scale up, and early attempts foundered. In Kemper, Mississippi, Southern Company has tried to build a ridiculously complicated coal CCS power plant that use not one but two novel technologies: First it converts lignite coal into synthetic gas; then it captures the waste CO2 for use in enhanced oil recovery at nearby wells. That unwieldy combination of first-of-a-kind techs made the Kemper plant incredibly difficult to build, and it’s become a multibillion-dollar debacle. Another coal CCS project in Wyoming also failed miserably.

Recent efforts have been more encouraging. In Texas, NRG and JX Nippon have taken a much simpler approach to CCS with the Petra Nova project, backed by $190 million in stimulus funds from the Obama administration. The companies retrofitted an existing coal plant with a carbon capture system, powered by a small natural gas generator. Petra Nova just came online this January, on time and within budget, and will capture 1.6 million tons of CO2 per year — the lion’s share of the plants emissions — for use in enhanced oil recovery:

You can read this in-depth synopsis from Jesse Jenkins on how Petra Nova was successfully built, but many energy experts think that this project — not the Kemper debacle — is a better model for future CCS projects.

There are also ongoing efforts to keep the CO2 buried underground forever, rather than using it for oil recovery. In Illinois, ADM just began operating a carbon capture system at an ethanol plant that will take more than 5 million tons of CO2 over the next five years and pump it down into sandstone layers deep beneath the surface, to see if the gas will stay trapped there. This project, the worlds’ first biofuels CCS plant, received $141 million in support from the Department of Energy.

That said, these are all just demonstration projects that relied on hefty federal subsidies. For CCS to actually take off as a viable technology in the marketplace, it would have to clear a few enormous hurdles:

1) Costs would have to come way down. Carbon capture is still incredibly expensive, not least because it takes extra energy to run the capture process (an issue known as “parasitic load”). To go mainstream, costs have to fall. In theory, this problem’s surmountable. NRG says it learned a lot from the Petra Nova project, and the company thinks it could get costs down 20 to 30 percent if it were to build more such coal CCS systems — which would offset the government support it received for the first.

What’s more, there may be new advances on the horizon that drive down CCS costs even further. In Texas, a company called NET Power is tinkering with a radically advanced type of natural gas power plant that, it hopes, can efficiently recycle and capture its CO2 for ready storage without much parasitic load. NET Power hopes to have a small privately funded demo plant built by this year and claims it will be cost-competitive with conventional natural gas plants. If they succeed, this could be a game-changer.

But even if the costs of CCS do fall, there’s a second problem…

2) Companies need incentives to bury their CO2. Even if CCS technology gets cheaper, companies still need reason to build it. And in the absence of strict regulations on CO2 emissions, no power plant or industrial facility has any incentive to go through the expense of capturing and burying its emissions.

In the short term, the hope was that enhanced oil recovery could help finance early CCS projects and at least help the technology develop further. This was a big part of the calculus behind the Petra Nova project, and the US technically has billions of barrels of oil that could be recovered through this technique. But thanks to the US fracking boom, oil prices have collapsed, demand for enhanced oil recovery has declined, and there’s less incentive for new CCS projects. NRG has said it doesn’t make sense to build another Petra Nova right now, so long as oil prices are so low.

Unless, that is, Congress steps in.

How Congress could — potentially — kickstart the market for CCS

Lately, Republicans and Democrats in Congress have been kicking around two ideas to help CCS technology overcome these two obstacles. These efforts are being backed by coal companies (who see CCS as a way to save coal if climate regulations one day get stricter), oil companies interested in enhanced recovery, and even some environmentalists who see CCS as a useful climate tool.

1) The first bill would tackle the cost problem. Last week, Sens. Rob Portman (R-OH) and Michael Bennet (D-CO) re-introduced legislation allowing states to issue tax-exempt “private activity bonds” to firms trying to finance CCS projects. This was a method used in the 1970s to help coal plants buy scrubbers to mop up air pollution.

2) The second idea would tackle the incentive problem. Back in 2008, Congress created the Section 45Q tax break, which gives companies a credit worth $10 for every ton of CO2 that they capture and use for enhanced oil recovery, and $20 for every ton of CO2 that they capture and bury in secure geological storage.

The problem is that Section 45Q hasn’t been very effective at spurring interest in CCS, says Brad Crabtree of the Great Plains Institute, which has convened a coalition in favor of expanding the credit. Since crude prices collapsed, $10/ton hasn’t been enough of a motivator to invest in large-scale carbon capture. What’s more, the credit is capped in such a way that makes companies reluctant to take a gamble on CCS projects.

So a number of senators have proposed expanding Section 45Q to give it more juice. A bill introduced last year by Sen. Heidi Heitkamp (D-ND) and Whitehouse would increase the credits to $35/ton for oil recovery and $50/ton for permanent sequestration. It would also allow more types of facilities to qualify and lift the cap, granting the credit to anyone who started building a CCS project in the next 12 years. That bill attracted support from 20 senators, including conservative Republicans and liberal Democrats, and could be taken up as part of a tax reform package. While there are no cost estimates yet, it would likely cost billions if companies actually took it up.

“If both of those bills passed,” says John Thompson, an expert at CCS at the Clean Air Task Force, one of the environmental groups backing this effort, “it’s likely you’d start to see the industry overcome the challenges from low oil prices.”

One optimistic scenario is that private companies would begin creating CCS “hubs” around depleted oil fields in places like the Midwest. First, companies that can capture their CO2 at relatively low cost, like fertilizer plants or ethanol plants, begin investing in carbon capture for enhanced oil recovery. (These facilities have lower costs because the CO2 they produce is purer and less diluted.)

That, in turn, leads petroleum companies in the area to invest in a network of pipelines to transport the CO2 around. Once those pipelines are built, nearby facilities with higher capture costs, like coal or gas power plants, start getting interested in the market. There’s a network effect that draws in more and more companies:

Over time, as more and more facilities start using carbon capture, the costs decline. Maybe NET Power builds its game-changing plant and you start to see more natural gas facilities with CCS. Maybe the Department of Energy continues R&D efforts and develops newer, cheaper ways of capturing carbon. (Though this will be much harder if Trump guts funding for the agency, as his initial budget proposed.)

Eventually, after enough research and deployment, the technology starts looking like a viable option for helping to address climate change — and at that point there’s a new policy conversation about legislation or regulations to require carbon capture, or to create incentives for carbon sequestration without oil recovery.

Then again, that’s all speculation. Crabtree says it’s difficult to say right now how many new projects would actually get built if Congress passed its CCS legislation. It’s also possible that CCS remains flatly uneconomic, Trump cripples federal research for new technology — and carbon capture turns out to be a dead end. (On the upside, in that case, the tax credits wouldn’t cost as much since few companies would be using them.)

Environmentalists are sharply divided on CCS — but there is a green case

The push for CCS will certainly face opposition. The conservative Heritage Foundation has generally opposed any targeted subsidies for energy tech. And groups like Friends of the Earth and Taxpayers for Common Sense have sharply criticized the push to expand Section 45Q, pointing out that it would send hundreds of millions of dollars to Southern Company to finance its coal boondoggle in Kemper, Mississippi.

“Squandering more tax dollars on carbon capture for coal plants like Kemper is just throwing good money after bad,” said Autumn Hanna of Taxpayers for Common Sense, at the time. “Extending or expanding these tax breaks makes no sense and will cost taxpayers dearly.”

Other environmental groups have also resisted the idea of subsidizing CCS, arguing that it would just boost oil production in the short term (potentially blunting whatever climate benefits come from carbon capture), and that there are no guarantees the stored CO2 won’t leak out from poorly monitored or regulated repositories (current rules around storage are flawed and incomplete). These groups would prefer the policy focus stay on technologies like wind and solar.

By contrast, the Natural Resources Defense Council — one of the biggest green groups in Washington — is supporting the CCS push. Why? David Hawkins, the director of NRDC’s climate program, made a few key points in an interview:

First, while Hawkins and NRDC prefer renewables and efficiency as the best way to reduce emissions, they do see a role for CCS. Right now, roughly half of all coal plants worldwide are younger than 25 years old and could operate for decades. The only way to avert, say, 2°C of global warming would be either to retire many of these plants early or retrofit them with carbon capture. At the very least, it’d be good for countries like China and India to have more options to deal with these existing plants:

(I’d add two more reasons CCS could prove essential for climate. First, while there’s lots of focus on power plants, 20 percent of global emissions actually come from industrial sources like cement kilns or steel mills. These facilities are very tricky to clean up, and CCS may be necessary here. Second, CCS could potentially be paired with bioenergy to create “negative emission” facilities that actually suck CO2 out of the atmosphere — a tech we may need to avoid large temperature increases.)

Meanwhile, it’s true that using carbon capture to pull up oil seems counterproductive. But in practice, a limited amount of enhanced oil recovery is unlikely to alter the world’s supply of oil. Instead, these operations are more likely to displace higher-cost oil production elsewhere, leading to a drop in CO2 on net. To Hawkins, that’s a good thing. “So long as we’re still using oil,” he says, “it’s preferable to get it from wells that have already been drilled rather than pushing into new areas like the Arctic, or relying on much dirtier sources like Canada’s oil sands.”

The long-term future of CCS as a climate strategy, however, will require moving away from oil recovery and toward permanent geological storage. The United States has a vast network of underground saline aquifers that could, in theory, permanently store centuries’ worth of CO2 from all our existing coal and gas plants. Though before proceeding, we’d need to ensure the CO2 won’t leak out from those aquifers — if it does, that’s a deal-breaker.

But in practice, this move to permanent storage won’t happen without stringent new climate policies or a stiff carbon tax that actually gives polluters motivation to bury their CO2. And that’s likely to be a heavy lift. As Hawkins points out, it’s unlikely that CCS will ever get cheap enough that coal and oil and gas companies decide they’ll happily get on board with strict climate rules. So while green groups and fossil interests may see eye to eye on early CCS development, they’re not going to stay friends forever.

Further reading