Radical environmentalists remain staunchly opposed to developing our nation’s quarter-millennium of coal reserves. Even if they succeed in killing our domestic industry, it will do almost nothing to reduce global pollution because the world’s ever-growing energy appetite will be satisfied by coal. Instead of leaving our vast resources in the ground, America must lead the world in making coal energy abundant, affordable and clean.

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The Carbon Capture Game Changer
Jay & Rich’s Take
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1. Jumpstart Clean Coal R&D

Proposed Policy Reforms

Support transformative coal R&D programs
Under President Obama, the Department of Energy invested three times more into renewables than it did in its fossil energy department. A more balanced approach is needed to sustain the clean fossil energy momentum launched by fracking.

Research more applications
Coal is used in more than power plants. It’s unique properties make it widely used in manufacturing steel, cement, and many other commodities. Research shows coal can also be refined into other products, such as a clean-burning synthetic gas or metals for advanced electronics.

 

 

Background

Coal is here to stay. The fuel is a main source of U.S. electricity and not much is expected to change for decades. At home, coal is still forecasted to supply 26% of America’s electricity in 2040.1 Abroad, coal consumption is expected to increase by 15% around the world over the same time period.2

Clean coal is not just a politically expedient term. Technologies are already being used to combat acid rain. A handful of coal plants have been recently engineered to address carbon pollution. These “carbon capture” technologies stop pollution from escaping into the air. Once captured, the emissions can be injected underground to reach billions of barrels of stranded oil that could not be reached otherwise.

Heeding the advice of radical environmentalists and leaving fossil fuels in the ground would be a costly mistake. Even the United Nations’ Intergovernmental Panel on Climate Change (IPCC) agrees meeting climate goals would be about 140% more expensive without carbon capture technologies.3

lawrence-livermore-national-lab

Lawrence Livermore National Laboratory demonstrated coal gasification in large-scale field experiments at the Rocky Mountain Test Facility near Hanna, Wyoming.
Source: Department of Energy4

Delays at Kemper and FutureGen have captured media attention, but successful projects are being overlooked. A Canadian utility has been quietly operating a clean coal plant since 2014.5 It was the largest carbon capture facility in the world until an even bigger one outside of Houston, Texas entered into service in 2016 on time and on budget.6

Advanced technologies promise to make carbon capture even more attractive. For example, one technology being piloted in Texas redesigns power plants from the ground up. It will make electricity cheaper than the natural gas combined cycle plants, while also capturing all the carbon dioxide. This pilot plant will use natural gas, but could also run on coal.7

Fund Basic Research

America’s economy has reaped billions from basic government research. In the case of fracking and natural gas, taxpayers benefited to the tune of billions of dollars each year. National laboratories research developed the basic mining bits, 3D imaging and liquids that were instrumental in the commercialization of fracking technologies.8 It can do the same for clean coal.

electron-microscope

This picture was taken with an electron microscope. It shows carbon dioxide gas reacting with a solid iron compound, which effectively traps the carbon dioxide in a solid and stable form. 
Source: Department of Energy9

The government’s importance in clean coal research cannot be understated. Due to low energy prices, most companies do not have the resources to invest in new projects. Outside of the United States, a large market for clean coal remains: Nearly 200 countries have agreed to cut carbon emissions.10

Research More Applications

Coal companies are losing value and market share with the recent influx of cheap natural gas onto the market. From 2001 to 2015, coal’s share of the U.S. power mix fell 51% to 33% and natural gas production increased its share from 17% to 33%. The Department of Energy is currently conducting research to improve the long-term sustainability of coal and develop new revenue streams to the industry.

One focus is to turn coal power waste into a valuable revenue stream. American scientists are developing ways to get “critical minerals” from coal, which are used in everything from communication systems to lasers.11 To date, the United States is almost exclusively reliant on China for these materials. This is just one pathway coal can benefit from additional research.12

 

Fellow Conservative Voices

Gov Mead: Wyoming will keep fighting for coal

Governor Matt Meade, 32nd Governor of Wyoming

Read more at wyofile.com

Op-Ed by Senator Shelley Moore Capito: Energy Secretary’s Visit Comes at Critical Time

Senator Shelley Capito, Senator of West Virginia

Read more at senate.gov

Curc-Epri 2015 Coal Technology Roadmap Update

CURC and EPRI

Read more at coal.org

2. Expand Carbon Capture

Proposed Policy Reforms

Update the carbon capture credit
Carbon dioxide from power plants and industrial facilities can be pumped into oil fields to simultaneously increase oil production and reduce emissions. The last significant federal tax incentive for “carbon capture projects” is outdated and need of reform.

Establish private activity bonds
Private activity bonds spur private investment because their interest is exempted from federal income tax. Today, private activity bonds can be used by municipalities to finance a wide variety of projects such as hazardous waste facilities, schools, and highways. Carbon capture projects should be added to the types of eligible projects.

 

 

Background

Fossil fuels are the foundation of the world’s economy. Making our fossil fuels unilaterally more expensive would hurt American competitiveness in the global economy and do little to curb the world’s carbon emissions. A more constructive approach is one that works with industry to develop cleaner technologies.

multi-cell-array

Caption: An artistic rendering of the Department of Energy’s multi-cell array. It can test fuel cell technologies and catch problems that might occur in commercial conditions.
Source: Department of Energy13

Since the majority of power plants in the world run on fossil fuels, even small improvements can generate sizeable environmental benefits. It’s estimated making coal plants more fuel-efficient could avoid up to 2 billion tons of carbon pollution each year.14 A reduction of this magnitude would be more than all of Japan and Germany’s annual pollution combined.15

Private Activity Bonds

Carbon capture technologies help prevent industrial and fossil power plant emissions from reaching the atmosphere. The captured emissions can then be safely stored underground or used in various industrial processes, such as oil extraction or fertilizer production.16 Yet, carbon capture is still in its infancy and is still more expensive relative to conventional technologies.17 Despite its large economic and environmental benefits, carbon capture projects have struggled to secure financing — in part, because few commercial scale plants have been built.

Senator Portman’s Carbon Capture Improvement Act would incentivize clean, fossil-energy use by enabling local governments to issue tax-advantaged, “private activity bonds” for qualifying projects. Private activity bonds lower the cost of capital because their interest is exempted from federal income tax. Today, private activity bonds can be used to finance a wide variety of projects such as hazardous waste facilities, schools, and highways.18

The carbon capture credit

The main policy incentive for U.S. carbon capture projects is called the 45Q tax credit. The credit, established in 2008 under President Bush, provides tax relief to carbon capture projects. 45Q provides up to $20 for each metric ton of captured carbon dioxide and was passed with a limit of 75 million metric tons. To date, over half the credits have been claimed and new projects cannot leverage them to finance new projects.19 Building new carbon capture projects takes several years and project developers are unsure how many will be the left by the time they are operating.

The 45Q reform effort is championed by a diverse coalition of energy industry, labor and environmental groups. This coalition includes America’s largest fossil energy producers, including Peabody Energy and Occidental Petroleum. Efforts are underway to lift the artificial cap, enable smaller projects to qualify and allow greater transferability. These reforms would increase investor confidence in carbon capture projects and signal the government’s commitment to clean coal technologies.

 

Fellow Conservative Voices

The Next Shale Revolution?

Samuel Thernstrom, Executive Director at Energy Innovation Reform Project

Read more at weeklystandard.com

Yes, coal can power clean energy

Jay Faison is the Founder and CEO of the ClearPath Foundation Glenn Kellow is the President and CEO of Peabody Energy

Read more at thehill.com

Leveling the Playing Field for Carbon Capture and Storage Technology

National Coal Council

Read more at utilitydive.com

3. Streamline Government Reviews and Permits

Proposed Policy Reforms

Clarify carbon dioxide injection rules
Under current rules, carbon dioxide could be interpreted to be a hazardous waste. This designation would significantly drive up costs on carbon capture projects with little benefits.

Establish national pipeline corridors
The government can expedite future requests from industry to build pipelines by establishing pipeline corridors. As demonstrated by the Keystone and Dakota Access delays, constructing pipelines can take longer than anticipated.

Create a New Source Review exemption
Installing carbon capture technologies at power plants can trigger New Source Review, a process that can mandate additional environmental controls. These extra requirements can be prohibitively expensive and encourage coal plants to shut down rather than comply with EPA’s carbon rules.

 

 

Background

Over 250 coal power plants make about a third of America’s electricity. These workhorse plants are at risk of shutting down in the face of unfavorable market conditions and aggressive federal environmental regulations.

Ironically, some regulations actually discourage environmentally-friendly retrofits. Instead they encourage utilities to prematurely retire the plants and replace them with government-preferred technologies. Regulating our coal industry out of existence makes little sense given our nation’s 200-plus years of coal reserves.

basalt-formation

Carbon dioxide can be safely stored underground in certain types of geology, such as the basalt formation shown above.
Source: Department of Energy20

Clarify carbon dioxide injection rules
The average coal plant produces 10,000 metric tons of carbon dioxide each day. In a feat of American ingenuity, our engineers have come up with ways to capture these emissions. Not only are emissions prevented from reaching the atmosphere, they can also be sold for a profit. Oil companies often buy carbon dioxide to inject into declining oil fields to stimulate more production.

Depending on the circumstance, Environmental Protection Agency regulations may require companies to monitor injected carbon dioxide for years. The oil industry is divided on whether these long-term rules are compatible with their business models. Some also fear that these regulations run counter to state laws. If the carbon dioxide is simply stored underground, without the intent of enhanced oil recovery, the EPA requires even more strict reporting requirements. Unfortunately, these legal uncertainties and costly regulations are dampening the appetite for captured emissions.

Establish national pipeline corridors
Over four thousand miles of carbon dioxide pipelines exist in the United States today.21 Most transport natural carbon dioxide to oil fields where they are needed. Select pipelines transport captured manmade carbon dioxide to where it’s needed for enhanced oil recovery and other purposes. To transport the carbon dioxide, pipelines will be needed. Although industry is willing to pay the costs of development, federal reviews can stymie development. To clear the way and reduce bureaucratic delays, the federal government should establish national pipeline corridors. A federal approach could emulate a state-initiated effort in Wyoming.

Create a New Source Review exemption
New source review (NSR) requires power plants and industrial sources to receive permission from the government for virtually any modification, retrofit or upgrade. If the proposed change is expected to significantly increase emissions, the government can require additional and costly pollution controls. According to current Environmental Protection Agency rules, a carbon capture retrofit may also trigger NSR. Eliminating the perverse incentive to retire our nation’s coal fleet should start with the Environmental Protection Agency.

 

Fellow Conservative Voices

Wyoming Pipeline Corridor Initiative

Wyoming Pipeline Authority

Read more at wyopipeline.com