Let America build - A policy path to modernize energy permitting
Our team spends a lot of time on reliable, affordable, clean energy systems that run 24/7. These types of technologies are an integral part of our energy future, but with a growing economy and electricity demand doubling, we need MORE power.
This means building a lot of new nuclear, geothermal, and clean fossil power plants. We’ll also need immense new transmission and pipeline infrastructure to move energy around the country.
But we’ve got a ton of work to do in very little time.
Whether you are motivated by deep emissions reductions, furthering our nation’s energy security, or enabling the next generation of American manufacturing, the coming decades are essential. By many estimates, that means at least 10,000 new clean energy projects this decade alone. And, every one of those projects will require new permits to build.
Unfortunately, the U.S. has a world-class apparatus… for getting in the way.
Let me give you an example. The National Environmental Policy Act, or NEPA, calls for developers to measure the environmental impact of their projects. But NEPA was passed years before we had other laws with strict environmental standards like the Clean Air Act, Clean Water Act, or Endangered Species Act.
Each of those are important — but all together … permit reviews can spiral into extremely long efforts, spanning thousands of pages with duplicative analyses and dozens of bureaucrats required to sign off on each individual project. And, this is not even taking into account the time it takes for any local permitting or state regulations. While this system may have made sense 50 years ago, the surge in new energy demand requires a new way.
When we think about how to build tens of thousands of new clean energy projects, and how to balance speed and safety, it's obvious the U.S. needs a more predictable process.
At ClearPath, we always focus on solutions. Here are two that should be pretty simple:
First, grant immediate approval to projects on a site that have already undergone an environmental review.
Second, we must expedite court challenges so a final decision on projects is made in a timely manner.
Let me simplify both concepts.
Do you remember standing in line at the airport before TSA pre-check? That was brutal! Now, individuals who have proven they are not a risk can move through an expedited line.
Here’s another example.
There are mountains of evidence that some projects have little to no environmental impacts, such as an advanced manufacturing facility that produces parts for clean energy on a brownfield, or converting a retired coal plant to an advanced nuclear facility or siting a new geothermal plant at a depleted oil and gas well. These are the types of projects we should automatically permit to move forward.
Just like random screenings at TSA, we can audit the operators to ensure they’re complying with all environmental laws as we go. So new energy accelerates at no new environmental costs.
And for those projects that do need permits up front, we should ensure reviews are complete within 1 year and resolve any legal disputes within 6 months.
Under the current system, clean energy projects can suffer long delays, sometimes decades, largely because of obstructive litigation practices. We must strike the right balance while halting the never-ending cycle of frivolous lawsuits.
At ClearPath, we believe all of this can be done without rolling back environmental protections or eliminating the public’s opportunity to be involved in the review process. Even with these necessary changes, a project would still be required to comply with environmental laws during its entire lifetime.*
It’s a win-win. Let’s get building.
Putting All the Carbon Management Innovation Pieces Together
One of the most exciting clean energy technologies the United States leads the world on is carbon capture, utilization, and storage (CCUS). The world’s abundant natural resources, or using them for industrial activity don’t alone create climate change, the emissions from them do.
That's why reducing carbon dioxide emissions at scale doesn’t mean you must scrap existing technology. In America, we have the incredible ability to innovate our way to a clean energy future. CCUS can be used in the power sector to reduce emissions from natural gas and coal fired generation, ethanol production facilities, and difficult to decarbonize industries such as steel and concrete.
Perhaps you’ve heard that CCUS is expensive, or that it’s only going to benefit the oil and gas industry. At ClearPath, we follow the facts, so let's dig into how this technology is cross-cutting and how it can be an economically viable tool for lowering global emissions.
Congress authorized a moonshot program in the Energy Act of 2020 to create a federal demonstration program to work with private sector innovators to scale up new technology. In 2021, Congress funded the program through the bipartisan Infrastructure Investment and Jobs Act (IIJA). In December 2023, the U.S. Department of Energy’s (DOE) Office of Clean Energy Demonstrations (OCED) selected three carbon capture demonstration projects for award negotiations, totaling $890 million in potential awards. These projects include the Baytown CCS Project in Texas, Project Tundra in North Dakota, and the Sutter Decarbonization Project in California.
Energy innovation is a little different than, say, a new app for your phone that runs algorithms. These are large construction projects that require millions of dollars of capital to build — just to see if the technology can work in real-world settings. The U.S. has a proud history of supporting energy projects in the early stages of development using demonstration programs. Once new technology is proven and shows its ability to lower commercialization costs, the private sector can adopt the technology. You can call this a public private partnership, or you can call it American innovation leadership coupled with good old-fashioned, market-based principles.
OCED is a critical piece of this innovation pipeline to aid in the transition of ideas from a lab to real-world applications. OCED’s CCUS demonstration projects can spur additional private-sector investment, and support the development of critical transportation and storage infrastructure across the CCUS supply chain.
Recognizing the importance of CCUS technologies in the Energy Act of 2020, Congress followed it up with the bipartisan IIJA of 2021, which allocated DOE $12 billion to carry out a range of carbon management initiatives, from direct air capture hubs to a CCUS demonstration program. IIJA also established OCED to help administer these new initiatives in collaboration with the private sector.
3 awarded, 3 more to go
The Energy Act and IIJA authorized and funded six potential CCUS demonstration projects. So far, only the three projects we mentioned have been selected for award negotiation – and none have officially received any award funds yet. A timely and efficient rollout of these critical funding opportunities will provide applicants visibility into expected timelines and decision-making milestones and ensure this program has the impact Congress intended.
Coordination of federal programs
A full value chain approach is critical for effectively demonstrating and deploying carbon capture technology. That includes developing a dedicated, diverse and reliable carbon transportation network, including pipeline, truck, barge, rail, and storage infrastructure.
To do this, OCED can leverage funding opportunities from other DOE programs, because once you capture the carbon it needs to go somewhere for utilization or storage. For example, Project Tundra, selected for award negotiation in the carbon capture demonstration program, has participated in DOE’s CarbonSAFE Initiative, which supports carbon storage projects. Another example is the DOE Carbon Dioxide Transportation Infrastructure Finance (CIFIA) program, which provides loans and grants to carbon transport project developers. By ensuring all midstream partners involved with OCED, from private sector pipeline to barge operators, are aware of and eligible for CIFIA support, funding opportunities can be leveraged across programs to support this critical transportation infrastructure. As DOE facilitates connections across complementary programs, it will be important that selected projects are co-located with other CCUS hubs and infrastructure to minimize duplicative efforts and optimize federal resources.
DOE could also facilitate the sharing of key learnings with CCUS demonstration program participants, including midstream and downstream project partners, and other offices. For example, in December 2023, DOE’s Office of Fossil Energy and Carbon Management (FECM) announced $40 million in funding for technical and informational educational assistance for carbon transport and storage project developers. DOE could ensure any learnings and best practices identified through FECM programs are transferred to participants in OCED’s carbon capture demonstration program and project partners. In addition, OCED can also provide specialized support for these demonstration projects. DOE can help applicants identify strategies to reduce project costs, hire personnel with the necessary skills and expertise, manage stakeholder relationships, and create plans to manage these large, complex projects.
Don’t forget about permitting
The timeline for permitting these projects is currently a tremendous barrier to success. Cross-agency coordination will be key to ensuring administrative delays do not prevent the build-out of transportation and storage infrastructure and hinder applicants’ ability to secure funding opportunities. Each part of the CCUS value chain is subject to its own unique, complex regulatory requirements that could fall under state or federal jurisdiction depending on the state. For example, applicants to DOE’s carbon capture demonstration program are required to obtain a Class VI permit, which allows for the underground storage of carbon. These permits are regulated by the Environmental Protection Agency (EPA) or, in some cases, by states that have been given authority, also called primacy. DOE requires applicants to provide evidence that these permits have been obtained or submitted to the EPA. If an applicant does not have a permit, they must explain when they expect to receive it.
However, the timeline for obtaining Class VI permits from the EPA can be long and unpredictable. It can take the EPA six years to issue a Class VI permit, and the agency has been slow to grant primacy to states – which have proven their ability to grant Class VI permits in a fraction of the time. A couple of perfect examples of how Class VI primacy works wonders are North Dakota where the state was able to issue a permit for Red Trail Energy in less than five months, or in Wyoming where their Department of Environmental Quality (DEQ) issued a draft permit for Tallgrass Energy’s Juniper I-1 well in just over one year.
Similarly, applicants must also demonstrate they will have access to transportation infrastructure. However, carbon pipelines, which are regulated at the state level, have encountered an unpredictable regulatory environment, leading to significant delays and even the cancellation of projects. Streamlined permitting for carbon pipelines and updated Congressional direction for carbon pipelines R&D and safety standards would aid in the build-out of this key infrastructure.
Congress is already leaning into the issue of improvements to pipeline permitting and development. In March of 2024, the House Science, Space, and Technology Committee passed the Next Generation Pipelines Research and Development Act with bipartisan support. This bill would seek to modernize our pipeline system by authorizing new research and development programs focused on various pipeline technologies and uses, including the transportation of carbon.
From R&D, demonstrations, and transport we covered here to the private sector incentives known as 45Q, Congress has put the pieces on the table to finally scale up carbon capture. If we can find the proper permitting piece, and put them all together, the United States can reduce emissions at home and turn the innovations and technologies into business opportunities for American developers to find customers all around the world.
A Decade of Dedication
The climate debate sure looked different 10 years ago.
When I founded ClearPath in 2014, we looked at global temperatures, sea levels and the so-called “100-year weather events.” We studied the data AND watched the political discourse.
And we were concerned.
At the time, many advocates said we could only solve the climate challenge with 100% renewable energy and by starving the fossil energy industry. They said the government needs to solve the challenge; free-market innovations would be too expensive, and consumers and industry wouldn’t adopt them.
Advocacy for small modular nuclear was limited, few embraced carbon capture as a solution, and other game-changing technologies like long-duration, grid-scale storage were barely a glimmer.
Thankfully, conservatives knew there was a better way.
Over the past 10 years, the ClearPath family of entities has worked with private sector innovators and leaders in Congress to shape conceptual ideas into pragmatic policy, leading to the construction of real projects. These relationships have led to significant clean energy policy wins – from developing the moonshot Advanced Reactor Demonstration Program concept in 2016 to the inception of the 45Q tax incentive in 2018 and the Energy Act of 2020, which culminated with new legislation like the Better Energy Storage Technology (BEST) Act and the Advanced Geothermal Innovation Leadership (AGILE) Act.
Over the last decade, U.S. emissions have decreased by 15%, more than any other nation.
That hasn’t happened by chance, conservative clean energy leaders have catalyzed innovation policies:
Between 2014 and 2024, roughly 20 gigawatts of batteries, geothermal, hydropower, and nuclear, were added to the grid. These facilities generated approximately 36 million megawatt-hours of electricity, enough to power nearly 3.5 million homes annually, avoiding roughly 19 million metric tons of CO2.
In 2018 – A Republican-led Congress updated the tax code, increasing the credit value for carbon capture projects, broadening eligibility thresholds, and allowing DAC eligibility for the incentive. Since, 14 carbon capture and direct air capture projects are operating in the U.S., with 123 under development. Together, those projects could capture 156 million tons of carbon every year.
In 2019 – Congress and the Department of Energy began to focus on building advanced nuclear reactors. Today, we are building two new advanced reactors and at least nine more are on the way in addition to 25 new license applications expected by 2029.
In 2020, conservatives in Congress passed the Energy Act of 2020 – one of the biggest advancements in clean energy and climate policy that has created the clean energy innovation roadmap in over a decade.
In 2021 – Congress enacted the bipartisan Infrastructure Investment and Jobs Act (IIJA), funding a wide range of clean energy demonstration programs.
Where is ClearPath today? The last decade has resulted in significant growth for the ClearPath family – both in size and impact. We’ve seen an 800% personnel increase and expanded our policy portfolio from primarily a nuclear and CCUS advocacy organization to 11 different policy areas. While we remain steadfast in our core technologies, we have added exciting new areas to our portfolio, such as tackling industrial emissions and agriculture and how we can deploy cleaner energy internationally.
In Washington, people and politics drive policy, and policy refines our heavily regulated energy system.
Recent polling conducted by Engagious and Echelon Insights shows 88% of voters believe climate change is happening, 74% want their Member of Congress to focus on clean energy, and 60% of votersbelieve innovation rather than regulation is the best way to reduce emissions.The leadership driving this seachange is remarkable, and here are just some of the federal lawmakers who are meeting the demand of their constituents and have championed clean energy policy over the last decade.
What’s next?
10 years into this dream, we have covered a lot of ground, but we still have quite the journey ahead. Many of the right policies are in place, but we need to get America building again. We need to get advanced nuclear reactors built, we need to capture carbon directly from the air, and we need to decarbonize heavy industry. Energy demand will double over the next decade, and one of the most important efforts everyone needs to get behind is updating our outdated permitting processes. Because if we continue to invest in novel technologies, and ensure that the projects currently under development are successful, then the U.S. will continue to lead the world in adopting clean energy solutions.
I mentioned that in Washington, D.C., people are policy, so when discussing ClearPath’s future, I must recognize how the organization is searching for the next generation of clean energy champions. ClearPath’s Conservative Climate Leadership Program (CCLP) actively recruits individuals passionate about climate and clean energy policy who want to work on Capitol Hill and drive innovative technologies to reduce global energy emissions.
We all hear a lot of talk about a clean energy future, and we know that success means putting cleaner, more affordable, and more reliable energy on the grid.
If there is one thing you can count on ClearPath doing for the next 10 years: supporting America’s free-market advantage. When American energy works, we all win…
Onward!
DAC Hubs: The IIJA Authorization Driving the Industry
Even if we hit the brakes on emissions today, there is still too much carbon dioxide (CO2) in the atmosphere to meet net zero by 2050. Engineer and Professor Klaus Lackner realized this back in 1999, at the 24th Annual Technical Conference on Coal Utilization and Fuel Systems in Clearwater, FL, where he proposed the concept of directly scrubbing CO2 from the air. Fast forward to 2021, and a momentous milestone was achieved as the world's first direct air capture (DAC) plant turned on in Iceland.
In 2021, Congress also provided the U.S. Department of Energy (DOE) a staggering $3.5 billion through the bipartisan Infrastructure Investment and Jobs Act (IIJA) to develop four Regional Direct Air Capture (DAC) Hubs, each with the capacity to capture 1 million metric tons of CO2 annually. While much of the federal investments in the IIJA were directed towards traditional projects such as roads and bridges, one significant section managed to revolutionize an industry: the Regional Direct Air Capture Hubs.
U.S. DAC innovators are eager to hit the ground running with their technology. In August 2023, DOE announced up to $1.2 billion for two DAC Hubs slated for award negotiations: the South Texas DAC Hub and Project Cypress in southwest Louisiana, both designed to capture a million metric tons of CO2. In March, Project Cypress, the first to emerge from negotiations, received the first portion of their award funding — $50 million issued by the DOE’s Office of Clean Energy Demonstrations (OCED). Battelle, the project lead, has indicated that an additional $51 million in private investment will be mobilized to kick-start the initial phase of the Project Cypress DAC Hub. DOE is anticipated to finalize the remaining $1.2 billion in DAC grants soon and is set to release an additional $2.4 billion in follow-on funding.
When included in a portfolio of innovative, clean technologies, DAC has the potential to provide a game-changing solution to the global challenge of removing excess carbon dioxide (CO2) already in our atmosphere. Research shows DAC can remove CO2 at the volumes needed to meet net-zero targets AND it can do so quickly.
Though the two million-ton DAC Hub winners are garnering the spotlight, there are 19 additional projects that will support earlier stages of DAC project development, including feasibility assessments and front-end engineering and design (FEED) studies. Of the 19, 14 projects will enable efforts to explore the feasibility of a potential DAC Hub location, ownership structure and business model. The remaining five projects will perform FEED studies establishing and defining technical requirements focused on project scope, schedule and costs to reduce risk during later phases.
While stakeholders eagerly await the finalization of these awards, DOE is already looking ahead to its next task of accelerating DAC deployment potential by supporting mid-scale commercial demonstration facilities. Last month, DOE issued a Request for Information on how to approach the development of DAC facilities with lower capture capacities of approximately 5,000–25,000 tons per year.
DOE’s Regional DAC Hubs represent a fusion of innovation and economic opportunity. Furthermore, these hubs offer a tangible solution to the pressing issue of climate change without resorting to heavy-handed regulations or mandates. By incentivizing private-sector investment in DAC technologies, the government empowers businesses to lead in reducing emissions while preserving economic competitiveness.
DAC Hubs showcase the potential for collaborative efforts between government and industry. The success of DAC technology hinges not only on its scalability but also on its capacity to integrate seamlessly into existing infrastructures and industries.
DAC is one of the many types of carbon dioxide removal (CDR) technologies that are taking on the challenge of removing CO2 from our atmosphere. Because of this, the program will lay the technical foundation for the future widespread commercialization of this critical suite of technologies. The yearly removal capacity for all U.S.-based CDR technologies is roughly one billion metric tons and 10 billion metric tons globally to reach net zero by 2050. With the DAC Hubs only clearing a percentage of the task, there is still a long road ahead. Other DOE initiatives like the CDR Pilot Prize are embracing a technology-inclusive approach to accelerate multiple CDR solutions, like enhanced weathering and bioenergy with carbon capture and storage, towards the billion metric ton goal. Bipartisan proposals, such as the Carbon Removal and Emissions Storage Technologies (CREST) Act of 2023 introduced by Senators Susan Collins (R-ME) and Maria Cantwell (D-WA), possess the ability to infuse the necessary resources toward this technology-inclusive DOE program.
The United States is leading the way for supportive policies for DAC innovation. As the DAC narrative unfolds, it underscores the importance of bold, forward-thinking American policies like the IIJA, which have the potential to catalyze transformative change within the industry.
Unlocking Carbon Storage Wells in 2024
Carbon storage is carrying momentum into 2024 following big year-end developments, with Louisiana obtaining regulatory primacy for carbon storage and Wyoming permitting its first set of Class VI wells. After years of delays and bottlenecks at the federal level, states are taking the lead to move these projects forward.
Both of these developments help address the main challenge developers are currently facing: unclear project development timelines due to permitting delays. To date, the Environmental Protection Agency (EPA) has permitted just two active wells in Illinois and six pending wells in Indiana and California.
The EPA is charged with implementing the Underground Injection Control (UIC) program as required by the Safe Drinking Water Act (SDWA) to prevent contamination of underground sources of drinking water. In 2011, the EPA created a new well classification, known as Class VI wells, specifically for the geological sequestration of carbon dioxide. This well class was specifically created to store CO2 in “non-usable” aquifers under a layer called caprock, which is a natural seal that prevents CO2 from escaping back out into the atmosphere. Research has shown that CO2 can be securely sequestered underground, particularly within deep and porous rock formations, lasting for thousands of years, and there are natural pockets of CO2 that have existed for millions.
States have recognized the need to accelerate these types of investments and have elected to pursue primacy – the ability to process applications through the state’s environmental regulator rather than the federal Environmental Protection Agency (EPA) — for carbon storage wells.
States have long been critical partners in the UIC program. In each case, the state regulator must demonstrate standards that are no less stringent than the federal requirements. While the EPA has delegated primacy for at least one well class to a majority of states, so far, just three states hold Class VI primacy: North Dakota, Wyoming and Louisiana. The number of states with Class VI primacy is expected to steadily increase as applications from Arizona, West Virginia and Texas are all currently under review. Additionally, the EPA recently made award selections across 25 states and tribes to support state primacy applications as directed by the infrastructure bill.
North Dakota and Wyoming have demonstrated a strong track record of approving permits for carbon sequestration in a timely manner. Whereas the federal EPA process can take years, North Dakota and Wyoming have been able to issue permits in a matter of months, with Wyoming issuing its first three Class VI permits in December 2023 after 10 months of review.
As of January 2024,179 wells across 63 projects are currently under review at the EPA. Creating efficient timelines through state primacy will be critical to approving the deluge of new well permit applications currently sitting under review at the EPA. The long and uncertain timelines at the federal level represent a significant barrier to developing the scale of storage capacity required for future carbon management infrastructure.
Additional recommendations to accelerate carbon storage projects include:
Clarifying CO2 Storage on Federal Lands: In 2022, the Bureau of Land Management (BLM) took the first step to authorize Rights of Ways to allow potential carbon sequestration developers to access pore space. However, the current guidance is limited, and Congress would need to provide support in the form of legislation to ensure that agency actions are legal and direct agencies involved in CO2 storage to clarify how CO2 companies can access pore space.
Clarifying storage in basalt formations: Though saline formations are a popular route for carbon sequestration, basalt is another known formation well-suited for carbon dioxide sequestration, sometimes referred to as “in-situ mineralization”. In-situ mineralization has been demonstrated as a viable option to store gigatons of CO2 securely underground. The Wallula Basalt Project, in Washington state was the world’s first deep basalt supercritical CO2 injection well. The project found mineralization was occurring on the order of years, much quicker than currently permitted Class VI wells. The current Class VI program allows for various types of long-term geologic sequestration, but to date, the EPA has not permitted a Class VI well that involves in-situ mineralization. In order to confidently pursue carbon storage projects in basalt formations, CO2 operators require clarity that their technology would fall under the Class VI program and ensure they are eligible to claim the 45Q tax credit.
CO2 Pipeline R&D: Federal research agencies like the U.S. Department of Energy have an important role to play in the development and deployment of new technologies that can streamline the pipeline permitting process. These include advanced leak detection methods and tools, novel materials for pipeline coatings and liners, advanced approaches for retrofitting existing critical infrastructure, and next-generation sensor technologies and processes. Despite recent significant investments in federal R&D, more can be done to clarify and coordinate federal investments in this space.
Unlocking CO2 Transportation: There are currently over 5,000 miles of CO2 pipelines in the United States. A 2020 Great Plains Institute report suggests that an additional 29,000 miles of CO2 transport routes are necessary to deliver around 300 million tons of CO2 in the near- and medium-term. However, in order to deploy carbon capture and sequestration (CCS) and carbon management projects at speed and scale, there needs to be clarification on the federal government’s role in facilitating CO2 pipeline infrastructure. Currently, there is no federal siting authority for this type of infrastructure, which in many cases will require crossing state lines. There is broad concern that as more projects develop, groups opposed to carbon management technologies will seek to delay critical infrastructure. The initiative should consider strategies to ensure CO2 pipeline infrastructure is not blocked by politically motivated states or local siting bans.
Combined with a growing interest in Class VI primacy applications from states, these policy recommendations will position carbon capture and storage for more breakthroughs in the year ahead. It will be critical for the EPA to demonstrate success by expeditiously reviewing state primacy applications to unlock projects and get more steel (and CO2 emissions) into the ground.
Rich Powell’s TED Talk: How to Modernize Energy Permitting
Rich Powell, ClearPath CEO, recently delivered a TED Talk on modernizing the energy permitting process. Rich shines his quintessential optimism on the otherwise gloomy permitting outlook, and outlines a plan for Congress to expedite project development and improve the burdensome judicial review process. There is no doubt the permitting system is slowing down America’s path to building more clean energy, and there’s no single national straightforward solution for our current permitting emergency, but it starts with all of us.
Watch Rich Powell’s TED Talk below:
Advancing American Clean Energy Leadership at COP28
November 30 marked the start of the 28th annual meeting of the Conference of the Parties (COP28), where a historic 97,000 participants registered and over 80,000 convened in Dubai, UAE to collaborate on solutions to reducing global emissions.
The outcome of the first global stocktake has received mixed feedback; regardless there were several developments from COP28 that should be celebrated.
First, the U.S., UK and Canada, along with more than 20 other countries, launched an ambitious call to triple nuclear energy capacity by 2050.
To triple nuclear capacity from now until 2050, the world will have to build around 30 large reactors each year, even more, if replacing retiring capacity is necessary or if smaller reactors take off.
ClearPath partnered with the World Nuclear Association on a number of events, including one where ClearPath CSO Jeremy Harrell spoke of the increasing bipartisan support for advanced nuclear and America’s position to lead global deployment.
Second, at COP28, conservatives took a leadership stake by driving discussions centered around an all-of-the-above approach to clean energy solutions.
In fact, there were a record number of Congressional Republicans at COP28, solidifying their ambitions to be part of the dialogue and present positive solutions. ClearPath collaborated with the bipartisan delegation by hosting several panels and joining them at others. Our CEO Rich Powell and Senator Lisa Murkowski (R-AK) hosted a fireside chat highlighting American policies that have catalyzed a range of technologies. Senator Murkowski emphasized the impact the Energy Act of 2020 had on authorizing advanced nuclear, but called for restructured permitting to ensure projects face reasonable timelines for attracting private investment.
ClearPath discussed permitting with Congressional leadership including Representative John Curtis (R-UT), Representative Garret Graves (R-LA), Representative Tim Walberg (R-MI) and Representative Scott Peters (D-CA). Powell led the conversation around the time-sensitive need for bipartisan legislation to address the broken permitting system.
L to R: ClearPath CEO Rich Powell, Representative Garret Graves (R-LA), Representative Scott Peters (D-CA), Representative John Curtis (R-UT), and Representative Tim Walberg (R-MI).
Alongside participation with conservative leadership, ClearPath highlighted pragmatic solutions to fill the white space of clean energy deployment. Compared to previous years, carbon management and nuclear energy were previously shunned; however, at this year’s conference, the final agreement calls for the acceleration of carbon capture and nuclear technologies. ClearPath’s participation in events helped underscore the importance of these vital technologies.
Speaking of technologies, that brings up a third key theme of COP28 — carbon management. In an event with Axios, ClearPath CEO Rich Powell referenced the Intergovernmental Panel on Climate Change (IPCC) report which specified the need for carbon removal technologies to stabilize global temperatures, while also noting the technology’s unique ability to retrofit existing infrastructure and preserve jobs.
L to R: Rich Powell (CEO, ClearPath); Nicholas Johnston (Publisher, Axios)
Photo Credit: Arthur Abraham/ Haiku D Photography on behalf of Axios
By collaborating with a diverse range of stakeholders with big ideas on solving the climate challenge, ClearPath left COP28 with a great deal of optimism. It was a pivotal opportunity to elevate nuclear energy, carbon management and conservative leadership. Ensuring American leadership remains prominent on the international stage is crucial for securing a future with both a prospering environment and economy.
America’s Global Energy and Climate Leadership Needs Carbon Capture (RealClearEnergy)
This op-ed was originally published by RealClearEnergy on December 3, 2023. Click here to read the entire piece.
The world is in the throes of a complex energy landscape as we recognize the unprecedented demand for affordable and reliable energy combined with our shared goal to decrease global carbon dioxide emissions. These twin realities create parallel challenges: producing more, while simultaneously deploying clean energy technologies that will reduce emissions.
The U.S. must lead in meeting both challenges. Domestic natural resources — oil, natural gas, coal and critical minerals – are prolific. Recent global instability has demonstrated just how crucial it is to decrease our dependence on hostile regimes like Russia, China and Iran. As the world’s largest producer of oil and natural gas, America’s seat at the table is clear.
Advancing U.S. leadership can’t stop with natural resources, we must also lead in low-carbon technologies. Financial incentives and policy support are accelerating the development of solutions like carbon capture and storage (CCS), which the International Energy Agency has said will be “necessary to meet national, regional and even corporate net-zero goals.”
The U.S. already has a competitive advantage with CCS. A recent report from the Global CCS Institute shows that the U.S. “dominates” the global CCS landscape with the U.S. facility count increasing by 73 in the past year alone. This is no surprise: the technology enjoys vast bipartisan support from Republicans and Democrats, environmentalists and industry alike, and is widely thought to be a crucial piece of the puzzle in decreasing emissions.
Earth, Wind, Fire: Geothermal Plants are Perfect for Direct Air Capture
Earlier this year, Houston-based geothermal energy developer Fervo announced an important new project to use its next-generation geothermal systems to power a direct air capture (DAC) facility. The announcement marks another milestone in the path towards a decarbonized economy and the expanded use of both geothermal and DAC technologies.
Geothermal + DAC = CO2 Reduction
The Need for Direct Air Capture of CO2
Deploying DAC technologies offer an exciting opportunity to add another tool to the toolbox for lowering global carbon dioxide (CO2) emissions by removing CO2 from the atmosphere.
Most decarbonization efforts focus on two areas. The first is keeping CO2 from going up into the atmosphere by generating electricity from technologies that don’t emit CO2 at all — think nuclear or renewables like hydropower and geothermal. The second effort is to use technology to capture the CO2 that would have been emitted from power plants and put it back underground – often referred to as carbon capture and storage (CCS).
The problem, unfortunately, is that there is already a heck of a lot of extra CO2 up in the atmosphere. DAC technologies offer a third option for decarbonizing by removing this CO2 from the air around us. If you have not heard of DAC, think of it as a massive vacuum cleaner that literally sucks carbon dioxide molecules out of the open air.
With recent Congressional action to pass bills with clean energy incentives, DAC technology is poised to see major growth moving forward. Last year, the U.S. Department of Energy (DOE) granted a series of awards to universities, utilities, and private businesses to study a variety of potential implementation models for DAC technologies ranging from use on nuclear and geothermal power plants to retrofitting steel and fertilizer plant operations.
Additionally, the Bipartisan Infrastructure Law (BIL), called for $3.5 billion in DOE funding to be used to establish four regional DAC hubs to, “demonstrate processing, transport, secure geologic storage, and/or conversion of CO2 captured from the atmosphere with DAC technology and accelerate commercialization of those technologies.” Project selections are expected later this summer and will provide another set of R&D opportunities for this technology.
Finally, under the tax package passed last year, the 45Q tax credit for CCS technologies included a special rule for DAC projects to expand tax incentives with the hope of enabling the industry to scale and export innovations on a global scale.
Why Geothermal?
Geothermal energy is heat that radiates from the core of the Earth to the subsurface, produced by the decay of radioactive materials and residual heat from the planet’s formation. Geysers, hot springs, volcanoes, and fumaroles are all locations where geothermal energy reaches all the way to the Earth’s surface. It is easier to access geothermal resources in these locations, but geothermal resources are actually available anywhere if one drills deep enough. Geothermal energy, like wind and solar energy, is an inexhaustible natural resource.
Enhanced or engineered geothermal systems (EGS) create opportunities to use hot, dry rock by enhancing the permeability of a specific geology or by adding water. EGS developers drill wells and inject water at high pressures to crack rock. After permeability has been improved to increase fluid circulation, hot water can be drawn to the surface through a production well and used for electricity generation.
U.S. Potential for Enhanced Geothermal Systems
Dots Indicate Existing Hydrothermal Sites
Shaded Regions Are Potentially Suitable for EGS
Similar to recent policies adopted to support DAC, Congress has taken steps to support the geothermal industry in an effort to spur growth and innovation and to expand the map in facilitating its use in projects outside just the Western U.S. In addition to support in the tax package, the BIL set aside funding for the DOE to fund EGS demonstration projects. In February of this year, the DOE’s Geothermal Technology Office announced they would fund up to seven EGS projects with applications due this summer.
Perfect Union
As of late 2022, there were 18 DAC plants in operation around the globe. Most of these are still smaller demonstration projects, but newly planned facilities like Occidental Petroleum’s in West Texas will be much larger, with the potential to remove up to 1 megaton (MT) of CO2 annually. To meet its net-zero goals, the U.S. could require 60 MT of CO2 removal each year by 2030, which would necessitate the buildout of an additional 60 plants similar in size to Occidental’s. Of note, Occidental has said that they could build up to 70 DAC projects globally by 2035 under current market conditions.
To result in a net carbon removal, DAC plants need electricity supplied by a 24/7 zero-emissions power source. Many DAC technologies also require access to a constant heat source, like that resulting from a geothermal plant, meaning EGS fits the bill perfectly.
Add to that the fact that the captured CO2 will need to be stored somewhere, usually in large underground geologic formations, and geothermal plant developers are uniquely qualified to pair with DAC plants. Companies like Fervo use next-generation technologies to survey the earth for their operations, and this same technology can be leveraged to help identify high-quality CO2 storage locations for DAC operations.
Today, the combo of geothermal and DAC is being used in Iceland, where Climeworks’ Orca plant has been removing CO2 from the atmosphere since 2021. Its system of fans, filters, and heaters are all powered by geothermal energy, and plans are underway to expand across the globe everywhere from Scotland to Texas.
As the U.S. market continues to take shape, recognizing the complementary nature of these technologies and their massive potential is producing a true ‘win-win’ for decarbonization. Not only will innovations in geothermal power allow for reliable, affordable, firm electricity generation, but when paired with energy intensive DAC projects, the impact will not just be ‘carbon neutral’ but could, in fact, be ‘carbon negative,’ offsetting past historical emissions.
Conclusion
This latest announcement is illustrative of the types of technological innovations that will be needed for the U.S. and the world to effectively decarbonize the economy in the future. Addressing climate change will necessitate an ‘all of the above’ approach to not only limit future emissions from reaching the atmosphere by expanding the use of technologies like hydropower, nuclear, geothermal, and renewables, but will also require cleaning up the current atmosphere. Continuing to prioritize support for innovative technologies like EGS and DAC and pairing these industries is not only promising for reducing emissions, but could also usher in a whole new innovative industry segment with global potential.
Why 45Q Matters - and Why It’s Not Enough
This blog has been updated. Previously posted on March 22, 2018 by Rich Powell and Justin Ong
One of the most critical clean energy incentives available today is the 45Q tax credit. Recent modifications raised the incentive for heavy industry and power carbon capture operators from $50 per ton to $85 per ton of CO2 and up to $180 per ton for direct air capture (DAC) – think machines that selectively vacuum CO2 out of the air – sequestration projects. Additionally, the legislation lowered capture thresholds and extended the construction windows for projects looking to take advantage of the tax credit.
The 45Q tax credit now represents the most aggressive policy driver for the deployment of carbon capture, utilization, and storage (CCUS) across the globe. This incentive will further U.S. leadership by accelerating a network of new CCUS projects from existing and new coal and natural gas plants, as well as industrial facilities that produce a range of U.S. products.
CCUS Projects Are in Development Across the Country
Map: CCUS projects are in development across the country for biofuels, cement, direct air capture, heat and power, hydrogen, heavy industry, storage, and other applications.
For background, Congress first established the 45Q incentive as part of the Energy Improvement and Extension Act of 2008. Over the next decade, it became clear that the incentive was not driving the level of investment and innovation that policymakers envisioned, leading to a bipartisan effort to make the credit more attractive for private investment. In 2018, recognizing that something needed to be done, Congress updated 45Q, increasing the credit value, lowering capture eligibility thresholds, and allowing DAC to be eligible for the incentive. The industry experienced additional gains when the Energy Act of 2020 established the research and demonstration programs for carbon capture that would ultimately be funded by the Infrastructure Investment and Jobs Acts (IIJA). IIJA infused nearly $12 billion to develop the full carbon capture supply chain, from capture to transportation and storage. This was a huge win for American technology leadership. Among other changes, the recent update allowed project developers to elect to have direct pay for the first five years of a project's life, eliminating the need to seek funds from the tax equity market – which can be very costly.
These modifications mean more projects to capture carbon could be developed.
Proposed business models also look at economic opportunities, including utilizing CO2 for enhanced oil recovery (EOR) and, in the longer term, manufacturing commodities such as sneakers, toothpaste, and building materials like cement. Some major energy producers, including ExxonMobil and Occidental Petroleum, estimate that carbon capture, utilization, and storage markets could be worth trillions of dollars by midcentury – an opportunity that can be seized by the U.S. not just domestically but also in helping deploy these technologies abroad.
That includes India, a serious player in global energy and climate change talks but also a country that imports three-quarters of its oil. Captured carbon will help them build a domestic oil supply through EOR. The Middle East – which amazingly still pumps natural gas into the ground for EOR – is also increasingly eager to mimic the U.S. by storing CO2 in underground geologic formations instead. Further down the line, carbon capture could help African nations build out clean energy and supply reliable electricity to the continent.
While the prospects abroad are exciting, we need to perfect the technology here in the U.S. An ambitious implementation agenda is still needed to scale up carbon capture technologies nationwide, drive down costs, and instill sufficient investor confidence.
It’s quite a list. The good news is the 45Q enhancements were a major hurdle that was overcome and will be the anchor that drives a lot of new, incredible innovation.
