S. HRG. 111–50 CARBON CAPTURE AND SEQUESTRATION HEARING BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES UNITED STATES SENATE ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION TO RECEIVE TESTIMONY ON S. 1013, THE DEPARTMENT OF ENERGY CAR- BON CAPTURE AND SEQUESTRATION PROGRAM AMENDMENTS ACT OF 2009 MAY 14, 2009 ( Printed for the use of the Committee on Energy and Natural Resources U.S. GOVERNMENT PRINTING OFFICE 50–986 PDF WASHINGTON : 2009 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON ENERGY AND NATURAL RESOURCES JEFF BINGAMAN, New Mexico, Chairman BYRON L. DORGAN, North Dakota LISA MURKOWSKI, Alaska RON WYDEN, Oregon RICHARD BURR, North Carolina TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming MARY L. LANDRIEU, Louisiana SAM BROWNBACK, Kansas MARIA CANTWELL, Washington JAMES E. RISCH, Idaho ROBERT MENENDEZ, New Jersey JOHN MCCAIN, Arizona BLANCHE L. LINCOLN, Arkansas ROBERT F. BENNETT, Utah BERNARD SANDERS, Vermont JIM BUNNING, Kentucky EVAN BAYH, Indiana JEFF SESSIONS, Alabama DEBBIE STABENOW, Michigan BOB CORKER, Tennessee MARK UDALL, Colorado JEANNE SHAHEEN, New Hampshire ROBERT M. SIMON, Staff Director SAM E. FOWLER, Chief Counsel MCKIE CAMPBELL, Republican Staff Director KAREN K. BILLUPS, Republican Chief Counsel (II) C O N T E N T S STATEMENTS Page Anderson, A. Scott, Senior Policy Advisor, Environmental Defense Fund, Aus- tin, TX ................................................................................................................... 38 Barrasso, Hon. John, U.S. Senator From Wyoming ............................................. 2 Batten, Kit, Ph.D., Science Advisor, Office of the Deputy Secretary, Depart- ment of the Interior ............................................................................................. 9 Bingaman, Hon. Jeff, U.S. Senator From New Mexico ........................................ 1 Der, Victor K., Acting Assistant Secretary, Office of Fossil Energy, Depart- ment of Energy ..................................................................................................... 3 Freudenthal, Hon. Dave, Governor, State of Wyoming, Cheyenne, WY ............. 53 Lubnau, Thomas E., II, State Representative From Wyoming, House District 31, Gillette, WY .................................................................................................... 14 Moor, Karl, Vice President & Associate General Counsel, Southern Company, Atlanta, GA ........................................................................................................... 32 Murkowski, Hon. Lisa, U.S. Senator From Alaska ............................................... 2 Tombari, John, Vice President, Schlumberger Carbon Services, Houston, TX .. 30 Trabucchi, Chiara, Principal, Industrial Economics, Inc., Cambridge, MA ........ 43 APPENDIX Responses to additional questions .......................................................................... 55 (III) CARBON CAPTURE AND SEQUESTRATION THURSDAY, MAY 14, 2009 U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. The committee met, pursuant to notice, at 3 p.m. in room SD– 366, Dirksen Senate Office Building, Hon. Senator Jeff Bingaman, chairman, presiding. OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW MEXICO The CHAIRMAN. Ok. Let me ask everyone to please be seated. I welcome everyone here. We have a distinguished group of wit- nesses here. This is to consider S. 1013 which is the Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2009. Senator Barrasso and I introduced this bill along with Sen- ators Dorgan, Tester, Bayh, Landrieu, Casey, Voinovich, Udall and Conrad. It establishes a national indemnity program through the Department of Energy for up to ten commercial scale, carbon cap- ture and sequestration projects. Based on the input from industrial and environmental NGO and other organizations it’s been made clear to me that there is a real need to for liability treatments and adequate project financing for early mover projects. The creation of an indemnity program for these large scale, early mover projects is an important, necessary step to building confidence for project developers as well as the public. S. 1013 sets qualifying criteria that will help to ensure that these critical early mover projects will be conducted safely while addressing the growing concern of reducing greenhouse gas emis- sions from industrial facilities such as coal and natural gas, hard utilities, cement plants, refineries, other carbon intensive indus- trial processes. This legislation also maps out a clear framework for closing down a geological storage site. It’s essential to consider the issue of safe, long term storage of carbon dioxide. It’s also critical to take the steps necessary for site stewardship during the injection phase di- rectly following closure and for long term, preventative mainte- nance of the geologic storage site. A science based monitoring and verification is required after the injection of carbon dioxide ends to ensure that the carbon dioxide remains safely in place throughout the life of the project and well beyond the closure phase. This topic of reducing greenhouse gases, particularly carbon dioxide emissions remains of great concern to (1) 2 me and to all members of the committee. Carbon capture and geo- logic storage holds promise as a measure that can be used to miti- gate global climate change while still allowing the use of fossil fuels at electricity generating plants and industrial facilities. I’d like to thank each of our witnesses who’ve come to testify as to the merits of the legislation. Also the administration witnesses as well as Tom Lubnau, who is here representing the State of Wyo- ming. The efforts that he and the Governor, Governor Freudenthal, have undertaken in their State legislature to rapidly move forward with commercial carbon sequestration projects in Wyoming serves as a model for other States to look at as well as a model for us to look at as we undertake here in the Senate the deployment of such a promising greenhouse gas reducing technology. Let me call on Senator Murkowski for any statement she would have. Then if Senator Barrasso had any statement I would call on him too, since he’s prime co-sponsor on the bill. But you go right ahead, Senator Murkowski. STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM ALASKA Senator MURKOWSKI. Thank you, Mr. Chairman. I want to thank the witnesses for joining us this afternoon. I think we all recognize that the advancement of carbon sequestration technology is a very important task. I think we all recognize the role that coal has played in the development of our country as we look to our energy sources and the value that it holds not only in the past tense, but moving forward. We’ve authorized many programs at DOE to advance carbon se- questration technologies between FutureGen, the Clean Coal Power Initiative, the Regional Partnerships. There’s about $4.1 billion sit- ting at DOE waiting to be spent. But I think we all recognize that it’s not always just about money. Sometimes there are other matters to be addressed. Certainly the responsibility for carbon sequestrationsites over the long term is one of those issues that is on the list. The bill before us would place that responsibility squarely on the shoulders of the Federal Government for a number of demonstration projects. This would be a bold decision. But it also raises a number of questions. I would hope that some of those questions can be ad- dressed before we mark up this bill. I’m very supportive of carbon sequestration. I believe that we must continue to aggressively advance the technology. But I want to make sure that we go about that task in the most effective way and responsible way so that the technology can continue to evolve as quickly as we would like it to do. So I look forward to hearing from our witnesses on this very im- portant subject today. Thank you. The CHAIRMAN. Senator Barrasso, did you wish to make an open- ing statement? STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM WYOMING Senator BARRASSO. Just briefly, Mr. Chairman. Thank you for al- lowing me to co-sponsor this important piece of legislation with 3 you. Like you I want to make sure that we make American energy as clean as we can, as fast as we can and do it in a way that doesn’t increase costs for American families. It’s especially a privilege to have with us today Representative Tom Lubnau. Tom and I served together in the Wyoming legisla- ture. Tom and I have held town meetings together in his home community in Gillette, Wyoming which is the coal capital of the world. It is also Mike Enzi’s, Senator Enzi’s hometown. Mike was mayor of that community. We know how important all the energy sources are. Coal is a very important part of the energy needs of this Na- tion. Tom has taken a significant leadership role, Mr. Chairman, in the Wyoming legislature with our carbon sequestration legislation. It has been a bipartisan effort. The Governor has been very in- volved. Tom has been involved and significant commitment on the part of the entire State because we know how important this is for the energy security of our Nation. So thank you, Mr. Chairman. Welcome to Representative Lubnau. The CHAIRMAN. Thank you again for co-sponsoring this bill with us. Let me introduce this first panel. Dr. Victor