<DOC> [110th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:36815.wais] CARBON CAPTURE AND SEQUESTRATION: AN OVERVIEW ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON ENERGY AND AIR QUALITY OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS FIRST SESSION __________ MARCH 6, 2007 __________ Serial No. 110-12 Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov U.S. GOVERNMENT PRINTING OFFICE 36-815 PDF WASHINGTON DC: 2008 --------------------------------------------------------------------- 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) 512-2250 Mail Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON ENERGY AND COMMERCE JOHN D. DINGELL, Michigan, Chairman HENRY A. WAXMAN, California EDWARD J. MARKEY, Massachusetts RICK BOUCHER, Virginia EDOLPHUS TOWNS, New York FRANK PALLONE, Jr., New Jersey BART GORDON, Tennessee BOBBY L. RUSH, Illinois ANNA G. ESHOO, California BART STUPAK, Michigan ELIOT L. ENGEL, New York ALBERT R. WYNN, Maryland GENE GREEN, Texas DIANA DeGETTE, Colorado Vice Chairman LOIS CAPPS, California MIKE DOYLE, Pennsylvania JANE HARMAN, California TOM ALLEN, Maine JAN SCHAKOWSKY, Illinois HILDA L. SOLIS, California CHARLES A. GONZALEZ, Texas JAY INSLEE, Washington TAMMY BALDWIN, Wisconsin MIKE ROSS, Arkansas DARLENE HOOLEY, Oregon ANTHONY D. WEINER, New York JIM MATHESON, Utah G.K. BUTTERFIELD, North Carolina CHARLIE MELANCON, Louisiana JOHN BARROW, Georgia BARON P. HILL, Indiana JOE BARTON, Texas Ranking Member RALPH M. HALL, Texas J. DENNIS HASTERT, Illinois FRED UPTON, Michigan CLIFF STEARNS, Florida NATHAN DEAL, Georgia ED WHITFIELD, Kentucky BARBARA CUBIN, Wyoming JOHN SHIMKUS, Illinois HEATHER WILSON, New Mexico JOHN B. SHADEGG, Arizona CHARLES W. ``CHIP'' PICKERING, Mississippi VITO FOSSELLA, New York STEVE BUYER, Indiana GEORGE RADANOVICH, California JOSEPH R. PITTS, Pennsylvania MARY BONO, California GREG WALDEN, Oregon LEE TERRY, Nebraska MIKE FERGUSON, New Jersey MIKE ROGERS, Michigan SUE WILKINS MYRICK, North Carolina JOHN SULLIVAN, Oklahoma TIM MURPHY, Pennsylvania MICHAEL C. BURGESS, Texas MARSHA BLACKBURN, Tennessee _________________________________________________________________ Professional Staff Dennis B. Fitzgibbons, Chief of Staff Gregg A. Rothschild, Chief Counsel Sharon E. Davis, Chief Clerk Bud Albright, Minority Staff Director (ii) Subcommittee on Energy and Air Quality RICK BOUCHER, Virginia, Chairman G. K. BUTTERFIELD, North Carolina J. DENNIS HASTERT, Illinois, Vice Chairman Ranking Member CHARLIE MELANCON, Louisiana RALPH M. HALL, Texas JOHN BARROW, Georgia FRED UPTON, Michigan HENRY A. WAXMAN, California ED WHITFIELD, Kentucky EDWARD J. MARKEY, Massachusetts JOHN SHIMKUS, Illinois ALBERT R. WYNN, Maryland JOHN B. SHADEGG, Arizona MIKE F. DOYLE, Pennsylvania CHARLES W. ``CHIP'' PICKERING, JANE HARMAN, California Mississippi TOM ALLEN, Maine STEVE BUYER, Indiana CHARLES A. GONZALEZ, Texas MARY BONO, California JAY INSLEE, Washington GREG WALDEN, Oregon TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma ANTHONY D. WEINER, New York MICHAEL C. BURGESS, Texas JIM MATHESON, Utah JOE BARTON, Texas (ex officio) JOHN D. DINGELL, Michigan (ex officio) ------ Professional Staff Sue Sheridan, Chief Counsel Bruce Harris, Senior Advisor Laura Vaught, Policy Coordinator David McCarthy, Minority Chief Counsel C O N T E N T S ---------- Page Hon. Rick Boucher, a Representative in Congress from the Commonwealth of Virginia, opening statement.................... 1 Hon. J. Dennis Hastert, a Representative in Congress from the State of Illinois, opening statement........................... 3 Hon. Mike Doyle, a Representative in Congress from the Commonwealth of Pennsylvania, opening statement................ 4 Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement................................. 5 Hon. Joe Barton, a Representative in Congress from the State of Texas, prepared statement...................................... 7 Hon. Michael C. Burgess, a Representative in Congress from the State of Texas, prepared statement............................. 8 Witnesses Thomas D. Shope, Principal Deputy Assistant Secretary, Fossil Energy, U.S. Department of Energy.............................. 9 Prepared statement........................................... 142 William Wehrum, Acting Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency................ 10 Prepared statement........................................... 174 John A. Fees, chief executive officer, Babcock & Wilcox Company, Lynchburg, VA.................................................. 41 Prepared statement........................................... 84 David G. Hawkins, director, Climate Center, Natural Resources Defense Council, Washington, DC................................ 43 Prepared statement........................................... 102 Edward C. Loew, general manager, Gasification Market Development, GE Energy, Schenectady, NY..................................... 44 Prepared statement........................................... 122 S. Julio Friedmann, Carbon Management Program, Lawrence Livermore National Laboratory, Livermore, CA............................. 45 Prepared statement........................................... 95 Mark K. Schoenfield, senior vice president, operations; general counsel, Jupiter Oxygen Corporation, Schiller Park, IL......... 47 Prepared statement........................................... 137 Stu Dalton, Electric Power Research Institute, Palo Alto, CA..... 49 Prepared statement........................................... 70 Jay B. Stewart, attorney, Hance Scarborough Wright Woodward & Weisbart, L.L.P., Austin, TX................................... 50 Prepared statement........................................... 166 CARBON CAPTURE AND SEQUESTRATION: AN OVERVIEW ---------- TUESDAY, MARCH 6, 2007 House of Representatives, Subcommittee on Energy and Air Quality, Committee on Energy and Commerce, Washington, DC. The subcommittee met, pursuant to call, at 10:06 a.m., in room 2322 of the Rayburn House Office Building, Hon. Rick Boucher (chairman) presiding. Members present: Representatives Melcanon, Barrow, Markey, Wynn, Doyle, Harman, Gonzalez, Inslee, Dingell, Hastert, Hall, Upton, Whitfield, Shimkus, Walden, Sullivan, Burgess, Matheson, and Barton. Staff present: Sue Sheridan, Laura Vaught, Lorie Schmidt, Bruce Harris, Chris Treanor, David McCarthy, Kurt Bilas, Tom Hassenboehler, and Peter Kielty OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF VIRGINIA Mr. Boucher. This morning the subcommittee continues its series of climate change hearings with an overview of carbon capture and storage methods. Our witnesses will discuss the state of technology development, the costs that are associated with the use of the technology, the status of research efforts to improve the technologies, and time frames for expected commercialization of the technologies. These are key considerations for the subcommittee as we prepare to draft climate change legislation. Coal is America's most abundant domestic fuel with reserves of 250 years within our borders. We have greater coal reserves than any other nation. Coal is also by a broad measure the Nation's least costly energy resource. Today coal accounts for 51 percent of the fuel that is used for electricity generation and the Energy Information Administration predicts that by 2030 coal's share of the electricity generation market will grow to 57 percent. Given our large coal reserves and its lower cost in comparison with other fuels that are used by electric utilities, preservation of the ability of electric utilities to continue coal's use in a carbon-constrained economy is desirable. The carbon capture and sequestration methods we are focusing on today are the means by which that result can be achieved. In drafting climate change legislation, our goal will be to have a nation which makes a substantial contribution to resolution of the global problem while not dislocating any domestic economic sector. We should enable electric utilities that desire to use coal to have the continued ability to do so after the carbon control provisions that we will write become effective. The technologies for carbon capture and sequestration we will discuss this morning will be essential to our ability to meet that test. If carbon controls take effect before the capture and storage technologies are available, there could be a rapid switch from coal to other fuels, and that rapid switch could prove unbearable for the Nation's economy. Fuel switching away from coal would significantly increase electricity prices to the detriment of both residential and industrial electricity consumers. Fuel switching from coal would probably result in far greater uses for natural gas by electricity generators, severely straining our already constrained natural gas supplies. At the present time, one-half of homes in the Nation are heated with natural gas. Industries, notably including the chemical sector, rely on natural gas for chemical feed stocks and some are already leaving the United States because of the high and volatile pricing for natural gas at the present time. That flight of jobs would certainly worsen if fuel switching from coal to natural gas occurs, and many other natural-gas- dependent industries would also suffer including farmers who use fertilizer manufactured in a natural-gas-intensive process. To avoid these problems, we must protect the ability of electric utilities to continue coal use. In a very real sense, therefore, the technologies that we are discussing today will be the enablers of a successful climate change program for the United States. The average coal-fired utility emits approximately 3 to 4 million tons of carbon dioxide annually. While carbon storage projects are underway in research, demonstration and in limited commercial phases, none has attempted to store that much carbon dioxide. In addition, much of the work done to date is with the purpose of enhanced oil recovery. While that is a viable use for injected carbon, we also need to store large quantities of it underground indefinitely, and on that front, further research, development and demonstration is clearly called for. We need to learn more about how the carbon behaves once it is injected underground in large quantities. Are there seepage issues or groundwater concerns? What kind of regulatory regime do we need to have in place to permit carbon injection? Are there liability issues that are associated with these projects? Most importantly, when will we have the capture and storage technologies available for both reliable and widespread use? Is the current flow of research dollars to these projects sufficient? Would larger allocations of research monies speed the availability of the technologies? I want to welcome our witnesses this morning and thank them for sharing with us information regarding the status and expected future development of carbon capture and storage methods, and we very much look forward to their testimony. I am pleased to recognize the ranking Republican member of the Energy and Air Quality Subcommittee, the gentleman from Illinois, Mr. Hastert. OPENING STATEMENT OF HON. J. DENNIS HASTERT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Mr. Hastert. Thank you, Chairman Boucher, for holding this hearing today. I want to recognize your work over the last few decades in trying to find environmentally friendly ways to use the huge coal reserves that we have under the surface of this Nation. I remember in 1992 when we took on kind of an oversight, where are we going to go on energy, and the conclusion in 1992 was, well, we have enough natural gas; natural gas will be the end-all for all things. We found out that is not necessarily true. The supply isn't there. So we have to think of new ways, more inventive ways to use the resources we have in an environmentally friendly way. This is the first of three hearings this week so we are going to be busy looking at these issues. Carbon capture and sequestration is probably a good way to start off this week's hearing. Whether or not you agree with the science behind the claims of human-caused global warming, at the end of the day we are going to have to deal with the proposed real-world solutions. We cannot legislate the science. We can only try to understand its uncertainties and nuances in order to inform our decisionmaking. We can, however, propose policies to deal with the emissions suspected of contributing to global warming. Carbon capture and sequestration is put forward as one such solution. Carbon capture and sequestration is a new technology. It has never been attempted on the scale required to alter the climate-affecting emissions which accompany the generation of electricity. Initially it will be expensive. Although the price may drop as we gain experience, but in the short term, make no mistake, it will increase the price of electricity. That is why before we jump into anything, we need to know how much we are asking the American people to pay and what we will get in return. We cannot ask the American people to pay a heavy price in jobs and consumer costs in the name of solving global warming only to discover that there is almost no environmental benefit. This is exactly what the Europeans have done with the Kyoto Protocol, paying a high price and still not meeting their emissions targets and seeing almost no environmental benefit. Carbon capture and sequestration is usually discussed in the context of the burning of coal. I am a strong supporter of coal. The United States has the greatest coal reserves of any nation on the planet. My State of Illinois has a lot of that coal. So does Virginia, so does Kentucky, so does a place like Gillette, Wyoming, where they claim they have enough coal to supply our energy needs for centuries into the future of this Nation. Clean coal technology is good for the United States. It offers a secure source of domestic energy for our homes and our jobs. By increasing our use of coal through coal-to-liquids technology, for example, we can decrease our dependence on foreign sources of energy and no doubt, we need to expand its use in a way that increases the efficiency of these plants and decreases their environmental consequences. I also support the expanded use of renewables such as ethanol. These alternative fuels also increase our energy independence. We have two very good panels today. I look forward to hearing from the Department of Energy and the Environmental Protection Agency about the work they are doing on the carbon capture and sequestration. I believe our Government must lead the way on the development and deployment of these new technologies. I am also looking forward to the discussion of the various coal combustion technologies needed for carbon capture and sequestration. I want to learn more about what is coming in the form of new combustion technologies and also what can be done to make our current fleet of coal-fired power plants cleaner and more efficient. I also want to hear about the legal and regulatory issues associated with long-term storage of carbon dioxide underground. While the technology is important, in today's society the legal and regulatory structure could be just as important in determining whether technology is ever going to be widely deployed. Carbon capture and sequestration can get a lot of attention as an available solution to reduced carbon dioxide. However, there is still quite a bit of research and testing to do before these technologies are ready for large-scale commercial deployment. We should be mindful in any proposed legislation that we do not set up a system guaranteed to fail because we mandated technology that is not deployable. If we do, Americans will get all cost and no benefit. I want to make sure that whatever we do, we do not overburden consumers, chase industry overseas, lose jobs and see no appreciable reduction in global emissions. That would be a lose-lose situation. I want to see a situation where new technology as it becomes available is deployed so that Americans reap the benefits of both a safer environment, a better future and affordable electricity. That is win-win. Thank you, Mr. Chairman. Mr. Boucher. Thank you very much, Mr. Hastert, for an excellent statement. Pursuant to the rules of the committee, any Member who waives making an opening statement will have 3 minutes added to his time for asking questions of our witnesses. The Chair is now pleased to recognize the gentleman from Texas, Mr. Gonzalez, for 3 minutes. Mr. Gonzalez. I waive. Mr. Boucher. Mr. Gonzalez waives. Mr. Inslee for 3 minutes. Mr. Inslee. I will waive. Mr. Boucher. Mr. Inslee also waives. Mr. Doyle for 3 minutes. OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA Mr. Doyle. Thank you, Mr. Chairman. I want to start my remarks with a review of a few things that I believe are absolute fact. One, global warming is real; two, man's actions have contributed to it; three, that it can be slowed and reversed; and finally, that it will take a real determined and comprehensive strategy through which American innovation is provided the tools and the environment necessary to succeed if we are ever going to fully address this threat. It is clear that carbon dioxide is one of the many contributors to global warming. As more continues to be pumped into our atmosphere, global warming grows worse. It is important that this committee and the American industry work together to craft a solution that is clearly defined, obtainable and allows our spirit of innovation to flourish. We have seen this begin with the Energy Policy Act and now it is time to redouble our efforts. There is no doubt that carbon sequestration is a very real and near-term technology that we can encourage here on this committee. By capturing the carbon dioxide that otherwise would have blown out of the smokestacks, we can today take one step towards our shared goal of eliminating the threat posed by global warming. The questions before us are: what are the technologies that are out there, what are the risks, what are their costs and how soon can they be deployed. We are beyond the point of asking if carbon dioxide has an impact. We must look at how we are going to manage, reduce and eventually eliminate that impact. This doesn't mean that we should simply pick winners and losers from the various methods of sequestration that are being deployed or currently being demonstrated. Instead, we should look at each for what they are and what they can deliver while also looking at the environment in which they will be deployed to ensure that obstacles to success are not already standing in their way. This is one piece of the greater puzzle and it is critical that we get this piece in place. I look forward to hearing from each of our panelists explain what successes they have had and what results they can clearly demonstrate. I am also interested in hearing what obstacles in current law may impede their progress as well as what incentives government should champion to encourage continued advancement in the field of carbon sequestration. This is clearly one place where government and industry can work hand and hand. Mr. Chairman, I yield back. Mr. Boucher. The Chair thanks the gentleman and recognizes the gentleman from Michigan, Mr. Upton, for 3 minutes. Mr. Upton. I am going to waive. Thank you. Mr. Boucher. The gentleman waives. Mr. Walden from Oregon for 3 minutes. Mr. Walden. I waive as well. Mr. Boucher. Mr. Walden waives. I am pleased now to recognize the chairman of the full committee, the gentleman from Michigan, Mr. Dingell. OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. Dingell. Mr. Chairman, thank you, and I want to commend you and thank you for calling this hearing and for the remarkable vigor with which you have been addressing the very serious questions which are the subject of today's hearing and related matters. Today, as we all know, we are continuing our series of hearings on climate change with an overview on the topic of carbon capture and sequestration, commonly referred to as CCS. CCS refers to the system of separating CO\2\ from either the fuel source, usually coal, or the flue gas that results from combustion and then storing that CO\2\ in an underground geologic formation. CCS will be a critical component of any policy that restricts and reduces carbon dioxide emissions due to the simple fact that coal is and will continue to be a major part of America's energy resource base. It is also extremely important to us for many reasons, not the least of which is the impact it will have on communities where this is a major part of the industrial base and the industrial activity. The United States has an estimated 250 years' worth of coal. According to the Energy Information Administration, coal provides fuel for 50 percent of our electrical generation needs today. We must, however, also recognize that coal-fired generation is a major source of CO\2\ emissions. The challenge we face then is how to continue to use this country's abundant coal supplies to meet our energy needs while at the same time limiting the amount of CO\2\ that we add to the atmosphere. I look forward to hearing from our experts today about how CCS can help us meet that challenge. Capturing CO\2\, transporting it and storing it to some same place in the ground or elsewhere is one of the basic components of CCS policy. The subcommittee's work today will focus on the challenge of capturing and storing CO\2\ because these areas present the greatest difficulty. But I must note that the transportation is not without challenges. The U.S. currently has some 1,500 miles of pipeline devoted to CO\2\ transport, mainly in Texas, where it is used for enhanced oil recovery. The amount of CO\2\ that would be needed to be sequestered under mandatory CO\2\-reduction policy would likely dwarf that capacity. We hope that we can explore this aspect of CCS at a later date. With regard to the capture of CO\2\, we have several excellent witnesses here today who can speak on the specific technology options, their state of readiness for commercial deployment and their costs, and I thank them for their presence and their assistance. I hope our witnesses will be able to inform us how a climate policy could take technology readiness into account. Can we achieve significant reduction in greenhouse gas emissions before carbon capture technologies are fully mature? Will we be able to retrofit existing coal generation facilities with any of these technologies or will they apply only to new plants? On the issue of sequestration, we also have distinguished witnesses who can inform us as to the availability of storage sites in the U.S., the capacity of such sites and the legal issues that arise from storing huge volumes of CO\2\ underground for long periods of time. To date, the committee has not spent a great amount of time studying carbon capture and sequestration but the issues raised by CCS are familiar to our work on hazardous waste and environmental contamination issues. How do we know that CO\2\ injected underground will stay there? Will it affect underground water resources? What do we need to know to assure the public that this is a safe way to proceed? I would also like our witnesses' response on who should manage these locations, who should hold title to the CO\2\ after it is captured? The Federal Government, the States, private entities? Another issue that I hope all witnesses will illuminate for us including our guests from EPA and the Department of Energy is the issue of costs associated with CCS. The Department of Energy currently estimates the cost of capturing and sequestration using current technologies is between $100 and $300 per ton of carbon emissions avoided. This is a rather wide range. It could make a significant difference in the effectiveness of CCS policy. What do we need to do to get better understanding of costs? Will costs come down as a result of technology maturation? I look forward to the testimony of our witnesses today. I thank them for their presence, and I thank you, Mr. Chairman, for your vigor and your diligence in addressing these questions. I yield back the balance of my time. Mr. Boucher. Thank you, Chairman Dingell. The gentleman from Illinois, Mr. Shimkus, for 3 minutes. Mr. Shimkus. Mr. Chairman, I will waive for questions. Mr. Boucher. The gentleman waives. That completes the opening statements from all Members present. Other statements from members of the subcommittee may be included in the record at this time. [The prepared statements of Messrs. Barton and Burgess follow:] Prepared Statement of Hon. Joe Barton, a Representative in Congress from the State of Texas Thank you, Chairman Boucher, for holding this hearing and thanks to our witnesses for sharing their expertise on this important topic. The stated purpose of these hearings is to produce legislation concerning global warming. Although I understand the political pressure to legislate on this issue, I hope we don't rush to judgment. This is a complex subject involving economics, the environment, energy, science and national security, and getting the balance right is critical. Long-term problems don't need short-term solutions. We can hit the gas and produce a bill, but legislating like it's a drag race will do what it always does--more harm than good. I'd rather be right than fast. I think we have agreed that any thoughtful legislation must ensure four things: that the lights stay on, that driving a car stays affordable, that natural gas prices stay low, and that we protect people's jobs. If we think we can achieve those goals without a continuing role for domestic fossil fuels, we're kidding ourselves. We need to keep promoting renewables, because of their benefits for clean air and energy security. But unless we want to abandon millions of jobs, we must also use our fossil resources until the next great energy source arrives to power our homes, cars, schools and factories. We struck that balance between fossil fuels and renewables in the Energy Policy Act of 2005, and it was the right balance. Looking at domestic fossil fuels in the context of our own energy security means looking carefully at coal. We have hundreds of years worth of coal in the ground, and provides half our electricity. We're making great strides in cleaner- coal technologies and, looking ahead, we need some that are even cleaner and more efficient than today's. One of those technologies is carbon capture and sequestration. I have supported this technology in the FutureGen program. In fact, two possible Future Gen sites are in Texas and two are in Illinois. I prefer the one in my district, but I'll support the program wherever it lands because no matter where it is, it will good for America. Other technologies such as integrated gasification combined cycle, supercritical combustion and oxy-fuel show promise. We have witnesses here today to detail the status of all three. I welcome the administration. DOE and EPA are working on the promise of a cleaner and more energy secure future. I am pleased that Jupiter Oxygen is here. I am told the Jupiter Oxygen technology is the only one that can allow for carbon capture on existing coal plants. I am also pleased to welcome Mr. Jay Stewart who works with the Texas FutureGen team on legal issues related to the long- term storage of CO\2\. We should understand legal questions that may arise if facilities with carbon capture and sequestration spring up around the country. I also welcome the other witnesses and look forward to their testimony. Finally, I hope to hear a discussion of the costs of these technologies and related regulatory programs. We learned in a hearing last May before this subcommittee that carbon capture and sequestration can spike the cost of electricity produced from coal. At a hearing last month, we learned that a cap and trade program added 40 percent to the wholesale cost of electricity in Germany and that was, I believe, without any of these technologies. Combined, carbon capture and sequestration and a cap and trade program could lead to a real rate shock for electric consumers. High electricity costs will only drive manufacturers overseas, and American jobs along with them. Thank you, Mr. Chairman. ---------- Prepared Statement of Hon. Michael C. Burgess, a Representative in Congress from the State of Texas Thank you, Mr. Chairman for convening today's hearing on carbon capture and sequestration. As we've begun to debate the issue of global climate change, there has been a lot of discussion about carbon capture and sequestration and the potential promise that it holds for reducing the amount of carbon in our atmosphere. These discussions, however, have focused on the carbon capture portion of the equation, and seemed to assume that the sequestration technology is available. One of the things that I hope to learn during today's hearing is whether that assumption is well founded. There are several different possibilities for carbon storage: depleted oil wells, unmineable coal seams, injection into the ocean, or storage in saline solutions. Yet many of these are still in the initial stages of being tested. The world's first commercial deep saline carbon dioxide capture and storage project was started in Norway's North Sea during 2006. That's not that long-ago. I look forward to hearing from our witnesses on the status of carbon capture and sequestration technology. One final note before I yield back. Two of the final four sites selected for the location of FutureGen are located in my home State of Texas. I'm extremely supportive of FutureGen and am hopeful that the FutureGen Alliance will ultimately chose to site the plant in its logical place--the Lone Star State--but let's not forget that this is a demonstration project. A 10-year, $1 billion demonstration project. And in the end, is only expected to produce 275 Megawatts of electricity, as compared to the 600 Megawatts capacity of most commercial power plants. There is an enormous amount of time and money being spent to show that this technology is even possible. And I think that it's a sound investment in future technology. Now, I know that the most difficult part of this project is the hydrogen production component, but it still raises an important question: how far off in the future is the technology of carbon capture and sequestration and how expensive will it be? ---------- Mr. Boucher.We are now pleased to welcome our first panel of witnesses: Mr. Thomas Shope, representing the Department of Energy. Mr. Shope is the Principal Deputy Assistant Secretary for Fossil Energy. We welcome him. Mr. William Wehrum and Mr. Benjamin Grumbles represent the Environmental Protection Agency. Mr. Wehrum is the Acting Assistant Administrator in EPA's Office of Air and Radiation, and Mr. Grumbles is the Assistant Administrator for Water. We welcome each of our witnesses on the first panel, and without objection, your prepared written statements will be made a part of the record. We would welcome your oral summaries of approximately 5 minutes. Mr. Shope, we will be pleased to begin with you. STATEMENT OF THOMAS D. SHOPE, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY, WASHINGTON, DC Mr. Shope. Thank you, Mr. Chairman, and members of the committee. It is my pleasure to appear before you today to testify on the Department of Energy's carbon sequestration program. The overarching goal of this program is to deliver practical lower-cost ways for our Nation to integrate large- scale reductions of the greenhouse gas CO\2\ where none now exist. First, let me be clear about carbon capture. We can capture CO\2\ today. What we cannot do is capture the CO\2\ of combustion and maintain prices that we can afford for electricity and other energy-intense consumer products. What we do not yet understand fully, and I emphasize the word yet, is how to develop the capacity to initiate and maintain safe, large-scale geologic storage for hundreds and thousands of years. Finally, we need to develop a nationwide infrastructure to align the CO\2\ sources being captured with the available storage sites or sinks. The sequestration program of the Office of Fossil Energy addresses these questions. It began 10 years ago as a small- scale investigation of technical viability. Then the administration made it a critical component of the President's technology initiatives to provide concrete means of dealing with concerns about climate change. Program investment to date is in excess of $300 million. In fiscal year 2008, the President has requested an additional $79 million. That represents a four-fold increase from the $18 million appropriated in fiscal year 2001. Today the program is dedicated to preparing America to reduce CO\2\ from fossil energy use without detriment to our energy security or economic well-being. It seeks to eliminate the harmful effects of using our most abundant and lowest cost energy, coal. It recognizes that coal is the backbone of our electric power supply which is the backbone of the economy. Today we are engaged in pioneering and world-class research, development and demonstration of technologies for affordable CO\2\ capture and for safe long- term storage. The carbon sequestration program has two main parts: the core research and development element and the deployment and demonstration element. The core research element includes capture, sequestration, breakthrough concepts and the monitoring, mitigation and verification of CO\2\ in geologic storage. It also includes mitigation of non-CO\2\ greenhouse gases. The portfolio contains more than 70 projects designed to find solutions. Lowering the costs of capture is a critical driver of our efforts. Our focus is on pre- and post-combustion capture and oxycombustion, which produces a flue gas strain composed largely of CO\2\ and water vapor. It includes providing retrofit capability for pulverized-coal plants, currently in use and for those that are planned. Our overall goal is 90 percent capture and 99 percent storage permanence by 2012 with no more than a 10 percent increase in the cost of energy services. We want to have ready by 2012 a portfolio of technologies capable of market penetration after 2012. Objectives to achieve this goal include post-combustion capture and a cost of power no more than 20 percent above that of a non-capture plant and pre-combustion capture for IGCC generation at no more than 10 percent above the non-capture plant. The second element of our program, our deployment and demonstration element, centers on the seven regional carbon sequestration partnerships. These partnerships involve more than 400 entities in 41 States, four Canadian provinces and three Indian Nations. Their mission is to develop sequestration capacity and infrastructure, and their work is critical to technical achievement and public acceptance of CO\2\ capture and storage. The partnerships have already assisted our National Energy Technology Lab in compiling the National Carbon Sequestration Atlas. These efforts have helped us identify all large-point sources of CO\2\ as well as what may be the biggest prize in carbon capture and storage, the vast potential geologic CO\2\ storage locations that exist. In this country alone, we have deep underground formations sufficient to store hundreds of years worth of CO\2\ emissions, not just from the power sector but from all sources of CO\2\. Current regional partnership activities also involve 11 projects dealing with terrestrial sequestration and 25 diverse field tests in geologic storage. As we move from characterization to validation, we look forward to expediting the demonstration of large-scale tests. Our large-scale testing phase will involve up to seven large-volume tests and could identify candidates for the class of new near-zero-emission power plants in the future modeled on FutureGen. FutureGen will integrate various technologies of capture and storage in the world's first-of-a- kind coal-based power with near-zero emissions. It will deliver electric power, hydrogen fuel and other byproducts. It will also test subsequent advances from the core research effort, and most important, FutureGen will be the prototype for a line of zero-emission plants based on coal gasification here in the U.S. and around the world. In conclusion, our program is demonstrating that while there is no practical alternatives to continued use of fossil fuels in the foreseeable future, coal in particular, carbon capture and storage technologies coupled with our array of clean coal efforts will allow fossil-fuel use in a carbon- constrained world without harming the environment and without constraining economic growth. Mr. Chairman, members of the committee, that concludes my spoken remarks. [The prepared statement of Mr. Shope appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Shope. Mr. Wehrum. STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, DC Mr. Wehrum. Good morning, Mr. Chairman, members of the subcommittee. Thanks for the opportunity to testify on behalf of EPA. My name is Bill Wehrum. I am the Acting Assistant Administrator for EPA's Air Office. With me this morning is Ben Grumbles, the EPA's Assistant Administrator for Water. As you know, the President and his administration are firmly committed to taking sensible action on climate change. The administration's policy is science-based, encouraging research breakthroughs that lead to technological innovation and harnesses the power of markets to commercially deploy those technologies. As my colleague from DOE explained, the administration is actively investigating the prospects for carbon dioxide capture from power plants and other industrial sources and long-term storage and geologic formations. Our testimony today will focus on EPA's role in ensuring the carbon capture and storage is developed and deployed in a manner that safeguards the environment. We are focusing that effort on two fronts, which I will explain. But before discussing each of these efforts, I would like to briefly discuss the role of coal in our Nation's energy future. As you know, coal is an essential fuel to achieve energy security and increase economic prosperity in the United States. Currently, about 50 percent of electricity in the United States is generated from coal and at current rates of consumption, U.S. coal reserves are large enough to meet our energy needs for more than 200 years. To achieve our goal of energy security, coal must continue to play a major role in the generation of electricity in this country. Carbon dioxide capture and storage can potentially make a significant contribution to reducing greenhouse gas emissions from coal- fired electricity generation while allowing continued use of our ample coal reserves. To address the potential environmental impacts of coal- fired power plants, EPA, DOE and others are exploring technological innovations that would allow coal to be burned more efficiently and with lower emissions. Recognizing the importance of advanced coal technology, EPA is already working to ensure that these new technologies are deployed in an environmentally responsible manner. EPA is examining how we can facilitate the use of advanced coal technologies through the efforts of a recently convened work group of private and public stakeholders. At the recommendation of the Clean Air Act Advisory Committee, EPA established the Advanced Coal Technology Work Group in January of this year to discuss and identify potential barriers and opportunities to create incentives under the Clean Air Act for the development and deployment of advanced coal technologies. The work group includes widely diverse participants. The work group is developing a set of recommendations that could be undertaken to accelerate the development and use of advanced coal technology. In its work to date, the work group has discussed a wide range of issues associated with commercial use of advanced coal technologies. With respect to carbon dioxide capture and storage, key issues identified by the work group include the availability and cost of capture technologies for new and existing pulverized coal and IGCC power plants, measures to accelerate the pace of carbon capture and storage, the siting of power plants including availability and location of pipeline capacity, monitoring and verification to ensure storage of carbon dioxide is effective, liability concerns associated with carbon capture and storage, legal issues involving property rights and other issues. EPA is also developing risk management strategies to ensure that carbon dioxide injection and long-term geologic storage are conducted in an environmentally responsible manner. The underground injection of carbon dioxide is subject to the Underground Injection Control program, or UIC program, of the Safe Drinking Water Act. In carrying out our responsibilities under the Safe Drinking Water Act, the EPA's goal is to ensure protective, effective storage of carbon dioxide injection in suitable geologic formations. EPA has more than 30 years of experience working with its State partners to implement the UIC program. There is a significant amount of expertise in transporting and injecting carbon dioxide, particularly in the oil and gas sector. Approximately 35 million tons of carbon dioxide are injected annually and in the Southwest United States, there is an extensive infrastructure to transport and inject carbon dioxide for enhanced oil and gas recovery. The knowledge gained from these activities is extremely useful but we still need to gain experience with integrated carbon dioxide capture and storage technologies on a commercial scale for coal-fired power plants. DOE's research efforts to integrate and demonstration carbon dioxide capture and storage will go a long way toward reducing costs and providing needed data. My DOE colleague's testimony lays out the Department's plans to develop this critical technology including implementation of field tests throughout the country in a variety of geologic settings and a smaller number of larger tests and ultimately commercial-scale projects such as FutureGen. To support these efforts, the EPA has developed UIC guidance that recommends treatment of injection wells associated with R&D projects as class V experimental technology wells which are covered under our existing regulations. Our goal is to provide guidance that facilitates permanence while encouraging environmentally responsible injection activities. Another goal of the guidance is to promote information exchange between project proponents and regulators which will eventually support the development of a long-term management strategy and answer public questions about the emerging technology. The guidance recommends a workable UIC permitting approach for the next several years while more data are gathered to determine the most appropriate management framework. Thank you once again for the opportunity to be here. Mr. Grumbles and myself will be happy to answer any questions you may have for us. [The prepared statement of Mr. Wehrum appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Wehrum. Mr. Grumbles, do you have a statement for us at this time? Mr. Grumbles. No. Mr. Boucher. All right. Thank you. I would like to thank both Mr. Shope and Mr. Wehrum for their testimony this morning. Mr. Shope, let me begin my questioning with you. You mentioned that you have a target date of 2012 in order to have determinations made by the DOE with regard to the adequacy of technology for CO\2\ storage. How confident are you that we will have that information by that date? Mr. Shope. I am very confident in the 2012 time frame that we will have at that period a portfolio of technologies that are available. The 2012 time frame again does not envision the wide-scale deployment at that time. That means we have the technology that is then available, that portfolio, and a portfolio that is available at a reasonable cost, the targets I had indicated to you, no more than a 20 percent cost increase for PC, or post-combustion capture of CO\2\, and a 10 percent cost increase for IGCC-type technologies, pre-combustion capture. But we are on the path to meet that 2012 portfolio. Mr. Boucher. What we are interested in is having a projected date when we can have the assurance that reliable geologic storage is available for the quantities of CO\2\ that will be emitted by the Nation's coal-fired power plants. I can say that my goal is to make sure that electric utilities under whatever carbon constraints we adopt have the ability to continue to use coal pretty much the same way they are using it today in those quantities, and my personal goal also is to protect the ability of coal to continue to grow as a percentage of the total fuel mix for electricity generation. So I am particularly very interested in making sure that we team the arrival of regulations with the availability of these technologies for commercial deployment. So when are we going to have that assurance? Is that 2012 or is that some later date? Mr. Shope. Well, I wish I could provide exact dates, Mr. Chairman, but I will tell you that again we are on that path from the 2012 time frame, but in addition to that, that would allow us to have that portfolio technology available. That also marries up well, as I indicated in our testimony, our FutureGen project, which ties them together not only the sequestration opportunities but then IGCC capture, energy production with hydrogen co-production and the storage, marrying that all together. We would have in the 2012 time frame getting the first testing of our FutureGen plants. Down the road from that, it would be approximately 10 years before that technology is then widely available for commercial deployment and you could envision full-scale the technology of choice deployment in the 2045 time frame. Mr. Boucher. So are you saying that it would be 10 years beyond 2012 before the technology would be available for wide- scale deployment? Mr. Shope. That is correct. Mr. Boucher. OK. That is a longer time frame than others have suggested. Let me ask you this. How much money is now being devoted to your R&D efforts? You have seven regional partnerships. How much money is being devoted to those at the present time? Mr. Shope. Our 2008 request is for $79 million. To date we have already spent $300 million on the sequestration piece. Now, of course, that is a subset of our larger clean coal budget, and again, there is some overlap obviously between all the technologies that we are working on under the clean coal program are directly applicable and they are all driving towards the same goal, which is that zero-emissions power plant, carbon capture and storage. But in our sequestration piece alone, we have used $300 million to date. Again the 2007 request is currently being discussed right now for our operating plans and will be submitted soon. Our 2008 request is $79 million. Mr. Boucher. And you are getting about $60 million in 2007. Is that right? Mr. Shope. Well, again, Mr. Chairman, those operating plans are being discussed right now at the Department in light of the continuing resolution. Mr. Boucher. What did you have in 2005? Mr. Shope. It was 60. Mr. Boucher. So it is roughly 60 presently and you are anticipating 80-plus for 2008. Mr. Shope. That is about right. Mr. Boucher. If more money were provided for this effort, could you accelerate your time frame for the arrival of these technologies with commercial reliability? Mr. Shope. Of course, I support the budget that we have that is on---- Mr. Boucher. I understand that but---- Mr. Shope. But in answer to the hypothetical question is yes, of course, there are some technology constraints, particularly in the testing area. We are engaging in our 25 geologic tests looking to expedite our larger-scale tests. If we had additional funds, then we could develop--hypothetically speaking, if you were to double our program budget, we could reduce the amount of time for that full deployment, so the answer is yes. Mr. Boucher. Thank you, Mr. Shope. I assumed that was going to be the answer. My time has expired. I have some further questions which we will defer to a later time. I am now pleased to recognize for 5 minutes the gentleman from Illinois, Mr. Hastert. Mr. Hastert. Thank you, Mr. Chairman. I have a series of short questions, and if you could be as explicit in the answers as possible, we will get through them. First of all, back two decades ago when we needed to clean these plants up and you did the scrubbers and those types of things, that was technology that you put on top of old plants. Basically this technology means that you have to build new plants, right? Mr. Shope. Well, we are working on existing plant technology as well as far as capture goes, that is, post- combustion capture on existing PC plants. Mr. Hastert. Well, let me lead into a sub-question off that then. You say you have a 12,000-megawatt plant. Isn't this stuff coming out so fast and so quick that it is really hard to capture all the CO\2\ coming out of the stacks? Mr. Shope. That is correct. Also, you have a much lower concentration of CO\2\ so you have a larger volume to process and it is expensive. That is correct. It is expensive to add on technology to existing plants. Mr. Hastert. When you carry out these studies, I know you are far enough into it, what effect do you think this has on retail electric prices? For instance, if you put a new plant in and you put it in the right base, what do you see the increase in prices roughly? Mr. Shope. Under our current scenario, for a PC plant, you are looking at a cost of electricity penalty anywhere from 40 to 85 percent. Now, on an IGCC, a plant with hydrogen co- production today, you are looking at a price penalty of 20 to 55 percent. Our targets are to drive those obviously much lower. Mr. Hastert. So we could be hypothetically paying half again increase in the price of electricity, whatever our price may be. Mr. Shope. Based on current technology, that is correct. Mr. Hastert. I think you said this, but I want to make sure it is clear. Time-wise to have these plants in place, to have a plant in place would probably almost be 16 to 17 years. Is that what you are talking about? Mr. Shope. Approximately. That is correct. Now, when I mentioned the 2045 time frame, that would the technology of choice, full-scale deployment. That would be the out year. FutureGen will be coming online in 2012, 3 years of testing, about 10 years following that, you are looking at a 2025, 2026 time frame for deployment. Mr. Hastert. I have a couple questions I want to ask about sequestration. I have limited time here but first of all, the science of this sequestration. You drive this gas deep into the ground, 5,000, 6,000, 7,000 feet and it is ingested by the chemicals, whether it is brine, whether it is existing coal beds, and absorbed. Is that correct? Mr. Shope. It stays in place, and it is important to note, sir, that it would be a liquid so when you put it down, you are putting a liquid down although we refer to it as gas. Under those pressures and depths, it becomes a liquid. Mr. Hastert. So it is liquid carbon dioxide but it is not frozen carbon dioxide? It is not dry ice, for instance? Mr. Shope. That is correct. Mr. Hastert. OK. Then what could happen? Today we are talking about Yucca Mountain where people want to make sure that that thing is absolutely safe for 10,000 or 20,000 or I don't know how many years, a lot of time. What happens now when this gas is down there? Is there any adverse effect that we have to worry about, liability issues, for instance? Mr. Shope. Well, there is always going to be concerns about liability but I would say first and foremost, the important measure is that it is CO\2\. It is not a hazardous substance. In fact, it is a commodity right now. We use CO\2\ in various processes from carbonation on out. The concerns of course would be what happens to it in those deep formations. Does it spread out, how far does it spread out, is there any leakage associated with it. These are all the things that we are looking at through our validation phase right now with our 25 geologic tests that are going throughout the country in different formations, different geologic formations, different areas of the country. Those are the things that we are exploring right now. Mr. Hastert. One of the things that they say that you can take the CO\2\ out of the atmosphere. That is one of the technologies you are looking at. So you are taking this huge amount of just air and you are taking CO\2\ out of it, putting it in the ground. The byproduct of that is oxygen. Is that one of the things you use the fluidize or to burn, or what is happening? Mr. Shope. I am not sure I understand the question or have the scientific background. The director of our national lab happens to be here. I would let the director of our national lab answer that. Mr. Bower. Congressman, thank you for the question. When you take the CO\2\ out of the flue gas, it has already come through the combustion process, or if it high pressure from a gasifier, it is already part of the process. When you talk about the oxycombustion, you would actually separate oxygen off and put it through from the air, instead of pure air going into combustion, you shoot pure oxygen. So either way you are taking the CO\2\ at a high concentration. It doesn't make oxygen. It actually just is a separate component of the air. You take it, pressurize it, put it in the ground. At that depth you are below solid layers of rock. It is not a void it is going into but it is permeating with other rock down there so it is like putting it into a sponge more likely, and the chance of it going anywhere is part of what we are evaluating. It looks very solid right now that it is going to stay where it is. We just have to confirm some of those things as far as transport. Mr. Hastert. So the effluent from that process, there is absolutely no CO\2\ or hardly any CO\2\? Mr. Bower. The effluent from the flue gas or the gasifier stream, the CO\2\ is taken off. Whatever else is left will go into the atmosphere. If there is some nitrogen, it will be left off in the atmosphere. If there were some other elements, they would go off. We would clean out the sulfur obviously and all the other things that we are concerned about in our normal regulatory process. Mr. Hastert. Thank you, Mr. Chairman. Mr. Boucher. Thank you, Mr. Hastert. And let me ask the director of the national lab if he would identify himself for our record, please. Mr. Bower. I am sorry, Mr. Chairman. My name is Carl Bower, director of National Energy Technology Laboratory. Mr. Boucher. Thank you very much. The gentleman from Massachusetts, Mr. Markey, is recognized for 8 minutes. Mr. Markey. Thank you, Mr. Chairman. Mr. Shope, the testimony submitted by the Natural Resources Defense Council witness who will be appearing on our panel, Mr. Hawkins, argues that we need to limit CO\2\ emissions through a cap and trade system and adopt a performance standard for emissions of CO\2\ from coal-burning plants in order to transform the economics of the coal utility industry so that instead of choosing to build a dirtier coal plant that releases carbon pollution into the air, it makes economic sense to build plants that do carbon capture and sequestration. Do you agree? Mr. Shope. Congressman, I am going to defer on the question just because again, my expertise is on the technology---- Mr. Markey. Please don't defer. We have a deadline that is very closely approaching. Can you please give us an answer? Mr. Shope. Again, the focus of the Office of Fossil Energy is on the technology end of the program, regardless of the particular emissions strategy that you are going to pick, we all have a common technology goal and that is what- Mr. Markey. Do you think changing the economic structure here of the incentives for the coal industry would make a big difference in terms of telescoping the time frame it would take to get an affordable technology that the coal industry would in fact play? Mr. Shope. Again, Congressman, the problem that we see, we perceive it as a technology problem and there is a technology path forward that is needed. Mr. Markey. Your testimony says, sir, that the technology is already there. Mr. Shope. What I testified to was that we do capture carbon today through EOR. That is enhanced oil recovery. The problem is that those technologies have different goals, different motivations. In an EOR situation, you are capturing the carbon dioxide with the number one goal of pushing out the oil, enhancing the oil recovery. Mr. Markey. I appreciate that, but the basic technology already exists, sir? Mr. Shope. That is correct. Mr. Markey. And that is what your testimony indicates? Mr. Shope. That is. Mr. Markey. And I just think that it is one more example of the Bush administration avoiding the central question that America wants to know the answer to, which is whether or not they are going to use technology and a cap and trade system in order to accomplish the goal, and your testimony is not helpful towards getting the answer to that question. Mr. Wehrum and Mr. Grumbles, in the NRDC testimony, Mr. Hawkins suggests that operating a coal-burning plant with carbon capture and disposal can be done safely, ``if an effective regulatory regime is put in place to license and monitor operations of disposal sites.'' He further notes that EPA already has the authority to write such rules but that direction from Congress is needed to ensure they are written in a timely manner and suggests that this committee direct EPA to write rules governing large-scale carbon injection and sequestration facilities within the next 2 to 3 years. Would EPA support such legislation? Mr. Grumbles. Congressman, what we are focused on right now is in working together with the environmental community and the States and Department of Energy, is taking an adaptive management incremental step forward aggressively to first get guidance out. We have issued guidance regulating the injection of CO\2\ under class V UIC programs under the Safe Drinking Water Act under the experimental technology wells provision. We are also going to be convening workshops and bringing in---- Mr. Markey. Would you support legislation to advance that goal, sir? Mr. Grumbles. My recommendation right now would be, we are on the best path working with Congress---- Mr. Markey. So you are on a better path than legislation so right now you don't support legislation. Is that correct? Mr. Grumbles. I think as we learn more about this proven-- -- Mr. Markey. How much more time do you need? Mr. Grumbles. Well, when I look at the aggressive roadmap that we are laying out---- Mr. Markey. What is aggressive under the Bush administration? Mr. Grumbles. I would say when it comes to carbon sequestration, we have an aggressive roadmap and that is, it is going to take--we are just now issuing---- Mr. Markey. All right. You are 6 years in so does that aggressiveness indicate that you will get an answer before the next President is elected? Mr. Grumbles. Well, I think the science drives the results and the technology is promising but it is unproven. Mr. Markey. Sir, science does not drive the decisions of President Bush and Vice President Cheney. Politics does. Ideology does. I am afraid that your evasiveness is just a continuation of---- Mr. Grumbles. Congressman, I would respectfully disagree and just simply say---- Mr. Markey. I would say that your testimony at that juncture on that subject is completely at variance with the facts. Does the other gentleman wish to answer? Mr. Wehrum. Thank you, Congressman. I will reiterate what my colleague said. We made a very crucial determination recently that is directly relevant to your question. We had to ask and answer whether we believe we have legal authority under the UIC program to regulate carbon injection and sequestration in geologic formations, and we determined the answer is yes and that was very important because what that allowed us to do is issue guidance, which has just been signed, that calls for the permitting of these activities under the program right now under an existing classification called class V. So what we are now committed to do is exactly what you described, which is develop a set of regulations specifically for CO\2\ injection and---- Mr. Markey. And when will those regulations be coming out? Mr. Grumbles. What we are committed to is a management framework that looks at the long-term---- Mr. Markey. Give me a timetable. How many months? Mr. Grumbles. Well, I think it depends on public dialog. Mr. Markey. July? Mr. Hall. Mr. Chairman, regular order, please. Mr. Markey. Can you get it done by July? Can you get it done by July? Mr. Grumbles. What we can get done by July is having informed debate and dialog with---- Mr. Markey. That doesn't help us. Let me move on. Mr. Shope, some of the testimony that we received for today's hearing raises concerns about provisions of the 2005 Energy Policy Act that provides significant subsides for coal plants that don't actually capture CO\2\ but merely have a carbon capture capability. It has been suggested that this provision of the law is not being implemented in a way that distinguishes between an ordinary integrated gas combined cycle plant and one that actually has been designed with early integration of carbon capture and sequestration in mind. There are also concerns that some of the language relating to loan guarantees allows loan guarantees for carbon sequestration optimized coal plants but fails to define what that means. What is the Department doing to ensure that these provisions of law are only used for plants that are actually being designed and built in anticipation of early adoption of a full carbon capture and sequestration capability so that we aren't subsidizing dirty plants with the provision designed to promote clean ones? Mr. Shope. Well, I would say, Congressman, that there is a technology path. You have to learn how to capture the carbon effectively. You can't immediately get to the end goal. It is a technology path forward and that is what the Department is working on. That is what our solicitations have given, the loan guarantees---- Mr. Markey. If I were a utility executive and I built a standard pulverized-coal-burning plant but with a big open building attached to it that I claimed was designed to accommodate installation of carbon capture technologies, do I quality for the subsidy? Mr. Shope. Well, I would have to look at the particular. Mr. Markey. So maybe---- Mr. Shope. Each of the projects---- Mr. Markey. Saint Augustine used to say: Oh, Lord, make me chaste but not just yet. These utility executives are saying oh, Lord, make me carbon-free but not just yet; I am getting ready to be carbon-free but I will leave a space there, maybe in another 20 years. That is what Saint Augustine used to say about chastity. So we are going to need more specifics from each of you in terms of what the deadline is in order to accomplish these goals. I thank the chairman. Mr. Boucher. The Chair thanks the gentleman and is pleased now to recognize the gentleman from Texas, Mr. Barton, the ranking Republican member of the full committee, for 5 minutes. Mr. Barton. Thank you, Mr. Chairman. I am delighted to be at this particular hearing. I know we have had it scheduled and postponed but I am still looking forward to the hearing where we actually try to talk about the science a little bit before we rush to judgment on all these proposed solutions. I am still not convinced that this is quite the earthshaking, earth- changing problem that it is presented to be. But having said that, I think it is important to have a discussion of some commonsense carbon capture mechanisms, so I welcome this hearing. My first question is to Mr. Wehrum, who is the air and radiation representative from EPA. Can you tell me what the pollutants are that the Clean Air Act currently regulates? Mr. Wehrum. Yes, Congressman. We primarily regulate the six criteria pollutants. Most importantly for power generation, they include SO\2\ and NOx and particulates, I should add. We made a determination a couple years ago that those---- Mr. Barton. Can you enumerate them? That is three of them. What are the other three? Mr. Wehrum. Lead--I knew you were going to put me on the spot here. Mr. Barton. Particulate matter is one. Mr. Wehrum. SO\2\, NOx---- Mr. Barton. Mercury. You just added mercury. Mr. Wehrum. Well, we regulate mercury as an air toxic, not as a criteria pollutant. So the answer is, we actually regulate a wide, wide variety of pollutants. Mr. Barton. CO\2\ is not one of them, is it? Mr. Wehrum. No. We made a determination that CO\2\ is not a pollutant that we regulate. Mr. Barton. COs is not a pollutant. Now, why are these others regulated? Why do we regulate the ones that we regulate? Mr. Wehrum. Because the Clean Air Act directs us to do so. Mr. Barton. No, but why do we do that in the Clean Air Act? It is because they are harmful to public health, to individual health. People get sick. They have an adverse health reaction because of that if they are subjected to large amounts of whatever the pollutant is. But you don't have that with CO\2\, do you? Mr. Wehrum. Well, again, Congressman, we made a determination a couple years ago and now in fact the question is currently before the Supreme Court as to whether the Clean Air Act requires us or authorizes us to regulate CO\2\. Mr. Barton. No, that is a lawsuit by some of the radical environmentalists but the point of fact is, under current law we don't regulate CO\2\ because it is not a health hazardous. Mr. Markey. That is the State of Massachusetts you are talking about. Mr. Barton. I rest my case. Mr. Markey. It is Mitt Romney that brought the case. Mr. Barton. I think that is an important point. SO\2\ and mercury, lead are directly harmful to human health. CO\2\ is not. It is not. There is this theory that CO\2\ somehow over time is increasing the temperature and increased temperature does things to the climate that over time might be harmful to human habitation of the Earth. That is a theory. It is not a fact. It is also a fact that if we pick one of these carbon capture methods, the most benign estimate we have right now is a 50 percent increase in cost. Now, a 50 percent increase in cost is going to cost somebody their job. In fact, it is going to cost a lot of somebodies their job. That is a fact. I am just totally tied up in knots that our new Speaker wants a bill out of this committee by June 1. That is an artificial deadline. It is also in my opinion wildly unrealistic. The same people that are now pushing for a bill are some of the same people that were telling me when I was chairman not to even hold hearings on this issue because of how difficult it would be to find consensus. My second question on CO\2\ is, can any of our panelists tell us the volume, just the volume of CO\2\ that comes out of a smokestack that is using coal as a fuel source of the emissions? What percentage of those emissions coming out of a smokestack in the average plant in the United States is CO\2\? Mr. Shope. I can tell you on total, the total just by way of---- Mr. Barton. I don't want a total number. I want a percent number. We hear all these tons and tons and tons. We never hear what the percentage is. Mr. Shope. On a PC, a pulverized-coal plant, you are looking at about 10 percent. Mr. Barton. Ten percent. Is that average? Mr. Shope. That is average for a pulverized-coal plant. That is correct. Mr. Barton. So one of the problems we have as you are going to capture it is, it is just not a high percentage of the smokestack. Mr. Shope. That is correct, Congressman. It is a very low concentration per volume of emissions. Mr. Barton. We also might want to put in the record, and I see my time has expired, that of the total percentage of the atmosphere, the number I have for CO\2\ is 0.03 of 1 percent, 0.03 of 1 percent. It is very, very hard to imagine that 0.03 of 1 percent of anything is causing some of these catastrophic problems that are credited. I am told that of the total greenhouse gases, 95 percent of all the greenhouse gas is water vapor and that 90 percent of that is created by the oceans. With that, I yield back, Mr. Chairman. Mr. Boucher. Thank you, Mr. Barton. The gentleman from Texas, Mr. Gonzalez, for 8 minutes. Mr. Gonzalez. Thank you very much, Mr. Chairman. I was engaged here with Mr. Markey and it is always an interesting conversation but I didn't have the microphone on. But in essence he said blaming the oceans, it was nice to have an alternative to Ronald Reagan's trees. I think that is what he was saying. Anyway, let me ask Mr. Shope real quick, I was reading in the materials that were provided us and it said in 2005 the Intergovernmental Panel on Climate Change, the IPCC, estimated there were 128 operating gasification plants worldwide. How many of those are in the United States? I don't have the answer. I am really asking in good faith. Mr. Shope. Most of them operating are not IGCC. Mr. Gonzalez. In the United States, how many of the 128 gasification plants identified by the panel on climate change are located in the United States? I mean, if you don't know, you don't know. Mr. Shope. There are two IGCC plants operating in the United States right now. Mr. Gonzalez. All right. And then they went to the next statement which address what you are saying. Integrated gasification combination cycle, IGCC, is a form of gasification and there are only four identified by the IPCC as existing worldwide, and you are saying that two of those are in the United States? Mr. Shope. There are two in commercial operation in the United States. Mr. Gonzalez. With the present technology, I look at these as kind of the Holy Grail of coal-fired plants. Would you agree? Mr. Shope. The next generation of them. You can have an IGCC plant that is air blown. What we are looking for, what the real prize would be an oxygen-blown IGCC plant with hydrogen co-production. Mr. Gonzalez. I guess I am getting to the overall plan that you have, but realistically, what is being built, licensed and regulated and permitted today in the United States as it relates to coal-fired plants? None of this, right? Not of what I just referred to. Mr. Shope. Under our CCPI program, there are plants that are being built now that are ready to take on that pathway, which is the IGCC pathway getting back towards our FutureGen plant, which would be again the culmination of all these technologies which would have electricity generation as with hydrogen co-production and sequestration, and that is---- Mr. Gonzalez. What percentage of plants that are being built or in the planning stages or in the permitting stages would you say would meet the criteria that you were just outlining? Mr. Shope. The FutureGen-type plant with---- Mr. Gonzalez. How many FutureGen-type plants do we have right now? Mr. Shope. There are none. That is why we are heavily engaged in that research because we are driving to that conclusion. Mr. Gonzalez. Who permits and licenses the building of these new plants, the ones that are on the drawing boards, the ones that are being proposed, the ones that are part of the initiative by any particular energy company. That would be the State, wouldn't it? Mr. Shope. Congressman, a wide variety of legal and regulatory approvals are needed to site and construct a power plant including, for instance, air permits that are necessary under the Clean Air Act. Mr. Gonzalez. All right, but primarily wouldn't you say it is a State regulatory commission entity that the process goes through, I mean, starts with and pretty much is dependent on getting the green light? Mr. Wehrum. Congressman, I can speak for the environmental side, and what I know is that getting an air permit for a new coal-fired power plant is one of the most critical approvals that is necessary and something we as an agency spend a lot of time and energy focusing on. Mr. Gonzalez. I actually have plenty of time if you guys want to discuss this. I think we need to deal with what you have on the table. No one here is espousing that we stop dead in its tracks the building of coal-fired plants. Is that correct? Mr. Shope. Again, the problem that we are getting at is that current plants, the technology, yes, we can capture that carbon dioxide but you are looking at almost up to 80 percent of a price penalty, and that is where the rubber meets the road. That is why the technology path forward is the solution to bringing those costs down so that it becomes more much of an occurrence so that the next time we have these percentages they would be much higher but it doesn't exist yet today at a reasonable cost. Mr. Gonzalez. Well, two things that we need to be working on, Congress and the administration, that we don't present unrealistic expectations. Nothing worse than dashed hopes because that really does equate to misrepresenting and misleading the American public, and that is my fear as we engage in this particular debate that we are on the fringes of this thing rather than trying to come to the middle and figuring out of course addressing the environmental needs and concerns and yet the economic realities out there of providing energy for the consumer, the citizen, the constituent. All I am saying is, we are identifying the technologies. Where are we now? If you really believe--and you may have to clarify this because I wasn't sure. DOE, the program on the initiatives the Federal Government is taking, one, to ensure 90 percent capture of CO\2\ from power plants to store 99 percent of the sequestered CO\2\ for over 100 years and add no more than 10 percent to cost. That is the objective? Mr. Shope. That is correct. Mr. Gonzalez. And you would like to have all that in place for adoption or as we adopt it by 2012? Mr. Shope. That is correct. We want to have that portfolio available so that someone building a plant in 2012 would have those technologies available at those costs. Mr. Gonzalez. I am going to go back to where I started. In the interim, all the permitting, all the licensing, all the building really will not be meeting that goal. It may be somehow built in a way that it might accommodate it more easily but this is something truly that you won't have in place until 2012 for adoption prospectively? Mr. Shope. That is correct. Now, I will state of course there is going to be incremental gains along the way. We are going to continue to gather the requisite data where the small- scale are going to be coming to completion. We are looking to expedite large-scale testing. All that information will then be available for people who are building these plants along the way. Mr. Gonzalez. And I do thank you, and I thank the panel that will follow you. Unfortunately, I will only be here for about 45 minutes of it. They may have some strong disagreement with the timetable and the manner in which the administration is attempting to accomplish this. But thank you all for your testimony today. I yield back. Mr. Boucher. Thank you, Mr. Gonzalez. Mr. Walden from Oregon is now recognized for 8 minutes. Mr. Walden. Thank you, Mr. Chairman. I appreciate that. I know you all are looking principally at power plants and ways to reduce carbon emissions from power plant, but as I read through some of the literature, it appears there are other things that could be attempted and I wondered if either of your agencies are looking at things, especially involving America's forests or global forests. I know in my State, we had a fire a few year ago at the BMB complex, fire that the scientists now have estimated produced six times the level of carbon dioxide into the atmosphere as the entire State for that year, and there are other discussions about other facilities that emit carbon: cement production, rice paddies that produce methane. And then we have this whole issue of how this is a global problem with I think India and China planning to put 650 coal- fired plants online in the next few years that will emit more carbon that the entire Kyoto Accords combined hope to reduce. Can you address some of these issues? Mr. Shope. Sure, I will take an initial stab at it. First you were talking about the forests. There are of course terrestrial sequestration as something we look at. It is a smaller part of our program yet it is an element. We have 11 terrestrial projects that are ongoing right now. The reason the majority of our focus is on carbon capture and storage from power plants is just because that is the biggest chunk that we have to focus our efforts on, and I will say that all the technologies we are developing in this area certainly are applicable to all the other segments of industry, not just for coal power. Now, that is where our focus is, particularly on the capture side of that. We are spending an inordinate amount of effort on those but even in the storage end of things, those will directly be applicable to CO\2\ regardless of the source. Mr. Walden. Mr. Wehrum? Mr. Wehrum. And if I may, Congressman, the administration has a wide variety of programs that address many of the issues that you described and I will just touch on a couple of them without trying to be comprehensive. For instance, energy efficiency is a key piece of our domestic energy security strategy and the Energy Star program that EPA and DOE jointly implement is a great example of how much success we can have by focusing on reducing the demand for energy in the first instance as a way of managing power generation. Mr. Walden. Sure. Mr. Wehrum. Another good example, you mentioned methane and non-CO\2\ greenhouse gases. We have very successful domestic methane programs focused on oil and gas production and distribution, agricultural emissions, coal mines and a wide variety of other sources and we in fact are trying to leverage the success that we have had domestically to an international partnership group where we hope similar opportunities can be found throughout the world. Mr. Walden. Mr. Shope? Mr. Shope. That reminded me as well, speaking of the international partnerships, to address your question about internationally. The United States is the Chair of the Carbon Sequestration Leadership Forum. That is something the Department of Energy helped to get moving and is actively participating in now. We have 21 countries plus the European Commission that meet on a regular basis to look at these technologies, look at carbon capture and storage issues associated with them to make sure that they are widely deployed throughout the world, not just here in the United States. Mr. Walden. But I want to get back to this issue of forests because I think it is important, and I of course come from an area that has very productive forests, and global forests currently store just over half of the carbon residing in the terrestrial ecosystems. The total biosphere carbon pool is estimated at 2,190 petrograms. Of this, approximately 1,000 petrograms is in forests. It is roughly 50 percent more carbon that now resides in the atmospheric pool and about 20 to 25 percent of the carbon pool stored in the remaining accessible fossil fuels, and I guess the point is, as you read through some of the scientific literature, we are losing something on the order of 45 million acres of forests across the globe every year and yet forests seem to be one of the great carbon sinks we have, and I am just wondering why we are not focusing more on both forest health, fire prevention, managing for old-growth characteristics, the things that the scientists say will help remove carbon and produce oxygen in the atmosphere. Mr. Shope. Again, Congressman, we are spending some effort on that and our regional partnerships also each have an element and particularly the ones that would cover your State are certainly probably looking at that heavier. I could get you more information on that. I would be happy to do that. Again, the problem with terrestrial sequestration though is in the long geologic scale of things, it is a temporary holding so that is why we are really focusing on the long-term permanent storage issues, the deep saline reservoirs and formations, because that is securing that carbon dioxide through eternity. Mr. Walden. And I am not saying not to do that. Don't misread me at all. I am just saying it looks to me like as I read some of this literature there are some other opportunities out there that this Congress has addressed in some measure and not in others that could help reduce--I mean, if one forest fire in Oregon puts out six times the amount of carbon dioxide as the entire State's automobiles, manufacturing, you name it, for a year, it seems to me we could be doing a better job on that front. Mr. Shimkus. Would the gentleman yield on your forestry question? Mr. Walden. Sure. Mr. Shimkus. Because you said temporary. Can you explain the temporary nature of terrestrial carbon sequestration? Mr. Shope. We are talking over geologic time. The trees eventually are going to decay and rot and give off the CO\2\. Mr. Shimkus. And they give up what they have consumed, so you pay for it. The only reason why I mentioned this is, there is a big buzz now about zero carbon footprint. It is all the rage out in Hollywood. But they are not going to be there. First of all, their math is wrong. Secondly, that carbon will eventually get emitted. Mr. Walden. And if I could reclaim my time. U.S. forests currently offset about 12 percent of annual U.S. greenhouse gas emissions from all sectors. Mr. Shope. Absolutely. I am talking about geologic time as opposed to---- Mr. Walden. Sure. And of course now we are seeing as temperatures are rising in Alaska and elsewhere, some of these stored carbons are now starting to come to light literally as the permafrost melts and so some of what has been stored is now being released and it is a real push-pull relationship. And so it is just an issue I think we need to address. The other question I want to get to, you mentioned this international organization you are involved in. Are China and India part of that? Mr. Shope. Yes, China and India are both active member of the CSLF. Mr. Walden. One of the disadvantages of being out in the west coast and on the Pacific Rim is the polluted air that is being generated in those countries comes right over us. There is another story today about it in the Oregonian. And I am just trying to figure out how come they get off apparently scot-free while a lot of us are trying to do the right thing for the environment. They are not under the Kyoto Accords, are they? Mr. Shope. That is correct. Mr. Walden. So we could in effect do incredible things here that we all do in the name of improving air quality, some of which we probably should continue to do, and meanwhile people who are competing against us economically are somehow free to go ahead and add carbon and other pollutants into the atmosphere and in effect even hurt the forest health in the Northwest. Is that right? Mr. Shope. That is correct and that is certainly a concern when we talk about fuel switching in this country because even if the United States were to stop emitting, certainly the developing nations are going to continue to use those fossil fuels that are available to them. Mr. Walden. So this is either a global issue or it is not. Thank you, Mr. Chairman. Mr. Boucher. Thank you, Mr. Walden. Mr. Inslee for 8 minutes. Mr. Inslee. Thank you. I didn't think it was possible but I think the administration has simultaneously spent way, way too little on carbon sequestration and way, way too much on carbon sequestration simultaneously, which is quite a feat, and the reason I say that is, is that this budget proposes to spend less than we spend in Iraq in 2 days on one of the largest national challenges we have in the entire U.S. economy which is to find a way to sequester carbon dioxide. You are spending about 379, we spent about 502 days in Iraq. This is not even close to cutting the mustard to this national challenge and I have to take issue with Mr. Barton. He said this is not a health impact. Tell it to the people who are getting infected by malaria with malaria increasing in Africa, moving up in elevation because of increasing exposure to these mosquitoes. People are dying today because of global warming. So we are not spending enough to get this job done but we are also spending way, way too much because your $379 million is a total waste of money because nobody is ever going to build one of these plants under your policies, because under your policies these plants can continue to put CO\2\ up the stack for nothing. They don't have to pay a dollar to do it because you are against a cap and trade system. And even though you waste my taxpayer's money for $370 million and you actually developed this technology, it will never be deployed because there is no reason to do it as long as somebody can build a dirty plant and put the CO\2\ up the stack. Now, I just want to give you a chance to respond to that. Why would anyone ever spend money, the 10 percent for the CGCC and the 20 percent you project on pulverized coal, why would anybody ever spend that if the Bush administration policies of allowing pollution for free would continue? Mr. Shope. Well, let me start by just suggesting that the technologies that we are talking about also bring efficiency along with them, that is, lower the cost. Aside from carbon capture and storage, they are lowering the cost of electricity. So I think that there is a market incentive to provide cost- efficient, effective electricity and I believe that if the technology is there, it will be used, it will be deployed. Mr. Inslee. So what you are telling me is that the only justification for your technology is to the extent that it can improve efficiencies? Is that what you are telling me? Mr. Shope. No, I am telling you that the technologies that we are working on are going to lower the cost of carbon capture and storage and are going to increase the reliability of the technologies that will---- Mr. Inslee. So what you are telling us if we do implement a cap and trade system, it will actually not cost the U.S. economy anything because you are going to develop efficiencies in the system and everything the President has been telling us, that a cap and trade system is going to wreck the U.S. economy, is a bunch of bunk? Is that what you are telling us? Mr. Shope. No, that certainly is not what I am telling you. Mr. Inslee. Well, which horse do you want to ride? Mr. Shope. I would like to ride the technology path forward. Mr. Inslee. Right, and I agree with that, and I agree with that horse which is not the one George Bush is riding right now. He is riding a horse that says we are too stupid to figure out how to sequester CO\2\ in an economically efficient way so that if we do a cap and trade system, it will wreck the U.S. economy. Now, what you are telling me is, you agree with me that there is a good likelihood that we can sequester CO\2\, have a cap and trade system, leave an environment for our kids and now wreck the U.S. economy. Is that what you are telling me? Mr. Shope. No, I am suggesting that the technology path forward regardless of the emission-reduction strategy that you choose, whether it is cap and trade or regulation or whatever in a carbon-constrained world, whatever the mechanism that we follow to get to that emissions-reduction strategy is dependent upon technology. Mr. Inslee. And I am not going to let you off this hook this easy. I just heard you tell me that you were going to develop efficiencies that would reduce the cost of these plants so that they could do carbon sequestration using their efficiencies and not cost any more money. Now, if that is true, the principal objection of the President of the United States to a cap and trade system that is going to cost Americans all this money and everybody is going to go bankrupt is bunk. Now, do you agree with that? Mr. Shope. No, I do not. Mr. Inslee. OK. Then apparently you agree that your previous statement that we are going to do this and increase efficiencies so there is no more cost is wrong. Is that what you are doing? Mr. Shope. I never said there would be no more costs. I said we are going to increase the efficiencies which would increase the cost of electricity---- Mr. Inslee. Now you are back to telling me that these plants are going to cost more money if we do this. Mr. Shope. That is correct. Mr. Inslee. OK. And if they are going to cost more money, then my original statement is, nobody is ever going to do it unless we have a cap and trade system. Now you agree with that statement? Mr. Shope. Again, my comment to you is that we need to follow the technology. We need to get the technology developed. We need to lower the cost of that technology. We need to increase the reliability of those technologies to make them available. Mr. Inslee. By the way, I don't hold you personally responsible for the President's position. I was sort of using your language to articulate my position. I want to make sure we understand that when we are talking about carbon sequestration, we are not talking about a coal-to- liquids technology, and I want you to clarify that because a lot of people in Congress think that if we do a coal-to-liquids plant, to use liquid fuel, for instance, in cars or even in various turbines, that that is going to be net CO\2\ neutral. I have been advised that although you can do some CO\2\ removal in the process, when you eventually end up burning the liquid in a coal-to-liquid transformation, you then release CO\2\ and you do not get any net CO\2\ benefits except very marginal ones. Is that the case? Mr. Shope. The technology for coal-to-liquids can be used. Gasification technology certainly can be used and that is the path forward that the administration is looking for. Mr. Inslee. Right. I want to make sure that we understand that the coal-to-liquid-fuel technology, not hydrogen, we are talking about some other non-hydrogen fuel, and people are talking about a massive increase in that industry in this country right now. That technology does not help us on CO\2\ because when you burn the gas, the non-hydrogen gas, you then release essentially the same equivalent amount of CO\2\ as you do from a gallon of gasoline. Isn't that the situation? And the reason I ask you this is I asked Governor Schweitzer about this last week and he agreed with me on this. Mr. Shope. Yes. Again, we need to separate the two issues. That is correct. When you are creating, making the coal-to- liquid fuel, you can do that cleanly with gasification technologies. Once you have the fuel, it would be equivalent to petroleum products. Mr. Inslee. Now, the reason I point this out is, I think it is very important for Members of Congress to understand this fundamental distinction between a coal-to-hydrogen technology with sequestration, which we have been talking about this morning, which I believe has the capability of getting close to zero CO\2\, and I believe research in this area is important and critical and I support it. But a secondary distinct technology, which is coal-to-liquid fuels, which somehow gets wrapped up in the first one, which is entirely separately, that second technology has benefits of energy independence but does not have any benefits on CO\2\ emissions. Is that a fair statement? Mr. Shope. No, I would disagree with that. Mr. Inslee. Well, let me rephrase my question to see if we can get one you agree on. Compared to burning gasoline, compared to going from a gasoline-based transportation sector, for instance, to a coal-to-liquid gasification process, according to the best research, which is a DoD study--I can't find any DOE studies on this but a DoD study indicated there is about 2 to 3 percent reduction in the cycle production CO\2\. Is that your understanding? Mr. Shope. What I know is that if you are producing the coal-to-liquid fuels and using gasification for it, you are going to be much--that is a very clean technology just as the technology we have been discussing this morning and cleaner than any of the emissions that are given off during a normal-- -- Mr. Inslee. Well, I will try to send you the DoD study. Their conclusion was, no net benefit. Thank you. Mr. Boucher. Thank you very much, Mr. Inslee. Mr. Hall for 5 minutes. Mr. Hall. Mr. Chairman, thank you, and I thank you, Mr. Shope for mentioning the word ``cost.'' That is a word they don't want to hear. That is the one thing that none of them that are pushing global warming now don't want to mention is cost and what is the cost that the world's greatest polluter, China, won't pay. What is the cost that Russia won't pay. What is the cost that Mexico won't pay, India won't pay. Those are necessary parts of solving all these major problems, and there is today is a major assault on energy all over this country, assault on fossil fuels, assault on coal and some of them are just trying to get some kind of an international award and I think, Mr. Shope, despite Mr. Markey's remarks that you are not helpful, I think what he really means is, you are not helpful to his testimony and I thank you for the testimony the three of you are giving. I want to ask this question, something that involves my State. As I understand it, current permit practice as taken by States such as my State, these current permit practices classify carbon capture and geologic sequestration as class V experimental technology wells, right? Has the EPA taken any further actions regarding classifying such wells as a subclass of class II or even a new classification altogether? Mr. Grumbles. Congressman, we have been working and I know in particular with State of Texas on a couple issues, the one you mentioned and also on the pass-the-salt initiative looking at ways of safe and acceptable ways to dispose of brine. We are looking at that. We also recognize that as we move forward with this new guidance under class V UIC program, a regulation under the Safe Drinking Water Act, that we want to work very closely with States and Texas in particular has shown leadership in using class II for enhanced oil recovery and also for a particular project under class V. So we are working with the State and I think we can learn a lot by working with all of the States on future regulatory approach to carbon sequestration using the UIC program. Mr. Hall. And we thank you for that. Does the EPA believe that the inclusion of non-enhanced oil recovery carbon capture and geologic sequestration wells under class I or class V of the UIC program would be appropriate? Mr. Grumbles. I heard you say class I. Mr. Hall. Yes. Would it be class II or would it be classified such as wells as a subclass of class II or as a new classification altogether? Mr. Grumbles. Well, we certainly want to take that very seriously. I don't have a specific answer to you other than to say that as we are issuing this guidance on the use of class V, we also want to work with the States on class II enhanced oil recovery. Congressman, we intend to have a process that involves the public and the States to help us decide what is the best long-term management strategy to help us move from the pilot stage of these carbon sequestration projects to longer- term potential commercial application and I think the point you are making about looking at different types of classes under the UIC program is very important to keep our eyes open to regulatory flexibility. Mr. Hall. And you do these through partnering with industry and the carbon sequestration program? Mr. Grumbles. Yes, sir. Mr. Hall. Who are some of the major partners for the record? Mr. Grumbles. The first partner that I think of is the partner that EPA has a memorandum of agreement with, and that is the Interstate Oil and Gas Compact Commission, the associations, the agencies that regulate oil and gas but also some of the different industries as well as industry trade associations, Edison Electric, also the Groundwater Protection Council and also important partner are the non-governmental organizations including the environmental organizations. Mr. Hall. What is the current status of the FutureGen project and when do you anticipate it might break ground? Mr. Shope. Congressman, the FutureGen project is on path on our projected schedule. We are working on the NEPA requirements right now. We hope to issue the Record of Decision this summer. We are looking forward to site selection this fall and moving forward with construction would begin in approximately 2009 after we finalize all the site selection and characterization and permitting work that is associated with it. Mr. Hall. I thank you. I yield back my time. Mr. Boucher. Thank you very much, Mr. Hall. The Chair will recognize Mr. Doyle for 5 minutes. Mr. Doyle. Thank you, Mr. Chairman. Mr. Shope, the President's budget request for 2008 is seeking to take $257 million from the clean coal technology account and place $108 million of those funds into this pie-in- the-sky FutureGen program. In fact this concept program is being funded at the expense of clean coal power initiatives and core fossil energy and R&D programs. Unlike the concept of FutureGen, these programs have the very real potential for making a major impact in the near term as well as the long term. At best, FutureGen is a high-risk initiative that is still years away from becoming a reality. If it becomes a reality at all, it will require continued appropriations from Congress as well as a real commitment from industry, a commitment that I believe is far from present today. By providing $108 million for FutureGen and canceling the remaining $149 million in the clean coal account, the administration is also reneging on previous commitments to existing clean coal power initiative projects and jeopardizing their success. This robbing Peter to pay Paul mentality that we have seen in this administration and this Department has got to stop. It isn't even so much that I am against FutureGen. What bothers me is that we steal money from accounts that have the potential to benefit us right now today and see deployment. We take the money right as we are getting close to deploying these new technologies and we shift that money into a project that is years and years down the road that we don't even know is going to happen. I think you answered the question I was going to ask, and that is in a perfect world where money wasn't the culprit and you could fund FutureGen but not by stealing the money off of the clean coal power initiative programs, what could you do and how could we have deployment sooner if money weren't the issue and you weren't shifting these funds like you do every year? Mr. Shope. Well, let me address first the pie-in-the-sky nature of FutureGen, which I would flatly reject. I think FutureGen is a very promising technology. There is plenty of industry support to go along with that. There is international support to go along with that. We have 12 alliance partners on the private side that are providing substantial dollars for the project. Mr. Doyle. If that is the case, why not fund it then? Why are you taking money out of the clean coal technology programs to fund it? Mr. Shore. The clean coal technology programs, any of the projects that were issued under the clean coal technology program are still ongoing. They have been funded. The remaining balance that is unused under that technology program has been moved forward to support our clean coal power initiative. Those are the same types of projects that we are talking about that are more in the near term that would lead up to the FutureGen project as well as FutureGen. It is again a technology path forward so we are looking at all the different time frames along the way. But those dollars are being used for clean coal research, and again, the President has made good on his promise to put in $2 billion over 10 years. We have delivered on that promise early and have used---- Mr. Doyle. You are taking money out of programs that are--I will give you an example. Right in eastern Pennsylvania, the WMPI project, you almost pulled the plug on that. We had Secretary Bodman here a couple weeks ago and---- Mr. Shope. That project was awarded under the CCPI program. Mr. Doyle. Yes, and then you pulled the plug on it, $100 million interest-free loan which you pulled the plug on until we made an issue of it just 2 weeks ago and now it has been re- examined and I understand the money has been restored. The situation that we have in the Department where money and clean coal technology programs are always the--you know, those are the monies that get taken first and put into these projects that are down the road. It is important if FutureGen is the technology down the road and I believe it can be, then we should be funding both of them. We shouldn't be stealing money from one program to fund these programs that are further down the road. There should be a commitment on this administration to say this is important to America and this is important to our future and we ought to put our money where our mouth is, and our complaint isn't so much the programs, is this constant robbing Peter to pay Paul that goes on. I know that is not your call in your Department. That is above your pay grade. But it is frustrating to hear people say how important this is to our country and then when it comes time to put our money where our mouth is, we don't fund the projects. I want to ask you another question. I understand that DOE is currently planning on conducting 25 field validation tests under its regional carbon sequestration partnership program. What if instead of doing that, large-volume tests like the type we really need to test this process were conducted in the seven regions involved in the partnerships? Would the validation test still be needed, and how will these projects help us understand sequestration in our country, and finally, will the NETL continue to have the lead in conducting these partnerships? Mr. Shope. Yes. Mr. Doyle. An answer I enjoy hearing. Mr. Shope. We need to walk before we can run, and that is why these geologic tests are so vitally important to us. The 25 tests are important. We are going to gain important information from those tests, the validation of the modeling, again what happens to the CO\2\ once it is put into the ground, what happens under different geologic formations and that is why the real attractiveness of the regional partnership because it is going to be looking out throughout the United States including into Canada, what are our best potential for these larger-type sites. Once we have that information, then we will lead right into the larger-scale tests. In our 2008 budget, I think you probably have seen in there that we looking to expedite those large-scale tests. We want to get to them as much as anyone does but we want to do it in the right way. So are looking for in 2008 to start using dollars to lay the groundwork for those larger-scale tests. Mr. Doyle. And NETL will have the lead on that? Mr. Shope. Yes. NETL has the cooperative agreements, holds the cooperative agreements with the regional partnerships, and we are very proud of that fact. Mr. Doyle. Thank you, Mr. Shope. Mr. Boucher. Mr. Shimkus is recognized for 8 minutes. Mr. Shimkus. Thank you, Mr. Chairman. What is going to be fun is watching the Democrats give a consistent position on this because here they are saying go faster, faster than technologically available because that is what FutureGen is about is to prove sequestration. That is what this hearing is about. But then on Yucca Mountain they say oh, go slow, we need more time. We can't have it both ways. This is a very frustrating hearing for many of us. And I have to respond on the coal-to-liquid issues. I think Honda did a study in 2004 which says when you change from gas to diesel, there is a 30 percent reduction in carbon dioxide. And the other part of this debate is they would rather burn Arab carbons or Venezuelan carbons than U.S. carbons. I mean, that is kind of the premise of the debate. We are a carbon- based economy and so the coal-to-liquid application, which is what--I don't want to speak for the chairman but I do on this-- that we are going to be pushing for is energy independence, cleaner, and also in particulate matter. So I hope we get some consistency across the board we move this issue. And it is very important because we do think we can sequester carbon, having FutureGen as successful, which I believe it will be, and then on the coal-to-liquid applications, then we can sequester the carbon in the coal-to-liquid production. So I am very excited about what the administration has been doing. You don't get enough credit. The President announced FutureGen in 2005 long before the change in Congress, long before--he keeps getting beat up on this global warming thing which Chairman Barton has issues with but FutureGen is designed to start addressing that, not just within the United States but it is a consortium. It addresses the for-profit entities because they are part of the FutureGen. They have buy-in. It addresses the international debate because you have foreign countries involved in FutureGen, and so if FutureGen is successful, it can then he shared to our competitors in India, to our competitors in China, to other countries that want to use the same, addressing an international concern, and if it is an international concern, that is why FutureGen has to continue and move forward. The funding issue, my understanding, the funding issue is primarily projects that have been completed or projects that no longer have an application. Yes, it is true. We want our cake and we want to eat it too. We want to go to zero carbon emissions but we still want low-cost power. Even in your evaluation, and I am glad you didn't take the bait on a lot of my colleagues, we are still saying a 10 percent increase by 2012 or maybe a 20 percent increase. There is still going to be an increase in moving in this direction. So let us talk about the manufacturing base. Let us talk about jobs. If you have a foreign country that is not complying with these standards and having low-cost power, you just give them another reason to move overseas. Low-cost power is a critical component in this whole debate, and that is why it is important for us to continue to address this. Let me ask a question on FutureGen. FutureGen will sequester--and that is the reason why we have it--that is to permanently store in geological terms, which we talked about, a large portion of carbon dioxide emitted from the demonstration project. Could you describe for the committee the various technological uncertainties and the costs currently associated with the sequestration of carbon dioxide? Mr. Shope. Costs associated with the capture technology, the additional costs that are in there, again, we have to prove out the technology that we have today with increasing our turbines, costs associated with hydrogen membranes and developing the efficiency way of handling the gas streams that are involved within gasification and improving the technology along those lines from the capture standpoint, increasing our efficiency of those. On the storage end of things, we have to again examine what kind of measuring and monitoring and verification technology is available, enhance those tools that are available to us, take a good look at what will happen to the CO\2\ once it gets into the ground, the element of permanence, the element of seepage, where the CO\2\ could migrate to once it is underground. All these different elements have to be--we have to progress along the path in order to pull them all together for our FutureGen project. Mr. Shimkus. You said carbon dioxide was stored as in essence a liquid. Natural gas, does that turn in a liquid also at those levels? Mr. Shope. Under those pressures, then it would be in liquid formation. Mr. Shimkus. Because we obviously store natural gas in this country. We have done so for decades. If some type of regulatory program to govern carbon dioxide emissions is enacted, is there needed a uniform Federal program to govern carbon dioxide sequestration or could this be addressed by each State? Mr. Grumbles. Congressman, from an EPA perspective, and I am speaking on behalf of the water program, when we look at the carbon sequestration, right now where we are is that we have made the determination that the Safe Drinking Water Act provides regulatory framework based on what we know in using the Underground Injection Control program, and we think that the guidance that we are issuing will be extremely helpful in learning, providing information and also having the regulatory flexibility for States who are our partners in the UIC program to learn more and develop more information about these promising but unproven technologies. So we will see as we have workshops and have public and scientific input on the longer- term future of the control program but we think the framework under the Safe Drinking Water Act is a good one. Mr. Shimkus. I like the way you said that: promising but unproven. So it is important for us to make sure it is proven before we mandate, and that is FutureGen. That is why we have it. With that, my time is close to expiring. I can't get in another question. I will yield back. Mr. Boucher. Thank you very much, Mr. Shimkus. The gentlewoman from California, Ms. Harman, for 5 minutes. Ms. Harman. I hail from Los Angeles where a little movie starring Vice President Al Gore just won an Oscar, and a lot of attention is now being paid to ``An Inconvenient Truth.'' I just would observe that the answers to an inconvenient truth are also inconvenient and we need to face up to that, and that is why I applaud you, Mr. Chairman, for holding this hearing on carbon capture and sequestration because I do think that coal is a big part of the answer and we have to face up to it and we have to understand what is good, what is bad, where we can push technology, what the environmental impacts are, et cetera. But I think we are going to have to move on carbon capture and sequestration of coal. We are going to have to do it. As inconvenient as it may be, as expensive as it may be, we are going to have to do it. So hopefully this committee, which does have the right jurisdiction, will learn a lot about this, and obviously some Members know a lot more about this than I do, and we will figure out the right path forward together, at least I hope and would believe we would. I just want to focus on a few real-life examples because maybe we can sort of come down to Earth and see how we are doing. I do know that in the next panel, which I am probably going to have to miss, we are going to hear about a coal gasification plant with carbon capture technology which is being designed for construction in Carson, California, which is just outside my Congressional district, and I would like to know more about it. If any of you know about that, please speak up. But what about the Wayburn project? That is something you all know about. Why don't you just assess it? How is it going? What problems have you encountered in construction and operation and what is the promise of the Wayburn project? Mr. Shope. Well, the Wayburn project is an enhanced oil recovery--basically an enhanced oil recovery project where in North Dakota, lignite is being gasified and the CO\2\ is being captured and shipped approximately 200 miles into Canada to be displaced into the Wayburn field to enhance oil recovery. Again, as I mentioned in my opening remarks, enhanced oil recovery has been going on for some time. However, the goals are somewhat different. In enhanced oil recovery, the main goal is to get additional oil out of the ground. The focus is not placed on permanence of the CO\2\ underground. So that being said, Wayburn presents us with an excellent opportunity to take a look at a field where they are putting in approximately a million tons a year of CO\2\ into these formations and we can use that for testing, for monitoring, measuring and verification. We are involved with that, that is, the Department of Energy is involved with that project in the sense of looking at some tools and techniques that we can use to measure and monitor the CO\2\ underground so it provides an excellent opportunity for laboratory essentially. Ms. Harman. And what are we learning? And I would welcome the EPA witnesses commenting on this too. And if you know anything about the Carson design and construction project in my last minute and 16 seconds, I would welcome your answer. Mr. Shope. Again, preliminarily from the Wayburn project--I will just address that and pass it on--there are very optimistic signs that CO\2\ can be stored permanently underground, and that is a very optimistic sign. Mr. Wehrum. I would just say I think our colleague from the Department of Energy adequately addressed Wayburn. We have caucused very quietly here. We are not familiar with the Carson project but we will be more than happy to answer questions on the record further with regard to that project. Ms. Harman. Well, I will appreciate that, and I know that the next panel of witnesses is more familiar but it is a collaboration between General Electric and BP and it is being built in southern California where there are a lot of cars and a huge demand for fuel. I think it may have some good lessons for us. Mr. Shope. Yes, they are producing CO\2\ for other applications. Again, a little bit of a change of focus than what we were talking about as far as FutureGen where our main focus is to make electricity along with hydrogen and their focus is producing CO\2\ for other purposes. So while there are certainly synergies, there are differences as well. Ms. Harman. But there will be sequestration, so I would welcome answers for the record, and if I have to miss the second panel, I will try to catch up with it. I thank you, Mr. Chairman, for exploring all of these issues, however inconvenient the answers may be. Thank you. Mr. Boucher. Thank you, Ms. Harman. Mr. Sullivan for 5 minutes. Mr. Sullivan. Thank you, Mr. Chairman. I appreciate everyone on the panel for being here today. Also, we are talking about a lot of complex environmental issues. The Democratic leadership and Speaker Nancy Pelosi says they want to get something done by I believe June. I would like to ask each of you, do you think we can address all these concerns adequately by June and address these complicated issues by June? Mr. Wehrum. I will just start by saying, I think as you well know, the administration's position is that mandatory measures are not appropriate at this time. We do believe, in response to many of the comments that have been made today, that we have an aggressive and a coherent strategy for dealing with the issues as we see them today that involves significant investment in basic research, significant investment in technology development, which is most of what we have talked about today. We are very, very active on the international front in a wide variety of forums and we are taking prudent actions domestically against the President's goal of an 18 percent reduction in greenhouse gas intensity. So I believe the administration has a very focused and effective policy in place and we are happy to have the opportunity to talk about it today. Mr. Sullivan. What do you think, sir? Do you think June we can get it all done by then? Mr. Shope. I will agree with Mr. Wehrum's comments and leave it at that. From a technology standpoint, there are a lot of issues that are yet to be addressed and that is why we are again focusing our efforts on a technology basis. Mr. Sullivan. It would be difficult, wouldn't it? Mr. Shope. It would be difficult. Mr. Sullivan. And sir, I am sorry, I can't see very well. Mr. Grumbles. I would agree with Mr. Wehrum. What we are committed to within EPA is laying out a roadmap that involves science and public sector and the regulated community and the State groundwater protection officials and oil and gas regulators and identifying the most promising technologies and learning more and continuing to be committed to advancing carbon sequestration in particular and ensuring that it protects underground sources of drinking water and also helps make significant progress in confronting serious challenges in the environment. Mr. Sullivan. I appreciate those approaches, working through it, and it does take time, I know. I guess, Mr. Grumbles, this will be directed to you or anyone else that wants to add anything, but in 2006, it started in 2006, a project, I can't pronounce the project name but in Norway's North Sea is the world's first commercial deep saline carbon dioxide capture and storage project. What have we learned from this, if you know? Have Government subsidies been involved in this project, and what would it take to become economic? Mr. Grumbles. I think locally and globally we are all learning more and doing more to confront the serious challenge of global climate change. I know a lot of research, international research is being carried out. I know of the Norwegian North Sea research and development project. They have operated a geologic sequestration project successfully for over 10 years, injecting millions of tons of CO\2\ deep in formations beneath the North Sea. The volumes though are still small, relatively small compared to what we can expect with full-scale implementation of geosequestration activities in the U.S. so I think the point for us is that we are all still very much on the learning curve internationally and domestically but we are optimistic just as the Intergovernmental Panel on Climate Changed recognized. We are optimistic about the technologies this approach of geosequestration compared to risks of other activities. We think the risks are not great but of course, we are committed to analyzing that risk and also the potential and promising technologies to manage geosequestration. Mr. Sullivan. I agree, we are on a learning curve, that is good, but it does show great promise, wouldn't you agree? Mr. Grumbles. I would. Mr. Sullivan. Also, sir, can you explain how the EPA's 30 years of regulatory experience with the UIC program correlates with the States 30 years of regulating injection of CO\2\ in the subsurface for enhanced oil recovery? For instance, does EPA have any expertise regulating the disposal of acid gas or the storage of natural gas in the subsurface? Mr. Grumbles. Thank you, Congressman. I would say that the States, as you noted, have decades of experience with permitting the class II enhanced oil recovery wells. I think one of the areas where EPA can really step in and help though is when you recognize that no State currently has experience with long-term large-volume storage of CO\2\, for example, commercial sale geosequestration in the U.S., and because those activities are significantly different with respect to the risks they present to underground sources of drinking water and public health, we believe that a combined approach, a Federal and State approach, working together using the regulatory tools under the Safe Drinking Water Act is the way to go and it will be essential in developing a cogent management framework for the long-term success of these promising but unproven technologies. Mr. Sullivan. I think that is good, a combined approach but don't you think there are some States that have greater expertise and experience in this than the EPA? Wouldn't you agree with that? Mr. Grumbles. I would agree, for instance, we embrace the fact that the States, 34, 35 States are the primary implementers of the Underground Injection Control program under the Safe Drinking Water Act. They do so under the national standards that EPA sets so definitely there is opportunity for continued State leadership but we think it is very important from an EPA perspective to lay out an overall framework to help manage this area. Mr. Boucher. The gentleman's time has expired. Mr. Wynn from Maryland for 5 minutes. Mr. Wynn. Thank you, Mr. Chairman. Mr. Grumbles, you confirmed that EPA has authority under the Safe Drinking Water Act Underground Injection Control program over the injection of CO\2\. Is that correct? Mr. Grumbles. Yes. Mr. Wynn. Now, have you developed a regulatory concept with respect to how the Federal Government would regulate this injection to protect our consumers? Mr. Grumbles. Thank you, and that is the key question, and the answer is, yes, we are working on an overall management framework. The first and more critical step that Mr. Wehrum and I described was that the two offices, the Air Office and the Water Office, working together are issuing guidance to help oversee and maintain the success and safety for pilot projects, experimental projects under the class V Safe Drinking Water Act UIC program. Mr. Wynn. This guidance, does that rise to the level of absolute regulations or are these---- Mr. Grumbles. It is guidance to the regulators using their authorities under the Safe Drinking Water Act so it is a regulatory framework. The goal though for anything that is experimental and early in terms of the promising but not yet proven technology stage is to provide some flexibility for the regulators to experiment and see what works on a small scale. We are committed to that. Mr. Wynn. All right. Thank you. You said that you favored a combined regulatory approach between the States and the Federal Government. How does that work? Mr. Grumbles. Our success over the years with the Underground Injection Control program of the Safe Drinking Water Act is that it works by EPA issuing overall guidance and regulatory framework and then having a process where States meet certain criteria and then are delegated the authority to run the program. Mr. Wynn. So EPA would set the minimum standards for the State? Is that basically the bottom line? Mr. Grumbles. We would set the basic standards under the Safe Drinking Water Act. Mr. Wynn. OK. Now, has there been any study of whether any other contaminants might travel with the CO\2\ as it is injected? Mr. Grumbles. Well, I know that there is a lot of research that is going on about the potential risks of CO\2\. I think one of the things that was important to me was that when the Intergovernmental Panel on Climate Change looked at the issue, the potential for carbon sequestration, geosequestration, they concluded that carbon sequestration offered minimal risk, that we all need to learn more about the potential for---- Mr. Wynn. Minimal risk to drinking water specifically? Mr. Grumbles. That is correct. While everyone agrees further research is needed but the basic statement was is that they estimate CO\2\ could be trapped for millions of years and that formations are likely to retain over 99 percent of the injected carbon dioxide over 1,000 years. Mr. Wynn. But the length of actual testing is only about 2 years? The longest we have actually tested this injection process in terms of the possibility of leaking is only 2 years, right? Mr. Grumbles. Well, it underscores the point that---- Mr. Wynn. Well, is that true? We have only tested for 2 years? Mr. Grumbles. Well, I am not sure what the 2-year---- Mr. Wynn. Well, it says that this North Sea project has been in operation since 2005. Is there a test or an example that is longer than two---- Mr. Grumbles. The North Sea example, my information indicates 1996, over 10 years they have been successfully---- Mr. Wynn. Ten years? Mr. Shope. Yes, or 11 years. We have been following it for about 5 years but they have been injecting for about 11 years. Mr. Barton. Will the gentleman yield? Mr. Wynn. Yes. Mr. Barton. I don't know what kind of test you are talking about but they have been injecting CO\2\ for enhanced oil recovery for decades. I don't know that that is under the kind of the conditions the gentleman from Maryland wants to allude to in terms of specific tests but it has been done for decades in Texas, Colorado and New Mexico, I know. Mr. Wynn. Thank you. I yield back the balance of my time. Mr. Boucher. The Chair thanks the gentleman and recognizes Mr. Whitfield for 5 minutes. Mr. Whitfield. Thank you very much, Mr. Chairman, and thank you all for being with us today. I think it goes without saying that coal is going to by necessary continue to play a major role in the production of electricity in this country and today I guess it is producing around 52 percent of all the electricity we use in our country, and I think Mr. Shimkus pointed out an important point, and that is that with China and India and a lot of other developing countries continuing to build coal-fired plants and for the U.S. to start penalizing itself for doing that, making us less competitive in the worldwide economy is something that many of us will find unacceptable. So all of us are quite excited about the FutureGen process, Mr. Shope, and just for clarification, of course, it is a production of emission-free coal, sequester all the CO\2\ and produce hydrogen, and it is my understanding that in the U.S. now, sites have been reduced to four. Is that correct? Mr. Shope. That is correct. Mr. Whitfield. And when do you anticipate a final decision will be made on a site? Mr. Shope. We are undergoing the NEPA process right now and we hope to have that Record of Decision out this summer. That would lead us to making site selection this fall. Mr. Whitfield. And how many other countries are involved with the private sector in exploring the FutureGen possibility? Mr. Shope. The FutureGen, it is set up in a private alliance. There are the 12 companies that I mentioned previously. They are actually operating the FutureGen facility. The counties are involved in what is called the Government Steering Committee. Right now we have commitments from India that has already made contributions to the Government Steering Committee. The governments of South Korea, China and Japan have also expressed interest as well as some other governments that we are currently working with. Mr. Whitfield. And do you anticipate that a FutureGen project would ever be constructed in those countries? Mr. Shope. Well, that would certainly be the hope at the end of the day. That is why we are doing FutureGen, to get this technology out and in place, not just here in the U.S. but around the world so that again their global emissions are taken care of. Mr. Whitfield. But in your discussions with them, are you finding them really engaged in this, the other countries, or is it---- Mr. Shope. Absolutely. This is not just a commitment. This is a financial commitment on behalf of these governments, $10 million from each government just to be a part of the Government Steering Committee. That doesn't put them into the private FutureGen alliance that is actually operating the plant so they are paying $10 million just to be a part of the effort and to obtain as much information as they can and share with us, to have a front-row seat to the entire project. So yes, there is certainly significant interest. Mr. Whitfield. And Mr. Wehrum, you referred to the Supreme Court case on whether or not the EPA had authority to regulate CO\2\ emissions under the Clean Air Act. Is that correct? Mr. Wehrum. That is correct. Mr. Whitfield. When do you anticipate that decision will be made? Mr. Wehrum. The issues were briefed up late last year. Oral argument has already occurred and we are waiting for a decision from the court. Mr. Whitfield. Now, if you were in the rotary club in Hopkinsville, how would you explain for a layman the decision of the Federal Court of Appeals on that issue? Mr. Wehrum. Well, the DC circuit upheld our determination and each of the judges on the panel expressed a bit of a different view with one dissent of course but voted to uphold our decision. So our determination was based on a careful reading of the Clean Air Act and consideration of the relevant policy issues and our ultimate conclusion was, we don't believe we have authority under the Clean Air Act to regulate CO\2\ for its impact on global climate change. Mr. Whitfield. So it is your position that it would require legislation for you to be given authority to regulate CO\2\ emissions, correct? Mr. Wehrum. That is correct. Mr. Whitfield. Now, are any of you on the panel aware, of all the CO\2\ emissions throughout the world today, what percent of those emissions are manmade? Mr. Grumbles. We would be happy to dig into it and get back to you on the record. I don't have that information in front of me right now. Mr. Wehrum. Just to hazard a guess, about 3 percent. Mr. Whitfield. Three percent? Mr. Wehrum. But we would put something on the record for you to give you more---- Mr. Whitfield. Well, I mean, I heard anywhere from 2 to 5 percent, so of all the CO\2\ emissions that we are talking about, only a minute part is manmade, correct? Mr. Shope. That is correct. Mr. Whitfield. Thank you, Mr. Chairman. Mr. Boucher. The Chair thanks the gentleman and recognizes the gentleman from Illinois, Mr. Hastert, for a motion. Mr. Hastert. Mr. Chairman, I move that all Members have 5 business days to submit written questions and ask that the panel would respond to those. Mr. Boucher. Without objection, so ordered. I want to say thank you to this panel of witnesses for your presence here today and for your answers to what have been probing questions from the members of this subcommittee to you. The information you have provided will be very helpful. There will be follow-up questions sent to you. I have some. I know that other Members do. And your attention to those and your timely response would also be appreciated. So with that, we will dismiss this panel and welcome to the table the second panel of witnesses for this afternoon. Our next panel has seven witnesses beginning with Mr. John Fees, who is the chief executive officer of the Babcock and Wilcox Company. Mr. David Hawkins is the director of the Climate Center for the National Resources Defense Council. Following Mr. Hawkins will be Mr. Edward Lowe, who is the general manager for Gasification Market Development for the General Electric Company. Dr. S. Julio Friedmann from the Carbon Management Program at the Lawrence Livermore National Laboratory. We have Mr. Mark Schoenfield, the senior vice president and general counsel for Jupiter Oxygen Corporation. Mr. Stu Dalton represents the Electric Power Research Institute on today's panel. And finally, we will hear from Mr. Jay Stewart, an attorney with the firm of Hance Scarborough Wright Woodward and Weisbart in Austin, Texas. The prepared written statements of all of the witnesses will be made a part of the record and we will welcome your oral summary and we would ask that you keep your oral summary to approximately 5 minutes. Mr. Fees, we will be happy to begin with you. STATEMENT OF JOHN A. FEES, CEO, THE BABCOCK & WILCOX COMPANY, LYNCHBURG, VA Mr. Fees. Thank you, Mr. Chairman, Mr. Hastert and members of the subcommittee, my name is John Fees and I am the chief executive officer of the Babcock and Wilcox Companies which employs over 20,000 people working on advanced energy solutions worldwide. I have a degree in industrial engineering and operations research from the University of Pittsburgh and a master's of engineering from George Washington University. Mr. Chairman, it is a particular pleasure to come before you representing the Babcock and Wilcox Companies with our headquarters in Southwest Virginia, Lynchburg specifically, where we employ nearly 2,500 employees and where my wife, Jill, and I have made our home for the last 28 years. Congressman Hastert, the Babcock and Wilcox Company also has the privilege of working with the University of Chicago at the Argonne National Lab as we develop advanced nuclear technologies for the future. Today, however, I am here to testify before you on combustion-based technology alternatives available to limit carbon dioxide emissions from electrical power plants. I am also here to ask Congress to ensure that any draft legislation on carbon capture promotes achievable solutions, allows the market to select technologies through competition and to set standards that will allow the emergence of improved technologies. B&W has a long history of providing technology solutions for efficient base load electrical generation throughout the United States and North America and around the globe. Babcock and Wilcox was founded in 1867 and the first utility plant in the United States had a boiler designed and supplied by B&W. B&W has literally written the book on steam, which is here, ``Steam, Its Generation and Use for Power Generation.'' This is the longest continually published engineering textbook of its kind in the world, first published in 1875. In the 1950's, B&W became a major supplier of components for the Navy's fleet of nuclear-powered ships and submarines and we are the only United States manufacturer of the heavy components required for the emerging civilian nuclear power renaissance. B&W understands that we must provide realistic solutions to the climate challenge on a timely basis, and we are doing just that. Coal-fired and nuclear power plants provide over two- thirds of all domestic-generated electricity and they are the foundation for our economic competitiveness, our energy security and a basis of our standard of living. With coal, B&W has been an environmental technology leader at the forefront of developing solutions for mercury, SOx and NOx emissions and particulates. In power generation, B&W has recently been awarded a number of new highly efficient supercritical coal-fired power plant projects in the United States and the first ultra-supercritical coal-fired power plant in the United States in many decades. These plants with their higher efficiencies enable the production of electricity at lower carbon intensity than older subcritical plants and ongoing efforts will deliver even higher performance in the future. B&W is also working on an array of potentially significant breakthroughs for carbon-friendly technologies. Some of these technologies could dramatically lower the cost of carbon capture and storage. B&W is working to commercialize oxy-coal combustion technology that inherently produces carbon dioxide with no needs for a separate capture technology. Oxygen combustion produces a concentrated stream of carbon dioxide that is ready for enhanced oil recovery or geological storage. We expect to deploy this technology as the first commercial-scale near-zero- emission coal-fired plant with carbon storage in North America, and let me repeat that. It is the first commercial-scale, near- zero-emission coal plant with carbon storage in North America and we are confident that oxy-combustion technology can provide the most cost-effective solution for many new power plants and for retrofitting some existing fossil-fired plants. The first wave of near-zero-emission coal plants will start operation around 2012 and improvements will inevitably follow and oxy- coal will be among the first of these first-wave projects. There is a building consensus that Congress should establish practical emission targets and that CO\2\ reduction will be most effective if there are a portfolio of technologies. Congress should establish targets within the industry grasp and permit the market forces to work here. We believe that regulatory and technological obstacles to the long-term storage of carbon dioxide for electrical power plants could be the limiting factor in reducing carbon emissions. Legislation therefore should support the acceleration of R&D associated with carbon storage, clear policies regarding the legal ownership and liability of the injected CO\2\, and overcoming local concerns with large annual injections at storage sites. I thank you for the privilege to testify before the subcommittee, and I have also provided a written statement and ask that it be included in the record. Thank you. [The prepared statement of Mr. Fees appears at the conclusion of the hearing.] Mr. Boucher. Thank you very much, Mr. Fees. We appreciate your testimony today, and also let me acknowledge how much we appreciate your presence in the western part of Virginia, not my congressional district but close enough. We are glad to have you here. Mr. Hawkins. STATEMENT OF DAVID G. HAWKINS, DIRECTOR, CLIMATE CENTER, NATURAL RESOURCES DEFENSE COUNCIL, WASHINGTON, DC Mr. Hawkins. Thank you, Mr. Chairman. Four years ago, I testified in this room before this committee under then-Chairman Barton on the same topic and a lot has happened in the last 4 years, not as much as needs to happen but a lot has happened. First, we have an increasing awareness of the urgency to act on global warming. Second, we have a lot more knowledge about CO\2\ capture and disposal from coal-fired power plants. And third, the growth rate in new coal plants in the pipeline in the U.S. and globally has increased dramatically, and that is because coal is very abundant. Right now coal plants are being built somewhere in the world about ten large coal plants every month. Unfortunately, those ten coal plants are not equipped to capture their CO\2\, and to make coal use and climate protection compatible, we have to begin to capture CO\2\ for geologic disposal at new coal plants without further delay. Some of the statistics are pretty startling. The new coal plants that are forecast to be built just in the next 25 years, if they are not equipped with CO\2\ capture systems, will emit about 750 billion tons of CO\2\ during their operating life. That is about 30 percent more CO\2\ than had been released from all previous human use of coal just from a 25-year period of investments. If we don't apply CO\2\ capture and disposal to these coal plants, we are going to make protesting the climate very much more expensive, if not impossible. The good news is, we know enough today about how CO\2\ capture and disposal works in order to be able to apply it right now to plants that are being designed. Capture systems have been demonstrated at commercial scale for some coal processes and others are being developed, as Mr. Fees just testified. Experts appointed from our Government and others under the Intergovernmental Panel on Climate Change have conclude that based on existing experience, disposal operations can be conducted safely if we have an effective regulatory regime. That effective regulatory regime we believe should be carried out by EPA and we believe that if this committee presses on EPA to get the job done, it can be done quite quickly. Experts have also concluded that we can have confidence that if we properly select and operate a disposal site, that the CO\2\ that we put there will stay there. Storage capacity in the United States and globally is very substantial, likely enough to be able to accommodate all of the CO\2\ from 100 to 200 years worth of global fossil power operation, depending on just how much fossil fuel we burn over the next 100 years or so. But policies to limit CO\2\ emissions and set performance standards are the key here. They are essential to promote a market reason to actually use CO\2\ capture and disposal technologies at the required scale and pace. Those policies we believe can and should be enacted in this Congress. Well- designed measures can phase in CO\2\ capture and disposal on new coal plants with only very modest impacts on retail electricity prices. One approach I discuss in my testimony is a low-carbon- generation obligation that would phase in a very small fraction of kilowatt hours initially from coal resources that would be equipped with CO\2\ capture and storage in order to meet a performance standard without specifying a particular technology. Combined with a cap and trade program, such an approach could result in quite rapid deployment of carbon capture and disposal and provide new American technology leadership while dramatically cutting emissions. So I would say that my key message here is that we really have to avoid building new coal plants without CO\2\ capture and disposal. There is no reason to delay that. There is no reason to build additional capacity without applying those techniques. We know how to do it. Cost reductions are going to be driven by learning from commercial experience. They are not going to be driven by R&D expenditures by the Federal Government. Finally, I just would say in closing that CO\2\ capture and disposal is an important tool but it is one of several tools available to cut global warming emissions. The fastest and cheapest method to attack global warming remains energy efficiency and increased reliance on renewable energy resources is another important tool. Thank you very much. [The prepared statement of Mr. Hawkins appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Hawkins. Mr. Lowe. STATEMENT OF EDWARD C. LOWE, GENERAL MANAGER, GASIFICATION MARKET DEVELOPMENT, SCHENECTADY, NY Mr. Lowe. Good afternoon, Mr. Chairman and members of the committee. I am Edward Lowe, general manager of Gasification Market Development at GE Energy. GE appreciates the invitation to participate in this hearing. I would like to thank this committee for recognizing the need for cleaner coal in the 2005 Energy Policy Act. Three coal IGCC projects and a petroleum-coke hydrogen-to-power IGCC project were recently awarded investment tax credits. These projects are a vital first step to accelerating the deployment of IGCC and positioning coal as an economic fuel in a carbon- constrained world. Today I will, one, discuss the differences between pulverized coal technology and IGCC; two, show that IGCC is proven and cleaner; and three, address why technology has not been rapidly deployed and what is needed for it to achieve its potential. The first slide, please. [Refer to slides beginning on page 133.] A diagram of a PC plant and an IGCC plant is shown on the screen. In PC plants, coal is ground and burned in a boiler. Pollutants such as particulates, sulfur dioxide and mercury are captured in large post-combustion pollution control systems. IGCC is fundamentally different than PC. It converts the coal into a high-pressure natural-gas-like fuel that is then burned in a gas turbine. Pre-combustion removal of pollutants in an IGCC plant is more efficient and less costly because only one one-hundredth the volume of gas needs to be treated compared to a PC plant. Next slide. [Slide shown.] IGCC is proven. GE technologies are used in over three gigawatts of IGCC plants around the world. IGCC is also cleaner than pulverized coal technology. GE's 630 megawatt IGCC plant will have 93 percent lower sulfur, 75 percent lower nitrogen oxides and 33 percent lower particulate emissions than the average of recently applied for and permitted PC plants plus it will consume 30 percent less water. You can turn off the screen. CO\2\ can also be removed pre-combustion with IGCC. According to a 2006 Department of Energy study, achieving 90 percent capture in a bituminous coal plant with IGCC will have a 23 percent lower cost of electricity compared to a pulverized-coal plant using currently available technologies. With all of these advantages, it is fair to ask why isn't IGCC being widely deployed. First, an IGCC plant is currently estimated to be 20 to 25 percent more expensive than a PC plant. IGCC is beginning to move down the experience cost learning curve but more plants need to be built in the near term to accelerate the cost reduction. Second, IGCC's ability to cost-effectively capture carbon has no value in today's marketplace. In summary, carbon capture-ready IGCC is commercially available now. All of the key processes and equipment required for carbon capture in IGCC are being used in the chemical and refinery gasification applications today. For low-carbon coal power to be deployed, a national policy is also required. Without long-term clear, consistent policy direction that creates a market price for carbon, low-carbon coal technologies including IGCC will not be widely adopted. What is needed are, first, an expansion of current Government incentives to get the first 12 plants built, thus driving down the capital cost of IGCC, and second, a policy that includes a cap and trade program to establish a value for carbon. We hope that the information that we have provided today will give you confidence to move forward with legislation to address climate change and the role that coal can play in a carbon-constrained world. Thank you for the opportunity to address this committee. [The prepared statement of Mr. Lowe appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Lowe. Mr. Friedmann. STATEMENT OF S. JULIO FRIEDMANN, CARBON MANAGEMENT PROGRAM, LAWRENCE LIVERMORE NATIONAL LABORATORY, LIVERMORE, CA Mr. Friedmann. Thank you, Mr. Chairman, Representative Hastert and members of the committee. I thank you for inviting me to testify today on the technical aspects of carbon capture and sequestration. I am pleased to be here in the capacity as the leader of the Carbon Management Program at the Lawrence Livermore National Laboratory. Carbon capture and sequestration can be a vital element of a comprehensive energy strategy that includes efficiency gains, conservation and carbon-free energy supplies such as renewable or nuclear power. It can also support environmentally sound development of domestic transportation fuels including biofuels, coal-to-liquids and hydrogen. To summarize my testimony upfront, opportunities for rapid deployment of geological sequestration exist in the United States today. There is enough technical knowledge to select a safe and effective storage site, to plan a large-scale injection, to monitor CO\2\ and to remediate and mitigate any problems that might arise such as well bore leakage. However, national deployment of commercial CCS poses technical challenges and concerns due to the operational scale. An aggressive research, development and deployment program could answer all key technical questions, especially those that could advise a regulatory and legal framework to protect the public without undue burden to industry. Carbon capture and sequestration has two components. The first is the separation and concentration of CO\2\ from point source flue gases like power plants. The other panelists in the previous panel talked about that. The second step is geological carbon sequestration, or geologic storage, which involves injection of CO\2\ into porous rock formations below the surface. I will focus my testimony on that. The most promising reservoirs are porous and permeable rock bodies at depth generally greater than 1 kilometer, where pressures and temperatures where CO\2\ to act like a dense liquid-like gas. The potential reservoirs include saline formations, depleted oil and gas fields, and unminable coal seams. Saline formations are likely sites for most geological sequestration because of broad distribution and large capacity. However, initial projects will probably start with depleted oil and gas fields due to the quality of existing data and the potential for economic return through enhanced oil recovery. Available pore space and suitable formations is a new natural resource, and I would like to repeat that: available pore space and suitable formations is a new natural resource. Once the CO\2\ is injected into the subsurface, it remains there indefinitely because of physical and chemical properties of the Earth's shallow crust. Four different mechanisms trap CO\2\ in place: physical trapping, capillary trapping, dissolution and mineral precipitation. What this means is that over time, CO\2\ sequestered in the crust becomes less mobile and more permanently bound into the rocks themselves. Geological disposal is very similar to oil and gas production, natural gas storage, hazardous waste disposal and enhanced oil recovery, as other members have mentioned. A key difference is the goal which is to keep CO\2\ in the ground and out of the atmosphere. Therefore, careful pre-injection site characterization and monitoring and verification programs are important to avoid hazards, to detect unexpected leakage from the formation and to properly credit effective storage. Today the U.S. emits annually 7 billion tons of carbon dioxide totaling 2.2 billion tons of this from large point sources, mostly coal power. The volumes of CO\2\ at depth represented by this mass exceed current U.S. oil and natural gas production combined. Just 1 billion tons of anything is more mass than all the human beings on this planet. It is the necessary scale of sequestration deployment that represents the challenges we face. The good news is that the U.S. appears to have more than enough capacity to deploy CCS at large scale. Conservative estimates are that the U.S. has over 2,000 billion tons, 2 trillion tons of capacity, enough capacity to comfortably inject all of our current point source CO\2\ emissions for more than 100 years. Large sequestration resource occurs in the Midwest, in Texas, the intermountain West and substantial opportunities also exist in California, the Dakotas, Michigan and offshore the eastern United States. The costs of geological storage are much lower than the costs of capture and sequestration. Estimated costs of storage in the U.S. range from only one to 12 bucks a ton but in most cases range from about $5 to $8 a ton. This is roughly 10 percent of the cost of capture and separation. The cost of monitoring the CO\2\ is much lower than that, with estimates of about 25 cents to $1 per ton. The cost of the geological assessment and site characterization are even less, estimated to be much less than one cent per ton. I was asked to comment on what we know about carbon sequestration as an option for addressing climate change, what we don't know, what work needs to be done and understanding those things we don't know. I won't have time to go into it, but from a technical basis, the potential for successful CCS deployment is only limited by the local geology. Thank you again for the opportunity to present. [The prepared statement of Mr. Friedmann appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Friedmann. Mr. Schoenfield. STATEMENT OF MARK K. SCHOENFIELD, SENIOR VICE PRESIDENT, OPEERATIONS, JUPITOR OXYGEN CORPORTATION, SCHILLER PARK, IL Mr. Schoenfield. Thank you, Mr. Chairman, Mr. Hastert, members of the committee. Carbon capture requires technologies that can effectively, efficiently and economically actually capture carbon, keep our coal-fired power plants running and give us affordable power. I am the senior vice president of operations and general counsel of Jupiter Oxygen, a small energy technology company that is privately held, which has developed a particular oxy-fuel, that is, using oxygen without air, with coal or other fossil fuels, technology process that makes it both practical and cost- effective for coal-fired power plants to be truly capture-ready now. It also can be used for retrofits, which makes it different than many of the other approaches that have been tried. The ability to retrofit the existing fleet of coal-fired power plants is essential for our economic and energy needs and our energy security, and although our focus may be coal, I just want to note that this technology also can address natural-gas- fired plants which also emit CO\2\ and have NOx issues. The Jupiter oxy fuel combination technology uses pure oxygen as the combustion agent instead of air, which contains nitrogen. The resulting exhaust gas contains almost no NOx and concentrates the CO\2\ for efficient capture. In other words, you don't have to separate out from all that nitrogen in the air because air is 80 percent nitrogen. That makes it much more efficient and much less costly to do, and by having an undiluted high-flame-temperature process, you save fuel. At the same time, you can address the NOx, SOx, mercury and particulate issues effectively. Now, this process actually began in the 1990's in an aluminum recycling and manufacturing plant. Strictly it started out for fuel efficiency purposes. At that plant, however, what was learned was, in aluminum re-melting you cut your fuel usage by 70 percent by using this and therefore you have 70 percent CO\2\ avoidance because when you don't burn the fuel, you avoid making the CO\2\. Since 2001, Jupiter Oxygen has tested its technology and moved from industrial furnaces to power plants, working under research agreements with the National Energy Technology Laboratory. In 2002, we tested our technology in a steam boiler, making good steam sufficient to make electricity while firing both natural gas and coal, so we are talking about a technology that has been tested with actual firing in an up to half-a-megawatt size unit. This is not tabletop research. It is not a simulation. And what we found was, that you create fuel efficiencies, you burn less fuel, and then we combined our technology with an integrated pollutant removal technology called IPR, which kind of follows that name, developed by the National Energy Technology Lab itself at its Albany research center. Our technology with its fuel efficiencies and other benefits enables that system to perform in an economical and efficient manner to capture the CO\2\ and to do it in a cost- effective way. This means that coal supplies can be used in an environmentally friendly fashion now and that we can use coal into the future. Now, the problem we have is that utilities are reluctant to anything and be first, so we have started a retrofit project with the Department of Energy to do about a 25-megawatt retrofit project which could be done now which would actually use oxy fuel firing and have a truly capture-ready plant because capture-ready ought to mean that you have all the equipment on it and all you got to do is hook up a pipeline and you are good to go with the CO\2\ if that is what we decide to do. The problem we have is that the administration's budget and the Department of Energy have not made this a priority. The administration's budget has nothing in it for retrofit of coal- fired power plants, does not address oxy fuel combustion, and we need the continued support of Congress. You have passed section 1407 of the Energy Act of 2005 which authorized $100 million of funding for undiluted, high-flame-temperature oxy fuel work and yet nothing has been appropriated under that. We need the funding. We are just a little company. We need funding from the Federal Government to bridge between the research that has been done and an R&D retrofit project which will provide the data so that utilities, the Government, consumers and everyone else can see what this technology combination can do for the American public. Thank you. [The prepared statement of Mr. Schoenfield appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Schoenfield. Mr. Dalton. STATEMENT OF STU DALTON, ELECTRIC POWER RESEARCH INSTITUTE, PALO ALTO, CA Mr. Dalton. Thank you, Mr. Chairman and members of the subcommittee. I am Stu Dalton. I am the director of generation for the Electric Power Research Institute headquartered in Palo Alto, California. EPRI appreciates the opportunity to provide testimony to the subcommittee on the topic of carbon capture and sequestration. We are a non-profit and collaborative R&D organization. I plan to make the following points in the testimony today. Carbon capture technologies can feasibly be integrated into virtually all types of new generation after the scale-up and storage is demonstrated. CO\2\ capture can be added to integrated gasification combined cycle to pulverized coal, and circulating fluidized bed combustion, and it can be incorporated in processes like oxy fuel combustion. Although CO\2\ capture appears technically feasible for all technologies, it represents substantial engineering challenges, requiring investments in R&D and in demonstrations, and it comes at considerable cost. Analysis by EPRI and the Coal Utilization Research Council suggests that once the substantial RD & D investments are made, the cost of capture and storage becomes manageable. Geologic storage has been proven effective by nature, and evidence suggests that depleted oil and gas reservoirs and similar capped sandstone formations as has been discussed containing saltwater and nonpotable water, have been capable of storing CO\2\ for millennia or longer. Licensing and regulatory requirements for these are uncertain, however. There is still much work to be done before CO\2\ storage can be implemented on a large scale enough to significantly reduce CO\2\ emissions into the atmosphere. Regarding CO\2\ capture, the technologies can feasibly be integrated into all types of power plants with integrated gasification, pulverized coal and fluidized bed and variance. We believe that several will need to be demonstrated at large scale and CO\2\ stored to prove the technology. For those building new plants, it is unclear which type of plant would be economically preferred if built to include CO\2\ capture. All may have relative competitive advantages under various scenarios based on available coal types, plant capacity, location and opportunities for byproduct sales. Although CO\2\ capture appears technically feasible for all these technologies, there are substantial challenges requiring scale-up in size and major investments. Analysis by EPRI and the Coal Utilization Research Council suggests that once these are made, the cost can come down to approximate the current cost of electricity in constant dollars. That is a long-term prospect. It is not today's situation. Where is it now? Post-combustion CO\2\ separation processes placed after the boiler in the power plant are currently used commercially in very small-scale food and beverage and chemical industries, literally to make the CO\2\ for soda pop, for freezing chickens and to make sodium bicarbonate. Those are actual installations. They are very small, much smaller than needed for power plants producing large-scale power. Current post-combustion processes are large energy consumers and could reduce the power plant electrical output by 30 percent. CO\2\ separation processes for IGCC plants are also used commercially in the oil and gas and chemical industries at a scale closer to that ultimately needed and they use less energy than current post-combustion processes, but their application necessitates development of modified systems with integrated CO\2\ capture. EPRI's most recent cost estimates suggest that for pulverized-coal plants, the addition of CO\2\ capture using the currently most developed technical option would add about 60 to 80 percent to the wholesale cost of electricity in life cycle terms. That is not including any storage site monitoring, liability insurance, et cetera, which is unknown at this point. The current cost premium for CO\2\ capture in IGCC plants along with drying compression and storage is about 40 or 50 percent in our estimation. This is a lower cost percentage increase than for PC plants but we estimate that IGCC plants initially cost more than PC plants, as you have heard testimony. Thus, the bottom-line cost to consumers for power from IGCC plants today is likely to be comparable to PC plants with capture. The cost premiums listed vary depending on the coals and the physical chemical properties, desired plant size, CO\2\ capture process and degree of integration and plant elevation and the value of co-products. IGCC often shows economic advantages with bituminous coals such as in the State of Virginia, and PC often shows advantages to low-rank coals, as you can see in some of the western coals. EPRI stresses that no single advanced technology has clear- cut economic advantages across all applications. The best strategy for meeting future needs while addressing climate change concerns and economic impact lies in developing several options to allow choice by the power producers. Let me just briefly mention a couple of the R&D---- Mr. Boucher. Well, why don't we ask you those questions. You are about a minute over, and we do need to move forward, so I intend to ask you about R&D requirements going forward. That is question No. 3 I have listed here. [The prepared statement of Mr. Dalton appears at the conclusion of the hearing.] Mr. Stewart. STATEMENT OF JAY B. STEWART, ATTORNEY, HANCE SCARBOROUGH WRIGHT WOODWARD & WEISBART, LLP, AUSTIN, TX Mr. Stewart. Thank you, Mr. Chairman and members of the committee. Thank you for the opportunity to discuss with you today the State of Texas's experience with legal issues regarding injection and storage of carbon dioxide. For the record, my name is Jay Stewart. I am an attorney who practices regulatory law in Austin, Texas. As part of my practice, I represent entities and individuals before the Railroad Commission of Texas and the Texas Commission on Environmental Quality regarding oil and gas and injection activities. I have also been retained to work with the FutureGen Texas team regarding the State's efforts to site a clean-coal project in Texas. I come before you today to discuss the Texas experience with CO\2\ injection and the existing and prospective regulatory framework necessary to ensure successful and secure geologic sequestration of CO\2\. Evaluating and licensing CO\2\ injection in Texas has a regulatory track record that spans back more than 30 years. The prolific Permian basin in West Texas began utilizing CO\2\ injection as a recovery technology in 1973. Once the traditional extraction of oil and gas has exhausted itself, secondary and tertiary recovery technologies are used to extract the vast remaining reserves. Recent data indicates that up to 70 licensed enhanced oil recovery projects utilizing CO\2\ were in operation in the Permian basin of West Texas alone. Over 5,800 wells have reported injection of CO\2\ with a total injection of 25 million metric tons per year. It is estimated that more than 55 million barrels of annual crude oil production resulted from these enhanced recovery efforts. With more than 30 years of history of using CO\2\ as a commodity for oil recovery, these operations have a safety record of no major accidents. From a legal, regulatory and engineering standpoint, CO\2\ injection into geologic formations for productive use is nothing new in Texas. The developed regulatory framework exists to evaluate and judge each and every project. The Railroad Commission of Texas regulates injection of water and CO\2\ for enhanced oil recovery operations. It also has decades of evaluating and regulating the common practice of brine and oil and gas waste injection into geologic formations, ensuring that those formations are not productive of oil and gas and they do not contain usable groundwater. The Texas Commission on Environmental Quality regulates injection of non-hazardous waste, hazardous waste and experimental wells. Both these agencies have experienced staff that routinely judge the available technologies for injection and geologic evaluation. It is only after these experts have approved an injection project that a project license is allowed to proceed. Acknowledging the experience in oil and gas and geologic evaluation of both the State's regulators and its industry, Texas courts have consistently developed case law that clearly delineates the liability of the actors and the neighbors of these projects. Evaluation of legal liability rests primarily in the common law. Liability for negligence or malfeasance in the construction and operation of a facility utilized for capture and injection of CO\2\ would rest in traditional tort law causes of action. There is no liability forgiveness for bad actors that operate negligently. Legal challenges to the activity of injection, however, have been thoroughly adjudicated in Texas and those causes of actions are limited under the common law. Actions for trespass, nuisance and negligence are severely limited in Texas so long as the operator has a valid license from the State agency and that operator has acted in accordance with the license and applicable regulations. Texas has adjudicated the public policy implications of injection activities within its borders and has consistently ruled with the State agencies charged with enforcing those requirements. I have discussed the legal treatment of liability in Texas to the practice of injection of CO\2\ and its use under existing regulatory framework. Carbon sequestration intended to be permanent adds a significant new component to the legal analysis. Liability for the unlikely possibilities of release or migration of sequestered CO\2\ that could occur well beyond the time frames that are occasioned by present operations should be evaluated. Proper geologic and technical considerations are the first requirements to avoid possible liability for long-term events. Carbon sequestration into proven, confined geologic formations is paramount. Proposed storage of CO\2\ in depleted oil and gas formations, deep saline formations, salt caverns and unminable coal beds all have containment and absorption characteristics that minimize the possibilities of any release or migration. Before a license is granted, the operator must prove to the agency experts the radius of influence or plume that the injected material will form in the injection formation. The pressures of the injection and of the injection formation must be shown to be compatible with what is being injected and permanently stored. Thorough evaluation and study of the injection proposal and target formation is the first and foremost check on potential future liability of permanent geologic storage of carbon. As with any good legal analysis, the lawyer must then ask the question, ``but what if''. In Texas, we answered this question by passing into law a transfer of ownership of the CO\2\ from the FutureGen facility to the State of Texas. Acknowledging the goal of permanence of carbon sequestration, the permanence of the State is the only entity that can provide the necessary notice and monitoring beyond what one could expect in a private entity's life span. The State is protected by the principles of sovereign immunity while it cares for the injected CO\2\, that is, by State law, its property and responsibility. Finally, I would like to add that many States including Texas through a task force of the Interstate Oil and Gas Compact Commission are very far along in developing a model legal and regulatory framework for the geologic storage of CO\2\. I understand that the IOGCC hopes to have published within a year a guidance document for States which includes this model framework. I have attached a legal brief discussing in more detail my testimony regarding applicable law and ask that it be entered into the record. Thank you, sir. [The prepared statement of Mr. Stewart appears at the conclusion of the hearing.] Mr. Boucher. Thank you, Mr. Stewart, and thanks to all of the witnesses for joining us here today. I am going to defer to Mr. Hastert for his questions. He has a very important meeting at 1:00 and I am going to recognize him first for 5 minutes. Mr. Hastert. I thank the chairman for his courtesy. Mr. Schoenfield, I listened to your testimony and I think maybe what I heard isn't what you meant. I just want to clarify that. You made a statement that says if you don't burn the fuel--I am kind of summarizing-- you don't produce the effluent. It is not the fuel, it is the combined air, right? Mr. Schoenfield. Well, whenever you burn fuel, even if you don't have air in there, you are going to produce CO\2\. That is why with even oxy fuel firing, you do produce CO\2\, Congressman Hastert. So it is the fuel reduction. In other words, there is a one-to-one relationship. If you don't burn the fuel, you are not going to make the CO\2\. Mr. Hastert. All right. Fine. Then let me go back on that. When you burn this fuel with oxygen, the next step is, how do you get the oxygen? Do you separate the oxygen from the air on site or---- Mr. Schoenfield. We would recommend separating the air from the oxygen on site although there are pipelines that produce oxygen. Mr. Hastert. If you do it on site, then in a sense you sequester CO\2\ at the same time, right? Mr. Schoenfield. Well, air is 79 percent nitrogen, 21 percent roughly of oxygen, so you are not sequestering the CO\2\. What you have is, you are separating it into oxygen and then you have a nitrogen byproduct which is actually salable in parts of the country as well. Mr. Hastert. What happens with the CO\2\ that is in there? Mr. Schoenfield. Well, you don't start out with CO\2\. The CO\2\ is a product of combustion, so---- Mr. Hastert. So there is no CO\2\ in the air prior? Mr. Schoenfield. Well, you have some but the amount of CO\2\ in the air, parts per million, is very, very small, as has been discussed, so there is some CO\2\ in there but---- Mr. Hastert. But it is not worth trying to segregate that? Mr. Schoenfield. It is not worth trying to segregate that, no. Mr. Hastert. OK. Now, when you burn this oxygen in these burners and you said you can retrofit, I would think if you burn something with air, that is one degree of burning and efficiency and heat. When you put pure oxygen in there, you are really kicking up the heat, aren't you? Mr. Schoenfield. Absolutely, sir. Mr. Hastert. Will that be a danger of melting these boilers? I mean, can you really retrofit these things? Mr. Schoenfield. We have done it successfully at that half- megawatt level with a 1973 Keeler D boiler. What you have to do is, you have to shape the flame properly, make sure the space is proper, cut back the amount of fuel so that the amount of energy that enters the water walls is exactly the same amount of energy as there was with air firing. Mr. Hastert. So in a sense you are using less fuel and creating the same amount of energy? Mr. Schoenfield. Yes, sir. Mr. Hastert. Then when you do this, you are having air come in and you still have CO\2\, you go through that process. Do you get less CO\2\ than you would--what I am getting at, when you bring air in and you blow air in here and you burn the fire, you are really just burning the oxygen out of the air, right? Mr. Schoenfield. Yes, sir. Mr. Hastert. And all the rest of this effluent and a lot of the effluent is the mass of air which happens to be nitrogen and other things that are going up the stack and so if you are trying to get this CO\2\ out of there, you have a lot of air moving through and again the CO\2\ is a very small amount of what you are trying to extract from that stack of effluent. Is that correct? Mr. Schoenfield. Yes. With oxy fuel firing, you don't have to separate out the nitrogen at the end. The flue gas stream is approximately 20 to 25 percent of what it would be with air firing. Mr. Hastert. And so are you saying the efficiency there, you are still trying to get the CO\2\ out of the flue gas stream? Mr. Schoenfield. Well, you basically can compress it at that stage depending on the grade you need, whether you have to remove sulfur or other things for food processing or other requirements but basically you have a pretty relatively pure CO\2\ stream at that stage. Mr. Hastert. All right. That is helpful. Thank you. The gentleman from Texas, Mr. Stewart. When you inject CO\2\ into the ground whether it is an old coal mine, whether it is forest rock, whether it is saline solutions or saltwater, do you change the physical nature of the host in any way? Mr. Stewart. The CO\2\ is absorbed so yes, but also whatever you are injecting the CO\2\ into, it binds up the CO\2\ so it doesn't become a new substance. It is a combination of whatever the two---- Mr. Hastert. Otherwise you are not creating saltwater into some kind of acid or something? Mr. Stewart. No, sir. Mr. Hastert. Thank you. Thank you, Mr. Chairman. Mr. Boucher. Thank you very much, Mr. Hastert. Mr. Dalton, let us go back to where we were with you. You wanted to talk about the research needs and I want to ask you about that. It has been suggested that something on the order of $11 billion might be required in research funding over approximately the next decade if we are to achieve within somewhat more than a decade reliable separation and storage technology. Is that the right number or is there a different number? Mr. Dalton. Thank you, Mr. Chairman. Mr. Chairman, I believe that number represents the portfolio of work that was outlined by the Coal Utilization Research Council and EPRI as a combined set of efforts, not just the CO\2\ capture and storage work, but that is a significant part of that. There are elements of that work that relate to almost every one of the technologies we have heard talked about here--combustion work, oxy-fuel, gasification and also the CO\2\ capture. It is putting the integrated system together that really makes it all work. In the written submission, I do have two graphics and they show both the efficiency increase with time against a series of time and cost decrease for both combustion technologies and for the gasification technologies. We believe both will improve with time and learning. Mr. Boucher. And you have numbers associated with the research requirements for that? Mr. Dalton. Yes, sir. There are numbers associated with each of the elements in the EPRI/Coal Utilization Research Council integrated plan. Mr. Boucher. Thank you. I would like to pose to the entire panel some questions regarding time frames upon which we can expect the arrival of reliable technologies both for separation for capture of CO\2\ and also as a separate matter for storage of CO\2\. Let me start with capture and talk about initially integrated gasification combined cycle. I understand, Mr. Lowe, that from your testimony you believe that technology to be available today. First of all, is it in fact available today? Second, at what cost in comparison to a pulverized-coal facility, and for purposes of that comparison, would this be using IGCC without the separation technology as compared to a pulverized-coal facility also without any sort of control technology for CO\2\? Mr. Lowe. OK. First of all, yes, this technology is available today with IGCC. There are 25 gasification facilities operating around the world that separate CO\2\ because that CO\2\ is valuable in a number of processes. Mr. Boucher. Well, what I am looking for immediately in the first set of questions is, just the availability of IGCC without CO\2\ capture added to it, and the cost of that in comparison to today's generation of pulverized-coal plants. I understand it is more costly. Mr. Lowe. Yes. As I indicated, the estimate today is that IGCC is approximately 20 to 25 percent more expensive in capital costs. Mr. Boucher. Now, how many IGCC units will have to be built before you have comparable costs for IGCC and pulverized coal? I understand after perhaps a dozen of these you reach that point. Is that accurate? Mr. Lowe. We would estimate that after a dozen of units you could end up shrinking that premium by at least half so it would be down to a maximum of 10 percent premium. Mr. Boucher. Now, how much does adding the carbon separation component increase the IGCC cost? Mr. Lowe. As I referenced in a DOE study that was done, the indication was that the cost of electricity, the cost coming out of the plant, would go up about 25 percent, and that was the same range that DOE referenced. Mr. Boucher. Mr. Fees, would you like to comment on your post-combustion separation technology where you take CO\2\ out of the flue gas? Mr. Fees. Well, I think there is two ways to think about this. One is with oxy firing. There is no separate separation technology. So what you have is, you have a pure stream of carbon dioxide that comes out the backside that is ready for injection and/or other purposes. So there isn't an incremental cost beyond the cost to deploy that technology. Mr. Boucher. And your technology is based on oxy firing? Mr. Fees. On oxy firing. Mr. Boucher. That is the same way that Mr. Schoenfield's technology is? Mr. Fees. It is different. We generate something that resembles ambient air and in ambient you have 20 percent oxygen and 80 percent of other things. Mr. Boucher. OK. Well, without diving into the technical differences, what is the cost of your oxy firing technology in comparison with the cost of IGCC with carbon separation? Can you make that comparison? Mr. Fees. Around 35 to 40 percent. Mr. Boucher. Yours is more costly than the IGCC with carbon separation? Mr. Fees. Yes. However, if you take a look at pulverized coal without oxygen firing with separation on the back end, there are a lot of studies that compare those in many ways and right now with the lack of development of commercial scale in either of those circumstances, right now looking at their future, it looks like about a wash. Mr. Boucher. Mr. Lowe, when will we see commercial availability of IGCC with carbon separation? When do you think that date arrives? Mr. Lowe. There was a question earlier by Ms. Harman from California regarding the BP project out in Carson, California, and this is a project that utilizes petroleum coke instead of coal and an IGCC process. The carbon is separated and the carbon will be put into a pipeline for use in enhanced oil recovery, and GE and BP have done initial design on that plan with an expected commercial operation date of 2011. Mr. Boucher. I am going to ask about storage in a second round of questions to this panel. I am now pleased to recognize for 5 minutes Mr. Hall. Mr. Hall. I yield to the former chairman of Energy and Commerce, showing my good judgment to Mr. Barton for my time. Mr. Barton. I normally wouldn't even mind but I am supposed to managing the OBJ bill on the floor right now, so I appreciate Mr. Hall's yielding to me. I have a confession to make before I get into my questions. It is going to hurt my reputation I know, especially with my friends in the environmental community, but I have long been a supporter of carbon capture in the form of the FutureGen project. I also happen to support the development of many of these technologies that you gentlemen are talking about today and I put my money where my mouth is back in the Energy Policy Act of 2005 and we made sure that we authorized, which is all a committee like ours can do, we can't appropriate but we authorized specific sums of money in the hundreds of millions and in some cases the billions of dollars to develop these technologies. So I am not quite the stick in the mud maybe that I am portrayed to be. I do think there ought to be a cost- benefit test to this technology because that is ultimately what the ratepayers and the consumers have to pay. My first question goes to a statement that Mr. Dalton made. Does everybody on the panel generally accept that whichever these technologies we decide to adopt, that in the beginning there is going to be a substantial premium in terms of plant construction? The EPRI gentleman said 60 to 80 percent. Does everybody accept that it is going to cost more? Mr. Schoenfield is shaking his head no. Your retrofit technology won't cost more? Mr. Schoenfield. No, sir. I mean, the retrofit technology when we project, for example, at 400 megawatts, is $170 million to fully retrofit NOx, SOx, particulates, CO\2\, mercury, everything, and at $180 a kilowatt or $1,600 a kilowatt, you are talking about new plants at $640 million to $720 million so retrofitting is less. Mr. Barton. Your retrofit is about a 25 percent. Mr. Schoenfield. Right. On a new build plant against present technology which doesn't capture CO\2\, doesn't address the rest of the pollutants the same way, the projections we made with the Albany research group of the National Energy Technology Lab had us in the same ballpark as present costs, that is, around 1.7 cents a kilowatt production cost and about 5.1 cents a kilowatt fully loaded and amortized capital costs. Mr. Barton. Well, the chairman indicated in his first round of questions, he was concerned about the cost. I too am concerned about the costs. I don't think this is a free lunch that we can technology our way to no cost increase to our rate consumers although I do think over time as the learning curve comes down that we can hopefully minimize that cost. Mr. Hawkins, we are glad to have you back. You are certainly one of the most distinguished leaders in the environmental community and also, in my opinion, one of the most commonsense ones, which may mean you are the only one that shows any common sense, but that is just a personal opinion of mine. Were you involved at all with the TXU proposal for the coal-fired power plants down in Texas? Mr. Hawkins. Yes, Mr. Barton. Mr. Barton. OK. What technology were they proposing to use in their plants? Mr. Hawkins. They proposed 11 plants initially, all of them using pulverized-coal technology. Mr. Barton. Some sort of, as I understood it, supercritical combustion cycle that would reduce emissions. Is that correct or incorrect? Mr. Hawkins. Some of them were proposed as supercritical units, which means a higher operating pressure and a slightly higher efficiency. Mr. Barton. But they did not propose the use of the Babcock and Wilcox IGCC. Is that correct? Mr. Hawkins. They didn't propose to use the Babcock and Wilcox oxy-fuel technology nor IGCC. Mr. Barton. Or the GE. So the environmental community just didn't believe that their plants would operate at the reduced emissions level. Is that fair to say? Mr. Hawkins. The opposition to those plants had to do with both the conventional pollutants as well as carbon dioxide and the modest reductions in carbon dioxide from a slightly more efficient plant still meant that you would be building a new plant that would have somewhere like 80 to 85 percent of the same plants that our grandfathers built and so that is not seen as acceptable progress. Mr. Barton. There is not a requirement that you build plants for laws that haven't been passed yet, is there? Mr. Hawkins. Well, in this area, Mr. Barton, the laws are lagging common sense and common sense in the business community are actually getting out ahead of the laws and we hope with the efforts of this committee that you will catch up soon. Mr. Barton. Well, I hope that we get a dose of common sense at some point in this process because I too am an industrial engineer and have a master's degree in various things like the Babcock and Wilcox gentleman. We were taught that you base decisions based on facts, not on theories, and it is yet to be proven to me that CO\2\ is the cause of all the catastrophic things that is has been accused of. As these hearings go forward, we will have a chance to get some of those scientists before us and hopefully get some of that information out on the table. My time has expired, Mr. Chairman. I appreciate your courtesy. Mr. Boucher. Thank you very much, Mr. Barton. Mr. Inslee for 5 minutes. Mr. Inslee. Mr. Barton had pointed out earlier that humans are responsible, I think he uses the figure of 5 percent of the total CO\2\ emissions into the atmosphere, and one of my colleagues asked me about that and I have heard numbers in that ballpark, and that seems like no big deal but I want to ask about that. That is a 5 percent increase over what would have happened had we not had an industrial revolution basically and 5 percent doesn't sound like much but I was thinking, if I weigh 200 pounds, which is close, and I gain 5 percent weight a year, cumulative putting it into the atmosphere in my waist line, I would weigh over 400 pounds on 20 years. Now, I think that is kind of analogous to the situation we have here where we are headed to at least twice CO\2\ pre-industrial levels. That seems to be the target we are all trying to stop it at. Mr. Hawkins, is that sort of a fair metaphor to this discussion? Mr. Hawkins. Thank you, Congressman. Actually the 5 percent number is a very misleading number. The oceans and the terrestrial systems--trees--release CO\2\ into the atmosphere. That is correct. But that same CO\2\ is taken out of the atmosphere by the same sources. So until we started mining fossil fuels a couple of hundred years ago in significant quantities, the net emissions to the atmosphere were zero. Just as much goes in as comes out. So if the question is what are the actual net emissions to the atmosphere caused by human beings, it is 100 percent, sir. Mr. Inslee. And we are heading to double pre-industrial levels by the end of the century. Is that our best estimate? Mr. Hawkins. We are headed to double pre-industrial levels by about 2035 at the current pace. Mr. Inslee. And I am very glad you seven people--I compare you to the Mercury Seven astronauts. I think you are heroes in trying to figure out what to do about this because we have got to reduce levels by probably on the order of 70 to 80 percent to be able to get down to stop it. Even to stop it at double levels, we have got to that level of reduction. So this technology is incredibly important. I want to ask Mr. Fees and Mr. Lowe, I have this concern that we are going to allow what I will just call dirty-coal plants with no sequestration technology to be built in the next decade and lock ourselves in to another horrendous amount of CO\2\, and I am just wondering what you can advise us as to what we can realistically do to insist that we in the plants as they go forward to embrace this technology to not allow another 50 years of dirty coal to get locked in. What can we do realistically in that regard? Mr. Lowe. What I think we need to do, as I indicated in my testimony, is without some kind of policy that ends up putting a value on carbon, that is exactly what is going to happen, and what we think is a very strong approach would be a cap and trade approach for CO\2\. Mr. Fees. I believe there is a timing issue in play. There is a timing issue of what is available in the technology and what can be done versus when we would like to get it deployed. If we start making short-term requirements, we might not have all the technology to get there and it may get into fuel- switching issues on a local basis that may affect economies and may affect us nationally. If you take a look at the technologies that are being developed, I think they are all good. I think it would be a cheap marketing ploy for me to try to talk about IGCC versus pulverized coal because they both have a chance and they have an equal chance under where things are going, and we are going to invest in excess of $40 million of our money into R&D this year looking at how we can improve pulverized coal and how we can capture CO\2\ on the back end. And the thing that I am trying to get to there is, I think this body, it is very important that they have an unbiased approach relative to technology because I think it would limit what we might accomplish. Mr. Inslee. Mr. Friedmann, I want to ask you about sort of projections. You made some projections about cost, and I wrote down one figure, either 21 or 25 percent more with sequestration, but does that take into consideration some of the projected improvements in efficiencies? There is a company called RamGen out in Washington State that has a compression technology they have told me they think they can reduce capital costs by 30 percent and deal with some of the heat issues to actually put heat to use. Mr. Friedmann. I am actually familiar with RamGen and I am familiar with other novel compression strategies that people are trying. Those were not included in my cost estimates. Conventionally, the way that our community handles things is, we put capture the separation piece, transportation, construction of pipelines and shipping and the compression, all of those costs get integrated into what we call the capture half; and then there is the storage half when you basically go from the well head down, and those were the costs I had talked about. Mr. Inslee. Mr. Chairman, would you indulge me one more question? I am over my time. Mr. Boucher. Sure. Mr. Inslee. Thank you. I appreciate that. Could you give us some estimate of the existing coal plants where they are located today, what percentage of them have a good chance of having geology that would allow sequestration within whatever X miles we think transportation will work out? Is there any estimate you can give us today in that regard? Mr. Friedmann. It is very well documented that coal basins, which is where coal plants tend to be built, are highly prospective places to store CO\2\. The geology works well in terms of saline aquifers, depleted oil and gas fields and coal seams, and all of them occur generally in abundance where you have a lot of coal. So the chance of finding within, say, 150 kilometers or 200 kilometers of a power plant a good sequestration site is extremely high. Mr. Inslee. Thank you. Mr. Boucher. Thank you very much. Mr. Hall for 5 minutes. Mr. Hall. Mr. Chairman, thank you. Mr. Dalton almost answered the question I have when he said all systems had to be put together if they are going to work, and Speaker Hastert entered into a little bit about the cost and of course you have to consider cost on everything because that is going to be the final determination as to what is selected and how well it works. But Mr. Schoenfield, you addressed the issue of oxy-fuel in your testimony and it has been kicked around here pretty well. I know this committee heard testimony last year from MIT, I believe it was a Dr. Katzer from MIT gave some testimony to Energy and Air Quality Subcommittee on clean coal technology. I don't know if you were here and heard his testimony or have read it, but he gave testimony about the relative cost of various clean coal technologies. Can you be more specific about the cost of oxy-fuel relative to other technologies that we would have to compare them with? Mr. Schoenfield. I am familiar with the testimony, Congressman. I have also spoken to Professor Katzer. I think the presentation at MIT had to do much like EPRI's with taking technologies that they consider more conventional levels and analyzing those, and I think their conclusion was that at this point there is not enough known to have a clear cost winner. So we have done our projections based on the testing today as I stated with those numbers and those I find it hard to compare because I am not sure what reliable numbers there are on some of these other technologies either, just like Professor Katzer stated in his testimony. Mr. Hall. Has DOE given any priority to having an actual retrofit with oxy-fuel on the grid so everybody can see how it really works? Mr. Schoenfield. No, sir, and it has been very frustrating since part of the technology is their own technology developed by their lab. Mr. Hall. In regard to their IPR system, explain why it works with your oxy-fuel technology. Mr. Schoenfield. Yes, sir. Because there is no nitrogen to separate out and because there is less fuel used and there is less CO\2\, their system can be smaller, more efficient, more economical. What it basically does is compress that CO\2\. It has a series of wet and dry heat exchangers to capture latent heat. It has filters to take out the mercury and sulfur and the particulate and in the end you get a CO\2\ stream that is as pure as you need it, depending on whether you are doing food processing, enhanced oil recovery or just plain old sequestration. Mr. Hall. I thank you. I yielded my time to Mr. Barton, and there are others to make some inquiries, and it is a little past noon so I will yield back my time, Mr. Chairman. Mr. Boucher. Thank you very much, Mr. Hall. Mr. Dingell for 5 minutes. Mr. Dingell. Thank you very much for your kindness. Gentlemen, as you have all observed in your testimony, there are a number of questions needing to be answered. The Department of Energy's witness has testified earlier that the goal of DOE's carbon sequestration program is for commercial deployment by 2012 of capture technologies that achieve 90 percent CO\2\ capture at less than a 10 percent increase in the costs of the energy. Now, starting with Mr. Stewart, if you please, gentlemen, is that an achievable goal, yes or no? Mr. Stewart. Mr. Chairman, I can't opine on the technology because I am not that experienced with it but I can tell you in Texas, we have an established regulatory framework where we can today permit at least the FutureGen project for sequestration. That does not achieve your 90 percent goal, no, sir, but there is our experience and the regulatory framework and the experience of regulators does exist today to accomplish that. Mr. Dingell. Thank you. Mr. Dalton? Mr. Dalton. Technology can be built by that date but it will not have established the long-term storage and the safety of that storage at that point. Mr. Dingell. Alright. Our next witness? Mr. Schoenfield. Congressman, the retrofit project for oxy- fuel technology that has been started can be completed in 18 to 24 months. It will require about 6 to 12 months of data collection and then some dissemination of data, and assuming it works based on the projections and the testing to date, it would then be ready for deployment. Mr. Dingell. You said assuming it works. Mr. Schoenfield. Right. We are confident it will work, sir, but I can't sit here until it works to say for 100 percent certainty. I am 100 percent certain but I would say assuming because that is how it has been presented when we have conversations with the DOE. Mr. Dingell. Thank you. Our next witness, please, sir. Mr. Friedmann. The most outstanding questions associated with deployment of storage technology can be answered with a handful of large tests quickly. Currently, within the DOE's program, they are trying to accelerate some of those steps. That is one pathway towards doing that. I think there are many ways that one could accelerate the deployment of large tests to provide the information needed to operators and to regulators to develop standards. Mr. Dingell. Next witness, please, sir? Mr. Lowe. Yes. I think that as I indicated, carbon capture technology will be demonstrated in 2011 at Carson for IGCC and I think that it is entirely likely that we are going to see costs going down both for the capture of carbon and also the sequestering of it in something like saline aquifers going forward. Mr. Dingell. Thank you. Mr. Hawkins. Mr. Hawkins. Thank you, Mr. Chairman. The performance goals in the DOE program are already demonstrated. I mean, cost goals can be achieved but not by the DOE program alone. To achieve those costs, you need to engage the private sector. To do that, you need the power of emission limits to move this forward at a required pace. Mr. Dingell. Last witness, please. Mr. Fees. Yes, and if you take a look at it, we believe that what is underway at DOE will work. However, our concern is that it will not be enough, that the combustion technologies will be there much earlier and a broader-based deployment of the combustion technologies may be limited by the availability of storage, and that is our concern, that we may actually limit our ability to deploy new plants with the new technologies because we won't have anywhere to put the CO\2\. Mr. Dingell. Now, gentlemen, I have so little time. It is so very hard to do this and I have to verge on discourtesy here. If you would, please, yes or no to this question. Will it be possible to deploy the leading CO\2\ capture technologies in the U.S. at a cost that isn't significantly going to increase the retail price of electricity and if adoption of a carbon- constraint policy is speeded up, will that help if we do that? If you please, Mr. Stewart? Mr. Stewart. It will increase the cost but a government policy from the Federal Government certainly would inspire and order industry to respond. Mr. Dingell. Next witness, please, sir? Mr. Dalton. I believe it will increase the cost but firm policies on storage particularly would help. Mr. Dingell. Sir? Mr. Schoenfield. Our projections are that the cost of capture can remain approximately the same as the cost of electricity today. Mr. Dingell. Same, sir, please? Mr. Friedmann. From a technical basis, the cost of storage will be a very small component of the total aggregate cost of electricity. Mr. Dingell. Next witness, please, sir? Mr. Lowe. Yes, there will be an increase initially in the cost of electricity but with a carbon policy, we are going to see a stimulation of new technologies coming forward that will end up reducing that cost. Mr. Dingell. Mr. Hawkins? Mr. Hawkins. Yes, the cost increase can be modest and yes, policies are needed to make it happen. Mr. Dingell. Sir? Mr. Fees. It will cost more. Our R&D objective is to try to limit that cost below 20 percent, and a policy would certainly stimulate more development in R&D. Mr. Dingell. Thank you, gentlemen. Mr. Chairman, I note that my time has expired. I have some more questions but I thank you for your courtesy. Mr. Boucher. Thank you, Chairman Dingell. Mr. Shimkus for 5 minutes. Mr. Shimkus. Thank you, Mr. Chairman. Mr. Schoenfield, just following up on the chairman's question, you are not including the capture and storage of CO\2\ in your no-net increase in cost, are you? Mr. Schoenfield. I am including the capture---- Mr. Shimkus. But not storage? Mr. Schoenfield. But not storage or transport. Mr. Shimkus. Because there is going to be a cost increase. Everybody needs to get prepared for that, and the question is how much. Marginal? What is marginal? Twenty percent, 10 percent? Those are things that will have to be addressed as we move this forward. Mr. Lowe, I appreciate this. I have been trying to understand, and I visited a lot of plants in pulverized coal and IGCC, but Mr. Schoenfield, your Jupiter oxygen would be kind of in between, would it not? It is retrofitting pulverized coal plants with oxygen to get a better return and the ability to capture the emittents and then sequester them. Is that correct? Mr. Schoenfield. That is correct. Mr. Shimkus. Can I ask, we addressed this in the EPAC bill in 2005 in section 1407. How are you using the funds that have been provided by Congress in your rollout here? Mr. Schoenfield. Well, so far, Congressman, we have received only the first $10,000 of 2005 money because since this is not a priority, it has been a very slow process to get through all the levels of paperwork and everything else. We have received none of the 2006 money yet. Mr. Shimkus. That is why I always talk to people who are coming to us for help because we are not really reliable partners in the funding stream in the world in capital risk and deployment, and I am sorry to hear that. We are trying to do our best to work with DOE. So DOE in essence hasn't been helpful with respect to the EPAC legislation in that section yet? Mr. Schoenfield. They have not made it a priority, and in that sense, that is correct. Mr. Shimkus. Maybe I can ask our chairman to help me readdress the Department of Energy on this section. Mr. Boucher. Yes. Well, let me just respond to the gentleman by saying that we had Mr. Shope here earlier and he did not talk about the loan guarantee provisions, which have been a major source of discouragement for some of the applicants but the gentleman is right in saying that full partnership with DOE is going to be necessary in order to achieve the goals we are discussing here today. Mr. Shimkus. Thank you. Mr. Hawkins, I think your organization has said you want IGCC with carbon sequestration. Is that correct? Mr. Hawkins. We want coal plants to meet CO\2\ performance standards that can be achieved with CO\2\ capture. We don't care what the technology is to turn coal into electricity. Mr. Shimkus. But you are really empowering this sequestration issue in this debate. Mr. Hawkins. We believe that continuing coal use makes it essential to do CO\2\ capture and storage. Mr. Shimkus. And you are still a supporter of using coal for electricity generation in this country, are you not? Mr. Hawkins. We think it is a fact of life that a lot of coal will be used for a long period of time. Mr. Shimkus. Do you also support nuclear power? Mr. Hawkins. Our position on nuclear power is that if there is a level playing field and we get rid of some of the subsidies in current law, if we address the waste issue and if we address the nuclear proliferation risks, then it should play a role. Mr. Shimkus. Wow. All right. Let me ask you about the permitting and transportation of carbon dioxide. Under what circumstances would you support or oppose any transportation or sequestration issues? Mr. Hawkins. We think that the regulatory system to cover transportation is already in place. Pipeline transportation regulations apply to existing commercial pipelines. Mr. Shimkus. Have you ever opposed transportation and siting of carbon dioxide sequestration projects in the country? Mr. Hawkins. No. Mr. Shimkus. Would you support an expedited process for permitting and siting? Mr. Hawkins. I think an expedited process may not be the best way to gain public confidence for a new technology. I think that a good process that involves the affected communities is the best way to get these technologies accepted. Mr. Shimkus. I am always vague in expediting because as I said earlier, we want to move quick but on some things we want to move slow. Now we are saying we need to move quick but we also hear that the Federal bureaucracy does not move quickly so once I figure out what expedited means and if we can do it in a timely and safe manner, then we may get a chance to visit it again. But I understand your concerns. Thank you, Mr. Chairman. Mr. Boucher. Thank you, Mr. Chairman. Mr. Markey for 5 minutes. Mr. Markey. Thank you, Mr. Chairman. Mr. Fees, Mr. Lowe, Mr. Schoenfield, all three of your companies have developed new technologies that you say would allow us to burn coal cleanly, capturing and disposing of the carbon pollution that currently gets released into the environment. If I were an electric utility CEO and I wanted you to build one of those plants today, could you build a 300- megawatt plant for me right now? Mr. Fees. We are building a 300-megawatt oxy-fired plant and we are in cooperation with Saskatchewan Power doing that today. We have a third---- Mr. Markey. I could buy one right now? Mr. Fees. Yes, sir. Mr. Markey. And how much would it cost me? Mr. Fees. It depends on the location and the coal and the development that is going on this summer. Mr. Markey. Can you give me a range? Mr. Fees. Not today. Mr. Markey. Three hundred-megawatt plant? Mr. Fees. Yes, we have a 300-megawatt plant. Mr. Markey. No, I am saying, but you couldn't give me any price at all? Mr. Fees. It depends on the location and the coal. Mr. Markey. Mr. Lowe? Mr. Lowe. Yes, we could build a 300-megawatt plant although with the economies of scale, we would encourage going to approximately 600 megawatts. Mr. Markey. And how much would it cost me? Mr. Lowe. Again, that is very specific to what you have for the location of the plant but right now approximately 20 percent more than you have for pulverized-coal units. Mr. Markey. OK, good, and Mr. Schoenfield? Mr. Schoenfield. Congressman, we would need to complete that retrofit project before going up to 300 megawatts but the projected cost based on the testing that has been done and all the firing which are consistent for the process would indicate that the cost of that 300-megawatt plant would be approximately the same cost it would be to build it with conventional technology today. Mr. Markey. So you are saying a plain old pulverized-coal plant without any carbon capture or sequestration would be built for the same prices you could build me one of these new plants right now? Mr. Schoenfield. That is what has been projected based on the testing to date and the cost---- Mr. Markey. Well, let me ask the other two gentlemen. Can you do that for me too? Could you build me the same plant for the price of a pulverized-coal plant no matter where I am? Mr. Fees. With carbon capture included for the same price? Mr. Markey. Without any carbon capture. He just said he could do it for me without carbon capture, same price with and without carbon capture. Mr. Fees. I can build a pulverized-coal plant and I do it every day. Mr. Markey. But can you do it for the same price you build one of the new plants that would capture the carbon? Mr. Fees. As I indicated earlier in my testimony, we thought that our oxy fire technology which we are doing today and can be back retrofit to existing pulverized-coal plants is about 35 to 40 percent more than the existing---- Mr. Markey. So it is 35 to 40 percent? Mr. Fees. Which is about the same cost of IGCC, in our estimation. Mr. Markey. And Mr. Lowe? Mr. Lowe. Yes, I have indicated that it would be a premium versus what a non-carbon-capture plant is and IGCC with carbon capture would be about 20 percent. Mr. Markey. Twenty percent. OK. And how would that compare to the cost of building a modern combined cycle natural gas plant to produce the same 300 or 600 megawatts? Mr. Lowe. Any solid fuel coal plant is going to be substantially---- Mr. Markey. Can you give me a percent range generally? Mr. Lowe. I would say that it is probably in the range of an additional 300 percent. Mr. Markey. Three hundred percent. Mr. Schoenfield? Mr. Schoenfield. I don't know that range offhand but the cost of the fuel difference makes a tremendous difference as well in the operating costs. Mr. Markey. Just give me a range. Mr. Schoenfield. I do not have the capital costs, Congressman, on that one. Mr. Markey. Mr. Fees? Mr. Fees. You need to look at the cost of the fuel because today they are---- Mr. Markey. We are trying to make some decisions here so factor in what you think is reasonable and give us a price comparison. Mr. Fees. Right now today natural gas is not competitive in a lot of markets because of the price of fuel and on a 20-year levelized cost of electricity dollars per megawatt, pulverized coal with CO\2\ capture is 62 bucks. Mr. Markey. So you are saying for a CEO right now it is a rational decision to build a coal-fired plant with this new technology as opposed to a natural-gas plant? Mr. Fees. I think it is a rational decision to build existing technology as well as approach the new technology, yes, sir. Mr. Markey. Mr. Hawkins, you heard DOE's response to the questions that I posed earlier regarding the potential for utilities to exploit loopholes in the 2005 Energy Policy Act to get subsidies for coal plants that don't actually capture CO\2\ but are merely capture-capable or carbon capture- optimized. Did you find DOE's answers reassuring? Mr. Hawkins. No. Mr. Markey. What should we do about the loophole in the law? Mr. Hawkins. Well, I think in the appropriations bill, there should be specifications that limit the appropriations authorities to the top priority technologies which are those that actually do capture CO\2\. Mr. Markey. Mr. Hawkins, in your testimony you say policies to limit CO\2\ emissions and set performance standards are essential to drive the use of CCD at the required scale and pace, and then you say, however, a CO\2\ cap and trade program by itself may not result in deployment of CCD systems as rapidly as we need. What sort of performance standards do you envision in order to drive the deployment of carbon capture and sequestration technologies? Mr. Hawkins. Well, one that we think is quite interesting and is in a bill introduced in the other body, it is 309, is a performance obligation modeled on the renewable portfolio standards. It basically says that if you generate coal-fired power starting in 5 or 6 or 7 years from now, a certain small fraction of your total kilowatt hours need to come from coal plants that meet a performance standard. Mr. Markey. And what fraction---- Mr. Boucher. The time of the gentleman has expired. The Chair is going to recognize at this time the gentleman from Texas, Mr. Burgess. Mr. Burgess. Thank you, Mr. Chairman. Mr. Fees, let me just be sure that I understand this correctly. If Mr. Markey's 300-megawatt plant is built today but it uses natural gas as a fuel, is carbon sequestration something that is going to happen at that natural-gas plant as well? Mr. Fees. We don't build natural-gas-fired plants so I can't really comment on how they would capture carbon but I would think the technologies that are being developed could be similarly applied. Mr. Burgess. Mr. Hawkins, is it necessary to capture the carbon from the natural-gas plant? Mr. Hawkins. Eventually it will. BP is proposing to do that at a plant that it operates in Scotland. It is going to send the CO\2\ under the North Sea to enhance oil recovery there. Mr. Burgess. Mr. Stewart, let me ask you, we had the Texas Railroad commissioner up here last week and he was talking about the FutureGen project if it were to come to Texas and he said Texas had passed a statute taking title to carbon dioxide for that sequestration project. Am I correct in that? Mr. Stewart. Yes, sir. Mr. Burgess. Now, why did Texas do that? Were there any other options available to the State other than simply taking title to the CO\2\? Mr. Stewart. Well, in the FutureGen process, there were multiple options promoted such as insurance and indemnification and taking title, and what the decision makers in Texas decided was, from a permanence standpoint, you need an entity that is going to outlast any private entity because of the monitoring and eventual care of the CO\2\ so they decided that a transfer once it has been captured of the CO\2\ to the State is the best management technique from a permanence standpoint. Mr. Burgess. Did they consider any other options? Mr. Stewart. We consider all of them actually, sir. Mr. Burgess. Are there any situations in which that model crafted by the State of Texas would not be applicable to CO\2\ capture where the State or the longest surviving Government entity were to take title to that CO\2\? Mr. Stewart. That is a public policy decision for each State or the Federal Government to make. We thought it was the most appropriate technique to ensure against long-term liability for the whole project. Mr. Burgess. Mr. Fees, is it possible to destroy carbon dioxide rather than to have to pump it back into the Earth? Mr. Fees. I am going to look at my R&D man behind me and see what he has to say. There is a tremendous amount of energy---- Mr. Burgess. Well, the reason I ask is because our anesthesiologist at the hospital used to have this little gizmo that trapped CO\2\ in these rebreathing circuits and would eliminate the CO\2\ from the anesthesia machine but we can't do that---- Mr. Fees. There is a tremendous amount of energy that gets put forth to create CO\2\ at the point of combustion so reversing that process is energy heavy. However, we are doing R&D where we are, for example, taking the enzyme that exists inside of your and my lungs and trying to engineer that enzyme in a wet condition that we can put flue gas through it and use the same technology that exists in our bodies to be able to capture that and to turn the CO\2\ into calcium carbonate and other things that may be friendly to be able to be used post combustion. But those things are way off and we are doing R&D that is directed in that end, but there are things that can be done. Mr. Burgess. Mr. Hawkins? Mr. Hawkins. Well, Mother Nature does this every day, Mr. Congressman. The problem is, we are putting CO\2\ into the air about a million times faster than Mother Nature can handle it. Mr. Burgess. Let me come back to that in just a minute if I could. I wanted to ask Dr. Friedmann, are there some parts of the country that are better for carbon dioxide sequestration than others? Mr. Friedmann. Yes. Mr. Burgess. Which areas are well suited and which are poorly suited? Mr. Friedmann. I described some of that in my testimony and some of that information is---- Mr. Burgess. I apologize. We took all morning to save Medicare and I didn't think I could do it, but I did, so I apologize for being late. Mr. Friedmann. That is OK. Explicitly, I mean my written testimony too, but the Department of Energy has just put--the partnerships have put together an atlas that provides some useful information. From a technical basis in my own estimation, three places stand out right away: Illinois, Texas and the central and northern Rockies but there are actually many other places within the country which have a high capacity and they all look quite good for CO\2\ sequestration, and that resource is available there. Mr. Burgess. What makes an area of the country absolutely unsuitable for CO\2\ sequestration? Mr. Friedmann. Well, there are three things you need to have a project. You need injectivity, which means you can inject at a high rate; you need capacity, which means if you make 300 million tons of CO\2\ you can put it someplace, and you need effectiveness, meaning it has to stay in the crust a long time, and there are places in this country that lack those characteristics. So one example and one that is pertinent is in central Minnesota and Wisconsin, there is a rift basin that goes through the middle of those States that may have those characteristics but we don't know yet. The rest of those States lack those characteristics and could not serve. So the States of Minnesota and Wisconsin are trying to find out quickly whether they have that resource because they would like to be able to use it. Mr. Burgess. And how deep do you have to put the CO\2\? Mr. Friedmann. Bare minimum is something like 800 meters. A good rounding number is a kilometer, and the reason why is because otherwise the CO\2\ is not dense enough. It doesn't have sufficient density to stay in place a long time. You use a lot of poor volume and it has a strong buoyant force. So at typical crustal conditions, 800 meters to a kilometer. Mr. Burgess. Very good. Mr. Hawkins, let me just ask you a follow-up on the CO\2\ question. Many more areas in the country in the last 50 years, U.S. Fish and Wildlife and the U.S. Forest Service have gone to great lengths to reestablish grasslands and forest areas. Has this resulted in any accumulation of carbon in those grasslands or forests that would otherwise just simply have remained in the atmosphere? Mr. Boucher. Mr. Hawkins can answer this but this will be the last question. Mr. Hawkins. The answer is yes. Mr. Boucher. That was a very efficient answer. This has continued for quite a time today and I actually have meetings. There are additional questions I would like to ask. I am going to submit those in writing for response by this panel. So let me say thank you to each of the seven of you for the information you provided to us. You have been very patient today in awaiting your turn to testify, and the information you have offered here has been extraordinarily beneficial to us and we appreciate your assistance. We will have two more hearings on climate change this week and further hearings throughout this month and during the month of April and so for those who are interested, there will be no shortage of conversation on this entire range of issues. Mr. Markey. Mr. Chairman. Mr. Boucher. Yes, Mr. Markey? Mr. Markey. May I ask one question? Mr. Boucher. Mr. Markey, yes, for 30 seconds. Mr. Markey. OK. I thank the chairman. Just back and forth between Mr. Hawkins and Mr. Fees, that is under the contention that Mr. Fees made that his new 300- megawatt commercial plant using his new technology is already commercially available. So my question is, why aren't people buying it? Why aren't people already investing in them and why aren't they avoiding, in other words, a cap and trade system and all the rest of the headaches? Why isn't the coal industry investing in right now if they are already available and they are, as you are saying, competitive with the alternative technology? Mr. Fees. We are moving that technology forward through an R&D to deployment phase and it will be deployed, operating and running in 2011. We are in discussions with other customers for the potential of applying the same technology whether it be retrofit against existing boiler locations or for new boiler locations in the United States. But to say that it is up and running and I can point to one that is operating today, that is not correct. Mr. Markey. I see. OK. That is a misunderstanding then. Mr. Hawkins? Mr. Boucher. Mr. Markey, thank you. Our time really has expired here today. Gentlemen, thank you very much, and this hearing stands adjourned. 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