AEP puts brakes on touted carbon capture project

July 14, 2011 by Ken Ward Jr.

Gazette photo by Lawrence Pierce

The New York Times broke the story late last night:

A major American utility is shelving the nation’s most prominent effort to capture carbon dioxide from an existing coal-burning power plant, dealing a severe blow to efforts to rein in emissions responsible for global warming.

American Electric Power has decided to table plans to build a full-scale carbon-capture plant at Mountaineer, a 31-year-old coal-fired plant in West Virginia, where the company has successfully captured and buried carbon dioxide in a small pilot program for two years.

The technology had been heralded as the quickest solution to help the coal industry weather tougher federal limits on greenhouse gas emissions. But Congressional inaction on climate change diminished the incentives that had spurred A.E.P. to take the leap.

Let’s read that last sentence again:

But Congressional inaction on climate change diminished the incentives that had spurred A.E.P. to take the leap.

We’re waiting this morning for an official announcement from Columbus, Ohio-based AEP.

Updated: Jeri Matheny, a spokeswoman for AEP, confirmed the development to me this morning:

We are tabling the project. It’s disappointing that we had to do that. It was a business decision that we had to make.

Updated 2: I’ve posted a copy of AEP’s news release here.

But one thing to be clear about is that the Times seems just a little confused about the size of the project involved here.

Reporters Matthew L. Wald and John M. Broder describe it as a “full-scale carbon-capture plant” at the company’s Mountaineer Power station in New Haven, Mason County. But, they go on to discuss a $668 million project that the U.S. Department of Energy had pledged to provide half of the funds to complete.

Regular readers of Coal Tattoo know that AEP has been working on a test project that would capture and store a small stream of the carbon emissions from Mountaineer, and that the partially DOE-funded expansion was really for a larger pilot project — not for full-scale CCS on the entire facility. As we described previously:

AEP’s Mountaineer Plant CCS project is among the most important tests of technology aimed at controlling greenhouse gas emissions from coal-fired power plants. But, the current test deals with an emissions stream equivalent to only 20 megawatts of the 1,300-megawatt plant. The federal funding would cover about half of the costs of expanding AEP’s chilled ammonia carbon capture process to cover the equivalent of 230 megawatts of the plant. (Still less than 20 percent of the overall facility).

Still, this is a major story … and it’s worth reading how the Times describes the reasons for this AEP decision yet again:

… Congressional inaction on climate change diminished the incentives that had spurred A.E.P. to take the leap.

The Times story elaborated:

Company officials, who plan an announcement on Thursday, said they were dropping the larger, $668 million project because they did not believe state regulators would let the company recover its costs by charging customers, thus leaving it no compelling regulatory or business reason to continue the program.

The federal Department of Energy had pledged to cover half the cost, but A.E.P. said it was unwilling to spend the remainder in a political climate that had changed strikingly since it began the project.

“We are placing the project on hold until economic and policy conditions create a viable path forward,” said Michael G. Morris, chairman of American Electric Power, based in Columbus, Ohio, one of the largest operators of coal-fired generating plants in the United States. He said his company and other coal-burning utilities were caught in a quandary: they need to develop carbon-capture technology to meet any future greenhouse-gas emissions rules, but they cannot afford the projects without federal standards that will require them to act and will persuade the states to allow reimbursement.

An Obama administration source, quoted anonymously by the Times, said:

This is what happens when you don’t get a climate bill.

UPDATED 3: David Hawkins, director of the climate center at the Natural Resources Defense Council, had this reaction to the AEP announcement, telling me in an email:

This decision is bad news for all concerned. While the days are numbered for many coal plants, many others around the world will continue to operate and CCS is essential to cut carbon pollution from those plants. The principle blame for this shortsighted decision belongs to the polluter lobbies who killed climate protection legislation in the last Congress and to the legislators who were cowed by those lobbyists. Unfortunately, climate disruption is not prevented by denying the problem and decisions like the one announced by AEP will add to the disruption we all face.

This project was being touted just the other day by Obama EPA Administrator Lisa Jackson, as an example of the sorts of clean and green energy jobs the administration was helping to create in Appalachia.

[President Obama] has shepherded and stewarded everything form the recovery act which had tens of billions of dollars in investment in cleaner form of energy, including a carbon capture and storage project right in West Virginia at, I think it’s an AEP plant, Mountaineer.

Energy Secretary Steven Chu has likewise touted the AEP-DOE project:

By harnessing the power of science and technology, we can reduce carbon emissions and create new clean energy jobs. This investment is part of our commitment to advancing carbon capture and storage technologies to the point that widespread, affordable deployment can begin in eight to ten years.

But what are West Virginia political leaders like Sen. Jay Rockefeller going to say now? Rockefeller in particular has touted this project (sometimes misstating its size and scope … perhaps the Times got that from him), and has said the nation should put off any limits on greenhouse emissions until projects like AEP’s have a chance to be tested and proven.

All along, though, experts continued to warn that the only way to make CCS a reality would be for our nation’s leaders to put in place some meaningful plan for dealing with the climate crisis, including actual limits on greenhouse emissions. See previous coverage of that here, here and here. And AEP itself has been pretty frank about the fact that it supported congressional action to limit carbon dioxide emission, and felt such a program was needed to make projects like Mountaineer viable.

UPDATED: Here’s a statement just issued by Sen. Rockefeller’s office —

AEP and Alstom have made critical strides in developing clean coal technology. Proving its dedication to the issue, AEP even spent over $100 million of its own money for this CCS research and development project. Because of these efforts, we have learned a great deal that will help us get closer to fully deploying this important technology. Unfortunately, the financing to continue this demonstration project to Phase II just isn’t available. Nonetheless, I sincerely hope and believe that it will lead to other opportunities, and eventually help pave the way to a bright energy future for West Virginia and build jobs in our state.

Coal boosters like Sen. Rockefeller — and the rest of West Virginia’s congressional delegation and other elected leaders — didn’t listen to the experts on CCS, and opposed any sort of climate bill. They continue to oppose any emissions limits regulation from EPA … What was it that White House official told the Times?

This is what happens when you don’t get a climate bill.

19 Responses to “AEP puts brakes on touted carbon capture project”

  1. Bubba says:

    Isn’t this one of the main reasons why they have been raising our rates? Not only the cost of coal but to pay for these improvements? Does this mean the PSC will be lowering my power bill?

  2. Jim Sconyers says:

    In he fine print – as so often, it’s all about money. AEP bails because they suspect our PSC may not allow them to make citizen ratepayers pay the cost of this ill-advised boondoggle.

  3. Jim Sconyers says:

    In the fine print – as so often, it’s all about money. AEP bails because they suspect our PSC may not allow them to make citizen ratepayers pay the cost of this ill-advised boondoggle.

  4. Montanus says:

    It wasn’t exactly the case that “the rest of West Virginia’s congressional delegation and other elected leaders” dismissed the obvious facts on the ground about the need to create a new federal revenue stream (via a carbon market) in order to generate enough money to finance the clean-up and preservation of America’s coal-fired generating fleet.

    Senator Robert C. Byrd actually engaged in drafting climate legislation that would have kept the Mountaineer plant afloat — the Kerry-Boxer climate bill, which would have provided $100+ billion for projects like the Mountaineer plant.

    As everyone should know, the government is too broke to pay for multi-billion-dollar carbon capture projects out of the general fund of the Treasury. Byrd understood that, and he worked on a new energy policy that acknowledged the new budget reality (and the new climate change reality) and sought to protect coal’s market share in light of those new realities.

    Sen. Rockefeller should be called on the carpet for claiming that the money “just isn’t available” for this project. I thought that part of Rockefeller’s pretenses for opposing the Kerry-Boxer climate bill (which would have provided $100+ billion for carbon capture) was that we had other plentiful sources of funding to pursue these multi-billion-dollar “Manhattan project” initiatives for carbon capture. It is now clear (as it always was) that his argument was a red herring — an effort to avoid the difficult work of passing major energy & climate legislation that could really have substantially bolstered central Appalachian thermal coal production during the coming decades.

    Somewhat paradoxically, the Nation’s decision to abandon the Kerry-Boxer climate bill might have been one of the worst things that could have been done for the long-term prospects of domestic thermal coal utilization.

    The abandonment of the Mountaineer project underscores these basic facts:

    Carbon capture technology has a dim future if there are no federal policies to subsidize it.

    There is no politically practical way to subsidize commercial-scale carbon capture projects without a cap-and-trade carbon market.

    Coal’s market share is going to suffer because America has not established a cap-and-trade carbon market that would generate the necessary funding to support projects like the Mountaineer plant.

    Coal miners will lose jobs and suffer as coal plants shut down, but coal executives can easily move to other industries, and electric utilities can move to other fuels.

    In typical fashion for the national Republican Party, their opposition to Democrats’ climate policy will turn out to be good for corporate executives — but bad for the working man.

  5. Jeff Altizer says:

    Stark reality: a business will make business decisions.

    Does everyone really expect AEP to shoulder the cost of R&D of a technology to this magnitude, even if the cost is cut in half? I have several points that span different topics, I will try to stick to the high points.

    The engineering side: The technology to do this is evolving, but slowly. The major question is what do you do with the CO2 once it is captured. At the rate we use the energy, the capacity to safely and securely store the CO2 just isn’t there. Do you build infrastructure to ship it elsewhere? Weighing the cost/advantage ratio, the numbers simply are not there.

    The climate debate side: There is no solid proof CO2 has changed the climate. Everything available is theory.

    The economic side: If I read/understand the statement above correctly the gov’t is investing $668 Mil to install a system for 115 MW (1/2 of 230MW). Doing the math, just for this one plant this technology would cost an estimated $7.55 Billion. (and those are the estimated numbers, in reality it is tough to estimate and would probably cost more)

    The logical side: The scientific proof does not support the financial strain the cost would place on the citizens of this country or the customers of AEP, especially in this economic climate.

  6. Ken Ward Jr. says:

    Montanus,

    Thanks for your point regarding Sen. Byrd. Shame on me for not making that clear.

    Jeff Altizer,

    Could you provide some links to peer-reviewed scientific research that support the nation that, as you write:

    “The scientific proof does not support the financial strain the cost would place on the citizens of this country or the customers of AEP, especially in this economic climate.”

    Thanks, Ken.

  7. PJD says:

    Jeff wrote:

    “The climate debate side: There is no solid proof CO2 has changed the climate. Everything available is theory.”

    I’m not sure what constitutes “proof” to you. Even Newtons Laws are not “proven”. And any person familiar with science knows that “theory” does not means “tentative hypothesis”. You seem toi have a poor understanding of the word. Material mechanics “theory” is relied on to hold the building up where you are sitting. Electromagnetic and Quantum “theory” runs your computer, and fluid mechanics “theory” makes the water come out of your tap and birds and airplanes fly. The theory on the role of atmospheric CO2 and climate is equally as overwhelmingly supported by the scientific community. The theories on role of rapid increase in qtmosphereic CO2 in catastrophic mass-extinctions in the geoligic past are only a little less robust.

  8. Ken Ward Jr. says:

    Montanus —

    One other thing, though … you wrote:

    “In typical fashion for the national Republican Party, their opposition to Democrats’ climate policy will turn out to be good for corporate executives — but bad for the working man.”

    In West Virginia, Reps. Rahall and former Rep. Mollohan voted against the Waxman-Markey bill. Sen. Rockefeller said he would vote against it. Then-Gov. and now Sen. Manchin certainly opposes such legislation.

    Aren’t you letting Democrats in West Virginia off a little easy? It’s their constituents who might be most hurt here …

    Ken.

  9. Ken Ward Jr. says:

    Folks,

    Concerning rate increases or passing through to customers the cost of this project … Mr. Morris of AEP said in the company’s press release:

    “But as a regulated utility, it is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place.”

    However, the NY Times notes:

    “Public service commissions of both West Virginia and Virginia turned down the company’s request for full reimbursement for the pilot plant. West Virginia said earlier this year that the cost should have been shared among all the states where A.E.P. does business; Virginia hinted last July that it should have been paid for by all utilities around the United States, since a successful project would benefit all of them.”

    You can read the West Virginia PSC ruling on this starting on page 44 of this document (page 44 of the document, not the pdf file):

    http://www.psc.state.wv.us/scripts/WebDocket/ViewDocument.cfm?CaseActivityID=317851

    Ken.

  10. Jeff Altizer says:

    PJD… let’s break it down a little further. Global warming is a hypothesis that needs to have a proof. Furthermore, a proof is needed that leaves no questions as to its validity. (Please reference the need for SOx and NOx equipment.)

    Ken… we have discussed this many times. I can go find as many sources as you but the fact of the matter is there is always opinion inserted (in both sides), thus in my mind the meat of the topic is convoluted. [By opinion I mean studies looking for specific results, being funded by one side or the other, etc…]

    To spend Billions of dollars on anything I need evidence beyond the shadow of a doubt, period.

  11. Ken Ward Jr. says:

    Jeff,

    Thanks for the continued discussion.

    You write:

    “To spend Billions of dollars on anything I need evidence beyond the shadow of a doubt, period.”

    That simply means that your priority is money, as opposed to the future of human-kind.

    But your personal priorities aside … when you have posted on this issue previously, and been asked for studies or science, you’ve responded with links to articles in the popular press. That doesn’t meet the smell test.

    So let’s try this again … you wrote:

    “The scientific proof does not support the financial strain the cost would place on the citizens of this country or the customers of AEP, especially in this economic climate.”

    How about you provide 1 link or citation to one peer-reviewed article from a scientific journal that you believe supports this statement. Just one. Peer-reviewed. From a scientific journal.

    I will in kind point you to the most recent summary by the National Academy of Sciences, which reported:

    Climate change is occurring, is very likely caused by human activities, and poses significant risks for a broad range of human and natural systems. Each additional ton of greenhouse gases emitted commits us to further change and greater risks. In the judgment of the Committee on America’s Climate Choices, the environmental, economic, and humanitarian risks of climate change indicate a pressing need for substantial action to limit the magnitude of climate change and to prepare to adapt to its impacts.

    There’s a link to the academy’s report with this blog post: http://blogs.wvgazette.com/coaltattoo/2011/05/12/new-national-academy-study-outlines-pressing-need-for-substantial-action-on-global-warming/

    Ken.

  12. Thomas Rodd says:

    It could be that political partisanship is going to be, for the short term, the biggest obstacle to enacting needed climate policy in the USA.

  13. Montanus says:

    Ken,

    I apologize if it seemed like I was letting off the WV Dems too easily.

    You’re absolutely correct that their WV constituents are going to be hurt –most especially the very coal miners whom they are supposedly helping by resisting passage of moderate, balanced federal climate change legislation.

  14. Phil Smith says:

    Tom: Excessive, poisonous political partisanship IS the biggest obstacle to enacting ANY needed policies in the USA, climate or otherwise.

  15. Thomas Rodd says:

    My previous comment was suggesting, rather inartfully, is that perhaps the recent unsuccessful effort at passing climate change legislation failed in large part due to political partisanship.

    Will the next such effort be much more bipartisan? Seems like it will have to be.

    So, let’s get started!

    What about a group of West Virginia Republicans and Democrats who are willing to take these first steps: (1) publicly acknowledge the need for substantially reducing global carbon emissions; and (2) commit to a dialogue process, to find common ground.

    This could be be a positive step. Isn’t there enough money and good sense among the office towers of Charleston, West Virginia to make it happen?

  16. Jeff Altizer says:

    Ken,

    Simple google search (I don’t get paid to research these topics):

    If The Globe Is Warming Why Are The Oceans Not?

    The School of Oceanography at the University of Washington undertook a comprehensive study of the earth’s recent ocean surface temperatures (with funding from NOAA) and came up with equally surprising results.

    “The ocean neither cooled nor warmed systematically over the large parts of the ocean for the entire analysis period.” — School of Oceanography at the Univ of Washington funded by NOAA. See the following World Climate Report article
    “there is large spatial variability of 51-yr trends in the upper ocean, with some regions showing cooling in excess of 3°C, and others warming of similar magnitude. Some 95% of the ocean area analyzed has both cooled and warmed over 20-yr subsets of this period” — Abstract from “Is the world ocean warming? Upper-ocean temperature trends: 1950-2000″. Journal of Physical Oceanograph

    The “analysis period” was from 1950-2000 when most of the earth’s warming was suppose to have occurred and during a time of increasing CO2 levels. If there has been any “global” climate change during the past 58 years (temperatures have been remarkably stable since 1998) the oceans missed out on it. From the World Climate Report article discussing this study “you cannot help but notice cooling in all five graphs for the 1980-1999 time periods”, this was during a period where the IPCC tells us there should have been significant warming.

    http://www.globalwarminghoax.com/news.php?extend.50

  17. Jeff Altizer says:

    My thoughts are not entirely money based but in this discussion it seems the economics are not taken into account. I try to play the devil’s advocate in many conversation/discussions inserting areas I believe have been neglected. In this case, the economic burden created by the political platform called global warming.

  18. Elizabeth says:

    Jeff, economic burdens will seem trivial once we have passed the point of no return with climate change. The economic burdens of those facing the loss of land due to higher sea levels is already occurring. Economic burdens are currently felt by communities experiencing drought, flooding, tornadoes,etc. Economic burdens are felt by families experiencing asthma, cancer, and other illnesses resulting from proximity to coal fueled power plants or other mining operations. We can avoid the type of burden you speak of if, as Tom said, we can get a bipartisan group of leaders together to work on how to transition our state to an economy that will include coal but is not dominated and held hostage by it. We will not avoid it by ignoring science or by denying it.

  19. Ken Ward Jr. says:

    Jeff Altizer,

    you quoted from a website called global warming hoax, arguing that the world’s ocean temperatures are not warming …

    I would refer you to the summary of such science and data contained in the most recent IPCC reports. I’m citing the summary for policymakers, but I’m happy to go into the more detailed technical report if you’d prefer …

    http://www.ipcc.ch/publications_and_data/ar4/wg1/en/spmsspm-direct-observations.html

    The IPCC concluded here:

    “Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and OCEAN TEMPERATURES widespread melting of snow and ice, and rising global average sea level.” (emphasis added)

    Specifically, they found:

    “Observations since 1961 show that the average temperature of the global ocean has increased to depths of at least 3000 m and that the ocean has been absorbing more than 80% of the heat added to the climate system. Such warming causes seawater to expand, contributing to sea level rise.”

    You might find more by clicking on this link:
    http://www.ipcc.ch/publications_and_data/ar4/wg1/en/tssts-3-3-1.html

    For example:
    The world ocean has warmed since 1955, accounting over this period for more than 80% of the changes in the energy content of the Earth’s climate system. A total of 7.9 million vertical profiles of ocean temperature allows construction of improved global time series (see Figure TS.16). Analyses of the global oceanic heat budget have been replicated by several independent analysts and are robust to the method used. Data coverage limitations require averaging over decades for the deep ocean and observed decadal variability in the global heat content is not fully understood. However, inadequacies in the distribution of data (particularly coverage in the Southern Ocean and South Pacific) could contribute to the apparent decadal variations in heat content. During the period 1961 to 2003, the 0 to 3000 m ocean layer has taken up about 14.1 × 1022 J, equivalent to an average heating rate of 0.2 W m–2 (per unit area of the Earth’s surface). During 1993 to 2003, the corresponding rate of warming in the shallower 0 to 700 m ocean layer was higher, about 0.5 ± 0.18 W m–2. Relative to 1961 to 2003, the period 1993 to 2003 had high rates of warming but in 2004 and 2005 there has been some cooling compared to 2003. {5.1–5.3}

    I look forward to your response.

    Ken.

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