Sunday, August 14, 2016

Piles of dirty secrets behind a model "clean coal" project

Piles of dirty secrets behind a model "clean coal" project
New York Times, 5 July 2016, by Ian Urbina

This is a sad story of failure and fraud at the frontiers of clean energy research: the Kemper "clean coal" plant in Mississippi.  The Kemper plant was supposed to capture the CO2 emitted from the combustion of coal, preventing its release into the atmosphere.  The captured CO2 would then be pressurized, piped to oilfields, and pumped underground to facilitate the extraction of oil while simultaneously sequestering the CO2 underground (permanently, it is hoped).  The plant was the U.S.'s big exploratory investment in this technology, called "carbon capture and sequestration" (CCS), and has been talked about as a "central piece" of Obama's plan to reduce greenhouse gas emissions.  However, the plant is now more than $4 billion over budget, two years behind schedule, and is being sued for fraud by ratepayers and investigated by the Securities and Exchange Commission – and all this before it has even started operations.  The Times has done some good investigative journalism here, detailing the saga in all its sordidness, including reviews of extensive documents provided by a whistleblower and interviews with many people on all sides of the situation.   There is plenty of blame to be shared: corporate executives, government officials, and regulators all had a hand in mismanaging the plant and covering up the problems.  Meanwhile, work on the plant continues, and ratepayers and taxpayers continue to foot the bill.

My take: This article serves as a counterpoint to the previous article I reviewed, on a carbon sequestration project in Iceland that appears to be wildly successful.  This article illustrates the flip side of that: carbon sequestration is hard, most of our attempts at it have failed, it remains very expensive, and although the benefits of success in this arena would be immense (and thus we ought to keep trying), we cannot afford to assume that we will succeed.  "Clean coal" has been a favorite mantra of the Obama administration, since it provides the possibility to have our cake and eat it too by being able to continue burning fossil fuels while avoiding the climate impact of the resulting CO2.  But the failure of the Kemper plant underlines the unresolved problems with this technology, and the importance of developing alternatives for baseline power.  This article also illustrates for me why having the government "pick winners" in energy and climate policy is dangerous.  The amounts of money involved, and the political pressures at work, are staggeringly large, and so when a "winner" is picked by the government, the result is often – as with Kemper – regulatory capture, mismanagement, coverups, and ultimately bailouts.  A carbon fee-and-divided scheme avoids these problems by changing the incentive structure (by incorporating the negative externalities of CO2 emissions into the price structure) and then allowing free market competition to arrive at the winners, whatever technologies they might be.  Lots of important lessons to be learned here.

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