Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

Carbon capture and sequestration, as the process is known, involves injecting carbon dioxide, a chief greenhouse gas produced by burning fossil fuels, into underground formations to prevent it from reaching the atmosphere.

Promoted heavily in some quarters, the technology has become controversial with environmentalists, partly because of its association with coal. Just this week, the environmental group Greenpeace issued a scathing critique of the technology's use in conjunction with coal, concluding it won't be available in time to save the planet's climate and could consume up to a 40 percent share of a power plant's capacity (see press release here; access report here).

The California project will be located at a plant near Bakersfield operated by Clean Energy Systems. Late last year, the company described the operation as using either natural gas or synthetic gas derived from coal (see text of press release here). Carried out under the auspices of the West Coast Regional Carbon Sequestration Partnership, a public-private partnership partially funded by the energy department, about a million tons of compressed carbon dioxide is expected to be pumped into a geologic formation more than a mile underground.

Adam Gottlieb, a spokesman for the California Energy Commission, which manages the regional partnership,  said he did not believe the plant, expected to be in operation by mid-2010, would rely on coal as a fuel source. The commission's statement suggested that the technology could also be used by industries such as cement plants and refineries. 

"If we can have other industries embrace this technology, not only for economic reasons but for environmental reasons, it's a win-win all around," he told Climate Law Update. 

Keith Pronske, Clean Energy's chief executive officer, told Climate Law Update his plant, which relies on aerospace technology, would likely use natural gas but could rely on other fuels, including renewables.

"What we're focused on is the carbon capture part and it's to have clean energy with captured carbon dioxide from a multitude of fuels," Pronske said. He said carbon dioxide could also become a commercial commodity, sold to be injected under old oil fields as a way of increasing their productivity.     

In the other project, to be carried out by the Midwest Regional Carbon Sequestration Partnership, another million tons of the gas is expected to be injected into a sandstone formation in Ohio about 3,000 feet under an ethanol production facility. That project is slated to get about $61 million. Both projects also anticipate additional millions of dollars coming from industry. 

The projects are the fifth and sixth to be funded by the department in the current phase of its  carbon sequestration program involving the regional partnerships. In addition to promoting at clean coal, the department said the technology would help meet President Bush's recently stated goal of stopping the growth of greenhouse gas emissions by 2025 (see Climate Law Update story here). 

Regarding FutureGen, the energy department in January backed away from its original plan to spend upwards of $1 billion to build a virtually zero-emissions power plant, eventually slated for a site in Illinois (see press announcements here and here). Under the new program, the department outlined a plan to solicit proposals for multiple plants, toward which the government would supply between $100 million and $600 million per project. About $1.3 billion is anticipated to be available over the years, the department estimated.

One goal of the government's overall effort is to reduce the whopping $100- to $300-ton cost of the technology (see DOE background information here).

(Photo: Artist's conception of hypothetical FutureGen plant, Department of Energy) 

Here's the Times' description of the opposition:

The 21-point "Environmental Justice Movement Declaration" challenges the stance of Gov. Arnold Schwarzenegger (pictured above with New York Gov. George Pataki discussing an emissions market program in 2006), a national advocate of a cap-and-trade program that would allow heavy polluters, often located in poor neighborhoods, to partly buy their way out of lowering their emissions.

"Under a trading scheme, 11 power plants to be built around Los Angeles could offset emissions by extracting methane from coal seams in Utah or planting trees in Manitoba," said Jane Williams of the California Communities Against Toxics, which fights pollution in low-income areas.

The defiant tone of news conferences in Los Angeles, Fresno, Oakland, Sacramento and San Diego indicated that political turbulence might be ahead as the state Air Resources Board hammers out a strategy to drastically reduce greenhouse gas emissions, as required under a 2006 law.

Joining Williams in leading the movement was Angela Johnson Meszaros, director of the California Environmental Rights Alliance. They are co-chairs of the California Air Resources Board's Environmental Justice Advisory Committee. That panel was established under California's AB 32, the 2006 law mandating sharp reductions on emissions blamed for changing the planet's climate. 

In addition to Schwarzenegger, cap and trade schemes, at least for the electricity sector, have drawn support from the California Public Utilities Commission President Michael R. Peevey, large sectors of the utility industry such as Pacific Gas and Electric Company and even garnered cautious backing from environmental groups, such as the Natural Resources Defense Council.

In order to implement its landmark 2002 law limiting automobile climate-changing emissions, California sought a needed a waiver from the EPA. Johnson said. no. The paper summed up the controversy over the California standards this way:

In December, Mr. Johnson angered a swath of environmental interest groups and governors in more than a dozen states, including California Gov. Arnold Schwarzenegger, by blocking California's efforts to curb greenhouse-gas emissions from automobiles.

In so doing, Mr. Johnson went against the advice of many of his EPA colleagues and delivered a huge victory for auto makers, which feared an onslaught of costly new state regulations. That decision has triggered a lawsuit by California and more than a dozen other states, as well as multiple congressional investigations seeking to determine how Mr. Johnson reached his conclusion.

The agency's lawyers told Mr. Johnson last year that California had a compelling need for the waiver, and that the EPA was likely to lose in court if sued over denying it, according to congressional aides who were allowed to see an internal EPA presentation turned over to a House committee under subpoena. The EPA asked the panel not to copy or disseminate the documents, saying they could be cited in litigation and "potentially impede the government's ability to defend its actions."

Despite the fact that some Republicans, including Schwarzenegger, disagreed with the determination, the paper reported that Johnson's sharpest critics have been Democrats.

The paper also reprised a controversy that erupted after Johnson spoke at a Republican fund-raising event "attended by representatives of various companies with business before the EPA. The event occurred at the offices of the former law firm of the disgraced lobbyist Jack Abramoff, whose crimes were a major campaign issue in 2006." Despite criticism by Democrats, the U.S. Office of Special Counsel recently concluded Johnson had not broken any federal law, the Journal reported.

The state's largest utilities, including PG&E, have until 2010 to meet the state's demands.  The Chronicle noted that the standard, which state policy makers are now working to boost to 33 percent, has been tough to meet:

Even PG&E's achievement comes with a caveat. The company now has enough power contracts to hit 20 percent, but some of those contracts won't kick in until after the state deadline passes, delivering power to PG&E customers in 2011. That isn't a legal problem. If a utility falls just short of 20 percent by the end of 2010, it can still comply with the law by overshooting the 20 percent goal the following year.

But that caveat underscores the difficulty utilities have had in meeting California's ambitious renewable-energy goals. Simply put, the state does not have enough geothermal generators, wind farms and solar power plants to produce as much clean energy as California's politicians and citizens want. More renewable-power projects have been proposed, but it's an open question how many will get built. 

Nevertheless, numerous projects are on the drawing boards and the state's ambitious goals would seem to provide significant incentives for at least some of them to go forward, and quickly, as California attempts to meet its self-imposed demands to reduce greenhouse gas emissions under legislation such as 2006's AB 32.

The panel, which adopted its final report February 11, clearly foresees that virtually no individual nor business will avoid the impact of meeting the anticipated reductions:

   Policies implemented under AB 32 and the Governor’s Executive Order for 2050 must address all sectors of California’s economy so that all significant sources of GHG emissions participate in both the challenges and opportunities afforded by this critical piece of state legislation. This broad-scaled approach is the most likely to create a level playing field, and address new alternative energy sources and fuels that could be used in multiple sectors. For example, policies need to recognize that electricity and biofuels will likely compete with more traditional transportation fuels in the future; therefore, policies that address only the electric sector or only the petroleum refining sector are unlikely to achieve the goals of AB 32.

The report outlines 55 recommendations for meeting the challenges posed by the state's political leaders covering virtually all sectors of the economy, including financial institutions; transportation; energy use by industry, commerce and residents; electricity and natural gas; agriculture; forestry and water. Among the eye-catching projections in the report: California's future sources of electricity and transportation and heating fuels will have to be virtually carbon-free by 2050. Renewable energy technologies, including wind and solar, the report said, offer the "technical potential" to generate all of the state's electricity, despite a number of technical and implementation obstacles that will need to be overcome.

Among the report's recommendations is the establishment of a "California Carbon Trust" that could use money, likely coming from an auction of emission allowances, to encourage reductions in carbon beyond whatever cap is established and to further other goals, such as funding research and development projects. It also includes recommendations for residential planning efforts to encourage "transit villages," new forms of automobile insurance designed to give drivers financial incentives to spend less time behind the wheel, and taking steps to encourage the development of renewable energy so that one-third of the state's power can be generated by such means.

The full air board, which is the lead agency implementing California's greenhouse gas-fighting efforts, was scheduled to get its first formal look at the report on February 28. The board is chaired by Mary Nichols, a Schwarzenegger appointee.