NCSL Advanced Coal Technologies Energy Institute
Tampa, Florida — October 31- November 2, 2007
Notes from Thursday facilitated discussion
Cross-Cutting Themes
A. Infrastructure
B. Cost Recovery
C. Regulatory & Statutory
D. Research, Development, and Demonstration
E. Ratepayer Education & Outreach (industrial, households, etc.)
F. Inter & Intra Governmental Education and Collaboration (legislators, governors, regulators, etc. across jurisdictions)
I. Question Number One: Based on the presentations and discussion today, what are the major policy opportunities to help commercialize advanced coal technologies and carbon capture and sequestration (CCS) in your state, and where applicable, in your region?
a. Mike Gregerson facilitated Group
i. Regulatory structure appears to be a requirement that will clear up a pathway for the industry to move ahead with
projects.
ii. States may have to evaluate their strengths so that they can reach agreement to focus on the policy debates that will
be most useful and productive for their state and customers.
b. Jennifer Johnson facilitated group
i. Research, Development & Demonstration support
i. Need for more R&D with the real goal/outcome of steel in the ground.
ii. Need for more R&D to know how to do this right.
iii. Optimize the potential of the technology and identify potential bi-products.
ii. Tax incentives to support the technology.
iii. Education & Outreach on the issues to the public & government officials (governors, legislators, regulators, etc.).
i. Get public input to learn the public’s reaction and knowledge base.
iv. Education: preparing students for skilled careers in the energy industry.
v. Pro-active action by states to show leadership prior to federal government engagement.
c. Courtney Welch facilitated group
i. Early cost-recovery
i. Build cost recovery mechanisms into consumer/industrial consumption rates.
ii. Tax incentives to help commercialize the technology.
iii. Collaboration between regulatory agencies and state legislature to create a more open and educated dialogue
between regulators and state legislators.
d. Kate Burke facilitated group
i. Recognition of CO2 as a commodity
ii. Allow movement of CO2 through pipeline
i. Need to designate recipient(s) and ownership
ii. Who owns the CO2 in the pipeline and at which point?
iii. Interstate compacts for transport and eventual storage.
iii. Look at low-level waste/radioactive depositories as a model.
i. Investigate the possibility of designated states for CO2 storage
ii. CO2 storage compacts.
iv. Review of Indiana and Kansas incentives for deployment of IGCC, EOR, CO2 capture utilizing algae based processes
along with storage from manmade sources for possible replication.
v. Use of Indiana and Kansas legislation mentioned above as models.
vi. Legislation on “who owns what”.
i. Use Kansas mineral rights as model.
vii. Address issues regionally.
e. Eric Schroeder facilitated group
i. Retain nuclear storage money sent to the federal government to be used for CCS infrastructure or other incentives.
ii. Infrastructure needs for CCS pipelines should be a first tier priority (noting an opinion that tax incentives are not
sufficient to fully incentivize projects to move ahead).
iii. Certainty of carbon storage comes from certainty of the cost/value of carbon.
iv. Frame deployment of IGCC w/CCS as rural economic development.
v. Address the issue regarding the certainty of future power availability for large industrial users if policies change to
make old technology economically unviable for continued use.
vi. Provide price certainty price on carbon with a gradual phased-in approach (coming from emitters), step back and the
rest will follow.
f. Kristy Monk facilitated group (speakers)
i. Guarantee on cost recovery and return on investment
i. Environmental bond
ii. Commodity charge
iii. Socializing cost but with a concern of framing the “local” benefit
ii. Regulatory certainty
i. CO2 regulation
iii. CCS regulation needs to be in place prior to having new plants required to have it.
iv. Define CCS as a clean energy option.
v. Define CO2 used for EOR as a clean energy option (not emitted-not waste).
vi. Facilitate interstate CO2 pipeline agreements.
II. Question Number Two: What are the major challenges to making advanced coal and CCS projects a reality that policy needs to address?
a. Mike Gregerson facilitated group
i. Some states like Montana are deregulated and don’t need and/or want to do anything with policies on CCS now.
ii. CO2 being considered a commodity or waste still appears to be an issue.
iii. The EU will make deal with classification by making a new category for CO2.
iv. The EU legal approach is conceptually similar to IOGCC and may provide some states/regions a way to deal with
various legal issues.
v. Long term liability needs to be resolved on this issue since most developers don’t want to accept any long term liability
for sequestered CO2.
b. Jennifer Johnson facilitated group
i. Statutory & Regulatory issues need to be solved
i. States need to figure out what they have on the books already and what are the barriers to be able to adapt
model legislation (e.g. IOGCC recommendations).
ii. The permitting process for advanced coal technologies needs to be improved.
iii. Certainty on these issues is necessary to move advanced coal technologies forward.
ii. Rate Increases.
i. How do legislators and regulators deal with rate recovery for utilities and possible backlash from ratepayers
if rates increase as a result of investing in advanced coal technology.
iii. Environmental opposition to CCS.
i. Some environmental groups appear to be opposed to fossil fuels in general.
c. Courtney Welch facilitated group
i. Liability/Jurisdiction over cavity/pore space where carbon will be sequestered.
ii. Federal v. State issues.
i. Should a state take action now if federal government will overlap or override efforts made in the states?
ii. Problems with state and regional overlap-physical overlap when sequestering carbon.
iii. Inconsistency between states
iv. Inconsistency between state and federal regulations/legislation
iii. Provincialism
i. State legislators address issues of generation, pipelines, and sequestration generally only within their own
state’s boundaries.
ii. Each state is unique:
a. Imports v. Exports.
b. Many resources v. No resources.
iv. Massive infrastructure needed nationally as well as within individual states.
v. Educating the public and rate-payers in general.
i. Explaining why rates are going to be increased and gaining public acceptance and support.
vi. Anyone’s business is everyone’s business
i. Who is taking notes on what everyone else is doing? How to inform and keep informed individual states on
what other states are doing?
ii. Gathering comprehensive information and making it readily available and easily accessible.
vii. Do we regard CO2 as a commodity or a waste?
i. Establish incentives/penalties or ignore it?
ii. Need a better definition of what CO2 means to states as well the federal government.
d. Kate Burke facilitated group
i. Cost and cost recovery.
i. Costs of energy born by lowest income groups.
ii. Costs that are passed on to all consumers.
iii. Costs to build new infrastructure.
ii. Issues with building new infrastructure (e.g., environmental implications, costs)
iii. Regulatory Environment
iv. Political Uncertainty
v. Liability - Sequestration – who’s liable for leakage (may look to hazardous waste and municipal waste as a model)
vi. Environmental implications.
vii. Capturing CO2 from other sectors (e.g., ethanol, coal to liquid, gas)
viii. Global Green House Gas emissions.
i. Context reference to China passing the US in CO2 emissions this year.
ix. Federal action.
e. Eric Schroeder facilitated group
i. Certainty of storage.
ii. Compare the CO2 profiles of different power generation (Nuclear/efficiency/renewable/NG).
iii. Provide certainty of cost recovery from:
i. FEED studies
ii. Construction costs
iii. Goal to provide investors with certainty on return of investment.
iv. Compile an inventory of emitters.
v. Cap and Credit.
i. Initiate a mechanism to provide a credit to the emitter if the emitter reduces emissions under that level and
a penalty if they exceed.
ii. Penalties and credits can be graduated.
iii. Penalties and credits can be phased.
vi. Environmental Tort Reform
i. Limit the liability of lawsuits from environmental interests against deployment of advanced coal technologies.
vii. Education across sectors and groups about the possibilities within advanced coal technologies and the increased costs
that will come at first with initial deployment.
viii. Directives and incentives to help investors feel comfortable.
f. Kristy Monk facilitated group (speakers)
i. Not pricing coal out of the market.
ii. Pushing a technology that is not in commercial operation.
iii. More plants needed to bring the costs down.
iv. All coal is not the same.
v. Local cost for global benefit.
vi. Legislators and commissions to do the right thing with out “politicking”
vii. Qualified labor force.
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