Government clean-coal projects flopped, federal watchdog finds
A decade ago, when the U.S. was climbing out of the Great Recession, the government dedicated more than a billion dollars to developing carbon-capture technologies aimed at making high-emissions energy facilities — coal plants, in particular — less polluting.
But the effort has flopped, a government watchdog found. According to a recent report from the Government Accountability Office, none of the clean-coal projects that received funding from Department of Energy (DOE) programs are currently operating, although two of the three industrial projects are. Of eight coal projects that were initially selected for federal funding, just one resulted in a completed operating facility. And that project — the Petra Nova plant near Houston — shut down in 2020 for economic reasons.
Of eight coal projects initially chosen by the Department of Energy, three were withdrawn in their early stages because their owners couldn't make them economically feasible even with hundreds of millions in government funding. The Energy Department ended agreements with four others before construction. The last one, the Petra Nova plant, went online in 2017 and operated for four years before shutting down in 2020, when plummeting oil prices made it unprofitable.
"The government has spent billions of dollars on this technology, and its administration, and there's not much to show for it," John Noël, senior climate campaigner at Greenpeace, told CBS MoneyWatch.
The GAO report focused narrowly on clean-coal and industrial projects that together received $1.1 billion in funding. A separate report from the Congressional Research Service last summer found that Congress spent $5 billion on carbon capture and storage, or CCS, projects over the last decade, plus an additional $3.4 billion in the American Recovery and Reinvestment Act, designed to jump-start the economy after the Great Recession.
The GAO findings raise even more questions as Congress appropriates record amounts of money in 2020 and 2021 for carbon-capture projects and fossil-fuel companies such as Exxon make the technology a key part of their emissions-reduction goals.
"What is surprising is the level of attention and incentives [for carbon capture] that are included in the Build Back Better Act and in the infrastructure bill," Noël said. "It's surprising that this enterprise is still getting such attention from policymakers when it's hard to spin these results — a billion dollars with little result."
Policy error
Much of the blame rests with the economics of coal-fired power plants, which are expensive to operate under the best of conditions. Soon after the American Recovery and Reinvestment Act funding began to flow, many coal plants were out-competed by cheaper natural gas plants.
But government policies didn't allow carbon-capture projects to be used on the less costly gas plants, which could have been more economically viable for the plants' owners, said John Thompson, technology and markets director at the Clean Air Task Force, an environmental group that supports carbon-capture.
"One of the reasons that DOE did so many coal plants was they were required by Congress," he said.
The GAO also found that the government moved quickly to get funds out the door, choosing early-stage projects that are inherently riskier, and ignored cost controls that would have limited the government's exposure, such as continuing to fund projects that didn't meet key milestones.
The DOE noted that it was creating a new division, dubbed the Office of Clean Energy Demonstrations to implement lessons learned after the Great Recession. "This office will seek to prove the effectiveness of innovative technologies in real-world conditions at scale in order to pave the way towards widespread adoption and deployment," a spokesperson said.
Coal, gas or fertilizer
Capturing carbon where it's produced involves filtering out CO2 from a point source of emissions, such as a fertilizer plant, power station or gas field. Differing from from what is known as direct-air capture — a nascent technology that could draw down CO2 emissions already circulating in the atmosphere — carbon-capture promises to trap emissions before they enter the air.
The problem is that it's much more expensive to pull carbon from a coal-fired power plant than from another source, such as a fertilizer plant or other industrial plant. Indeed, two of three industrial carbon-capture projects the Energy Department funded were built and are operating today: an ethanol plant in Illinois and a hydrogen plant in Texas.
Thompson contends that, even if the U.S. ends up with no clean-coal plants, building the technology is still worthwhile because it can be adopted by newer coal plants in China or India, he said.
"To the extent that we have a few such plants, it could be three, could be five, could be 10 — we may eliminate four to five years from the time it takes [China] to decarbonize their economy," he said. "Since they're the largest emitter of CO2 on the planet, that could be globally significant."
Inherent risk
Some proponents of carbon capture deny these projects were failures. Part of the DOE's job is to develop new technology — not to create functional commercial projects, said Holly Krutka, executive director of the School of Energy Resources at the University of Wyoming.
"These are high-risk projects — they only take on the high-risk ones because the industry doesn't want to," she said.
"The U.S. is a global leader in CCS technology, and that's largely due to the Department of Energy and their support from Congress and many administrations," she added. "While we're still waiting for widespread commercial launch of CCS, tremendous progress has been made."