The Unlikely Path of CCUS and Hydrogen in the USA

Keywords: CCUS, Carbon Capture, Blue Hydrogen, Green Hydrogen, CO2 Sequestration, CO2 pipelines, Hydrogen Pipelines, Investment Recovery Act, ARC Advisory Group.

Overview

Past pollution problems for fossil fuels have found solutions like removing or scrubbing sulfur from coal or finding alternatives for lead in gasoline, but the issue of reducing CO2 and methane pollution will be much harder because it is the carbon in fossil fuels that is the source of energy, and it is the carbon emissions that are the pollutants. While the energy transition will eventually shift from fossil fuels to a combination of hydro, nuclear, solar and wind, the dominant role fossil fuels play today will stay in the mix for a long time. New CCUS and hydrogen chemical processes can extend the rein of fossil fuel industry but only if they can compete.

Government Policies and Regulations

Federal

The future of CCUS and low carbon H2 are highly dependent on government policies and regulations. In 2007, the Supreme Court, in a 5-4 decision, ruled that greenhouse gases, including CO2, are air pollutants under the Clean Air Act, however, in the case of West Virginia v. EPA (2022), the Supreme Court, in a 6-3 decision, limited the EPA's authority to regulate greenhouse gas emissions from existing power plants. The EPA is developing a replacement rule for regulating greenhouse gas emissions from existing power plants. The exact nature of this rule is still under development, but it will likely take a different approach than the original Clean Power Plan. The Clean Air Act Mercury and Air Toxics Standards (MATS) has reduced emissions of mercury and other pollutants from coal-fired power plants, indirectly leading to lower greenhouse gas emissions due to coal plant closures. New Source Performance Standards (NSPS) has set limits on air pollutants from new, modified, and reconstructed power plants, including limitations on greenhouse gases for certain types of plants.

Signed into law on Nov. 15, 2021, the Infrastructure Investment and Jobs Act totals $1.2 trillion in funding over the next 5 years for infrastructure. Funding aligns with climate goals that include net-zero economy emissions by 2050 and 100 percent carbon-free electricity by 2035. We have already seen appropriations for CCUS Programs of $12.1 billion:

• CCUS Demonstration Projects - $2.5 billion

• CCUS Pilot Projects - $937 million

• CO2 Storage Validation and Testing - $2.5 billion

• CO2 Infrastructure Finance and Innovation - $2.1 billion

• CO2 Utilization - $310.14 million

• Regional Direct Air Capture (DAC) Hubs - $3.5 billion

Section 40314 has proposed $8 billion for clean hydrogen hubs and project financing including fossil fuels with carbon management (blue hydrogen).

State and Regional

Many states have adopted Renewable Portfolio Standards (RPS) which are policies that require electricity providers to source a certain percentage of their electricity from renewable sources like solar and wind power. This incentivizes the development of renewable energy and reduces reliance on fossil fuels. While a direct federal tax on carbon seems unlikely, some states and regions have implemented carbon pricing initiatives, such as cap-and-trade programs, which put a cost on carbon emissions.

Chemistry and Physics for CCUS and H2

CCUS

Capturing CO2 is the most energy intensive part of CCUS, but once CO2 is captured it must be compressed and transported to a secure storage location. If we focus on the capture part, there are basically 3 technologies.

• Post-combustion – removes CO2 after combustion of fossil fuel. This scheme applies to fossil-fuel power plants. Post-combustion capture is most popular in research because fossil fuel power plants can be retrofitted to include CCS technology.

• Pre-combustion – oxidizes the fossil fuel, e.g., in a gasifier. The CO from the resulting syngas (CO and H2) reacts with added steam (H2O) and is shifted into CO2 and H2. The resulting CO2 can be captured and the H2 used as fuel.

• Oxyfuel combustion - The fuel is burned in pure oxygen instead of air.

CCUS competes with other energy options as shown in the Cost of Energy (LCOE) chart below. The cost of a CCUS power plant adds about 30 percent to the capital cost, and a CCUS power plant uses about 10 percent more fuel than a conventional power plant. Federal tax incentives range from $10/ton for CCUS used with Enhanced Oil Recovery (EOR) up to $180/ton for direct air capture (DAC) with geologic storage without EOR. Capturing CO2 is a separation process that thermodynamically will use more energy for dilute concentrations. 

DAC must extract CO2 from air at 420 ppm. CO2 in a coal stack is about 12-18 percent CO2, while a gas power plant has about 4-8 percent CO2 in the stack. The CO2 released from an ethanol fermenter is nearly pure CO2 and water. 

While it would be logical to capture CO2 from the most concentrated sources, there are complications. Without a pipeline to a geologic formation nearby, transportation cost via trucking is prohibitively expensive. Coal plants remove pollutants like sulfur oxides (SOx), nitrogen oxides (NOx), mercury, and particulate matter (PM) from the flue gas before it's released into the atmosphere. These systems can make retrofitting existing coal plants uneconomical and the design of new coal plants using Integrated Gasification and Combined Cycle (IGCC) compete with other lower cost energy options. 

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