Among the energy credits tucked inside the budget deal eked out in early February lies a controversial measure: carbon capture and sequestration (CCS) credits designed to push the technology from the clean energy margins toward the mainstream.A tax credit for reducing carbon is equivalent to a tax for producing it. Maybe not as flexible in this format, but it's a way to slowly get there.
For years the technology has divided environmentalists and many working in the energy industry, even as some researchers argued for its essentiality in a decarbonized world. Now, modifications to an existing credit called Section 45Q offer more money per ton of carbon dioxide captured and remove a cap on how much plants can store.
“These changes to the tax code and the enhancements of the 45Q tax credit will absolutely make the difference between a whole bunch of projects being financed and a whole bunch of projects not making it,” said Julio Friedmann, formerly of the Department of Energy’s Office of Fossil Energy, and now a distinguished associate at the Energy Futures Initiative and CEO of Carbon Wrangler, LLC.
The changes extend tax credits to carbon capture projects constructed over the next six years. Projects formerly received $10 for each ton of carbon captured and used for enhanced oil recovery and $20 for each ton captured and put “in secure geological storage” underground. The new credit bumps those sums to $35 and $50, respectively. It also eliminates a pre-existing annual volumetric cap of 75 million tons of carbon dioxide.
I'll take good news where I can get it.
> A tax credit for reducing carbon is equivalent to a tax for producing it.
ReplyDeleteI don't think that's true, and that's the problem here. This directs economic activity towards CCS, and it isn't at all clear that's a good idea. It doesn't, for example, help nukes-vs-gas at all. Is $50 enough for CCS, as in to make it commercially viable? It is kinda amusing, though, that an administration that would violently oppose carbon taxes can be promoting something so similar-in-principle.
"A tax credit for reducing carbon is equivalent to a tax for producing it."
ReplyDeleteTo the extent that radiative forcing is fungible in climate models, I presume Brian favors a tax credit for reducing radiative forcing equivalent to that for reducing carbon by the amount that produces such a forcing.
For example, tax credits for white roofs , contrails or pale paving .
Har har har. They ripped you off! The tax credit for using CO2 in enhanced oil recovery is a really good gimmick. Do you realize a lot of that CO2 is injected, mixes with the crude, comes to the surface, gets separated, compressed, and reinjected? The projects usually require a make up stream, but the gross volume isn't captured CO2.
ReplyDeleteNow do you realize why you need an engineer to fix things? You put me in charge and I'll have you wearing nerd pockets and counting molecules, instead of fretting over your thermometers.
A tax credit to subsidize the burning of coal, especially with a technology proven as a failure, seems to me to be diametrically opposed to the supposed intent of a carbon tax.
ReplyDeleteI think the author supports the idea of a carbon tax too much. The majority of experience we have with them is abject failure, and that is using a measuring stick that merely counts any reduced fuel use or emissions in the region as attributable to the carbon tax.
What we should be asking is:
1) whether any carbon tax has resulted in the significant deployment of new RE infrastructure
2) whether that deployment is more efficient than using targeted subsidies
Because in the U.S., you can not have both. The Republicans have been explicit that any initial talks about a CT are dependent on the elimination of all RE subsidies. So, if you are going to be all rah-rah about a CT, you'd best make sure they will be a better idea than targeted RE subsidies.
And the record of CT's around the world does not support that conclusion.
Anything to do with CCS has to be treated with suspicion. 2.8 tons of CO2 for every ton of black coal burned is the fundamental arithmetic that can't be gotten around; lots more waste output by weight than input and requiring it's own specialised infrastructure.
ReplyDeleteBut the post is about carbon pricing. I think it needs to apply to something nearer the centre of the problem, to actual emissions, to have real significance and absolutely not give tax benefits to enhancing fossil fuel recovery.
Ken needs to adjust his 'fundamental arithmetic.'
ReplyDelete"Black coal" is not the same thing as carbon, in theory or energetic practice , because its composition varies so greatly. Some deposits yield solid fossil fuel with hydrogen to carbon ratios approaching those of liquid benzene or acetylene gas, and the CO2 per Kg burned varies in proportion.
It is mildly scandalous that carbon mitigators ignore what policies aimed at fuel chemistry mitigation might accomplish - favoring high hydrogen coals over those closer to anthracite could cut US CO2 emissions as much as instantly jumping to cars hat get 55mpg- it adds up to half a wedge.
ReplyDeleteA lot of the heat content of soft coals is in trapped hydrocarbon gases. Modern coal mining grinds the coal at the mine head for easier transport losing that heat value and making for some spectacular explosions, which is why deep mines require enormous amounts of ventilation.
Russell, if I was treating high quality black coal as the same as pure carbon it would be closer to 3.6 tons of CO2. Best quality black coal makes 2.86 times it's weight in CO2. Yes, lower quality coal makes less - by weight of coal burned; but you burn more of it to make the same amount of energy so the total burden of CO2 for sequestration is not less. Which would be your point that shifting to black coal would reduce emissions. Just not by much, and nowhere near the emissions reductions we need to be making. Also, like any significant changes to our energy mix, there is no way to simply shift to high quality black coal on any near term time scale.
ReplyDeleteWe get ads all the time on free to air TV (from Minerals Council of Australia) urging Australians to support new HELE coal plants. HELE is a misleading naming of high emissions coal plants as "high efficiency, low emissions". It may be higher efficiency than other coal plants but in climate terms it is - like gas - undisputedly high emissions, and a shift to them will entrench too high emissions for the lifetime of those plants.
So I don't think my arithmetic is in error.
If CO2 is a problem, the only thing with a proven track record of reducing it is nuclear power. Is a carbon tax going to help nuclear power? I suspect it'll just make the countries that adopt it poorer and less able to convert to nuclear power.
ReplyDeleteC: If CO2 is a problem, the only thing with a proven track record of reducing it is nuclear power.
ReplyDeleteBPL: Show your work.
Wrong Ken- you have to correct for the atomic weight differential between C and H. Do so and you will find plenty of high volatile bitumenous deposits offering substantial improvement in energy per pound at constant carbon content, with proportionate reductions both in CO2 per KWH when burned, and the amount of CO2 that needs sequestering -
ReplyDeleteI just posted the tabulated data on my blog :
https://vvattsupwiththat.blogspot.com/2018/05/fifty-shades-of-black.html
The problem Russell, is that today coal is broken up into small chunks at the mining face and in many cases is ground at the power plant to provide more surface for burning. This means most of the hydrocarbon heating value is lost.
ReplyDeleteRussell, some may be better than others but every one of those fuels needs to be displaced and shuffling them around, even as an interim transitionary measure is not going to be good enough, especially in the absence of commitment to displacing of those interim fossil fuels in turn with non-fossil fuels.
ReplyDeleteThere isn't economically viable sequestration for the best (most energy/least CO2) of them. Even where the amount of CO2 does not exceed the amount of fuel - none of them - it is in addition to other operating costs.
This is not an apologetic for coal , but an argument for reality based energy policy.
ReplyDeleteWhen it comes to fuel quality mitigation, denial is the ground state of many team green, climateers, because Moral Hazard.