Conventional wisdom holds that the 2010 demise of cap and trade in Congress killed carbon capture and storage technology in the USA. After all, why spend hundreds of millions of dollars installing CCS technology, when the captured carbon has no monetary value? Yet, the reported death of CCS technology in the USA is premature, ironically as a result of China.
Last week, the Texas Clean Energy Project made a startling announcement that the Chinese Export-Import Bank would finance a $2.5 billion, 400 megawatt coal plant that will capture 90% of its carbon emissions that will then be sold for enhanced oil recovery. http://www.texascleanenergyproject.com. The plant has sold 200 megawatts of its output to CPS Energy, the municipal utility serving San Antonio, and states that its carbon emissions will be one-quarter of a gas plant and one-tenth of a conventional coal unit. The plant also will produce large quantities of urea, enough to raise US production by 20%, and has sold that product to an outfit in Minnesota.
Apart from the Chinese financing, the US Department of Energy is providing $450 million to finance the plant from the nation's Clean Coal Power Initiative.
So what do the latest developments of this project teach? First, carbon capture and storage technology lives in the USA, thanks substantially primarily to Chinese and secondarily DOE financing. The Texas plant will be the first commercial scale operation to deploy CCS here.
Second, the Chinese see both an environmental and economic opportunity in coming years, if they can be world leaders in developing CCS. The Chinese are flush with cash, but they are not wasting it. They plainly judge CCS to be a good bet on the future.