The Department of Energy (DOE) will spend nearly $200 million over the next decade to test the efficiency of sequestering carbon generated from burning coal. According to a new report from the Carnegie Mellon Electricity Center, large scale carbon sequestration is technically possible, but could cost billions of dollars per year.

The DOE announced this month that it would spend $197 over the next ten years on three pilot programs to test the feasibility of storing underground carbon generated from coal plants. The DOE will pay for 62 percent of the $318 million projects, and the private sector including utilities will pay the remainder.

According to DOE the three deep saline reservoirs near the pilot projects span parts of 27 states and 3 Canadian provinces and can store up to 100 years of the total carbon output of the U.S.. The three projects will store 1 million tons of carbon underground, doubling the amount currently being sequestered.

Collectively the projects will store approximately .05 (five one hundredths) of one percent of the carbon generated by coal power plants annually, according to data from the Energy Information Administration.

The Carnegie Mellon Electricity Center on October 15 published a new report entitled "Incentives for Near-Term Carbon Dioxide Geological Sequestration" that outlines the potential and the cost for sequestering carbon while suggesting the government incentives needed to make it cost-effective for the power industry.

(The Carnegie Mellon Electricity Center is funded by the Electric Power Research Institute and the Alfred P. Sloan Foundation.)

According to the report, "Carbon capture and deep geologic sequestration holds the promise to make deep carbon emission reductions possible with the continued and increased use of coal and petroleum coke (petcoke)."

CO2 can be safely sequestered "essentially indefinitely," according to the report, but "financial incentives are necessary to begin commercial scale [sequestration]." The study suggests sequestering carbon at gasification sites because "transport and sequestration costs are estimated at $5-$15 per ton of CO2."

Based on DOE estimates for the three pilot projects, carbon sequestration will cost approximately $30 per metric ton.

Because of the high cost of sequestration, the report suggests a broad array of federal tax incentives to make carbon sequestration viable for power companies, including:

Continue the 15% enhanced oil recovery federal tax credit

Enact a federal CO2 sequestration tax credit.

Enact a federal investment tax credit for CO2 pipelines.

Add low-carbon emission coal facilities to the facilities eligible for the production tax credit.

Enable tax-exempt financing for CO2 sequestration infrastructure investments'

Each kilowatt hour of electricity produced by a coal plant generates slightly less than one (0.94) metric ton of coal, so the cost of transporting and sequestering all of the carbon generated by coal power plants would be between $10 and $30 billion annually.

Photo: Wikimedia commons

(Also, see Can Coal Be a Clean Transportation Fuel?)