Introduction

Carbon capture and sequestration (or storage)—known as CCS—is a physical process that involves capturing man-made carbon dioxide (CO₂) at its source and storing it before its release to the atmosphere. CCS could reduce the amount of CO₂ emitted to the atmosphere from the continued use of fossil fuels at power plants and other large, industrial facilities. An integrated CCS system would include three main steps: (1) capturing CO₂ before it is emitted to the atmosphere and separating it from other gases; (2) purifying, compressing, and transporting the captured CO₂ to the sequestration site; and (3) injecting the CO₂ into subsurface geological reservoirs. Following its injection into a subsurface reservoir, the CO₂ would need to be monitored for leakage and to verify that it remains in the target geological reservoir. Once injection operations cease, a responsible party would need to take title to the injected CO₂ and ensure that it stays underground in perpetuity.

The U.S. Department of Energy (DOE) has pursued research and development (R&D) of aspects of the three main steps leading to an integrated CCS system since 1997. Congress has long been interested in the future of CCS as a mitigation strategy for lowering global emissions of CO₂. Since FY2008, Congress has appropriated more than $7 billion for CCS activities at DOE. Nearly half that funding, $3.4 billion, came from the American Recovery and Reinvestment Act (P.L. 111-5; enacted February 17, 2009; hereinafter referred to as the Recovery Act). Authority to expend Recovery Act funding expired at the end of FY2015.

The large and rapid influx of funding for industrial-scale CCS projects from the Recovery Act was intended to accelerate development and demonstration of CCS in the United States. Along with the large financial boost to CCS research and development provided by the Recovery Act, Congress continued to appropriate additional funds annually to support other CCS activities. CCS-focused research and development has come to dominate the coal program area within DOE Fossil Energy Research and Development (FER&D) since the Recovery Act was enacted.

Table 1 and Table 2 of this report show the funding for DOE CCS programs since 2010 under FER&D, including the Administration's FY2017 budget proposal. Table 1 shows funding from FY2010 through FY2016, including Recovery Act funding. Table 2 shows a comparison between FY2016 enacted funding and the FY2017 budget proposal, including proposed changes to the budget structure for FY2017, and includes columns for the House and Senate appropriations bills.

DOE Carbon Capture and Sequestration Funding Since FY2010

In Table 1, Recovery Act programs are organized under the CCS Demonstrations category. CCS-related programs funded by annual appropriations—apart from the Recovery Act—are organized under the Coal CCS and Power Systems category. The remainder of Fossil Energy spending is organized under Other Fossil Energy R&D. DOE changed the program structure for coal after FY2010, renaming and consolidating program areas. In Table 1, the Coal CCS and Power Systems bottom-line total is provided for FY2010, but the amounts for individual programs are not provided for that year because of the reorganization.

Recovery Act funding supported four main categories of activities: (1) FutureGen; (2) the Clean Coal Power Initiative (CCPI); (3) Industrial Carbon Capture and Storage (ICCS); and (4) Site Characterization, Training, and Program Direction. FutureGen, CCPI, and ICCS garnered the bulk of Recovery Act funds for CCS ($3.32 billion, or 98%). Table 1 shows the Recovery Act funding amounts in one column for 2009, but those funds were available through FY2015. Zeroes in the columns for FY2010 through FY2016 indicate that no new Recovery Act funds were made available during those years. However, DOE continued to fund other CCS programs and activities with regular appropriations in each of those years, as shown by the rows in the table below Recovery Act programs.

Some programs are directly focused on one or more of the three steps of CCS: capture, transportation, and storage. For example, the Carbon Capture program supports R&D on post-combustion, pre-combustion, and natural gas capture. The Carbon Storage program supports the regional carbon sequestration partnerships, geological storage technologies, and other aspects of permanently sequestering CO₂ underground.

Also shown in Table 1 are funding levels under Other Fossil Energy R&D. Activities in this category include programs pursuing fossil energy R&D and support activities. The largest activity is Program Direction ($114.2 million in FY2016), which provides DOE headquarters support and federal field and contractor support of the fossil energy R&D programs overall. These activities support CCS-related activities directly and indirectly. The next-largest activities are Natural Gas Technologies ($43 million in FY2016) and Unconventional Fossil ($20.3 million in FY2016), which support collaborative research to foster safe and prudent development of shale gas resources, the reduction of methane emissions from natural gas infrastructure, and research on gas hydrates. The other activities listed in Table 1—Plant and Capital, Environmental Restoration, and Special Recruitment—total approximately $24.5 million for FY2016.

FY2017 Budget Request and Proposed Restructuring

Table 2 shows the FY2017 DOE budget proposal for Fossil Energy R&D and compares the proposal to the FY2016 enacted amount. On the left side of Table 2, enacted funding for FY2016 is shown in the current organizational structure. On the right side of Table 2, FY2016 enacted funding and FY2017 proposed funding are compared in the proposed restructuring scheme. The total funding for Fossil Energy R&D is $632 million for FY2016 and $600 million for FY2017. (In FY2017, DOE proposes using $240 million of prior-year balances, plus $360 million, for a total request of $600 million.)

Observations

The FY2017 budget request continues the trend of the past several years of shifting increasingly toward CCS-related activities and away from what were termed coal program areas in previous budgets. The term coal itself is omitted in the proposed restructuring of the FER&D accounts. DOE notes in its Highlights and Major Changes summary:

In FY2017, FER&D continues to focus on CCS and activities that increase the efficiency and availability of advanced power systems integrated with CCS. It is important to demonstrate that electric generation technology with CCS can be deployed at commercial scale while maintaining reliable, predictable, and safe operations. Therefore, the FER&D portfolio includes several major integrated CCS demonstration projects encompassing different technological approaches and applications of CCS. A number of those projects have not yet reached financial close. DOE intends to de-obligate $240 million from CCPI projects that have not yet reached financial close and repurpose these funds to support the FY2017 R&D portfolio.

Further, the budget request "proposes a restructuring of the account to support clarity in the Budget request, improve execution, and eliminate the categorization by fuel type that is no longer appropriate for this R&D portfolio." The emphasis on developing CCS technologies would apply to coal and natural gas. Other changes indicate some consolidation of accounts, such as National Energy Technology Laboratory (NETL) research and operations and NETL infrastructure, and moving the Supercritical CO₂ Technology program—a separate program in the FY2016 structure—to a subprogram of Advanced Energy Systems under the proposed FY2017 structure (see the comparison in Table 2).

Congressional Action

The Senate Appropriations Committee reported S. 2804, the Energy and Water Development and Related Agencies Appropriations Act, 2017, on April 14, 2016, and recommended $632 million for FER&D, the same amount as the FY2016 enacted amount. The committee did not accept the proposed restructuring of most of the FER&D accounts but did support the proposed reorganization of the NETL budget structure. On May 12, 2016, the Senate approved the Energy and Water appropriations bill and included the Appropriations Committee's recommendations regarding FER&D.

The House Appropriations Committee reported its version of the bill, H.R. 2028, on April 19, 2016. Like the Senate, the House committee did not accept most of the proposed restructuring, except for the reorganization of the NETL budget structure. The House bill would provide a total of $645 million for FER&D, $45 million more than the request and $13 million more than the Senate-passed version.

Table 2 includes a column to the left of the bold vertical bar showing the FY2017 House and Senate bill recommendations for programs under the existing structure and a column to the right of the bold vertical bar showing the FY2017 House and Senate bill funding under the proposed restructuring of the NETL accounts. Funding levels in the Senate bill for FY2017 are either identical or roughly similar to FY2016 levels for most of the programs shown in Table 2. The restructured NETL accounts are not directly comparable, but the overall funding recommendation for FER&D of $632 million is identical to the FY2016 enacted amount, suggesting that the NETL activities would be funded similarly in FY2017. The House bill shows some more significant differences from the FY2016 enacted amount, as shown in Table 2, and would provide $13 million more in total FER&D funding than either the FY2016 enacted amount or the Senate-passed version of the bill.

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