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Carbon Capture Roadmap Suggests Competing Agencies a Key Hurdle

Feb. 17, 2022, 11:00 AM

Carbon capture backers got the Biden administration’s endorsement to accelerate vast projects capturing emissions from heavy industry and manufacturing, but the administration left the herding of agencies bound by different environmental laws for another day.

This week’s White House Council on Environmental Quality guidance provides a clear signal that the Biden administration is embracing carbon capture and storage as a vital tool for meeting the president’s target of cutting U.S. emissions to net zero by 2050.

But the guidance also highlighted a stark hurdle to making such projects a reality. It rattled off 15 federal statutes that may apply—including the Clean Air Act, Clean Water Act, Safe Drinking Water Act, various pipeline safety laws, and the Endangered Species Act.

Other federal laws could apply to promising offshore capture and storage, which could one day store emissions from big industrial emitters in geological storage under the sea.

Federal agencies play “a key role in ensuring that projects are done right” and protect marginalized communities already burdened with pollution, said CEQ Chair Brenda Mallory.

Backers say the guidance could help overcome what is the Achilles’ heel for U.S. carbon capture and clean energy efforts, which rely on scattershot incentives without an overarching law.

“We don’t have the mandates, we don’t have a carbon price, and we really don’t have anything to drive the reductions we need outside of tax credits, grants, loans, and general market forces,” said Shannon Heyck-Williams, the National Wildlife Federation’s lead climate and energy policy adviser.

Congress Requirement

Congress required the CEQ guidance under the USE IT Act, a carbon capture package that President Donald Trump signed into law in December 2020.

The way the White House highlighted the guidance suggests the administration wanted to telegraph its embrace of carbon capture as a climate solution, said Brittany Bolen, an attorney and senior adviser to Sidley Austin LLP’s environmental and government strategies.

“Let’s face it, agency guidance is issued often without fanfare,” particularly when mandated by Congress, “so this signals some high level of support,” said Bolen, a former EPA policy chief and senior counsel for the Trump administration.

CEQ’s role is limited in urging agencies to untangle the regulatory web, Heyck-Williams said.

But the 13-page document does reassure investors and an array of players who back carbon capture but recognize a daunting challenge remains ahead, she said. Those backers include other environmental groups, labor unions, and large oil and industrial companies.

The guidance urges agencies to resolve outstanding issues including more efficient environmental permitting that takes into account direct, indirect, and cumulative impacts of pollution. It also calls for more consultation and transparency—particularly for tribal and other marginalized communities.

Equity Groups Unimpressed

Environmental justice groups, who worry carbon capture will encourage reliance on fossil fuels and further burden their communities, largely panned the guidance.

A White House environmental justice council warned in May that such projects pose an environmental justice threat, noted Anthony Rogers-Wright, environmental justice director for the New York Lawyers for the Public Interest.

“What’s the point of having an advisory council if you’re not going to take their advice? The bottom line is that this unproven, profligate and nefarious technology” will worsen environmental racism, he said, and represents more broken promises “to the people who are responsible for the existence of a Biden administration in the first place,” he said.

The CEQ does have a big role in environmental permitting, but Congress has vested environmental protection and agency-specific permitting requirements within the Environmental Protection Agency, Energy and Interior departments, and other agencies.

Projects Planned

U.S. carbon capture projects have grown rapidly to approximately 45 projects and 5,200 miles of pipelines, and the U.S. now has more projects planned or proposed than any other nation, CEQ said in a 2021 report.

But the U.S. has to increase deployment ten-fold over the next decade to achieve climate goals. To get there, agencies need to make quick headway in building public confidence that carbon dioxide will remain securely contained underground. CEQ is urging EPA to revamp its Greenhouse Gas Reporting Program to provide a better accounting of captured emissions.

Supporters concede that is key to maintaining public confidence and congressional support for the existing 45Q carbon capture tax credit, but also for an ongoing push for a multi-year extension and expansion of the credit.

Agencies also need to tackle transparency and regulatory issues for direct air capture, a nascent technology of capturing carbon dioxide from ambient air, said Jessie Stolark, the Carbon Capture Coalition’s policy and member relations manager.

“In a lot of cases, direct capture isn’t situated directly above appropriate storage locations” and will need to transport emissions for storage elsewhere, raising permitting issues, she said.

“So anything we can do to pave the road for those projects in the regulatory framework, it’s going to be important,” she said.

Promising Technologies Offshore

One area in which Congress has recently provided specific regulatory direction is for offshore carbon capture and storage.

Gulf of Mexico formations alone could hold more than 130 years of total U.S. industrial and power generation emissions, the Energy Department projects.

The 2021 infrastructure law directed the Interior Department to establish a permitting framework for offshore storage and amended leasing provisions to allow Interior to grant leases and other rights of way for carbon storage, said National Ocean Industries Association President Erik Milito.

Interior “still has to figure out how they’re going to draft and implement those regulations,” Milito said, but having specific congressional direction ensures the department isn’t “trying to fit this into a statutory regime designed for something else.”

CEQ requested comments by March 18 on the interim guidance.

To contact the reporter on this story: Dean Scott in Washington at dscott@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com