[Senate Hearing 108-558]
[From the U.S. Government Publishing Office]
S. Hrg. 108-558
ELECTRICITY GENERATION
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
on
SUSTAINABLE, LOW EMISSION ELECTRICITY GENERATION
__________
APRIL 27, 2004
Printed for the use of the
Committee on Energy and Natural Resources
______
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee RON WYDEN, Oregon
LISA MURKOWSKI, Alaska TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana EVAN BAYH, Indiana
GORDON SMITH, Oregon DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky CHARLES E. SCHUMER, New York
JON KYL, Arizona MARIA CANTWELL, Washington
Alex Flint, Staff Director
Judith K. Pensabene, Chief Counsel
Robert M. Simon, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Pete Lyons, Professional Staff Member
Jonathan Epstein, Democratic Fellow
C O N T E N T S
----------
STATEMENTS
Page
Akaka, Hon. Daniel K., U.S. Senator from Hawaii.................. 3
Bunning, Hon. Jim, U.S. Senator from Kentucky.................... 3
Burke, Dr. Frank P., Vice President, Research and Development,
CONSOL Energy, Inc., on behalf of the National Mining
Association.................................................... 25
Domenici, Hon. Pete V., U.S. Senator from New Mexico............. 1
Garman, David, Assistant Secretary for Energy Efficiency and
Renewable Energy, Department of Energy......................... 19
Moniz, Ernest J., Ph.D., Professor of Physics, Massachusetts
Institute of Technology........................................ 10
Murkowski, Hon. Lisa, U.S. Senator from Alaska................... 4
Smalley, Richard E., Ph.D., Director, Carbon Nanotechnology
Laboratory, Rice University.................................... 6
APPENDIX
Responses to additional questions................................ 49
ELECTRICITY GENERATION
----------
TUESDAY, APRIL 27, 2004
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 10:03 a.m. in
room SD-366, Dirksen Senate Office Building, Hon. Pete V.
Domenici, chairman, presiding.
OPENING STATEMENT OF PETE V. DOMENICI, U.S. SENATOR FROM NEW
MEXICO
The Chairman. The hearing will please come to order. This
hearing of the Energy and Natural Resources Committee on
sustainable low-emissions electricity generation shall come to
order. This committee has heard testimony in several previous
hearings about our growing dependence on imports of oil and now
we are beginning to see how we are going to become more and
more dependent, if things do not change, on natural gas from
overseas or a substitute for it.
We have all heard serious questions about the availability
of these precious resources. Past hearings have noted alarming
statistics. Oil imports now fulfill about 55 percent of the
total U.S. petroleum demand, with projection that imports will
reach 70 percent of the U.S. needs by 2025. Natural gas imports
are similarly expected, believe it or not, to be 23 percent of
the total demand by 2025.
These trends are disturbing enough in the near term, but in
the longer term we face far greater challenges if we want to
maintain our standard of living, our strong economy that runs
on energy. Natural gas and crude oil are finite resources.
Experts debate when supplies will dwindle to the point that it
will no longer make economic sense to use them in electricity
generation and transportation. Few people will argue that these
resources are sufficient to maintain our thirst for energy
throughout the next century.
In this hearing, we look beyond the next few decades to the
days when natural gas and oil simply cannot be used to provide
economic electricity generation or transportation fuels. Today
we want to ask what we should be doing today to prepare for
that future. Only three sources of energy in use today have the
potential to expand substantially to take up the slack when we
are forced to shift from oil and gas. Those are renewable
sources of energy, nuclear energy, and clean coal. Only these
three sources clearly have the potential to protect the
environment and meet our energy needs beyond this century.
Some may argue that only one of these sources can meet our
needs if only we expand our conservation efforts. I do not
believe that. Conservation is vital, but it is not the whole
answer to our future needs. Diversity of energy sources is
equally vital. Our Nation will need all the energy resources it
can produce, or maybe there I should say the new sources we can
produce.
I hope our witnesses today will share their perspective on
the energy demands and the challenges of the future. In
addition, I would like to hear their views on the research and
development efforts that must be undertaken now to prepare for
that future.
Testifying today before us are Dr. Richard Smalley, a
winner of the Nobel Prize for pioneering work in nanotechnology
and director of the Carbon Nanotechnology Laboratory at Rice
University. We are very, very appreciative that you joined us
today and we are very pleased to know that we have an American
of such accomplishments as you. Thank you so much.
Dr. Smalley. Thank you.
The Chairman. We have the Honorable David K. Garman, Acting
Under Secretary for Energy Sciences and Environment and
Assistant Secretary of Energy Efficiency and Renewable Energy
in the Department; Dr. Ernest J. Moniz, professor of physics at
MIT and Under Secretary of the Department of Energy in the
Clinton administration. That is where I first met him and it
was a pleasure working with him there then because he knew a
lot and it was good to have somebody in the Department that
knew a lot.
Dr. Francis--I do not know what I am saying.
Dr. Moniz. I appreciate it.
The Chairman. I will just stop there.
Dr. Francis P. Burke, vice president for research and
development at CONSOL Energy, Inc. We look forward to your
testimony today.
Senator Bingaman, do you care to make an opening statement?
Senator Bingaman. Well, very briefly, Mr. Chairman. Thanks
for having the hearing. I think this is a very important issue.
Obviously it is an important issue because of the problems that
we can foresee related to price and availability of oil and gas
in the future, but also of course with regard to emissions and
how we position ourselves to deal with the need to reduce
emissions, CO2 emissions in particular, as we move
forward.
The information I have been given here is that in 2002
electricity generation represented 39 percent of the Nation's
carbon dioxide emissions. In 2025, according to the EIA the
estimate is that electricity production will account for about
40 percent of our total carbon dioxide emissions.
The Chairman. What is the 2002 one?
Senator Bingaman. 39 percent. So clearly it is a major
issue. The question of which technologies we can use to
generate electricity is a major factor in determining whether
we come to grips with this emissions problem as well. You have
an excellent group of witnesses here and I look forward to
hearing from them.
Thank you.
The Chairman. Thank you very much.
Senator Bunning.
STATEMENT OF HON. JIM BUNNING, U.S. SENATOR
FROM KENTUCKY
Senator Bunning. Thank you, Mr. Chairman. I am pleased that
we are having this hearing today and I want to thank you for
holding it.
The Chairman. You are welcome.
Senator Bunning. I think it is important that we remain
focused on our needs to increase our domestic energy production
and lessen our dependency on foreign nations such as those in
the Middle East. While we appear to be trying to move away from
combat in Iraq, there is still a lot of uncertainty in the
Middle East. The need to increase our own production of energy
has never been more important than now.
This hearing is especially important because of the high
price of oil and natural gas and gasoline. We need to have
alternative forms of energy to keep the cost of energy in our
country down.
I am proud to be from a coal State. Generations of
Kentuckians have made their living in coal fields and coal
mines. For the last decade, coal in Kentucky has been on the
downturn because of Federal legislation and regulation policies
which forced electric generation to invest in natural gas-fired
facilities instead of coal. Now I am glad to see that we have
turned things around and are taking steps to make sure that
coal continues to play a vital role in meeting our future
energy needs.
This focus on clean coal is good for the environment. It is
certainly good for the economy and for putting people back to
work. It is also a good way to decrease our reliance on foreign
sources of energy. Clean coal technology will result in a
significant reduction in emissions and a sharp increase in
energy efficiency of turning coal into electricity. I hope that
we can continue to work to bring new clean coal technology
quickly into the commercial sector.
I thank our witnesses for appearing before us today to
discuss this important topic. I look forward to hearing their
testimony.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator.
The Senator from Hawaii.
STATEMENT OF HON. DANIEL K. AKAKA, U.S. SENATOR
FROM HAWAII
Senator Akaka. Thank you Mr. Chairman, for convening
today's hearing on this extremely important topic. I would like
to add my welcome to our distinguished witnesses today, Dr.
Richard Smalley, Dr. Ernie Moniz, and Dr. Francis Burke. I
would like to offer a special aloha to Dave Garman whom I have
known for many years when he worked for the Senate, and I want
to send my aloha to the family, too, Dave, and welcome you to
this hearing.
Mr. Chairman, the quality of the air Americans breathe has
improved significantly over the last 20 years, but many
challenges remain in protecting public health and the
environment. One of the most significant challenges is to
reduce airborne pollutants released from the Nation's
powerplants, especially those fueled by coal. I want to say to
my friend the Senator from Kentucky that I am not against coal.
I am just pointing out a fact here. Carbon dioxide emissions
are not regulated under the Clean Air Act, but there is a
growing interest in requiring reporting and reductions in
carbon dioxide emissions.
More than one-half of electricity generated in the United
States today comes from coal. While coal is the Nation's major
fuel for electric power, natural gas is the fastest growing
fuel. Natural gas is more plentiful than oil in the United
States, but as demand increases domestic producers must turn to
deeper and more expensive gas reservoirs. As demand and costs
for natural gas rise, alternative electricity sources such as
clean coal, nuclear, and biomass will play an increasingly
important role as potential sources of energy.
Hawaii's overall energy prices are the second highest in
the Nation, behind the District of Columbia. Our prices of
electricity rank among the highest in the Nation, which is a
dubious honor because our gasoline prices are also consistently
the highest in the Nation. Most of Hawaii's electricity is
generated by petroleum-fired plants, and data indicate that
over the last decade, while sulfur dioxide emissions from
utility plants in the State were falling, emissions of nitrogen
oxides and carbon dioxide were increasing.
The State of Hawaii has moved ahead in providing guidelines
for requiring renewable sources of electricity for its
residents. Currently, 8.4 percent of our electricity in the
State is from renewables, while nationally just 2 percent of
electricity is from renewable sources. Electricity generated
from solar, wind, biomass, geothermal, municipal solid waste,
and hydro sources all play a role in Hawaii's renewable
portfolio.
As you know, I have long been a supporter of sustainable
energy sources. I am confident that American scientific
ingenuity, through basic R&D can help make low-emission and
sustainable electricity competitive in the markets of the
future.
Mr. Chairman, you have convened an outstanding panel of
forward-looking witnesses today to help us understand the
future of low emission and sustainable electricity generation.
With Hawaii's unique situation, I look forward to hearing
various perspectives on how we will be able to move from
petroleum dependency to more sustainable and healthier
electricity generation.
Thank you very much, Mr. Chairman.
The Chairman. Senator Murkowski.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Mr. Chairman, thank you for calling this
hearing on sustainable low emissions electricity generation.
Promoting technologies to generate electricity in an
environmentally friendly and cost-effective way is one of my
top priorities. About 70 percent of our Nation's electricity is
generated by the combustion of fossil fuels, 50 percent from
coal, 18 percent from natural gas, 2 percent from oil. Despite
sustained high natural gas prices, almost all new generating
capacity in America built over the last few years is designed
to run solely on natural gas. By 2025, EIA predicts natural gas
will account for about 23 percent of all electricity
generation. It is clear that Congress must act to increase our
domestic supplies of natural gas.
On April 2 I sent a letter to each of my colleagues
outlining the importance of an Alaskan natural gas pipeline to
our economic recovery and job creation. As this committee looks
for ways to generate electricity in an environmentally
responsible manner, I encourage my colleagues who are opposing
the energy bill to reconsider their position. The energy bill
takes some important first steps towards increased use of
sustainable low emission electricity generation. It also
includes the necessary fiscal and regulatory provisions to
lesson the cost of financing the construction of an Alaska
natural gas pipeline. It streamlines the permitting process and
expedites judicial review of the project. In passing the energy
bill, we can unlock 35 trillion cubic feet of proven reserves
of natural gas stranded on Alaska's North Slope.
While natural gas is increasingly important as part of our
electricity generation mix and will become even more so in the
future, coal still remains the backbone of our electricity
portfolio. There are several emerging technologies that are
being developed to find new ways to use our abundant coal
resources in an environmentally responsible way. Again, I would
like to remind my colleagues that this is an area where the
energy bill, which is currently stalled in the Senate, can
help.
The coal title of the energy bill authorizes $2 billion to
fund the Clean Coal Power Initiative. The development of clean
coal technology will help our Nation use its abundant coal
resources in an environmentally responsible manner. In Alaska
we are working to find new ways to use our reserves while
mitigating the impact on the environment.
In Healy, Alaska, we have a small experimental clean coal
powerplant which is sitting dormant because it just barely
missed its emissions requirements. The Healy clean coal plant
is illustrative of why the Federal Government must take the
lead in investing in emerging technologies. Once the kinks can
be worked out, new processes that will greatly benefit the
environment and that may not have been developed without
Federal support can become economically viable and eventually
commercial.
Once the Healy clean coal plant and other clean coal
technologies demonstrate better ways for us to generate
electricity from coal, we can utilize our Nation's vast coal
resources in an environmentally responsible manner. As we work
together to promote the construction of the Alaska natural gas
pipeline and look for cleaner ways to utilize our coal
resources, we must also consider other low-emission electricity
generation, such as nuclear and renewables.
The renewable energy production incentive program which is
reauthorized in the energy bill is vital for the development of
renewable energy technologies, such as wind and geothermal.
This incentive program is particularly important for small
rural electric cooperatives, like those in Alaska, which are
seeking new ways to generate electricity in sustainable and
cost-effective ways while protecting the environment at the
same time.
Part of this hearing and the testimony is going to focus on
the need to have a work force educated in the physical sciences
to work on these emerging technologies. I agree that as we
promote new technologies we must always remember that our
trained work force is vital if these technologies are going to
become a commercial reality.
Mr. Chairman, I appreciate the opportunity to listen to the
panel of witnesses that you have brought before us today. I am
looking forward to their comments, and again I thank you for
the highlight on this very important issue.
The Chairman. Thank you very much, Senator. I do want to
say we are all aware now that the energy bill is at least in
two parts: the part that is the tax provisions, which
principally if completed in their totality would be production
tax credits for solar, wind, bio, and then also the same for
nuclear and a very similar one for clean coal; we will then,
hopefully before the year is out, move to the rest of the bill.
It will have a lot of amendments on it, just because there are
many who do not share our interest in getting it done, and
there are some with legitimate amendments.
I am going to move now to Dr. Smalley. I just mentioned who
you were and what you were and that little tiny bit was enough
to distinguish you. I want to call to everyone's attention a
statement, just a little tiny statement in his statement. It
says at a point in your statement: ``However, I am an American
scientist, brought up in the Midwest during the Sputnik era,
and, like so many of my colleagues in the United States and
worldwide''--most important five words--``I am a technology
optimist.''
With that, I would ask for your testimony.
STATEMENT OF RICHARD E. SMALLEY, Ph.D., DIRECTOR, CARBON
NANOTECHNOLOGY LABORATORY, RICE UNIVERSITY
Dr. Smalley. Thank you, chairman.
Energy is the single most important challenge facing
humanity today. As we peak in oil production and worry about
how long natural gas will last, life must go on. Somehow we
must find the basis for energy prosperity for ourselves and the
rest of humanity for the 21st century. By the middle of this
century, we will need to at least double world energy
production from its current level, with most of this coming
from some clean, sustainable, CO2-free source. For
worldwide peace and prosperity, it must be cheap.
We simply cannot do this with current technology. We need
revolutionary breakthroughs to even get close. As the chairman
said, let me repeat, I am an American scientist, brought up in
the Middle West in the Sputnik era, and I am a technology
optimist. I think we can do it. We can find the new oil, the
new technology that provides massive clean, low-cost energy,
the energy necessary for an advanced civilization of what may
very well be ten billion human beings on this planet before
this century is done.
Electricity I am quite convinced, electricity is the key.
Consider for example a vast interconnected electrical energy
grid for the North American continent from above the Arctic
Circle down to below the Panama Canal. By 2050 this grid will
interconnect several hundred million local sites. There are two
key aspects of this future grid that will make a huge
difference: one, massive long-distance electrical power
transmission; and two, electrical storage, storage of
electrical power on local sites with real-time pricing.
Storage of electrical power is critical for stability and
robustness of the electrical power grid and it is absolutely
essential if we are ever to use solar and wind as our dominant
primary energy source. The best place to provide the storage is
locally, near the point of use. Imagine by the middle of the
century that every house, every business, every building, has
its own electrical energy storage device, equivalent to an
uninterruptible power supply capable of handling the entire
needs of that site for 24 hours.
Since the devices are small and relatively inexpensive, the
owners can replace them with new models every 5 years or so as
worldwide technological innovation and free enterprise
continuously and rapidly develop improvements in this most
critical of all aspects of the electrical energy grid.
Today, using lead-acid storage batteries such a unit for a
typical house storing 100 kilowatt-hours of energy would take
up a small room and cost over $10,000. But through the
revolutionary advances in nanotechnology, it may very well be
possible to shrink the size of that unit down to the size of a
washing machine and drop the cost below $1,000. With intense
research and entrepreneurial effort, many schemes are likely to
be developed over the years to supply this local storage
technology, a market that very well may expand to several
billion units worldwide. Think of the automobile industry, but
in your home.
With these advances, the electrical grid can become
exceedingly robust. Its local storage protects the customers
from power fluctuations and outages. With real-time pricing,
the local customers have incentive to take power from the grid
when it is cheapest. This in turn permits the primary
electrical providers to deliver their power to the grid when it
is most efficient for them to do so, and it vastly reduces the
requirements for reserve capacity to follow peaks in demand.
Most importantly, it permits a large portion or even all of the
primary electrical power in the grid to come from solar and
wind.
The other critical innovation needed is massive electrical
power transmission over continental distances, permitting, for
example, hundreds of gigawatts of electrical power to be
transported from solar farms in New Mexico to markets in New
England. Then all primary power producers can compete with
little concern for the actual distance to market.
Clean coal plants in Wyoming or Kentucky, stranded gas in
Alaska, wind farms in North Dakota, hydroelectric from northern
British Columbia, biomass from Mississippi, nuclear power from
Hanford, Washington, solar power from the vast deserts, all of
these remote powerplants from all over the continent can now
contribute power to consumers thousands of miles away on the
grid. Everybody plans.
Nanotechnology in the form of single-walled carbon
nanotubes forming what we call the Armchair Quantum Wire may
play a big role in this new electrical transmission system.
Such innovations in power transmission, power storage, and the
massive primary power generation technologies themselves can
only come from miraculous discoveries in science together with
free enterprise and open competition for huge worldwide
markets.
America, this land if technological optimists, this land of
Thomas Edison, should take the lead. We should launch a bold
new energy research program. Just a nickel for every gallon of
gasoline, diesel oil, and fuel oil would generate $10 billion a
year. That would be enough to transform the physical sciences
in this country and to inspire a new Sputnik generation of
American scientists and engineers.
At minimum, it will create a cornucopia of new technologies
that will drive wealth and job creation for this next
generation in our country. At best, it will solve the energy
problem within this generation, solve it for ourselves and, by
example, solve it for the rest of humanity as well.
It sounds corny, but I think it is a good line: Give a
nickel, save the world.
Thank you.
[The prepared statement of Dr. Smalley follows:]
Prepared Statement of Richard E. Smalley, Ph.D., Director, Carbon
Nanotechnology Laboratory, Rice University
I appreciate the opportunity today to testify to your committee on
this most important of issues.
We are heading into a new energy world. With economic recovery in
the countries of the OECD and rapid development of China and soon
India, huge new demands will be placed on the world oil and gas
industry. Yet oil production will probably peak worldwide sometime
within this decade, and the future capacity of natural gas production
is unclear. Coal will be able to pick up some of the slack, but with
current technology this will amplify the threat of massive climate
change.
Energy is at the core of virtually every problem facing humanity.
We cannot afford to get this wrong. We should be skeptical of optimism
that the existing energy industry will be able to work this out on its
own.
Somehow we must find the basis for energy prosperity for ourselves
and the rest of humanity for the 21st century. By the middle of this
century we should assume we will need to at least double world energy
production from its current level, with most of this coming from some
clean, sustainable, CO2-free source. For worldwide peace and prosperity
it needs to be cheap.
We simply cannot do this with current technology. We will need
revolutionary breakthroughs to even get close.
Oil was the principal driver of our economic prosperity in the 20th
century. It is possible that Mother Nature has played a great trick on
us, and we will never find another energy source that is as cheap and
wonderful as oil. If so, this new century is certain to be very
unpleasant.
However, I am an American scientist brought up in the Midwest
during the Sputnik era, and like so many of my colleagues in the US and
worldwide, I am a technological optimist. I think we can do it. We can
find ``the New Oil'', the new technology that provides the massive
clean energy necessary for advanced civilization of the 10 billion
souls we expect to be living on this planet by 2050. With luck we'll
find this soon enough to avoid the terrorism, war, and human misery
that will otherwise ensue.
Electricity is the key. As we leave oil as our dominant energy
technology, we will not only evolve away from a wonderful primary
energy source, but we will also leave behind our principal means of
transporting energy over vast distances. By 2050 we will do best if we
do this transportation of energy not as oil, or coal, or natural gas,
or even hydrogen. We should not be transmitting energy as mass at all.
Instead we should transport energy as pure energy itself.
Consider, for example, a vast interconnected electrical energy grid
for the North American Continent from above the Artic Circle to below
the Panama Canal. By 2050 this grid will interconnect several hundred
million local sites. There are two key aspects of this future grid that
will make a huge difference: (1) massive long distance electrical power
transmission, and (2) local storage of electrical power with real time
pricing.
Storage of electrical power is critical for stability and
robustness of the electrical power grid, and it is absolutely essential
if we are ever to use solar and wind as our dominant primary power
source. The best place to provide this storage is locally, near the
point of use. Imagine by 2050 that every house, every business, every
building has its own local electrical energy storage device, an
uninterruptible power supply capable of handling the entire needs of
the owner for 24 hours. Since the devices are small, and relatively
inexpensive, the owners can replace them with new models every 5 years
or so as worldwide technological innovation and free enterprise
continuously and rapidly develop improvements in this most critical of
all aspects of the electrical energy grid. Today using lead-acid
storage batteries, such a unit for a typical house to store 100
kilowatt hours of electrical energy would take up a small room and cost
over $10,000. Through revolutionary advances in nanotechnology, it may
be possible to shrink an equivalent unit to the size of a washing
machine, and drop the cost to less than $1,000. Since the amount of
energy stored is relatively small, there are many technologies that are
being considered. One is a flow battery with a liquid electrolyte based
on salts of vanadium. Another features a reversible hydrogen fuel cell
which electrolyzes water to make hydrogen when it stores energy, then
uses this hydrogen to make electricity as it is needed. Another uses
advanced flywheels. With intense research and entrepreneural effort,
many schemes are likely to be developed over the years to supply this
local energy storage market that may expand to several billion units
worldwide.
With these advances the electrical grid can become exceedingly
robust, since local storage protects customers from power fluxuations
and outages. With real-time pricing, the local customers have incentive
to take power from the grid when it is cheapest. This in turn permits
the primary electrical energy providers to deliver their power to the
grid when it is most efficient for them to do so, and vastly reduce the
requirements for reserve capacity to follow peaks in demand. Most
importantly, it permits a large portion--or even all--of the primary
electrical power on the grid to come from solar and wind.
The other critical innovation needed is massive electrical power
transmission over continental distances, permitting, for example,
hundreds of gigawatts of electrical power to be transported from solar
farms in New Mexico to markets in New England. Now all primary power
producers can compete with little concern for the actual distance to
market. Clean coal plants in Wyoming, stranded gas in Alaska, wind
farms in North Dakota, hydroelectric power from northern British
Columbia, biomass energy from Mississippi, nuclear power from Hanford
Washington, and solar power from the vast western deserts, etc., remote
power plants from all over the continent contribute power to consumers
thousands of miles away on the grid. Everybody plays. Nanotechnology in
the form of single-walled carbon nanotubes (a.k.a. ``buckytubes'')
forming what we call the Armchair Quantum Wire may play a big role in
this new electrical transmission system.
Such innovations in power transmission, power storage, and the
massive primary power generation technologies themselves, will come
from miraculous discoveries in science together with free enterprise in
open competition for huge worldwide markets.
It would be useful to have these discoveries now.
America, the land of technological optimists, the land of Thomas
Edison, should take the lead. We should launch a bold New Energy
Research Program. Just a nickel from every gallon of gasoline, diesel,
fuel oil, and jet fuel would generate $10 billion a year. That would be
enough to transform the physical sciences and engineering in this
country. After five years we should increase the funding to a dime per
gallon. Sustained year after year, this New Energy Research Program
will inspire a new Sputnik Generation of American scientists and
engineers. At minimum it will generate a cornucopia of new technologies
that will drive wealth and job creation in our country. At best we will
solve the energy problem within this next generation; solve it for
ourselves and, by example, solve it for the rest of humanity on this
planet.
Give a nickel. Save the world.
The Chairman. Terrific. Thank you.
I wanted to tell you that the bill that we are trying to
get passed has some very, very pronounced and live sections on
nanotechnology. We do not have the nickel, but if we think
enough about it we will pay for it, because I would submit to
you we paid for National Institutes of Health at a much higher
rate than you have just suggested because we got excited about
health. If we can get excited about what you are talking about,
we certainly should be able to take the National Science
Foundation and the Department of Energy and work toward
doubling their spending in a 10-year period. There are a number
of us that are going to introduce such legislation. The time
has come to double that because you cannot add that much more
to National Institutes of Health unless you just want to give
every university in the United States carte blanche to fund
every kind of research that anybody has to offer, which I do
not want to do. I am the only one so far who spoke up against
the funding, and NIH thought I was nuts when I did it, but I
did it because I do not know how much more it can grow.
The Senator from the great State of Kentucky, I want to
suggest something to you and then we will go on to the next
witness. There is a new invention that is currently in the
market that is called Horizon Sensor. It is a little company in
Ratone, New Mexico, where an engineer has invented a machine
that is so simple with reference to coal that everybody forgot
about it other than him. It cuts a swath of coal, in your coal
and any other major coal veins. The physical evidence is that
over 95 percent of the dirty stuff is in the top and bottom six
inches. So the swath comes along and leaves the six inches and
takes the rest out. When the coal comes out the other side to
be mined, it is almost clear of the major pollutants, the
mercury and the bad stuff.
Currently the Department is considering submitting to the
EPA that it be mandatory that it be used on mines that are
producing coal that has the structure that I have just
described. I thought it would be good maybe if we brought that
person down to have a showing perhaps in your State at your
leisure. I think it would be something very exciting.
Now we are going to go to you, Dr. Moniz, because that is
the way I have it in my list. So if you would proceed. I do not
think I will go through your bio except to tell everybody that
he was second in charge of the Department of Energy, his
expertise was nuclear. When he left there he joined up with
another very involved person, Dr. Deutche. They have since that
time published a great manuscript on nuclear.
I am going to suggest to you, Dr. Moniz, that I was just
telling Senator Bingaman after all these years I am about 3
weeks away from a book on nuclear power, the future of the
world, and it will be ready.
Mr. Smalley, I want to suggest that you probably know, that
at Sandia National Laboratories there is the largest facility
for nanoresearch in the world and it is about two-thirds
finished. So I do not think we are short of money. I think we
may be a little short of what we want to do with it, which
people like you could be very helpful on.
Your statement will be made part of the record, doctor. Let
us proceed.
STATEMENT OF ERNEST J. MONIZ, Ph.D., PROFESSOR OF PHYSICS,
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Dr. Moniz. May I just note before starting, Senator, that I
am looking very much forward to your book and recall your very
interesting and important talk at the Kennedy School some years
ago which put together nuclear power with nonproliferation
issues in a way that I thought was extremely important. Also, I
will mention for the gentleman from Kentucky that with John
Deutsch our new study is on coal.
But if I may go to my statement, Mr. Chairman, Senator
Bingaman, and members: Thank you for the opportunity to discuss
the results of our MIT study on the future of nuclear power.
The study was framed by the global warming challenge of
increasing energy use, especially electricity use, very
substantially by mid-century to meet global human need while at
the same time cutting emissions of greenhouse gases. We believe
the United States will join others in this effort and stress
the importance of enabling the technological solutions early
on, really in the next decade to 2, if we have any chance of
being on the glide path to addressing this problem by mid-
century.
This is a very stiff challenge and we believe that all
options represented here on this panel must be on the table,
including nuclear power. The United States must certainly be a
leader if this kind of global growth is to be realized on a
scale big enough to seriously impact greenhouse gas emissions
by mid-century, probably a tripling or so of American
deployment by mid-century, again if this global scenario is to
be realized.
This is obviously very challenging for a technology that
has, bluntly, not seen a new plant ordered in a quarter century
because it is facing economic, safety, waste, proliferation,
and public acceptance issues. The principal utility criteria
for moving ahead with new plants in the United States includes
operational confidence, licensability, and economics. This
growth will be met for several decades by evolutionary versions
of currently deployed technologies, so-called thermal reactors,
principally light water reactors, with some possibility of
heavy water reactors, and then in a couple of decades gas-
cooled reactors in the mix.
But the advanced reactors and fuel cycles much discussed
these days in the research community are many decades from
deployment and thus are not relevant to the challenge that I
have laid out, getting on the trajectory to meet greenhouse gas
challenges in this first half century.
Within this context, we offer several recommendations which
I will summarize briefly: Economics. The economics of new
nuclear plants are challenging in a restructured electric
sector. A merchant plant model of costs shows that if nuclear
power is to be competitive with coal and natural gas industry
must demonstrate reactor capital cost reductions that are
plausible, about 25 percent, but as yet unproved, and the
social costs of greenhouse gas emissions need to be
internalized. Enough plants need to be built on budget and
schedule to remove the financing risk premium.
For the United States, overcoming this first mover problem
is really the key to determining the role of nuclear power.
Based upon the public good of determining the competitiveness
of evolutionary reactor designs in the evolved regulatory
context, we recommend electricity production tax credits for
first movers modeled after those in place for wind, with a
total credit scaled to first mover costs. This has the
advantages of technology neutrality in addressing carbon
emissions and of still requiring substantial private sector
equity investments and therefore keeping risk where it belongs.
First mover demonstration of the economics and safety of
new plants must occur within the next decade or so if nuclear
power is to make a significant contribution to mitigating
climate change in the first half of this century. We note that
the 2003 energy bill conference report included such a
mechanism, production tax credits, although with somewhat
higher total credit and smaller first mover capacity relative
to the MIT report.
Waste management. In the growth scenario, long-term storage
of spent fuel prior to geological emplacement, specifically
including international spent fuel storage, we believe should
be systematically incorporated into waste management
strategies. The scope of waste management R&D should be
expanded significantly as a very high priority. An extensive
program on deep borehole disposal was one example that we put
forward.
Proliferation. The current international safeguards regime
should be strengthened to meet the nonproliferation challenges
of globally expanded nuclear power. The IAEA additional
protocol needs to be implemented and the accounting and
inspection regime should be supplemented with strong
surveillance and containment systems for new fuel cycle
facilities.
The Nonproliferation Treaty implementation framework should
evolve to a risk-based framework, keyed to fuel cycle activity.
Central to this is having growth in global nuclear power
realized by having fuel cycle services, especially fresh fuel
supply and spent fuel removal, provided by a relatively small
number of suppliers under international oversight. Such an
approach needs to be established over the next decade prior to
a possible acceleration in nuclear power deployment and
American leadership is essential.
R&D. The government nuclear energy R&D program is
substantially underfunded. The MIT study group priorities for
the next 5 to 10 years encompass waste management, thermal
reactor development, safeguards, uranium resource assessment,
and advanced fuel cycles. Specifically, a major international
effort, the nuclear system modeling project, as we called it,
should be launched to develop the analytical tools and to
collect essential scientific and engineering data for
integrated assessment of fuel cycles. Large demonstration
projects are not justified in our view in the absence of this
advanced analysis and simulation capability.
Any international program, however, must be pursued with
proliferation resistance as a key criterion, both in terms of
fuel cycles explored and in terms of facilities required while
pursuing the program. We recommend joint management of such
programs by the Nuclear Energy and Nonproliferation Offices of
the Department of Energy.
Finally, we observe that public acceptance is critical to
expansion of nuclear power in many countries. In the United
States, the public does not yet see nuclear power as a way to
address global warming. Environmental organizations, power
providers, and the government need to engage in a much more
open discussion of the benefits and problems associated with
nuclear power and climate change.
Thank you again for the opportunity. I will be most happy
to address the committee's questions.
[The prepared statement of Dr. Moniz follows:]
Prepared Statement of Ernest J. Moniz, Ph.D., Professor of Physics,
Massachusetts Institute of Technology
INTRODUCTION AND SUMMARY
Mr. Chairman, Senator Bingaman, and members of the Energy and
Natural Resources Committee, I thank you for the opportunity to discuss
the results of an interdisciplinary study on The Future of Nuclear
Power [1] carried out at MIT and published in Summer 2003. It produced
a set of recommendations aimed at preserving the option for nuclear
power to contribute significantly towards meeting the greenhouse gas
(GHG) emissions challenge. That challenge is to maintain or reduce the
level of anthropogenic global GHG emissions over the next several
decades even as energy demand increases substantially, especially in
the developing economies of the world. As a reference point, about 6.5
Gigatonnes of carbon are emitted annually, principally from energy
production and use, and a risky doubling of pre-industrial carbon
dioxide concentrations in the atmosphere is expected in the second half
of this century in a ``business-as-usual'' (BAU) scenario. Policy
options and recommended actions for the next decade are offered in the
MIT study with an eye towards possible Terawatt-scale global deployment
of nuclear power by mid-century. That represents nearly a tripling of
today's global capacity, which most likely would modestly increase
nuclear power's market share of global electricity production. The
Terawatt scale (which is about a third of total primary energy use per
year in the United States) is that at which nuclear power (or other
``carbon-free'' technologies) displaces carbon emissions from fossil
fuel plants at the Gigatonne scale.
A possible tripling of nuclear power capacity to mid-century is a
major challenge for a technology that is projected by EIA to continue
at more or less constant deployed capacity for the next two decades in
a BAU scenario. Of course, international commitment to major reductions
of energy sector carbon intensity would be far from BAU, and that
provides the context for the MIT study. We believe that such a
commitment will eventually be forthcoming, that the United States will
join with others to do so, and that an early commitment will greatly
improve the odds of holding GHG atmospheric concentrations at
acceptable levels. Success will likely require Terawatt-scale or
greater contributions from all technology pathways the ``negawatts'' of
accelerated efficiency gains, renewables, nuclear power, and clean coal
with carbon dioxide capture and sequestration.
We shall discuss only the nuclear power pathway. To realize growth
on the indicated scale, economic, safety, waste, and proliferation
challenges must be met to the public's satisfaction. Some key
observations and recommendations, elaborated in the rest of the
testimony, include:
A mid-century growth scenario on a scale that substantially
impacts greenhouse gas emissions would be realized with thermal
reactors operated principally in a once-through mode. This best
meets the principal utility criteria for moving ahead with new
nuclear plants in the United States [2]:
Operational confidence based on familiarity with the
system designs and standardization of both design and
operation
Licenseability, for which the extensive regulatory history
with light water reactors is very important
Economics, requiring large reductions in overnight capital
costs compared to past experience.
The economics of new nuclear plants are challenging in a
restructured electricity sector. A merchant plant model of
costs shows that, if nuclear power is to be competitive with
coal and natural gas, industry must demonstrate reactor capital
cost reductions that are plausible but as yet unproved, and the
social costs of greenhouse gas emission need to be internalized
[1]. For the United States, overcoming the ``first mover''
problem is key to determining the role of nuclear power. Based
upon the public good of determining the competitiveness of
evolutionary reactor designs in an evolving regulatory context,
we recommend electricity production tax credits for ``first
movers'', modeled after those in place for wind, with a total
credit scaled to first mover costs. This has the advantages of
``technology neutrality'' in addressing carbon emissions and of
still requiring substantial equity investments (and therefore
keeping risk with the private sector). First mover
demonstration of the economics and safety of new nuclear plants
must occur within the next decade or so if nuclear power is to
make a significant contribution to mitigating climate change in
the first half of this century. We note that the 2003 energy
bill conference report included such a mechanism, although with
somewhat higher total credit and smaller first mover capacity
relative to the MIT report.
Long-term storage of spent fuel prior to geological
emplacement, specifically including international spent fuel
storage, should be systematically incorporated into waste
management strategies. The scope of waste management R&D should
be expanded significantly; an extensive program on deep
borehole disposal is an example. Successful operation of
geological disposal facilities and public acceptance of the
soundness of this approach are essential for large-scale new
nuclear power deployment.
The current international safeguards regime should be
strengthened to meet the nonproliferation challenges of
globally expanded nuclear power. The International Atomic
Energy Agency (IAEA) Additional Protocol [3] needs to be
implemented, and the accounting and inspection regime should be
supplemented with strong surveillance and containment systems
for new fuel cycle facilities. The Nonproliferation Treaty
implementation framework should evolve to a risk-based
framework keyed to fuel cycle activity; central to this is
having growth in global nuclear power deployment realized by
having fuel cycle services, in particular fresh fuel supply and
spent fuel removal, provided by a relatively small number of
suppliers under international oversight. Such an approach needs
to be established over the next decade, prior to a possible
acceleration in nuclear power deployment. American leadership
is essential.
Widespread deployment of nuclear power in the second half of
this century and beyond, as might be necessary in a GHG-
constrained world, may call for advanced fuel cycles and
reactors requiring a sustained R&D effort. Gas-cooled reactors
have potential advantages with respect to safety, proliferation
resistance, modularity, and efficiency and could, given
accumulated experience, contribute earlier, perhaps in two
decades. A major international effort, the Nuclear System
Modeling Project, should be launched to develop the analytical
tools and to collect essential scientific and engineering data
for integrated assessment of fuel cycles (advanced fuels,
reactors, irradiated fuel reprocessing, waste management).
Large demonstration projects are not justified in the absence
of advanced analysis and simulation capability. Any
international program should be pursued with proliferation
resistance as a key criterion, both in terms of the fuel cycles
explored and in terms of capabilities required while pursuing
the program. Joint management of such programs by the nuclear
energy and nonproliferation offices of the Department of Energy
is called for.
The government nuclear energy-related R&D program is
substantially underfunded. The MIT study group recommended
priorities for the next five to ten years encompass waste
management (engineered barriers, waste form characterization,
deep borehole disposal), thermal reactor development (cost
reduction, high burn-up fuels, gas cooled reactor development),
safeguards (MPC&A tracking systems, containment and
surveillance systems),uranium resource assessment, and advanced
fuel cycles (modeling, simulation and analysis project, new
separations approaches).
Public acceptance is critical to expansion of nuclear power
in many countries. In the United States, the public does not
yet see nuclear power as a way to address global warming.
Environmental organizations, power providers, and the
government need to engage in a more open discussion of the
balance of risks associated with nuclear power and climate
change.
GLOBAL GROWTH SCENARIO
The MIT study group constructed a scenario for global growth of
electricity demand to mid-century and for nuclear power's share of that
growth. The scenario for electricity demand was based on U.N. world
population and urbanization projections and an assumption of national
per capita electricity consumption rising towards a world standard. The
resulting projection for global electricity production is consistent
with EIA projections over the next two decades (slightly below the EIA
reference case) and yields an increase of nearly a factor of three by
mid-century. The nuclear power market share, assuming a strong impetus
to deploy nuclear power (presumably because of greenhouse gas emission
``caps'' and of satisfactory resolution of the challenges noted above),
is based upon national capabilities and infrastructure. The resulting
scenario is shown in Table 1.
Table 1.--GLOBAL GROWTH SCENARIO
------------------------------------------------------------------------
Nuclear
Projected electricity market
Region 2050 GWe share
capacity -------------------
2000 2050
------------------------------------------------------------------------
Total world............................. 1,000 17% 19%
Developed world......................... 625 23% 29%
U.S................................. 300
Europe & Canada..................... 200
Developed East Asia................. 115
FSU..................................... 50 16% 23%
Developing world........................ 325 2% 11%
China, India, Pakistan.............. 200
Indonesia, Brazil, Mexico........... 75
Other developing countries.......... 50
------------------------------------------------------------------------
Projected capacity comes from the global electricity demand scenario in
Appendix 2, which entails growth in global electricity consumption
from 13.6 to 38.7 trillion kWhrs from 2000 to 2050 (2.1% annual
growth). The market share in 2050 is predicated on 85% capacity factor
for nuclear power reactors. Note that China, India, and Pakistan are
nuclear weapons capable states. Other developing countries includes as
leading contributors Iran, South Africa, Egypt, Thailand, Philippines,
and Vietnam.
Several features of the scenario deserve note. The total deployment
of 1000 GWe globally is nearly a tripling of today's deployment. This
corresponds to an approximately level world market share and would
displace about 1.8 Gigatonnes of carbon (equivalent) emissions annually
from coal plants of equivalent capacity [4]. Such a displacement might
represent about 25% of incremental greenhouse gas emissions from energy
use in a business-as-usual scenario, a significant amount. Indeed, one
may question whether difficult public policy steps are worthwhile from
a climate change perspective unless one envisions nuclear power
contributing to the ``solution'' at this level.
To reach such a level, the developed world will need to increase
its nuclear market share substantially, up to about 30%. In particular,
the United States must play a lead role, because of the combination of
high per capita demand and projected population increase of about 100
million people. The reality that no new nuclear plants have been
ordered in the United States for a quarter century is one indicator of
the difficulty in realizing this global scenario. In contrast to the
U.S. situation, projected stable (e.g., France) or declining (e.g.,
Japan) populations in countries seen today as more favorably disposed
to nuclear power serve to limit demand growth.
A substantial part of the growth also occurs in the developing
economies, but in a relatively small number of countries. This has
important implications for addressing proliferation concerns,
particularly since China, India and Pakistan already have nuclear
weapons capabilities and thus are not major concerns for fuel cycle-
associated proliferation (since they are likely to continue with
dedicated weapons programs). An incentive structure that has the
relatively small number of remaining countries engaged in nuclear
reactor construction and operation but not in enrichment or
reprocessing has major nonproliferation benefits; we return to this
below.
ECONOMICS
The economic comparison of new nuclear plants with baseload coal
and natural gas plants and the economics of closing the fuel cycle
underpin many of the recommendations. The baseline costs for new plants
were compared within a framework of
merchant plants (i.e., a competitive generation market in
which investors bear the primary risk)
experience, rather than engineering analyses lifetime
levelized costs.
Table 2 shows that, with gas prices of about $4.50/MCF, both
pulverized coal and natural gas combined cycle plants have a
substantial cost advantage relative to the nuclear plant baseline in
the absence of a carbon ``tax'' (detailed discussions of the
methodology and of the input parameters can be found in the MIT
report). An independent analysis performed by Deutsche Bank [5] is in
quite close agreement. This comparison may be altered significantly by
two factors.
Table 2.--COMPARATIVE POWER COSTS
------------------------------------------------------------------------
Real
levelized
Case (year 2002 $) cost cents/
kWe-hr
------------------------------------------------------------------------
Nuclear (LWR)............................................. 6.7
+ Reduce construction cost 25%........................ 5.5
+ Reduce construction time 5 to 4 years............... 5.3
+ Further reduce O&M to 13 mills/kWe-hr............... 5.1
+ reduce cost of capital to gas/coal.................. 4.2
Pulverized coal........................................... 4.2
CCGT \1\ (low gas prices, $3.77/MCF)...................... 3.8
CCGT (moderate gas prices, $4.42/MCF)..................... 4.1
CCGT (high gas prices, $6.72/MCF)......................... 5.6
------------------------------------------------------------------------
\1\ Gas costs reflect real, levelized acquisition cost per thousand
cubic feet (MCF) over the economic life of the project.
First, as shown in Table 2, plausible reductions in new
nuclear plant costs can bring them in line with coal and gas.
Reducing capital costs by 25% to $1500/kWe, a target that has
not yet been met but appears plausible with new systems
approaches and enough experience, has a large financial impact.
A similar impact would arise from eliminating the risk premium
(higher equity requirements and higher return on equity) for
financing nuclear plants. Presumably, this reduction in the
cost of financing would be achieved only by building and
operating several plants successfully.
The second major factor is the uncertainty surrounding
internalization of carbon emission costs. Table 3 shows the
impact of a carbon ``tax'' on the levelized costs for coal and
gas. Clearly, the competitiveness of nuclear power would be
enhanced significantly if carbon emission costs are
internalized at $50 to $100 per tonne, which is considerably
less than the cost of carbon dioxide capture and sequestration
using today's technologies for either pulverized coal or
natural gas, close to $200/tonne [6]. Also, $50/tonne is about
the bid price today in the nascent European carbon trading
market.
Table 3.--POWER COSTS WITH CARBON TAXES
------------------------------------------------------------------------
Carbon tax cases levelized electricity cost
-------------------------------------------------------------------------
Cents/kWe-hr $50/tonne C $100/tonne C $200/tonne C
------------------------------------------------------------------------
Coal.......................... 5.4 6.6 9.0
Gas (low)..................... 4.3 4.8 5.9
Gas (moderate)................ 4.7 5.2 6.2
Gas (high).................... 6.1 6.7 7.7
------------------------------------------------------------------------
If nuclear power is to be deployed at mid-century on the scale
being discussed, substantial construction of new plants must be
underway within ten to fifteen years. Both the economics and new
regulatory procedures need to be demonstrated. We recommend, for the
United States, that production tax credits be offered to first mover
nuclear plants at a rate set by that for wind. This is currently 1.8
cents/kWh, which can be thought of as about $75/tonne [4] of avoided
carbon from a coal plant (and with the public benefit of carbon
avoidance for decades following expiration of the credit). A production
tax credit has the advantages of fundamentally keeping the risk with
the private sector and of being applicable to any carbon-free option.
Because of the very different natures of nuclear power and wind with
respect to baseload characteristics, we recommended limiting the credit
to 10 GWe of first mover capacity and to a total of about $200/kW. This
recommendation is reflected in the 2003 energy bill conference report,
although with less eligible capacity and a potentially much higher
credit per installed kilowatt. The public good argument for such a
mechanism rests with the importance of having government, industry, and
financial markets understand in a timely way whether new nuclear power
will be competitive with fossil fuels and thus a serious option for
simultaneously meeting electricity demand and addressing climate
change.
The ``first mover'' reactors are overwhelmingly likely to be
evolutionary advances of operating reactors, with passive safety
features replacing some of the active systems in today's plants. This
addresses the first two principal criteria noted in the introduction
[2], while the tax credit provides the incentive to determine the
economics. Clearly other criteria will also need to be met to make a
business decision [2]: reliable demand for baseload electricity; cost
of alternatives, especially natural gas prices; continued successful
operations of existing nuclear plants and a path to resolve plant
security and spent fuel disposal issues; regulatory predictability
through the Combined Operating License process; possible risk sharing
through a ``first mover consortium;'' and recognition of the
environmental benefits.
If the industry is not confident in meeting cost targets with a
substantial production tax credit available for several plants
(allowing cost reduction through experience and by spreading one-time
costs), then the credit will go unused with the obvious implications
for nuclear power's role in meeting greenhouse gas challenges. The
experience of successfully building and operating several plants is
needed to work down the substantial risk premium for private sector
financing of new nuclear plants.
The MIT study also looks at the economics of plutonium recycling in
the PUREX/MOX fuel cycle, which creates a significant proliferation
risk by separating weapons-usable plutonium during normal operation.
Not surprisingly, the once-through fuel cycle costs less. This is
reflected indirectly in the difficulty of funding military plutonium
disposition programs, where MOX fabrication costs alone are seen to
equal the entire once-through fuel costs, and in the indefensible
accumulation in several countries of about 200 tonnes of separated
plutonium from power reactors. The arguments given in the past for
pursuing PUREX/MOX have been inadequacy of uranium resources, which is
no longer a credible argument, and the energy value in the plutonium,
which is basically answered by the unfavorable economics. The current
reason offered is the benefit to long-term waste management, to which
we now turn.
NUCLEAR WASTE MANAGEMENT
The management and disposition of irradiated nuclear fuel has not
yet been dealt with anywhere in the world. This is a major impediment
to the growth of nuclear power. The Yucca Mountain repository is moving
towards a licensing decision and, if it proceeds to successful
implementation, a major milestone will have been achieved.
Nevertheless, the MIT study's growth scenario calls for a dramatically
expanded capacity for waste management in any fuel cycle.
Partitioning of the spent fuel to remove plutonium and possibly
other actinides unquestionably reduces long-term radioactivity and
toxicity of the waste. Nevertheless, the MIT study group did not find
the benefits of partitioning and transmutation to be compelling on the
basis of waste management. There are several reasons. First, although
successful implementation has not yet been demonstrated, the scientific
basis for long-term geological isolation appears sound. Partitioning
leads to a large volume and mass reduction, but these are not terribly
important criteria for repository design. Heat and radioactivity, which
are far more important criteria, are only marginally reduced on the
century time scale, since the fission products remain with the waste.
In addition, the trade-off of benefits possibly of small consequence to
human health--in the millennium time scale against near-term increases
in waste streams, occupational exposure, and safety concerns is not
clear. There is certainly little evidence that the public is more
concerned with the millennium rather than the generational time scale.
Finally, other approaches may yield even greater confidence in long-
term isolation and may do so more economically and simply. This would
include advanced engineered barriers and other disposal approaches,
such as deep boreholes. These are modest diameter holes drilled 4 to 5
kilometers deep into stable crystalline rock. The approach looks
promising and economical because of drilling advances, because the
geochemical environment (highly reducing) is favorable, and because the
emplacement is not subject to surface vagaries. This is not to say that
deep boreholes will prove to be the best approach, since major
uncertainties exist. The point is that important alternatives to
partitioning exist for adding even greater confidence to long-term
waste isolation and these should be explored vigorously through new R&D
programs.
An important role for advanced fuel cycles well into the future
cannot be excluded, although significant economic and technical
barriers must be overcome. The MIT study recommends a program of
analysis, simulation tool development, and basic science and
engineering of advanced concepts, and eventually appropriate project
demonstrations. Such a program carries some risk of itself aiding
possible proliferants by providing technology know-how with respect to
actinide separation and metallurgy, as well as associated research
facilities. However, the U.S. approach of rejecting plutonium recycle
and cutting off research and international cooperation on fuel cycles
demonstrably proved ineffective, since other countries have moved
forward anyway. Rejection of the civilian MOX option should continue.
Our recommendation is one of U.S. engagement to shape international
advanced fuel cycle R&D properly, with an open mind to its eventual
outcome, even while pursuing and advocating the open fuel cycle with
thermal reactors as the basis for growth over the next decades. We also
recommend that the U.S. government offices responsible for
nonproliferation have an explicit management role, along with the
nuclear energy office, in defining the scope, scale and location of
such international R&D programs.
NONPROLIFERATION
Global expansion of nuclear power into numerous new countries
raises concerns about proliferation. This is not new, since a similar
concern formed the backdrop for President Eisenhower's ``Atoms for
Peace'' speech fifty years ago. However, the nonproliferation regime
rooted in the Nuclear Nonproliferation Treaty (NPT) framework faces new
circumstances: the end of the Cold War has changed security threats and
relationships; the dramatic spread of manufacturing capability and
technology lowers the barriers for translating nuclear know-how into
nuclear weapons; and the post-9/11 world is more aware of the
capabilities of terrorist groups and their interest in nuclear
materials. These realities have refocused attention on the control and
elimination of weapons-usable fissionable material (HEU and plutonium)
and on the uncomfortable recognition that countries can move to the
threshold of a nuclear weapons capability within the NPT regime.
Strengthening the nonproliferation regime in the face of a possible
global nuclear power growth scenario calls for many coordinated
actions. One fundamental change to the NPT implementation regime,
discussed in the MIT report, would focus on a risk-based framework
rooted in the technology, as opposed to political views. The key issue
is that power reactors are not themselves the major proliferation
threat, as opposed to enrichment and reprocessing plants, in the fuel
cycle. Thus, states that deploy only reactors, with international
assistance as desired, would have internationally secured fresh fuel
supply and spent fuel removal. This would involve either ``fuel cycle
states'' or internationally operated fuel cycle centers. The advantages
of a country taking a ``reactor-only'' path would be avoidance of
significant nuclear fuel cycle infrastructure development and
maintenance costs, of intrusive safeguards regimes (since spent fuel
and refueling operations for light water reactors are relatively easily
monitored), and, most important, of nuclear waste challenges. The
relatively inexpensive fresh fuel services (in particular enrichment)
might even be offered at cost or below through international agreement
and support. An insistence on developing a full fuel cycle
infrastructure, given the option of internationally guaranteed,
economically attractive fuel cycle services and avoidance of
significant challenges (especially waste management), would greatly
heighten suspicions about proliferation intent, presumably leading to
toughened international control mechanisms with regard to such
countries. The major obstacle is acceptance of the spent fuel in a
multiplicity of countries. So far, only Russia has expressed interest
in receiving such fuel. This willingness of Russia to accept return of
spent fuel may yet facilitate a resolution of the concerns about Iran's
nuclear infrastructure development, a resolution much along the lines
being suggested here for broader application. Clearly, establishing the
validity of long-term secure spent fuel and/or high-level waste
geological isolation is a critical step for responsible growth of
nuclear power in response to electricity supply and climate change
imperatives.
PUBLIC ATTITUDES
The MIT study carried out a poll of well over 1000 Americans on
their attitudes and understanding of energy-related issues. By and
large, the public has a good understanding of relative costs and
environmental impacts of different technologies; the cost of renewables
was a notable exception, in that these were widely thought to be
inexpensive. Nevertheless, it was interesting that perceptions of
technology, rather than ``external'' factors such as politics or
demographics, were at the core of their attitudes. A majority of
respondents did not believe that nuclear waste can be stored safely for
many years, and the typical respondent believed that a serious reactor
accident is somewhat likely in the next ten years. The poll also showed
that, in the United States, the public does not connect concern about
global warming with carbon-``free'' nuclear power. There is no
difference in support for building more nuclear power plants between
those who are very concerned about global warming and those who are
not. This may prove to be either an opportunity for nuclear power
advocates to better educate the public or a major obstacle to
motivating the growth scenario. A more open discussion is needed among
interested constituencies about the balance of risks in dealing with
nuclear power expansion and climate change.
CONCLUDING REMARKS
The MIT study sought to define actions needed to enable nuclear
power as an option for significantly mitigating greenhouse gas
emissions while satisfying increasing global demand for electricity. If
expansion of nuclear power is to contribute in a meaningful way up to
mid-century, a robust growth period must commence within ten to fifteen
years. This in turn means that very soon costs of new plants must be
understood, including those costs driven by the licensing process and
possible litigation, and issues surrounding waste management must be
resolved. Addressing the financial risks associated with first mover
plants, perhaps through first mover production tax credits, is an
important step. However, resolving the economics is a necessary but not
sufficient condition for the robust growth scenario. In addition,
difficult international nonproliferation measures must be adopted and
nuclear spent fuel management programs must demonstrate successful
implementation and earn widespread public acceptance. These challenges
are linked in ways that are complicated by the very different nuclear
policies of the United States and some of its allies. Only if these
challenges are met can nuclear power responsibly expand to the Terawatt
scale needed for seriously contributing to climate change mitigation at
mid-century.
REFERENCES AND NOTES
[1] The Future of Nuclear Power, ISBN 0-615-12420-8 (July 2003),
available on-line at http://web.mit.edu/nuclearpower/; this workshop
paper is largely drawn from this report. The study was funded
principally by the Sloan Foundation. Study group members were
Professors S. Ansolabehere, J. Deutch (co-chair), M. Driscoll, P. Gray,
J. Holdren, P. Joskow, R. Lester, E. Moniz (co-chair), and N. Todreas.
[2] Long-Term Strategy for Nuclear Power, Marilyn C. Kray, Exelon
Corporation, presented to the Pew Center for Global Climate Change/
National Commission on Energy Policy 10-50 Workshop (March 2004)
[3] The Additional Protocol permits the IAEA to inspect undeclared
facilities suspected of use in a nuclear weapons development program.
[4] For the reference coal plant, we take a capacity factor of 85%,
a heat rate of 9,300 BTU, and a carbon intensity of 25.8 kg-C/mmBTU.
[5] Adam Siemenski, Deutsche Bank, presentation at the 2002 EIA
NEMS conference
[6] David, J. and H. Herzog, ``The Cost of Carbon Capture'', Fifth
International Conference on Greenhouse Gas Control Technologies
(Australia, 2000); available at http://sequestration.mit.edu
The Chairman. Thank you very much.
Now, David, you are next. I am just going to say that you
worked for us here and we were very proud of you then. I was
personally proud to recommend you. It seems, however, that with
the passage of each month you get another job. I do not know
how many more you can handle. But when they cannot get
somebody, they fill another niche with you. You have done a
great job in Renewables and I am sure you will as Under
Secretary.
Dr. Smalley, I made a misstatement. The biggest facility at
Los Alamos--excuse me--at Sandia is not a nanocenter. It is a
microengineering center. There is a nanocenter, but it is equal
to four others. So I am sorry that I misstated.
David, would you proceed.
STATEMENT OF DAVID GARMAN, ASSISTANT SECRETARY FOR ENERGY
EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY
Mr. Garman. Thank you, Mr. Chairman. Since my written
statement is part of the record, I will be brief, and I will
focus on renewable energy as I was asked to by the committee.
Over the past 3 years we have invested about a billion
dollars in renewable energy technologies, plus another nearly
$3 billion to promote efficient use of energy from all
resources. Let me make my pitch for energy efficiency here.
There are environmental consequences to any kind of power
generation and energy use--coal, wind, nuclear, hydro, solar.
The environmental consequences may vary, but there still are
consequences. Therefore, the cleanest, most sustainable,
environmentally benign form of energy is in essence the energy
we do not need, the energy we manage to save, the so-called
negawatt.
So any discussion of sustainability should recognize the
value of energy efficiency at the start, and I need not dwell
on that point because the members of this committee all
understand the importance of smart energy use and have been
leaders in the effort to promote energy efficiency.
So with that said, let me turn to a discussion of renewable
energy research and development, because even with solid
efforts toward energy efficiency we are still going to need
much more energy supply. As a consequence of the renewable
energy R&D undertaken by the Department of Energy and our
partners, the cost of wind-generated electricity has fallen
from roughly 80 cents per kilowatt hour in 1980 to as little as
4 cents today. The cost of solar photovoltaic electricity has
fallen from over $2.00 per kilowatt hour in 1980 to less than
25 cents today. The cost of geothermal electricity has fallen
from 15 cents per kilowatt hour in 1985 to between 5 and 8
cents today.
Continued research and development will and it must yield
further progress. We believe we can achieve onshore wind
generation at 3 cents per kilowatt hour by 2012 in all areas of
the Nation with average annual wind speeds of 13 miles per hour
or greater, the so-called class 4 areas and above. We believe
we can achieve solar photovoltaic power generation at a cost of
6 cents a kilowatt hour by 2020. We also hope to move
geothermal power down to the 5 to 8 cent range by 2010.
If we continue to succeed in bringing down the cost of
these technologies, we think their market share will continue
to increase and any policy measures that a future
administration or Congress might wish to employ to accelerate
renewable energy deployment will be less expensive for
taxpayers and ratepayers alike.
Even with business as usual policies, the analyses that we
perform as part of our budget formulation process suggest that
the R&D we are currently engaged in can increase our production
of renewable energy from today's roughly 6.8 quadrillion Btu's
to some 27 quadrillion Btu's in 2050. Now, that is not a
prediction of the future. I know I am not clever enough to
design or predict a particular energy future. But instead, Mr.
Chairman, we see ourselves as being in the options business. We
are working to provide a rich set of technology options. We do
so because we know we ultimately face limits in the amount of
carbon dioxide or criteria pollutants we can safely emit or
limits in the amount of petroleum we can affordably extract or
other limiting factors we cannot yet fully appreciate.
Recognizing that there is no silver bullet, we invest in a
diverse technology portfolio that includes renewables, nuclear,
clean coal with carbon sequestration, as well as associated
technologies such as hydrogen, superconductivity, and fuel
cells that can help us to move or store or utilize that energy
more efficiently.
With that, Mr. Chairman, I will look forward to questions
and discussion. Thank you.
[The prepared statement of Mr. Garman follows:]
Prepared Statement of David Garman, Assistant Secretary for Energy
Efficiency and Renewable Energy, Department of Energy
Mr. Chairman, Members of the Committee, I appreciate the
opportunity to discuss the Administration's views on the role that
renewable energy technologies can play in sustainable electricity
generation.
As stated in the President's National Energy Policy, the
Administration believes that renewable sources of energy can help
provide for our future energy needs by harnessing abundant, naturally
occurring sources of energy with less impact on the environment than
conventional sources. We are committed to a research, development,
demonstration and deployment program that supports that role. The
Department of Energy (DOE) FY 2005 budget request for renewable
technologies totals $374.8 million, a $17.3 million increase over the
FY 2004 appropriation. This year's budget proposes increases in our
programs for wind, hydropower, geothermal, hydrogen, and (when the
impact of Congressional earmarks is taken into account), solar and
biomass as well. Over the past three years we have invested nearly a
billion dollars in renewable energy technologies, not including
substantial cost-sharing from our private sector partners.
Advances in technology over the past 25 years have brought us great
strides in lower costs, improved performance and competitiveness of
renewable energy technologies. Today, electricity is being produced
from the wind, the sun, the earth's heat and biomass in a variety of
applications across the Nation.
The current contribution of non hydropower renewable energy
resources to America's total electricity supply is relatively small
(about 2.3 percent), and we expect it to remain relatively small for
years to come. Nevertheless, the promise is great. For example, since
2000, nationwide installed wind turbine capacity in the United States
has more than doubled. We believe that renewable power technologies are
still at the stage where significant advances are likely to result from
strong R&D programs. Such advances coupled with lowered manufacturing
costs, increased user confidence that results from increased
deployment, and appropriate market-based incentives proposed in the
President's FY 2005 Budget can lead to a significant role for these
technologies in serving future electricity demands.
My testimony today will discuss those renewable energy technologies
in DOE's Renewable Energy Portfolio.
WIND TECHNOLOGIES
Wind energy is a virtually emissions free electricity generation
technology that eliminates environmental concerns associated with
conventional fuel cycles, such as mining or other extraction,
combustion and other emissions, and waste disposal. Wind energy is also
one of the most widely used and fastest growing renewable energies in
the world. According to the American Wind Energy Association, worldwide
installed capacity increased by 26 percent in 2003. Globally the total
amount of installed wind power has grown 500 percent since 1997, from
7,636 megawatts (MW) to 39,294 MW in 2003.
Wind resources are widespread and substantial in many areas of the
nation, particularly in the Midwest and West. The Department estimates
that in 2003 nearly $2 billion was invested in new wind power
facilities. Installed wind power capacity reached 6,374 MW by the end
of 2003 with utility-scale turbines now installed in 30 states.
Improvements driven by DOE sponsored research have dramatically
reduced costs. A recent study by the National Renewable Energy
Laboratory showed that wind energy systems are currently capable of
producing electricity for less than $0.05 per kilowatt hour (kWh) in
locations with Class 4 \1\ wind speeds. At higher speed Class 6 \2\
wind speed sites, the cost of electricity is less than $0.04/kWh
without subsidies.
---------------------------------------------------------------------------
\1\ Class 4 sites are locations with average annual wind speeds of
13 miles per hour, measured at a height of ten meter.
\2\ Class 6 sites are higher wind speed sites, with average annual
speeds of 15 miles per hour.
---------------------------------------------------------------------------
While significant potential remains to tap in to high quality wind
resources with today's technology, these resources are generally not in
the areas where people live or where transmission is available. The
Department is now focused on developing technology that can cost-
competitively harvest more widely available, lower speed wind resources
that are generally closer to populations and load centers. This so-
called ``low wind speed'' technology will expand the land area where
wind can be developed by a factor of 20, while reducing the average
distance between the wind resources and where power is needed by a
factor of five.
We are also looking at off-shore wind energy resources off the
coasts and in the Great Lakes of the United States. These areas offer
immense, economically viable wind energy resources that are close to
major urban areas with growing demand and increasingly limited energy
production and delivery options. Wind turbines located in shallow
waters offshore could produce electricity for $0.07-0.08/kWh in Class 4
sites with current technology, with the potential for future cost
reductions with further research.
DOE's Wind Energy program has a long term goal of $0.03/kWh for
onshore systems in Class 4 sites in 2012. DOE projects that the
development of technology for onshore Class 4 wind sites will result in
an installed capacity level in 2025 of an estimated 59,000 MW, the
largest portion of which will be represented by turbines designed
specifically for use in moderate wind areas.
GEOTHERMAL TECHNOLOGY
Geothermal energy uses steam and hot water from the Earth to create
energy. Geothermal power plants have a proven track record of
performance as baseload facilities, with capacity factors and
availabilities often exceeding 95 percent. Today, domestic geothermal
energy production is a $1 billion a year industry that accounts for
about 15 percent of all non-hydropower renewable electricity
production, and about 0.35 percent of total U.S. electricity
production. Geothermal's net summer capability in the U.S. has grown
from about 500 MW in 1973 to over 2,200 MW today in the states of
California, Nevada, Hawaii, and Utah. Other states with significant
near-term potential include Alaska, Arizona, Colorado, Idaho, New
Mexico, Oregon, and Washington. Recent estimates by industry of
hydrothermal potential ranges from 5,000 MW with current technology to
over 18,000 MW with advanced technology.
The U.S. Geological Survey estimates that already-identified
hydrothermal reservoirs hotter than 150 C have a potential generating
capacity of about 22,000 MWe and could produce electricity for 30
years. We further estimate that additional undiscovered hydrothermal
systems may have a capacity of 72,000-127,000 MWe. At depths accessible
with current drilling technology, virtually the entire country
possesses some geothermal resources. The best areas are in the western
United States where bodies of magma rise closest to the surface.
The Energy Information Administration projects geothermal
installations totaling 6,800 MWe by 2025, based on the assumption that
natural gas prices will remain relatively stable. Geothermal output is
projected to increase from 13 billion kWh in 2002 to 47 billion in
2025. The EIA projection does not forecast new geothermal capacity
occurring from the undiscovered hydrothermal resource base or the
potential of non-hydrothermal resources, such as the heat energy that
underlies much of the country, which may be recoverable by use of
enhanced geothermal systems (EGS) technology being developed through
our research and development program.
EGS technology has the potential to make a sizeable addition to the
inventory of geothermal resources available for production. When that
broader resource base is considered, 40,000 MW of resources could be
made economic in the 2020-2040 timeframe. Of course, these projections
also depend heavily on the ability to reduce the cost of energy using
EGS technology to competitive levels.
SOLAR ENERGY TECHNOLOGY
Fifty years ago scientists at Bell Laboratories developed the first
silicon solar cell. With efficiencies of less than six percent, these
solar cells offered, for the first time, the ability to power a wide
range of electrical equipment. Photovoltaic (PV) arrays convert
sunlight to electricity without moving parts and without fuel wastes,
air pollution, or greenhouse gasses. PV systems can be installed as
either grid supply technologies or as residential or commercial scale
customer-sited alternatives to retail electricity.
Today solar energy accounts for one percent of non-hydroelectric
renewable electricity generation and 0.02 percent of total U.S.
electricity supply. But PV technology has progressed remarkably in
terms of both performance and cost in recent decades. The cost of PV-
generated electricity has dropped 15 to 20 fold over the past 25 years
and such systems are highly reliable. Thousands of systems are
successfully operating today, serving applications that range from
water pumping to residential power to remote utility power
applications.
Crystalline silicon wafer technology dominates today's PV market.
Direct manufacturing costs (labor and materials) for crystalline
silicon module power in the United States are around $1.95/watt. This
corresponds to an installed system vendor price for grid-tied PV energy
of about $0.22 per kWh over a 25-year lifetime. Crystalline silicon
module reliability has greatly improved to the point where modules are
now warranted for 25 years, and many will probably have a functional
lifetime much longer than this.
DOE's photovoltaic program is focused on the next-generation
technologies such as thin-film photovoltaic cells, leap-frog
technologies such as polymers and nanostructures, and technologies to
improve interconnections with the electric grid. Our research and
development seeks primarily to reduce the manufacturing cost of highly
reliable photovoltaic modules. DOE's research goal is to achieve grid-
tied systems with lifetime energy costs around $0.06/kWh and 30 years
lifetime by 2020.
Even though some thin-film modules are now commercially available,
their real impact is expected to become significant during the next
decade. Thin films using amorphous silicon, a growing segment of the
U.S. market, have several potential advantages over crystalline
silicon. They can be manufactured at lower cost, are more responsive to
indoor light, and can be manufactured on flexible or low-cost
substrates. Other thin film materials are expected to become
increasingly important in the future.
In addition to improvements in crystalline silicon technology,
other notable technical accomplishments achieved over the past decade
through our research and development programs include:
The price of inverters (for changing direct current of the
PV modules into alternating current suitable for the commercial
power grid) is decreasing, and their reliability is steadily
increasing. DOE seeks at least ten year warranted reliability.
Production of thin film modules is expected to increase
sharply in CY 2004 and 2005. The environmental issues of safely
retiring these modules have been successfully resolved by DOE
researchers at Brookhaven National Laboratories.
The development of super-high efficiency cells, with
efficiencies now nearing 38 percent under concentrated
sunlight, has progressed faster than expected ten years ago, in
part due to the major investment in this technology by the
space PV industry in collaboration with NREL researchers.
DOE made extensive contributions to Article 690 of the
National Electric Code which deals with PV safety issues. This
is a major development because it helps to remove a serious
impediment to wide-scale PV grid-tied deployment--the
reluctance of commercial power companies to allow PV systems to
be interfaced to their power lines.
In the longer term, DOE expects wide-scale deployment of very
inexpensive systems made from novel specially engineered materials,
e.g., quantum dot and organic material technologies. Such systems will
allow not only utility scale power, but also inexpensive production of
fuels such as hydrogen, or complex carbon-based fuels through synthesis
using atmospheric carbon dioxide.
Concentrating solar power may also offer significant potential. DOE
recently contracted for an independent study by Sargent and Lundy, a
draft of which was reviewed by the National Academy of Sciences (NAS).
The report found that concentrating solar power troughs could reach
costs of 4.3-.6.2 cents per kWh and solar power towers could reach 3.5
to 5.5 cents per kWh by 2020. (These cost estimates are predicated on
significant R&D investments and market incentives not included in the
President's FY 2005 Budget).
BIOMASS
Biomass represents an abundant, domestic and renewable source of
energy that has significant potential to increase domestic energy
supplies. Biomass is used to generate electricity through the direct
combustion of wood, municipal solid waste, and other organic materials,
cofiring with coal in high efficiency boilers, or combustion of biomass
that has been converted chemically into fuel oil.
Biomass power is a proven electricity generating option that today
accounts for about 70 percent of nonhydroelectric renewable electricity
generation and 1.6 percent of total U.S. energy supply, or about 9,733
MW in 2002 of installed capacity. This includes about 5,886 MW of
forest product and agricultural residues, 3,308 MW of generating
capacity from municipal solid waste, and 539 MW of other capacity such
as landfill gas. The majority of electricity production from biomass is
used as base load power in the existing electrical distribution system.
EIA projects that electricity output from biomass combustion will
increase from 37 billion kWh in 2002 (1.0 percent of generation) to 81
billion kWh in 2025 (1.3 percent of generation).
More than 200 companies outside the wood products and food
industries generate power in the United States from biomass. Where
power producers have access to very low cost biomass supplies, the
choice to use biomass in the fuel mix enhances their competitiveness in
the marketplace. This is particularly true in the near term for power
companies choosing to co-fire biomass with coal to save fuel costs and
earn emissions credits. An increasing number of power marketers are
starting to offer environmentally friendly electricity in response to
consumer demand and regulatory requirements.
The Department estimates that the total available domestic biomass,
beyond current uses for food, feed, and forest products, is between
500-600 million dry tons per year. Within the continental U.S., we can
literally grow and put to use hundreds of millions of tons of
additional plant matter per year on a sustainable basis. These biomass
resources represent about 3-5 quadrillion Btus (quads) of delivered
energy or as much as 5-6 percent of total U.S. energy consumption. In
terms of fuels and power, that translates into 60 billion gallons of
fuel ethanol or 160 gigawatts of electricity. This is enough energy to
meet 30 percent of U.S. demand for gasoline or service 16 million
households with power.
The current focus of our biomass program is the simultaneous
production of liquid fuels, products, and power in a so-called
``biorefinery.'' Simultaneous production of products, fuels, and
electricity enables the selection of the highest value outputs while
providing synergies that can lower production costs. Successful
development of these technologies could provide important jobs and
income for rural America through the sustainable production of biomass
feedstocks for biorefineries that produce power, fuels, chemicals and
other valuable products.
THE EERE PORTFOLIO OF TECHNOLOGIES
The overall EERE portfolio provides a combination of multiple
renewable energy technologies-solar, wind, biomass, geothermal, and
others--together with research and development of energy efficiency
technologies. Such a diverse portfolio offers benefits that extend
beyond those of the individual technologies described above, and we
believe it is important that EERE's research, development,
demonstration, and deployment activities continue as a balanced
portfolio.
A diverse and balanced portfolio offers several benefits:
near, mid, and long term research activities and associated
deployment opportunities are included, ranging from low-wind
speed turbines to quantum-dot photovoltaics.
degrees of risk are balanced within technology areas--such
as research on several types of thin-film photovoltaics
technologies along with high-risk work on advanced concepts--as
well as across technologies.
synergies are identified and built between technologies. For
example, geothermal, biomass, hydropower, wind, and solar offer
power in different regions of the country according to the
available resources, at different times of the day and year,
and in ways that can complement each other, filling in where
another resource is not available. Further, the natural gas
saved by producing power using wind turbines, for example, will
be available for conversion to hydrogen.
The current portfolio will take us far toward a clean energy
future, as we continue to fund innovative ideas. For example, our
Future Generation photovolatics solicitation in 1998 funded 18
competitively awarded projects out of 72 proposals from 1999 to 2002.
In addition to contributing to our program goals, these activities
helped to build our national capacity for innovation, as each project
was with a different university.
CONCLUSION
Renewable energy technologies hold tremendous promise in moving the
Nation toward sustained, low-emission electricity supply. Government-
sponsored research and development efforts over recent decades have
been very successful in helping to lower the costs and improve the
reliability of renewable energy technologies, and more can be achieved
with robust research and development in the future.
The Administration believes that, in the context of a comprehensive
energy strategy, more is needed for renewables to gain market share and
contribute to our energy independence and environmental objectives.
That is why the President's FY 2005 Budget includes energy tax
proposals devoted to increasing efficiency and renewable energy, such
as extending and modifying the tax credit for producing electricity
from biomass and wind, providing tax credits for energy produced from
landfill gas, residential solar energy systems, and investment in
combined heat and power; and extending the ethanol tax exemption.
Another important factor is that these renewable sources of
generation must be able to integrate into our existing distribution
system. The tools that form the necessary interface between distributed
energy systems and the grid need to be less expensive, faster, more
reliable and more compact. And as pointed out in the National Energy
Policy, renewables don't fit into traditional regulatory categories and
are often subjected to competing regulatory requirements. The lack of
uniform interconnection protocols and regulatory treatment is another
area where developers of small renewable energy projects have to
negotiate interconnection agreements on a site-by-site basis.
That completes my statement, Mr. Chairman. I would be happy to
respond to questions the Members of the Committee may have.
The Chairman. Thank you very much.
Dr. Burke.
STATEMENT OF DR. FRANK P. BURKE, VICE PRESIDENT, RESEARCH AND
DEVELOPMENT, CONSOL ENERGY, INC., ON BEHALF OF THE NATIONAL
MINING ASSOCIATION
Mr. Burke. Thank you, Mr. Chairman. I am vice president of
research and development for CONSOL Energy, which is the
largest Eastern U.S. coal producer, with production in
Kentucky, Ohio, Pennsylvania, West Virginia, and Virginia. I am
testifying on behalf of CONSOL and the National Mining
Association to discuss technology to enable coal to continue to
provide low emission electricity to our Nation that we will
need to meet our energy demand in the future.
Mr. Chairman, we agree with the statement in your letter of
invitation that action should be taken today to prepare the
Nation for a future time when oil and gas prices and
availability limit their uses to areas other than electricity
generation.
In 2003, the United States mined a billion tons of coal,
primarily to generate electricity. 52 percent of U.S.
electricity comes from coal. We are self-sufficient in coal. In
fact, coal is the Nation's only net energy export. The
Department of Energy forecasts that U.S. coal use will grow to
1.4 billion tons in 2020. This will require the construction of
120 gigawatts of new coal-fired powerplants while maintaining
most of our existing 300 gigawatts of existing capacity.
The United States is not unique in its dependence on coal
and it is vital to our national interest to promote the
increased use of coal, not only domestically but worldwide. The
most compelling evidence of this is China. The Chinese, who
already use 50 percent more coal than the United States, expect
to double their coal-fueled electric generating capacity by
2020 and to nearly triple it by 2040.
Therefore, throughout the world economic growth and
political stability are tied to electricity and electricity
throughout the world is tied to coal. The desire and in fact
the necessity of the world to utilize its abundant coal
resources will not be denied. Energy availability and energy
quality are key to meeting all three aspects of sustainable
development: economic, societal, and environmental. The
question is not whether we will use coal for human development,
but how we will use it.
We can reconcile our need for coal with our environmental
and economic needs through technology. Clean coal technology
can preserve our existing coal-based electricity capacity and
can replace and expand as needed in the future, all while
continuing to reduce emissions. Many of the technical
challenges and opportunities for future coal generation
technology are embodied in a clean coal technology road map
that has been developed by industry and the Department of
Energy. This is discussed in more detail in my written
testimony.
The road map sets power cost, efficiency, and environmental
performance objectives for technologies that will allow
existing plants to meet anticipated future environmental
restrictions, such as expected mercury regulations. The road
map also lays out the R&D pathway for the next generation of
coal-based plants. Furthermore, the road map allows us to
determine the costs for the necessary R&D and demonstration
work. We estimate this to be $10 to $14 billion in public and
private funds between now and 2020.
Unfortunately, the Federal funding in the administration's
fiscal year 2005 budget for both the core R&D program and the
clean coal power initiative demonstration is low, barely half
of what is needed to follow the road map. Without adequate
support from the public sector, it will not be possible to meet
the road map's schedule.
A new aspect of DOE's program is the FutureGen project.
FutureGen would minimize pollutant emissions to near-zero
levels. This facility would be based around a coal gasification
system with the capability to make hydrogen and to sequester a
million tons of carbon dioxide per year. We believe that a
program like FutureGen that defines the cost and feasibility of
advanced coal use options is a prudent strategic investment.
Furthermore, FutureGen would serve as an important research
platform capable of testing advanced powerplant components as
they emerge from the R&D program.
My company is one of a consortium of ten coal and
electricity companies offering to provide the public sector
resources to conduct the FutureGen project. As discussions
about FutureGen proceed, it is important to understand that it
is not a substitute for either the core R&D program or the CCPI
demonstration program. We need the core research to bring new
technologies to the status that they can be tested at FutureGen
and elsewhere and we need to continue R&D and demonstration
projects on technologies that are not part of the FutureGen
design.
Furthermore, it will be critical for government to commit
to fully funding its share of the project before major costs
are incurred.
Beyond R&D, we need to plan for the commercial deployment
of these new technologies. The coal-related provisions of
Chairman Domenici's pending energy legislation are critical in
this regard. First, the bill authorizes $2 billion to 2012 for
the Clean Coal Power Initiative, which will help ensure that we
can bring products out of the R&D program to commercial
readiness. Second, the energy bill contains over $2 billion in
vital tax incentives that are necessary to the deployment of
clean coal technologies. We strongly urge the Senate to act on
energy legislation and we applaud Chairman Domenici for his
steadfast leadership.
In conclusion, Mr. Chairman, we need to continue to define,
follow, and fund a technology road map that focuses on the
costs, efficiency, and environmental performance of coal-based
electricity generating technologies in order to preserve our
existing infrastructure and build new coal-based powerplants.
Thank you.
[The prepared statement of Mr. Burke follows:]
Prepared Statement of Dr. Francis P. Burke, Vice President, Research
and Development, CONSOL Energy, Inc., on Behalf of the National Mining
Association
Mr. Chairman, my name is Frank Burke. I am Vice President of
Research and Development for CONSOL Energy Inc. (CONSOL). I am
appearing here on behalf of CONSOL and the National Mining Association
(NMA) to testify on how technology can permit coal to provide the fuel
to generate low emission electricity that our nation will need to meet
our energy demands of the future.
I would like to commend you, Mr. Chairman, for holding these
important hearings. Mr. Chairman, we agree with the statement in your
letter of invitation to testify that ``actions should be taken today to
prepare the nation for a future time when oil and gas prices and
availability limit their uses to areas other than electricity
generation.'' As emphasized in the Energy Information Administration's
(EIA) latest Annual Energy Outlook published in January of this year,
the demand for electricity is expected to increase by nearly 50% by
2025 and we can only assume that this growth will continue beyond that
time. Affordable and clean electric energy must be available to allow
our nation to reach its full economic potential. Clean electric energy
means economic growth and it means jobs. Coal, which is over 90% of our
nation's domestic energy resource on a Btu basis, and now provides over
50% of the electricity we use, is - and must continue to be - the
source for much of this electricity. Advanced clean coal technologies
that are being developed under long-standing federal/private
partnerships will assure that coal can continue to be used in a manner
consistent with environmental needs.
CONSOL Energy Inc., founded in 1864, is the largest producer of
high-Btu bituminous coal in the United States, is the largest producer
of coal by underground mining methods, and is the largest exporter of
U.S. coal. CONSOL has 19 bituminous coal mining complexes in seven
states. We have a substantial technology research program focused on
energy extraction technologies and techniques, coal utilization,
emission management and byproduct utilization. CONSOL has been an
active partner with DOE in the advancement of many technologies and in
basic research. CONSOL is a publicly held company (NYSE:CNX) with over
6,000 employees.
The NMA represents producers of over 80 percent of the coal
produced in the United States, the reliable, affordable, domestic fuel
used to generate over 50 percent of the electricity that we use today.
NMA's members also produce another form of fuel uranium that is the
source of just over 20 percent of our electricity supply. NMA also
represents companies that produce metals and non-metals, companies that
are amongst the nation's largest energy consumers. Additionally, NMA
members include manufacturers of mining and processing equipment,
machinery and mining supplies, and transporters, engineering,
consulting and financial institutions serving the mining industry.
THE DEMAND FOR ENERGY WILL INCREASE DURING THE NEXT TWO
DECADES AND BEYOND
Energy, whether it is from coal, oil, natural gas, uranium, or
renewable sources, is the common denominator that is imperative to
sustain economic growth, improve standards of living and simultaneously
support an expanding population. The significant economic expansion
that has occurred in the United States over the past two decades, and
the global competitiveness of U.S. industry, was in no small measure
due to reliable and affordable energy.
Our demand for energy will continue to increase. The 2004 Annual
Energy Outlook issued by EIA in January of this year forecasts that
total energy use in the United States will grow by 40% percent between
2002 and 2025. All sources of energy will be required to meet this
increase in use. Over this period, continuing a trend that began over
two decades ago, the nation will become even more dependent on
electricity to meet final energy demands. The same EIA report predicts
that electricity demand will increase by nearly 50% by 2025. Unlike the
forecast of a year ago, EIA is now predicting that much of this
increase will come from coal-fired power generation. The demand for
coal for electricity is expected to grow from today's nearly 1 billion
tons to 1.5 billion tons annually by 2025 when coal will produce
approximately 52% of the electricity used by U. S. consumers.
New coal fired capacity will be needed to meet this growing demand
for electricity. For first time in several years, EIA has increased its
estimate of new coal fired capacity that will be built within their
forecast timeframe. EIA is now forecasting that 112 GW of the 356 GW of
capacity that will be built between now and 2025 will be coal fired, a
forecast that is over 50% greater than a year ago. At the same time, we
cannot overlook the importance of the existing coal fired generating
fleet which will remain the source for 75% of future coal fired power.
Very little of the 305 GW of coal-fired capacity that is in operation
today will be retired over the next 20 years. The existing units will
have to be operated at a higher capacity and with lower emissions.
Considerable additional investment will be required to maintain these
plants and to install pollution control equipment needed to meet new
SO2, NOx and mercury requirements.
The reason that coal demand is expected to grow more quickly than
previously forecast is the expectation that the natural gas supply will
be limited and much higher in price. Indeed we have seen a substitution
of coal for natural gas in the past year as natural gas prices have
hit, and remained at, near record highs. In 2003, generation from coal
increased by more (29,856 million kWh) than the total increase in
demand for electricity (12,491 million kWh). Conversely, generation
from natural gas dropped by more than 8% (or by 58,377 million kWh) to
the lowest level since 2000. Use of coal-fired capacity has increased
while use of natural gas capacity has declined despite the large number
of new natural gas-fired units built over the last decade. Again, the
reason is price. The use of natural gas for electricity generation
increased by 75% between 1990 and 2002, while use of gas by industry
declined by 2%, and total gas use increased by 20%. This resulted in
concerns about supply and caused prices to escalate.
Clearly, the trends of the past are unsustainable in the future.
Higher prices for natural gas mean higher prices for electricity and
higher raw material costs for industries using gas as a feedstock.
Considerable job losses have already occurred due to the higher gas
prices brought about by over-reliance on gas for power generation. Both
of these factors impair our overall economic growth and employment
levels. Fuel diversity is a requirement for stability. We cannot - as
we have done over the past decade - put all our eggs in the natural gas
basket. Coal generation will have to increase at existing plants and
new coal power plants must be brought on line. The challenge for coal
is to build these plants with low emission technologies. This will
require support from Congress in terms of public policy.
The fact that coal generation can increase while emissions decline
has been demonstrated by history. In 2004, sulfur dioxide
(SO2) and nitrogen oxides (NOx) emissions will be
40% less than in 1980 while electricity from coal will be approximately
70% greater. Existing air pollution controls already have reduced
mercury emissions by 40%, and emissions will continue to decrease as a
result of current and future regulations and legislation. This history
is a good indication of the trends that can be expected in the future
lower emissions as more coal is used for generation of electricity.
The United States is not unique in its dependence on coal, and it
is vital to our national interest to promote the increased use of coal
not only domestically, but worldwide as a key component of our energy
and economic security. The most compelling evidence of this is China.
This year, the Chinese will mine and consume 1.5 billion tons of coal.
In 15 years, they will consume 2.5 billion tons; China's increase alone
will equal our current consumption. They expect to double their coal-
fueled electricity generating capacity to 600 GW by 2020. By 2040, the
Chinese expect to use 4 billion tons of coal annually.
Throughout the world, economic growth and political stability are
tied to electrification, and electricity is tied to coal. Therefore,
the desire and, in fact, the necessity of the world to utilize its
abundant coal resources will not be denied. Energy availability and
energy quality are key to meeting all three aspects of sustainable
development: economic, societal and environmental. The question is not
whether we need or will use coal for human development, but how we will
use it.
THE NEED FOR CLEAN COAL TECHNOLOGIES
One of the principal reasons for developing new coal-fired
generating technologies is to ensure that electricity generation from
coal does not compromise environmental quality. Because of its chemical
composition, coal poses more environmental concerns than other fossil
fuels. On average, coal contains more sulfur and nitrogen, and more
mineral matter, than oil or natural gas. Fortunately, the means are
available to control the emission of these substances into the
environment to levels that meet current regulatory limits with the wide
range of technologies already deployed on many coal-fired power
stations. These include particulate collection devices, such as
electrostatic precipitators and fabric filters that control emissions
of coal ash, flue gas desulfurization scrubbers of various designs that
control emissions of sulfur dioxide (SO2) and a variety of
methods and devices for reducing nitrogen oxide (NOx)
emissions. Many of these were developed under the DOE-industry
partnerships of the Clean Coal Program. There are no technologies in
widespread commercial use today to control emissions of mercury or
carbon dioxide from coal-fired power plants, but as I will discuss,
these are the subjects of active research programs.
Like others throughout the world, the United States faces the
challenge of meeting our need for low cost energy while reducing the
environmental impact of energy production and use. The EPA recently
proposed new environmental regulations that will reduce SO2,
NOx, and mercury emissions from existing power plants to
levels well below current regulatory limits. This will require the
widespread deployment of improved technology that further reduces
SO2 and NOx emissions below current regulatory
levels at an acceptable cost. Mercury will be substantially reduced as
a co-benefit of increased SOx and NOx control,
but, in the long run, it probably will be necessary to develop and
deploy technology specific to mercury emissions. In addition, there are
opportunities to improve the efficiency of existing generating units.
Increasing efficiency can reduce emissions, because less fuel is
required for each unit of electricity generated, and efficiency
improvement is the only method currently available to reduce
CO2 emissions from power production.
These Clean Coal systems will need to be designed and integrated in
a way that achieves the expected benefits of each, without creating any
unintended consequences. For example, the use of combustion
modifications to reduce NOx emissions can result in
increased carbon in coal fly ash, making fly ash less valuable as a
byproduct. Selective Catalytic Reduction, which is an effective means
for NOx control, can cause deposition that impairs
efficiency in the boiler system. On the other hand, the intelligent
integration of technologies can have synergistic benefits. As noted
earlier, emission control devices installed for other pollutants can
remove a limited amount of mercury from some coals from the flue gas
coming out of the plant's stack at no additional cost. As another
example, the solid byproducts from coal combustion can be converted
into salable materials such as wallboard gypsum and road aggregates.
Research is underway to learn how to take full advantage of co-benefits
such as these, and to incorporate them into the design of existing and
new power plants.
In the future, we will need new coal-fired power plants to meet
electricity demand growth and to replace existing facilities as they
reach the end of their economic lives. Notable among these new
technologies are supercritical pulverized coal combustion, advanced
combustion, integrated gasification combined cycle (IGCC), and various
hybrid power systems. These technologies hold the promise of high-
energy efficiency and minimal environmental impact if they are
developed and successfully deployed at an acceptable cost. For example,
IGCC technology is currently being demonstrated at several sites, but
it must still be considered pre-commercial technology because of its
relatively high capital cost. Nevertheless, IGCC systems can produce
some of the cleanest power available from coal; emissions from these
systems approach the levels generated by modern natural gas-fired power
plants, and research is underway to reduce the capital cost through
design improvements. As with all technologies, the full benefits of
potential design optimization will not be gained until a sufficient
number of full-scale commercial units have been built and operated.
THE CLEAN COAL TECHNOLOGY ROADMAP
The term ``Clean Coal Technology'' (CCT) is used to describe
systems for the generation of electricity, and in some cases, fuels and
chemicals from coal, while minimizing environmental emissions. This is
accomplished through increased efficiency (i.e., electricity produced
per unit of fuel [energy] input), equipment for reducing or capturing
potential emissions, or a combination of the two. Various CCTs are
commercially available, or have been demonstrated at full commercial
scale, but need further commercial use for economic optimization. Other
CCTs are in the research and development stage.
Currently available CCTs include the efficient pulverized-coal-
fired boiler (supercritical type) equipped with a full complement of
fully-developed, state-of-the-art pollution control technologies. An
example of this would be a supercritical boiler equipped with selective
catalytic reduction for NOx, high efficiency flue gas
desulfurization for SO2, and a particulate collection
device. It is important to realize that many coal-fired generating
units are currently equipped with these CCT systems, some of which were
brought to the state of commercial readiness since 1986 in the
Department of Energy's previous Clean Coal Technology program.
Clean Coal Technology also refers to high-performance technologies
that are well along the development path, but not yet fully
demonstrated to be commercially available because of either technical
or economic risks. Examples of these are integrated gasification
combined cycle (IGCC) and advanced combustion power plant technologies.
``Advanced'' Clean Coal Technology refers to technology concepts
that are in development for future use, such as advanced IGCC or
ultrasupercritical boiler technology. In this context, the term
``advanced'' refers to improvements in costs, efficiency, and
performance that are expected at some future date, assuming successful
development.
Moving advanced clean coal technologies to full commercial
operation will take a continuing commitment to research, development,
demonstration and a strategy to ensure that the technologies, once
developed, will be deployed commercially. To provide a means of
planning future research needs, and to chart progress toward meeting
them, the industry, largely through the efforts of the Coal Utilization
Research Council, the EPRI, and the Department of Energy, has devised a
Clean Coal Technology roadmap that sets cost and performance targets
and a timeline (See Tables, below) for new coal technology.
It must be clearly understood that these are merely research
targets and are not intended to serve as a basis for regulatory
requirements. Moreover, as noted later, progress along the roadmap will
depend upon adequate funding. If the roadmap were followed, technology
would be available in the near term to allow operators of existing
coal-fueled power plants to meet increasingly stringent environmental
regulations, such as those of the Clear Skies Act. Again, were the
roadmap followed, it would be possible in 2015 to design a high
efficiency power plant, capable of carbon capture, with near-zero
emissions; by 2020, the first commercial plants of this design would be
built.
DOE/CURC/EPRI CCT Roadmap I
------------------------------------------------------------------------
Reference
Roadmap performance targets plant * 2010 2020
------------------------------------------------------------------------
SOx, % removal.................... 98% 99% >99%
NOx, lb/MMBtu..................... 0.15 0.05 <0.01
Particulate matter, lb/MMBtu...... 0.01 0.005 0.002
Mercury........................... ``Co- 90% 95%
benefits''
By-product utilization............ 30% 50% 100%
------------------------------------------------------------------------
* Reference plant has performance typical of today's technology.
Improved performance achievable with cost/efficiency tradeoffs.
DOE/CURC/EPRI CCT Roadmap II
------------------------------------------------------------------------
Reference
Roadmap performance targets plant * 2010 2020
------------------------------------------------------------------------
Plant efficiency (%, HHV)......... 40 45-50 50-60
Availability, %................... >80 >85 90
Capital cost, $/kW................ 1000-1300 900-1000 800-900
Cost of electricity, $/MWh........ 35 30-32 <30
------------------------------------------------------------------------
* Reference plant has performance typical of today's technology.
Improved performance achievable with cost/efficiency tradeoffs. W/o
carbon capture and sequestration.
The roadmap contains considerable detail on the specific
technological advances that are necessary to meet the roadmap coal.
Some of these ``critical technologies'' are listed below.
Improvements for Existing Plants
Mercury control
Low-NOx combustion at reduced costs
Fine particle control
By-product utilization
Advanced Combustion
Ultra-supercritical steam
Oxygen combustion
Advanced concepts (e.g., oxygen ``carriers'')
Gasification Systems
Gasifier advances and new designs (e.g., transport gasifier)
Oxygen separation membrane
Syngas purification (cleaning) and separation (e.g.,
hydrogen, CO2)
Energy Conversion Advanced gas turbine technology using H2-rich syngas
Fuel cell systems using syngas
Fuels and chemicals
Carbon Management
CO2 capture and sequestration
<10% increase in cost of electricity for >90% removal of
CO2 (including sequestration)
``Hydrogen economy''
Systems Integration
Integrated power plant modeling and virtual simulation
Sensors and smart-plant process control
Finally, the roadmap makes it possible to estimate the cost of the
research, development and demonstration programs necessary to achieve
the performance targets, as shown in the table below. These values
represent the total cost of the research programs, including both
federal funds and private sector cost shares.
------------------------------------------------------------------------
Coal technology platforms RD&D spending through 2020
------------------------------------------------------------------------
IGCC/gasification......................... $3.5 billion
Advanced combustion systems............... $1.7
Innovations for existing plants........... $1.4
Carbon capture/sequestration.............. $2.8 (?)
Coal derived fuels and liquids............ $1.2
-----------------------------
Total................................. $10.6
------------------------------------------------------------------------
The cost for carbon capture and sequestration research is shown
with a question mark, to denote the relatively greater uncertainty in
the estimate of the cost of research in this unprecedented area. It
could be substantially higher, particularly because a number of large
scale, long-term demonstrations will be needed to understand the
technical, economic and environmental feasibility of carbon
sequestration technology. This was one conclusion of a recent National
Coal Council report, entitled ``Coal-Related Greenhouse Gas Management
Issues,'' which provides a detailed discussion of the opportunities and
impediments to developing, demonstrating and implementing greenhouse
gas management options related to coal production and use.
the role of the federal government in technology development
The DOE Office of Fossil Energy, through its Coal and Environmental
Systems program, expended about $198 million in 2004 to co-fund coal-
related R&D, in addition to providing $170 million for the Clean Coal
Power Initiative demonstration program. The DOE is supporting the
development of new technology for mercury reduction and carbon
management. The DOE coal program seeks to develop advanced, highly
efficient, low-emitting energy complexes, for the production of
electricity, fuels and chemicals. The federal government has had a
significant role in the development of clean coal technology. The
original Clean Coal Technology (CCT) program and the current Clean Coal
Power Initiative support the first-of-a-kind demonstrations of new coal
use technologies. These demonstrations encompass a wide range of
technologies, including environmental controls, new power generating
facilities and fuel processing. Forty projects were conducted in the
original CCT program, with a total value of $5.4 billion, consisting of
$1.8 billion in federal funds and $3.4 billion in non-federal funds (a
2/1 leverage on federal dollars).
In 2002, the Energy Department announced the selection of eight
projects to receive $316 million in funding under Round 1 of the Clean
Coal Power Initiative program, the first in a series of competitions to
be run by the Energy Department to implement President Bush's 10-year,
$2 billion commitment to clean coal technology. Private sector
participants for these projects have offered to contribute over $1
billion, well in excess of the department's requirement for 50 percent
private sector cost-sharing.
Three of the projects are directed at new ways to comply with the
President's Clear Skies Initiative that calls for dramatic reductions
in air pollutants from power plants over the next decade-and-a-half.
Three other projects are expected to contribute to President Bush's
voluntary Climate Change initiative to reduce greenhouse gases. Two of
the projects will reduce carbon dioxide by boosting the fuel use
efficiency of power plants. The third project will demonstrate a
potential alternative to conventional Portland cement manufacturing, a
large emitter of carbon dioxide.
The remaining two projects will reduce air pollution through coal
gasification and multi-pollutant control systems.
CONSOL has been an active participant in coal-use research since
the 1940s. Our goals are closely aligned with those of the DOE coal
program, and much of our research has been done in partnership with the
DOE. We were a member of the project teams for two of the CCT projects,
and we made both financial and technical contributions to these
projects. We also were selected for award under the recent Power Plant
Improvement Initiative program to demonstrate a multi-pollutant control
technology, targeted at the smaller power plants that generate about
one-fourth of our coal-based electricity.
Much of our research is directed at helping our utility customers
deal with the consequences of environmental regulations. For example,
we developed a new technology for the beneficial use of the solid
byproduct of flue gas desulfurization, by converting it into aggregates
for use in road and masonry construction. This technology, which we
piloted in partnership with DOE, reduces the cost and the land-use
consequences of solid waste disposal. It can provide a valuable source
of construction materials in areas without good indigenous sources,
such as Florida, and areas of high growth, such as the southwestern
states. Projects like this, which are a win for the economy and a win
for the environment, justify CONSOL's commitment to work in partnership
with the DOE to develop technology that makes sense from both
perspectives.
In some cases, research and demonstration projects, such as those
conducted under the DOE Coal and CCT programs, have been sufficient to
bring important technologies directly to the marketplace. For example,
over $1 billion in Low-NOx burners have been installed at
U.S. power plants since being demonstrated in the CCT program. However,
other CCT program technologies, such as Integrated Gasification
Combined Cycle systems, have not been widely commercialized at their
current stage of development because of the technical and economic
risks that remains despite these one-of-a-kind demonstrations.
Nevertheless, large scale demonstrations are essential to understand
the technical and economic performance of these new technologies and to
provide potential owners and inventors with sufficient confidence to be
able to attract financing.
The DOE has issued a second CCPI solicitation. We believe that
these large-scale demonstration projects are essential to reduce the
technical and economic risks of new advanced clean coal technology.
The government has a critical role to play in providing resources
to follow the Clean Coal Technology roadmap, but unfortunately, current
funding levels are not sufficient to meet the roadmap goals. The table
below compares the funding levels required to follow the roadmap to the
level in the Administration's FY 2005 budget.
------------------------------------------------------------------------
CURC roadmap
Technology program (all figures Administration FY annual R&D budget
in $millions) 2005 request \1\
------------------------------------------------------------------------
IGCC/Gasification............... 34.5.............. 106
Advanced combustion............. 0.0............... 18
Advanced turbines............... 12................ 17 (sungas from
coal)
Existing plants................. 18.1.............. 43
Carbon sequestration............ 49................ 79
Advanced research
Advanced materials only..... 4.65.............. 4.0
Coal derived fuels & liquids.... 16.0 (H2 only).... 13 (Fuels only)
Total R&D................... 160............... 280
Clean coal power initiative..... 50................ 240.0
FutureGen....................... 227............... (\2\)
------------------------------------------------------------------------
\1\ This number is 80% of the total R&D amount required and represents
the federal contribution.
\2\ The CURC roadmap does not explicitly include the FutureGen
initiative.
Although it varies by program area, the overall R&D funding level
is little more than half of that called for in the CURC roadmap.
Unfortunately, this continues a pattern of past years of under funded
clean coal research. Unless research and demonstration funds are
increased, it is unlikely that technology will be developed on the
roadmap schedule, if at all.
Similarly, the funding level for the CCPI falls well below the
roadmap requirements. Furthermore, the progress of the CCPI program is
hampered by the requirement for annual, as opposed to advance
appropriations. Because of the size and cost of demonstration projects,
it is necessary for the DOE to use money from both FY04 and FY05
appropriations to be able to fund the current solicitation. Future CCPI
solicitations are likely to be delayed or limited in scope for the same
reason. It is even possible that some necessary demonstrations will not
be done because the available appropriations are insufficient. Given
this situation, it may be appropriate for the Department to consider
targeted solicitations focused on the roadmap objectives, or to utilize
other approaches to match demonstration priorities with budgetary
limitations.
Because it was proposed after much of the work on the Roadmap was
completed, the FutureGen initiative is not explicitly included in the
Roadmap or in the CURC funding recommendations. However, the goals of
the FutureGen project are consistent with the Roadmap, and properly
coordinated with the core R&D and demonstration programs, FutureGen can
be an important element in meeting its objectives, as discussed below.
THE FUTUREGEN PROJECT
In February of last year, the Department of Energy announced plans
to build a prototype of a coal-based power plant of the future. Dubbed
``FutureGen,'' this facility would be based around a 275MW IGCC system,
but it would have the capability to convert synthesis gas into hydrogen
and to capture and sequester up to one million tons per year of carbon
dioxide. FutureGen would be designed to minimize emissions of criteria
pollutants and mercury to ``near zero'' levels. Furthermore, the
FutureGen facility would be designed to serve as a ``research
platform'' capable of testing advanced components, such as air
separation membranes or fuel cells, during the ten year duration of the
project, and perhaps beyond. The Department issued a ``Request For
Information'' soliciting responses last June from parties willing to
undertake the FutureGen project. My company, CONSOL Energy Inc., is a
member of a ten-company group of major U.S. coal producers and users,
which submitted a response to the DOE RFI, offering to enter into
negotiations to conduct the FutureGen project. In part, our submittal
says that the FutureGen mission should have four key elements:
1. develop commercially competitive and affordable coal-based
electricity and hydrogen production systems that have near-zero
emissions;
2. develop large-scale CO2 sequestration
technologies that are technically and economically viable and
publicly acceptable;
3. provide a large-scale research platform for the
development and commercialization of advanced technology; and,
4. provide opportunity for stakeholder involvement and
education.
The vision of FutureGen as a research platform is particularly
significant because it means that the FutureGen facility can be used as
a test site to bring promising technologies out of the core R&D program
and to accelerate their testing at scales up to full commercial
implementation without the need for separate stand-alone test
facilities.
However, it is important to understand that FutureGen should not be
viewed as a substitute for either the core R&D program or the CCPI
demonstration program for at least two reasons: First, the FutureGen
facility will not be operating for at least five years. During that
time we need to continue the research needed to bring new technologies
to the state that they can be tested at FutureGen. Second, we need to
continue R&D on technologies, such as combustion-based systems, that
are not part of the FutureGen design. That said, as the FutureGen
concept is further defined, industry and government should look for
opportunities for efficiencies in the coordination of the R&D program,
the CCPI, and FutureGen to produce the greatest benefits at the lowest
possible cost. This coordination should be an integral part of the
ongoing technology road-mapping process.
Finally, although the exact cost is not known, DOE originally
estimated the project cost as $1 billion, with 80% provided by the
federal government, and 20%, or $200 million, provided by the
industrial alliance and its partners. Both an acceptable cost share
ratio and the ability of the Government to commit its full cost share
to the project before major costs are incurred are critical to the
project's success.
INCENTIVES FOR CLEAN COAL TECHNOLOGY DEPLOYMENT
The foregoing discussion in this statement deals with the need for
research, development and demonstration of advanced clean coal
technology, and discusses technical and economic criteria that these
new technologies will need to meet to achieve acceptance in the
commercial marketplace. However, while the Clean Coal Power Initiative
and the enhanced core Fossil Energy authorization that are included in
the pending conference report of the energy bill, H.R. 6, are necessary
for the continued development of coal technologies, they are not by
themselves sufficient to ensure that these technologies will find their
way into widespread commercial use. When they are initially introduced,
they will need to be built with substantial engineering contingencies
to assure their operability and reliability, which will increase
capital and operating costs. Over time, as operating experience is
gained, these costs will come down. Therefore, there is a need for
financial incentives to offset the increased technical and financial
risk inherent in the initial deployment of advanced clean coal
technologies. These critical incentives are included in the conference
report to H.R. 6, in the tax package that is part of the new ``leaner''
energy bill, S. 2095 and in the energy tax provisions that have been
incorporated in S. 1637, the FSC/ETI bill. We strongly urge the Senate
to act on these energy provisions on an expedited basis so that
comprehensive energy legislation can be enacted this year.
CONCLUSIONS
Mr. Chairman, there is little doubt that coal will continue to be
widely used in the United States and abroad as a principal fuel for
electricity generation, and coal's use will grow over time. We
appreciate your strong recognition of that fact. The interests of the
economy, society, and the environment in coal can be reconciled if we
invest now in the development and deployment of advanced clean coal
technology which will allow coal to be truly a low emission form of
electricity. By working with industry to develop a coal technology
development roadmap, the Department of Energy has and continues to
align its program with a logical path forward to support the
development of advanced clean coal technology. The coal industry
remains committed to do our part to see that coal remains an abundant,
affordable fuel for power generation, and to help to advance the
technologies needed to meet the goals of societal, economic and
environmental betterment.
Senator Bunning [presiding]. Thank you, Mr. Burke.
I am going to pinch-hit for the chairman since he has been
called away. I will get my questions or some of them out of the
way, then I will proceed with Senator Bingaman and Senator
Akaka.
Mr. Garman, in the past the Government pushed the use of
natural gas. Today that singlemindedness is causing serious
problems for Americans because of the current high price of
natural gas. The presidential fiscal year 2005 budget, as Mr.
Burke mentioned, request is for $237 million for FutureGen and
only $50 million for Clean Coal Power Initiative.
The President's clean coal plan has pledged to commit over
$2 billion over 10 years for advanced clean coal technology.
Funding only $50 million will not meet that pledge. While the
prospect of FutureGen seems promising, why does it seem that
DOE is pushing one program over another by focusing more on
FutureGen rather than the Clean Coal Power Initiative.
What do the other witnesses think about this and what do
you think about it?
Mr. Garman. I thank you for that question. One of the
reasons that we are going after FutureGen is because it is
analogous to the long bomb. It is a daunting R&D effort. It is
something that is worthy of Federal participation. If we are
successful in FutureGen, if we are successful in being able to
design and deploy and demonstrate a coal plant with virtually
zero emissions, no emissions of carbon dioxide, then we will
have made a tremendous stride toward stabilizing greenhouse gas
concentrations in the atmosphere. We would have developed U.S.
leadership in a new technology that could be applicable in
India, China, and all of the other high coal-burning countries
of the world.
It is a high-risk, high-reward proposition. Yes, it is true
that we have in our budget submissions taken some money from
nearer term incremental improvements in the performance of
clean coal technology and shifted it to that longer-term
higher-risk effort. But we think there is an argument for doing
that.
Senator Bunning. Well, let me ask you. It is my
understanding that DOD has not yet announced projects for
FutureGen, but it has projects already under way for Clean Coal
Power Initiatives. How does the DOE plan to spend $237 million
for FutureGen if no projects have been announced?
Mr. Garman. We sent a plan to the Congress on FutureGen
outlining our future plans, I believe, on March 4 of this year.
We described a FutureGen program where we envision about a----
Senator Bunning. But you do have Clean Coal Projects----
Mr. Garman. Yes, we do, and we will continue that work in
that area. But I will tell you it is my understanding that we
will be using some of that budget authority in the context of
FutureGen in the future.
Senator Bunning. Well, it seems disproportionate when you
have $50 million on one side and $237 million on the other, and
you are throwing the long bomb with $237 million and you are
developing clean coal technologies at a--well, at a much lesser
rate, and you actually have programs in clean coal technology
right now.
Mr. Garman. Correct.
Senator Bunning. So why the disparity?
Mr. Garman. Because FutureGen is also a clean coal program.
Senator Bunning. Well, I understand that, but it is a maybe
program.
Mr. Garman. It has risk, yes, it does.
Senator Bunning. Big time.
Mr. Garman. Yes, sir.
Senator Bunning. Well, it is my opinion--and maybe some of
the other panelists can weigh in; I would like for them to.
Mr. Burke. Could I address that?
Senator Bunning. Yes, please do.
Mr. Burke. My company is one of ten companies that last
year responded to DOE's request for information and offered,
contingent upon our ability to negotiate an appropriate
agreement, to do the private sector portion of the FutureGen
project. We view FutureGen as being a very important strategic
element in the overall clean coal technology area. It is a
longer term strategic issue compared to some of the nearer term
issues that are being funded out of the core R&D program and
out of the Clean Coal Power Initiative program right now.
FutureGen is one technology, the FutureGen project will be
one technology. We think that, in addition to FutureGen, it is
necessary to continue to develop other parallel clean coal
technologies.
[Buzzer sounds.]
Mr. Burke. I am sorry.
Senator Bunning. Do not bother about that.
Mr. Burke. I am sorry, I did not know if I was supposed to
do something.
Senator Bunning. No, we are, but you do not have to.
Mr. Burke. I apologize.
So FutureGen is important from the strategic point of view.
Probably the most important thing about FutureGen is it will be
a full-scale demonstration of carbon sequestration, which is a
very important element in the overall clean coal technology
program. But it is only one demonstration of carbon
sequestration. We need demonstrations of carbon sequestration
at a number of sites. We need the development of a variety of
clean coal technologies that stress not only new facilities,
not only gasification-based systems, but combustion-based
systems and technologies that address existing plants.
So I think in that context the FutureGen project is an
important strategic objective, but the CCPI and the core R&D
programs are essential to continue to develop a range of clean
coal technologies that we need to use now and in the near term,
as well as to provide technologies which will ultimately be
tested at facilities like FutureGen.
Senator Bunning. Dr. Moniz.
Dr. Moniz. Thank you Senator Bunning. First let me just
repeat, as I said earlier to the chairman, that at MIT John
Deutsch and I have a new major study going on on coal, so I
would be especially happy to answer your questions in
approximately a year. However, a few comments may be at least
framing some of the questions. I do share some of your concern.
FutureGen I believe has extremely important objectives.
Having said that--and I am fully supportive of going forward
with research and development in gasification technologies and
others, other of the technologies that are part of FutureGen. I
think some of the questions that legitimately can be raised,
however, involve questions about when is the right time for a
major integrated demonstration project. Let us face it, we have
had in the history, in our history, a number of large
initiatives that proved to be premature in terms of their
demonstration of commercial technologies.
I do not know the answer, but I think that that is a
legitimate question. I believe that one needs clarity on the
goals. For example, any project, FutureGen or any other, that
is, let us say, focused on trying to demonstrate commercial
viability versus providing a flexible research platform for
looking at different technologies typically have a hard time
coexisting. I have to be honest, I do not have complete clarity
as to which of these is the leading effort.
The integration is a little bit of concern in the sense
that I believe, as David said, and I completely agree with him,
and Francis as well, that there are several risky technologies
here being integrated and a strategy of trying to separate some
of those for research may or may not prove more effective for
getting to the goal I think we all share.
From that point of view, what I believe is missing--and not
only in this part of the research portfolio, but the entire
energy R&D budget I believe remains underfunded. In that
context, we do not have the kind of overall portfolio balance
between shorter term projects, longer term home runs that I
think we need in the Federal R&D portfolio.
Senator Bunning. Thank you.
Dr. Smalley, you have something to add?
Dr. Smalley. No.
Senator Bunning. Okay. Senator Bingaman.
Senator Bingaman. Thank you very much.
Let me just frame the issue the way I hear it being
discussed here. Senator Bunning made a very good point by
referring to the effort of, his characterization as I took it,
of the FutureGen project as throwing a long bomb. It strikes me
that on the one hand we have got the administration trying in
various ways in this R&D area to throw the long bomb.
We are committed to a new hydrogen economy and we have this
hydrogen posture plan which we have been given by the
Department of Energy. When you get over here to figure 6 on
page 10 and look at when all of this is going to start
happening, not a whole lot starts happening in the marketplace
until you get past 2020. This is a long bomb as I see it.
FutureGen is the same way. It is a proposed project to
develop hydrogen from coal production and also sequester
emissions. It sort of feeds into the hydrogen economy that we
are aiming for, which is this long bomb.
Now, what you have talked about, Dr. Smalley, in your
testimony is very different than that, at least the way I
understood it. You suggested that we launch a bold new energy
research program, as you were putting it. As I understand, you
particularly put emphasis on the need for advances in storage
technology and advances in technology, much of the work which
you are credited with related to transmission of electricity
over long distances with great efficiency.
What I understood you to be talking about is a very
multifaceted, robust energy research effort that would move us
ahead in a lot of different areas to make what progress could
be made as quickly as it can be made in each of these areas,
rather than throwing the long bomb. My concern, frankly, is
when I look at the budget of the administration DOE-wide, the
request for hydrogen this next year is up 43 percent for R&D
related to hydrogen. The request for other energy R&D
activities in the DOE over the next 5 years all shows a
decline. Renewables are proposed for a 21 percent decline,
fossil energy production 22 percent decline, conservation R&D--
which, David, you referred to the importance of conservation--
is scheduled for a 26 percent decline over the next 5 years.
It seems to me we are putting all of our eggs in one
basket. We are saying, look, let us go for the long bomb, it
will solve all our problems and it will happen after 2015 or
2020, and in the mean time we can afford to cut back on funding
of research in these other areas.
Dr. Smalley, maybe you would have a comment as to whether I
have correctly characterized what you have proposed and whether
there is any validity to that characterization of what we are
talking about.
Dr. Smalley. Yes, Senator, I think that is a fair summary.
I believe the path that we are on right now is not going to get
us there. We are not going to be in a situation where we will
have energy security. The economic basis for strength of this
country and, for that matter, the world is going to be eroded.
It is hard to fully internalize what it means when we do in
fact peak in worldwide oil and as natural gas prices continue
to go up. We have never been in this circumstance before in the
history of this country.
Oil and gas are so wonderful. What we need to do is find
something to replace them. I am a great believer that we should
try to do what we possibly can with coal. We should push it. I
believe we should push it even stronger than what is being
talked about now. But the big answer is probably someplace
else.
The status of basic research and even the development
enterprise in the physical science and engineering in this
country is in decay. What you mentioned as the budget
projections for DOE is only going to enhance this decay. We are
just not going to get there on this path. That is why I am
calling for a major program.
As Senator Domenici pointed out, we still would be talking
about something tiny compared--well, not tiny, but about half
of what is currently the NIH budget. The NIH budget is what we
do when we are serious about something. I believe it is time to
get very serious about not only our energy problem here in this
country--energy is a worldwide business. We compete worldwide
for the energy that is produced.
There will be a new energy technology that will come out.
There will be a new oil. We will get to it some time. Maybe it
will be 50 or 100 years from now. It will be there. When we are
there, it will transform the largest enterprise of humankind,
energy. I do not believe the United States can afford to be out
of that business. We need to be the leaders in it, to take the
opportunity to develop our science and engineering capability
and to get the new startup companies and the major divisions of
existing large companies involved in this.
So I am a great fan of clean coal and nuclear, both fission
and fusion, biomass and so forth. I do not think we can afford
to take anything out of the equation. We are going to need all
the energy we can possibly get. But even doing that is not
going to get us there. This is a bigger problem than we are
giving it credit for.
Senator Bingaman. I think my time is up. I guess, David, go
ahead.
Do you mind if he responds? Go ahead.
Mr. Garman. Sure. Thanks for the chance to maybe give a
slightly different characterization of our resource portfolio
than you provided. We believe that our research portfolio is
balanced several different ways, with a variety of
technologies, against a spectrum of risks, both high risks and
lower risks. Yes, it is true that we are engaged in some very
high-risk long-term propositions, such as FutureGen and the
President's hydrogen initiative.
But it is also true that we are engaged in much shorter-
term types of R&D activities such as making more efficient
building insulation or window material for a building. Our
technology spectrum is arrayed to deliver results in the mid
and the short and the long term, not to mention technology
deployment activities that can be as simple as the President's
commitment to low-income weatherization, which is not included
in the figures that you portrayed. It is $291 million that we
want to use today to upgrade the energy efficiency for those
low-income Americans that can least afford higher energy
prices. That is taking technology and putting it to work right
now.
So in that sense we think our portfolio is balanced and,
just as in the case of an individual stock investor if--I had
money and could invest in something, I would invest in a wide
variety of things, some high risk, maybe some more speculative
equities, but I would also have something in T-bills. And we do
that. The weatherization program is in essence our T-bill. But
we have some high-risk propositions as well, looking for high
rewards down the road.
Senator Bingaman. Mr. Chairman, I will wait for my next
round. I will come back to the issue because I think Dr. Moniz
and Mr. Burke both pointed out--I think Dr. Moniz said that the
R&D budget for nuclear is woefully underfunded. Mr. Burke said
that the funding for this road map toward clean coal is barely
half of what, the projected funding is barely half of what the
road map requires.
So I think we have a serious problem as to whether we are
putting the resources behind these things to actually make any
major progress.
Go ahead.
Senator Bunning. Thank you, Jeff.
I would be remiss as a U.S. Senator from Kentucky, since
you are here, David, if I did not get into this a little bit.
As the new Under Secretary, you have the responsibility for the
Energy Employee Compensation Program. As of late March, the
Department of Energy had completed only 4.5 percent of over
2,700 Kentucky workers' requests for assistance. 88 percent of
those completed cases were found ineligible cases or were
withdrawn. Zero Kentuckians have received any payment for their
claims.
After almost 4 years and $10 million spent on the program,
when will the thousands of workers at Paducah who need ongoing
medical benefits from workers compensation get the help they so
desperately need?
Mr. Garman. Thank you, Senator, and this was one of the
first briefings I received. I have been on the job precisely 1
week and 1 day, but am already trying to get as immersed in
this issue as I can be.
I think my predecessor sat in this chair and said that he
had not been satisfied with the way that the Department of
Energy got out in front of this issue, and clearly we did not
get a quick start, no doubt about it. Similarly, I read very
carefully the transcript of the hearing that was held on this
issue recently, and I sense something else is going on here
beyond simply the slow pace of the Department of Energy's
progress in going through the EEOICA Part D provisions. That
is, even when we are successful--and we have moved a number of
cases to the physician review panel and cases have emerged from
the physician review panel; about 476 actually have come out of
the process on the other end. But I am hearing that Senators
are not satisfied with what came out of the other end--a piece
of paper from a physician that gives them perhaps a leg up when
they go before State compensation boards and try to get
compensated for the exposures they had.
We pledge to work with you, I think as my predecessor did,
to try to grapple with some of these very difficult issues,
willing payer issues among them, and how to speed this process
along. I am going to be very careful not to overpromise to you,
Senator, because I think there has been a lot----
Senator Bunning. It would not do any good, promising after
almost 4 years.
Mr. Garman [continuing]. Of overpromising that has been
done in relation to this program, and I do not want to make it
worse. But I think we need to envision a two-track approach.
Track one is to speed up the process--and we have committed to
that. We are now running through 100 cases a week. We want to
ramp that up to 300 cases a week.
But we also want to explore with you alternative aspects,
different ways of dealing with this problem.
Senator Bunning. I have a bill to do just that.
Mr. Garman. I know you do, and I am preparing to engage
with you and the Deputy Secretary and the Secretary as well on
that. So we do want to work with you.
Senator Bunning. Do you have an Assistant Secretary, by the
way?
Mr. Garman. No, sir, we do not.
Senator Bunning. You do not?
Mr. Garman. No, sir.
Senator Bunning. Okay. Well, the whole point I am trying to
make is that the DOE has not lived up to their commitment to
get it done. They have kind of thought that it would go away,
and it is not going away. It is getting worse.
My suggestion is to get as many of those people with their
certificates so they can at least try to find a willing payer.
If we have a willing payer in Kentucky or any other areas--New
Mexico, Colorado, or wherever it might be--they ought to be
able to get some kind of compensation out of workers comp.
My suggestion is to take a look at our new bill and see if
that is not going to be an alternative to what has been a very
frustrating 3\1/2\ years for the workers.
Mr. Garman. Yes, sir.
Senator Bunning. Thank you.
The Chairman.
Mr. Chairman [presiding]. Thank you very much, Senator.
Senator Bingaman.
Senator Bingaman. I already had one round, Mr. Chairman, if
you want to go ahead.
The Chairman. Thank you very much. I have about three and
that is it. I will submit a few in writing.
Dr. Moniz, I strongly concur with most of the key points
that you made. Expansion of nuclear is needed in the country.
Production of tax credits is a good way to encourage the
construction. I am glad you have come out that way. Interim
storage of spent fuel is essential in the near term, and
international safeguards through the IAEA should be
strengthened, and significant research should be accomplished
on multiple fronts to determine our best path forward.
I would put a little different emphasis on a few areas
overall, but overall I think we are thinking alike. Your
thoughtful testimony is appreciated. In your testimony you
emphasize that the Department's nuclear energy program is
substantially underfunded. I previously expressed my amazement
that the current budget proposal calls for a 26 percent cut in
nuclear R&D after Congress worked to restore that funding from
zero in 1997.
What level of R&D funding would you recommend for 2005 for
nuclear energy compared to the administration's proposed level
of $96 million and $130 million in the current year?
Dr. Moniz. Mr. Chairman, first if I may again say that I
think the first context is the entire energy R&D budget I think
is too low. We are literally back in 1965 levels in terms of
real dollars, before we had our first energy crisis.
With regard to nuclear energy, let me first note that the
budget recommendations we made for R&D in the current
organization of the Department of Energy would not be only in
the Nuclear Energy Office. It would be nuclear energy, it would
be in waste, etcetera. But we recommended going up to, ramping
up to approximately $450 million per year in this area.
This would fund, the discussion we were having a few
minutes ago, we believe an appropriate portfolio of activities
that would have relatively short-term impacts, for example, the
very important issue of high burn-up fuels in thermal reactors,
to the much longer term focused issues like literally we
believe a $50 to $100 million a year analytical simulation
project to understand how one should design fuel cycles and
acquire the bench-scale scientific and engineering data
required to inform those analyses.
These are, unfortunately, not there.
The Chairman. Right. Well, you know, I understand how bad
things look, but I have been here when we had no nuclear
activity to speak of and when we had a Department that was
embarrassed to have any indication that they were doing
anything in the nuclear field. You came along at the end of
that era and I am very appreciative that at least you broke
that, but you surely did not get it broken--you did not break
it and cause a great surge of research even in your day.
Dr. Moniz. May I add a comment, Mr. Chairman?
The Chairman. Sure.
Dr. Moniz. In fact, one of those initiatives is an example
of what I think is very unfortunate, is in a bipartisan way the
administration and the Congress--I testified with Senator
Bingaman on this a couple of years ago--we did start this NERI
program, the Nuclear Energy Research Initiative, specifically
focused on new concepts developed especially in the university
and university-laboratory partnership settings.
That is now--I believe 2 years ago I noted that it was
really time to get beyond paper and raise that level. Well,
actually it has gone now to zero, which is not a very good
approximately to $100 million.
The Chairman. Well, as far as I am concerned as the
appropriator, I have not been sitting by. I am the one started
all of those. They were zero a few years ago, whoever was
President. I do not even remember who was. But I am the one
that got them up, with your help and others.
Dr. Moniz. Yes.
The Chairman. And this year it is back down, you know,
which is to me kind of goofy. I mean, you get started in the
right way and all of a sudden because you have got a tight
budget you do away with something that is terrifically
important.
Dr. Moniz. And in particular, if I may say, things like the
NERI go exactly along the lines of what Dr. Smalley was saying
about we have to be building our young people up and investing
in longer term university-based research as well.
The Chairman. Well, I want to just talk about another one
with you. You know, you talk a little bit in your remarks about
how important it is that the environmentalists, whatever that
is, that somehow they come to an understanding how well nuclear
power addresses some of their major issues, not all of them,
but clearly the dirty air, it is a model. That does not mean we
know yet how to satisfy everybody on where to put the waste,
but if we did it like France we know how to do that in a
nickel. That is nothing, temporary, but it is pretty much
everybody knows how to do it. We could do it with a big team of
existing engineers.
But can you suggest how a wider appreciation of the
environmental benefits of nuclear power might be achieved?
Dr. Moniz. Well, if I may bring up and recall an editorial
in Science magazine written by Richard Meserve earlier this
year, former Chairman of the NRC. He wrote an editorial that
was interesting. It picked up from the poll done in our study
that said that the public did not certainly connect
particularly global warming issues with nuclear power.
What he noted really was that, not his words, but there is
almost a conspiracy of silence in making the connection. Many
in the environmental community have not been willing to
readdress the question of nuclear power in this role. However,
he points out as well that in the utility industry this point
is not being made either, often because the same utility that
may be promoting a nuclear plant is also promoting coal plants
and they do not want to get into that discussion. And frankly,
the administration has not been very forthcoming in making
especially this link between nuclear power and global warming.
I do not know what to say other than the obvious, that we
need to have I think much more open and frank discussions. I
want to make it clear, I am an advocate not of nuclear power; I
am an advocate of energy supply, of clean environment, and of
energy security. I am not pushing any particular technology.
But nuclear power simply has to be discussed openly, its
plusses and its minusses, in terms of the challenges that we
face for energy supply and clean energy supply.
The Chairman. Well, I disagree with you that the energy,
electricity companies are not attempting to promote nuclear. I
have been amazed at what they have been doing and how they have
been putting themselves out front. The consortium they just put
together to see if the statute we drew will work is pretty
exciting.
Dr. Moniz. Yes.
The Chairman. But I do agree that if you are looking for
promotion and that kind of activities, there seems to be
something running into each other where you cannot get that
done.
Dr. Moniz. We actually do not disagree on the point that
you just mentioned, Senator. Clearly, these consortia going
forward to test combined construction and operating licenses,
etcetera, are an important movement. I was referring more
specifically to the role of nuclear power in global warming,
which is not a link that is being made by the companies.
Frankly, I believe in the end, certainly for me, that is
uniquely the principal driver for having to address the
question of nuclear power's future on a relatively short time
scale.
The Chairman. My last question is directed at Dr. Smalley
and Mr. Garman. I realize that if wind and solar renewable
sources are accompanied by energy storage we can compensate for
their intermittent production of electricity. Dr. Smalley
discussed the vision for such storage in his testimony, and I
will be brief. It was very emphatic in his testimony and he
emphasized the importance of it.
I would be interested in the perspectives from both of you
on current studies of energy storage and whether you think we
need to expand that research or cause something to change so it
will happen with more effectiveness. In addition, I wonder if
you have made estimates of the additional costs incurred by
renewables if storage is required.
Do you want to start, David?
Mr. Garman. There is substantial work going on in energy
storage technologies today. Compressed air energy storage
systems for utility-scale work have been demonstrated. Flow
batteries are showing some promise as storage media; reversible
fuel cells, something we are working on in the context of the
hydrogen so that when you have excess electricity generation
you can make hydrogen; when you do not have it you let the
hydrogen flow back into electricity.
These are all things that are being worked. Of course, we
can always discuss the scale of the activity and whether more
can be done. In all of these activities that the panel has
raised, I think we all agree that more can be done. I am also
mindful of what you said in our Appropriations Committee
hearing: The money is limited. So we have this tension built
into the system where we are trying to make sure the portfolio
is optimized as best we can.
The Chairman. All right.
Dr. Smalley.
Dr. Smalley. It has been over 150 years since the lead-acid
battery was discovered. We still have not really beat it. It is
not for lack of trying. There has been a tremendous effort for
pretty much this entire time to get the lead out of the
batteries.
As you commented, I am a technological optimist. I assume
that mother nature really has provided a way for us to do this.
We just really have not found it yet. It may very well turn out
that that new battery that is transformingly better than the
lead-acid battery just cannot be made with the materials we
have today. It might take a few little miracles.
Now, you may have heard me say this before, but let me say
it again. The good news is that miracles do happen. I have been
involved in the physical sciences for over 30 years and I have
seen quite a number of them during my time period. They come
out of this thing we call the garden of physical sciences and
engineering. I think of it as a garden. And I think the real
issue in front of us is just how should we handle that garden,
how big should it be, how should we nurture it, how should we
cultivate it, weed it, how do we learn how to direct resources
in a way that actually treats it as a serious enterprise of
humanity and we get technologies out.
We have a huge problem to solve here that is connected to
essentially every other problem facing humanity. We have to
solve it. Electricity I think is going to be at the core of
this. Storing that energy in vast amounts cheaply will be
transforming. That is the major reason I made my testimony
about this. You do not need me to tell you that it would be
wonderful to have photocells at the cost of paint, of course.
But I think this is one area that deserves more attention in
our research portfolio. It is something else for us to work on
that actually connects to so much else, nanoelectronics, the
whole push for new nanomaterials. This is something that could
have a huge impact on energy while following these paths that
we are taking really for other reasons.
The Chairman. Well, I would say, at least from my
standpoint, just so you know how mundane we are still working
at what level of activity in terms of electricity transmission,
for the first time we got Republicans to agree to a bill that
essentially says if you have got a bottleneck that we can solve
it by eminent domain. It is not that simple. A lot of things
have to be tried. But essentially the bottom line is in the
bill that is pending you go through all those hoops and we have
agreed that at the end of them, if they do not work, that the
law will establish the fact that somebody will do it.
Now, you have told us that that is an essential thing, but
it is also such a baby step that one wonders why we are still
here today talking about it. But that is the kind of problem
that we have in this field.
Superconductivity, we know how important that is and we
have been pumping money into it and we have been told by our
scientists we are right there or almost there, and frankly I am
not sure we are very much further than when Ronald Reagan
announced I do not know how many centers, but he put one of
them in our State after we complained up at Los Alamos. But
there have not been great strides; some, but not great.
Senator Bingaman.
Senator Bingaman. Thank you.
I wanted to just ask Mr. Burke. Some of the statements you
make in your testimony I think need to be focused on here. You
say over on page 6, talking about this clean coal technology
road map, ``Were the road map followed, it would be possible by
2015 to design a high efficiency powerplant capable of carbon
capture with near-zero emissions, and by 2020 the first
commercial plants of this design would be built.'' So, that is
possible?
Then, on page 10 you say: ``Unfortunately, current funding
levels are not sufficient to reach the road map goals.'' Then
you go on to say: ``This continues the pattern of underfunding
clean coal research and unless research and demonstration funds
are increased it is unlikely that technology will be developed
on the road map schedule, if at all.''
Mr. Burke. Right.
Senator Bingaman. So, you are basically saying this whole
notion that we are going to have emission-free use of coal may
never happen.
Mr. Burke. We do not have the technology to do it now,
Senator, and the road map envisions that technology and
attempts to define the time in the future when it would be
available if research, development, demonstration, and
commercial deployment follows a particular path. Then the
people that put the road map together, people in industry and
people in the Department of Energy--this road map is a combined
effort of industry and the Department of Energy. The people
that put the road map together then attempted to determine what
the specific pieces of research were that were needed from
laboratory scale up to demonstration scale and what those would
cost and put together an estimate for the cost to follow the
road map within that time frame.
That is the comparison I am making, between the cost as
estimated to achieve that vision of the future and the funding
levels that have been and are now in the DOE budget.
Senator Bingaman. So basically what you are saying is, if
we keep funding clean coal R&D at the levels we have been
funding it and at the levels that are proposed for next year,
we will not develop the technology needed to have emission-free
power production from coal any time in the foreseeable future?
Mr. Burke. Well, I think the road map sets out goals,
quantitative goals in terms of emissions levels and costs and
efficiencies, performance and cost and efficiency goals. The
work that is being done today, that is being done now, will
help to move toward those goals. There will be improvements. So
I do not think that the fact that the funding levels are below
what we think are necessary obviates any value in doing that
research. There is still a high degree of value in doing that
research.
Some of it is directed at much more near-term objectives,
like mercury control for example, which we will need to
implement in the next decade, and that technology will be
developed. We need more funding for that, but nevertheless
those technologies, those near-term technologies, we developed.
I think that the road map also addresses this longer term
strategic issue and, as I said, sets performance goals. The
likelihood I believe is not that we will not make progress
toward those goals, but that we will not achieve those specific
goals within that time frame, particularly the cost goals.
There is a lot we can do if we are willing to spend money. We
can build a power plant now that can capture and sequester
CO2, but we would not want to pay what that is going
to cost.
So the road map constrains this technology development in
terms of the cost of electricity. We think that is what coal
delivers, is low-cost electricity that really helps to vitalize
our economy, and that is what we want to protect.
Senator Bingaman. Yes. David, go ahead.
Mr. Garman. I would just make an observation, having been
through several roadmapping exercises in technology
development. Road maps, as Mr. Burke said, are developed with a
consortia of folks from the Department of Energy, from the
national labs, from civil society, and from industry. It is an
aspirational product, really. We say: We want to achieve this
technological result in this time frame. And most technology
road maps are underfunded because there is not enough money to
go around to fully fund all of them.
So what we do is, instead of pursuing five paths to a
particular technology, we will pursue three. Instead of
achieving this goal in the time frame of 2015, well, if the
money is not there we will let it slip to 2020. So the
roadmapping exercise is still extremely valuable because it
does present a consensus view on how we can overcome
technological obstacles to get to a shared vision.
However, there is rarely enough money to do precisely what
everybody wants to do in their various road maps. I would argue
that is probably true of just about every road map that is
developed in the Department of Energy and in industry as well.
Senator Bingaman. Mr. Chairman, let me just make a comment
to summarize the point I made earlier when you were not here.
The Chairman. Sure.
Senator Bingaman. It seemed to me that the portfolio, as I
think various people have referred to it, portfolio of
activities that we are pursuing in the R&D area related to
energy, I think we need to do a real analysis as to whether or
not it is balanced. I know David's view is that it is balanced,
that this is the proper allocation.
My own sense is that we are putting so much money into this
new hydrogen economy idea and some of the long distance goals
that are involved in that that. You can say maybe that does not
come out of the rest of the R&D activities, but it seems to me
there are a lot of R&D-related activities that could be pursued
as part of the energy budget that are being neglected while we
put very substantial amounts into some of these other things.
That is a concern to me. I just wanted to make that point
again.
Thank you again for the hearing.
The Chairman. Thank you.
Well, let me thank you for your observations and
thoughtfulness. Let me close by my own observation, and in
particular I want to address this at you, Dr. Smalley. Maybe it
will prompt an answer, maybe it will not.
I am a technology optimist, but I never have called myself
that. In the book I am writing I call myself something else,
but I think if you were reading it you would say, well, there
it is; that is his way of saying it. I just think there are no
humankind problems that are not solveable. That is my theory. I
thought it was based upon faith, but you believe it and I do
not think you believe it on faith. You believe it because you
have seen things happen, and your vision is pretty big. I have
not seen that many happen where I am party to it, but I look at
it and I have seen it happen.
But I actually believe that our future depends on a
regularity of breakthroughs that are big enough to make us make
our economy continue to be more powerful and able to cope in a
competitive world. I think we cannot make it without that.
So looking back at what happened, well, I guess the first
thing I would say, the computer chip and computerization was
the recent one. It took us from an era to another era and we
did not even know it was happening, and then as it evolved
further it made us more and more capable of doing things the
rest of the world could not keep up with us on. But lo and
behold, they are almost there.
You are looking around, I assume, for what is next. I am.
And I wonder if you have an idea, based upon what you know,
some aspect of nanotechnology, microengineering. Do you have an
idea what might be next?
Dr. Smalley. Those of you who know me will know that I am
going to say carbon nanotubes. I believe that they may very
well offer a path to this long distance power transmission that
we have been looking for.
But let me not talk so much about my research, just the
more broad issue. I have wondered often in my life why I live
in Houston, Texas. It is not the hottest place for scientific
research. It is not MIT, although we will get there. The one
thing I have learned in Houston, Texas, from people I have
talked to is how huge the energy business is, and Houston is
the capital of the oil and gas business worldwide.
Over this past couple of years I have every day realized
just how massive and wonderful oil and gas were. You know, in
1900 people got crazy rich as this magnificent energy source
came self-propelled out of the ground. If you read this
wonderful book by Daniel Yergin, ``The Prize,'' it is the
history of oil for the past 100 years. It is pretty much the
history of the entire world. It is how we got rich.
We have grown up, lived in a world where it seemed like
that was going to go on forever. Well, some time over this next
20 or 30 years we have got to go invent something completely
new. We have never been in this position before.
Yes, I believe in miracles coming out of the garden and I
have seen a lot of them--lasers, microelectronics for example,
these stop lights that we see these days that actually came
from Sandia, the strained layer super-lattice--just stunning
miracles. If you told me before that you were going to have
diodes in your street lights that you could see even though the
sun is shining, I would have said you are crazy. These things
do happen.
But if you look over the past 50 years at the rate at which
these major inventions happened and you look at what is going
to be necessary to make the fuel cells work in our automobiles,
for example, we need more miracles quicker than we have had in
history. The challenge is how do we, with the resources of this
country, nurture that enterprise to make miracles happen. You
cannot predict them. It is a tremendous challenge, but it is in
fact the one that is in front of us today.
The Chairman. Well, I was going to say--first of all, I
thank you very much for your thoughts. I assume that the
members of the panel are just as impressed as I am with what he
has said. Every one of us, whether we are well read or not,
have read enough recently to know that these miracles occur
because of people. They are well trained or they are full of
ideas or they are just innovative people.
I was reading just the other day on how jet engines that we
now take for granted, somebody in England literally developed
that and right off the bat it worked. It was not like he took
20 experiments. He just had an idea that if he pushed that hot
air out there was a way to push it so that it would push
whatever it was pushing against through air. And he was a
little short man nobody thought much of, and there he came up
with that thing.
That was one of the pieces, that was one of those miracles.
It may not be the one, but it is a pretty big one. And whoever
came up with the computer chip has a big one. I think we have
got to come up with a couple more, not just because we need it
to stay big in the world, which is probably true, and to stay
alive and stay healthy. But I think we need it because the
world needs it, whether it is a breakthrough in energy, which
you have just told us today that is where it has got to be, I
think. You have said the world runs on energy and I assume if
it is going to run out we had better start running to catch it
right.
So anyway, I thank you very much. Good to be with you.
[Whereupon, at 11:45 a.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
CONSOL Energy Inc.,
Research & Development,
May 13, 2004, South Park, PA.
Senator Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Chairman Domenici: Attached are responses for the record to
the questions concerning my testimony of April 27, 2004 and posed in
your letter of April 29. I am grateful for the opportunity to testify
before your committee on the need for Clean Coal Technology, and my
optimism that, with the proper dedication of private and public
resources, coal will deliver its full value as America's most abundant
energy resource.
Sincerely,
F.P. Burke.
Responses of Dr. Frank Burke
Question 1. Dr. Burke, the Administration has proposed reducing
Mercury emissions from power plants by 70 percent by 2018. Would you
please provide the Committee with an assessment of the present state of
technology associated with Mercury emissions reduction in currently
operating plants and in the new coal-fired power generation
technologies?
Answer. At present, there is no mercury-specific control technology
in use on power plants in the U.S. To some extent, devices installed to
control SO2, NOx and particulate emissions remove
mercury, but the amount removed is highly variable, depending on a
number of factors including the type of control device (e.g., wet
scrubber, dry scrubber, fabric filter, electrostatic precipitator),
boiler type and operating conditions, and coal composition. Although
the mercury removed as a ``co-benefit'' of existing control technology
may for some units be sufficient to achieve the 2018 goal, it is clear
to me that new technology will be needed to avoid severely disrupting
the reliability of the U.S. coal supply and coal-based electricity.
With respect to the 70% mercury reduction requirement posed in the
question, it is important to realize that 70% is the average mercury
reduction required for all coals and sources. However, coals vary
widely in mercury content. For coals that contain more mercury than the
average, a greater percentage of mercury reduction may be required,
depending on the form and implementation of the final rule. For
example, if a hypothetical rule required the emissions from bituminous
coal units be reduced to a level corresponding to a 70% reduction from
the average coal, half of the coal would require more than 70%
reduction, 20% would require more than 80% reduction, and 10% would
require more than 90% reduction. Therefore, a great deal of the U.S.
coal supply could be jeopardized by a rule based on the hypothetical
performance of a developing technology applied to an ``average'' coal.
To some extent, this would be mitigated under a cap-and-trade program,
for which the average performance of the fleet of boilers is a more
meaningful concept. Nevertheless, even a cap-and-trade program would
not guarantee the ability of many coals to be used at a 70% overall
reduction level. In that context, EPA's discussion of developing and
existing removal technologies in the Supplemental Notice to the mercury
rule is instructive. EPA explains that technologies for 50-70% mercury
removal may be commercially achievable after 2010.\1\
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\1\ Supplemental Notice to the Proposed Rule, 69 Fed. Reg. 12,403
(March 16, 2004).
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``Although pursuit is continuing on some mercury emission control
technologies at the bench and pilot scale, much work has already been
completed at these smaller scales. However, some technologies, like
sorbent injection, have entered the large-scale field testing stage,
and we have initiated a full-scale demonstration project for sorbent
injection technology. It appears that these technologies, with at least
50-70% mercury emission reduction, will be ready for broader full-scale
demonstration. on bituminous coal in 2005, and on subbituminous coal
and lignite in 2007. If these demonstrations are successful, commercial
deployment could occur on a large scale after 2010, or perhaps later.''
In general, I concur with EPA's opinion as it pertains to the
installation of technology on new units. Therefore, to reliably meet a
70% average mercury reduction requirement without eliminating much of
the existing coal supply from the market will require the development
and commercial deployment of new technology with performance beyond
that expected to be achieved in 2010. With respect to existing units,
the situation is further complicated by the diversity of sources in
operation and the problems that are likely to be encountered in
retrofitting first-of-a-kind technology at full scale. Therefore, the
performance of new technology with an ``average'' coal in a new-plant
installation, may overstate its performance with a higher mercury coal
in a retrofit application.
Question 2. Dr. Burke, I know that there are many different types
of coal used in the U.S. to generate electricity. What kind of problems
arise in developing new, clean technologies when you are confronted
with such a wealth of diverse energy sources?
Answer. The principal challenges are the lack of a sound,
fundamental understanding of mercury chemistry, the diversity of
sources and their coals that must be controlled, the difficulty in
designing mercury control tests that can be extrapolated to a wide
range of sources, and the cost of and time needed to do long-term
performance tests that will be necessary to convince potential users of
the efficacy of candidate technology.
As explained in my response to the first question, coals are highly
variable in mercury content, mercury chemistry in the boiler
environment is poorly understood, and the efficacy of various control
technologies with the wide range of U.S. coals is largely unknown.
Fundamental research on mercury is needed to better understand the
results of previous and current mercury control technology tests and to
identify and develop new approaches. Intensive long-term measurements
of mercury emissions are essential to provide underlying information
for applying the research to practical applications. Short-term
episodic measurements of mercury emissions, like those done in EPA's
1999 Information Collection Request program, while valuable, are wholly
inadequate to provide the basis for intelligent rule-making,
particularly if the rule anticipates the availability of as yet to be
developed technology, as explained above. To illustrate the point, the
EPA data used in the mercury rule-making consists of the results of
three one-hour tests at only of 80 of the over 1100 coal-fueled
electricity generating units in the country. Thus the mercury sampling
time used to obtain the data bears the same relationship to the total
annual operating time of the 1100 units as 3 seconds does to a day.
One of the fundamental problems with mercury technology development
is that mercury is present in very low concentrations in coal and
therefore in flue gas. The analogy has been made that the concentration
of mercury in flue is equivalent to 30 ping-pong balls dispersed in the
Astrodome. As a result it is difficult to measure mercury
concentrations accurately (the standard measurement method has an
uncertainty of 20% or more) and mercury concentrations, even from a
single mine, are much more variable (by a factor of 2-to-3) than other
coal constituents of concern, such as sulfur. This creates problems
with designing and executing well-controlled experiments. In addition,
mercury control can be greatly affected by unrelated factors, such as
coal chemistry (primarily chlorine and sulfur), carbon burn-out in the
boiler, flue gas temperature profile, boiler load, and others. This
makes it problematic to extrapolate or generalize the results of even a
well-designed and controlled experiment to predict the performance of a
technology in all circumstances for all coals.
Another challenge to the development and deployment of mercury
control technology is cost. To be confident in the application of a
technology it must be subject to long term testing at full scale. The
operation of most coal-fired boiler units changes frequently, such as
when the unit is cycled daily and seasonally to follow load demand,
shuts down for a planned or unplanned maintenance outage, or performs
operational procedures such as soot-blowing. Long-term testing and
performance monitoring are expensive ( -$2-3 million per test), and as
a result relatively little has been done. The Department of Energy's
budget over the last several year, combined with private-sector cost
sharing, has only been sufficient to initiate eight long-term tests
which are just getting under way.
Question 3. Dr. Burke, you mention in your prepared remarks that
China's use of coal to generate electricity will grow by a billion tons
from 1.5 billion annually to 2.5 billion tons by about 2020. I assume
that India and other developing nations in the Far East will experience
similar growth in the use of coal. Do you think our efforts to develop
new clean coal power technologies will be available and affordable to
these nations to help them reduce their emissions of sulfur and
nitrogen oxides, mercury and carbon?
Answer. I believe that the developing economies will utilize their
indigenous coal resources. Helping them to do so contributes to global
economic and political stability. If we pursue our current research and
deployment agenda in a timely manner, U.S.-developed technologies can
have a major impact in helping coal-using countries throughout the
world to meet economic and environmental objectives.
The United States is leading the world in the development of power
generation and emission control technologies for coal-fueled power
plants. The principal drivers behind the technology development program
in the U.S. are defined in a technology ``roadmap'' jointly developed
by the Department of Energy and the coal and electric utility
industries, and described more fully in my written testimony. The
roadmap lays out cost and performance targets designed to do two
things: First, to develop suitable technologies so that coal can be
used in a manner that meets our environmental objectives. Second, to
ensure that the capital and operating costs of these technologies are
low enough to allow coal to be used in a way that meets our economic
need for affordable energy. These needs and aspirations are not unique
to the United States. We should look for opportunities for
international collaboration where they exist, such as in the DOE Carbon
Sequestration Leadership Forum, which is fostering international
cooperation to address greenhouse gas emissions. However, we need to
set and follow our own research, development and deployment agenda to
ensure the continued availability of our domestic coal resources.
Question 4. You also discuss the difficulties associated with
controlling carbon dioxide emissions in your prepared statement. Can
you please elaborate on the challenges associated with controlling
carbon emissions?
Answer. All fossil fuels (coal, oil and natural gas) consist mostly
of carbon (75-85% by weight). Carbon dioxide is the thermodynamically
stable end product of fossil fuel combustion. In a sense, the purpose
of fossil fuel technologies, whether used in cars, furnaces or power
plants, is to turn carbon into carbon dioxide and utilize the energy
produced by that chemical transformation. Therefore, there is no
practical way to avoid the production of carbon dioxide in fuel use,
although its production can be minimized through efficiency
improvements. Beyond that, ``carbon management'' implies that carbon
dioxide be ``captured'' from the source and ``sequestered'' to prevent
its emission into the atmosphere.
Because of thermodynamic limitations, fuels are converted to useful
energy (such as electricity) with some unavoidable loss of the original
energy value of the fuel. Conventional power plants operate at 30-40%
efficiency (the U.S. average is about 33%). Increasing efficiency
reduces the amount coal needed to generate a unit of electricity and
reduces carbon dioxide emissions accordingly. For example, replacing a
33% efficient technology with one 40% efficient would reduce carbon
dioxide emissions by about 20%. Advanced systems under research now
have the potential to increase power plant efficiency to about 60%. The
employment of these systems provides the benefit of lower fuel usage
and, thus cost, so efficiency gain can be pursued based on its economic
advantage alone. The principal challenge is to gain the efficiency
improvement, while maintaining an acceptably low capital cost. I
believe that power production efficiency improvement should be pursued
as the first and most expedient approach to reducing carbon dioxide
emissions.
The first challenge to controlling carbon dioxide emissions is to
develop energy efficient and cost effective technologies for the
capture of carbon dioxide from the variety of sources that produce it.
Technologies to capture carbon dioxide from sources such as flue gas
exist, in the sense that commercial technologies developed for other
uses, like amine scrubbing of natural gas, could be applied. However
these technologies exact a large energy penalty, and are prohibitively
expensive for application to large combustion sources like coal-fueled
power plants. Some sources, such as coal gasification systems, may
offer advantages in terms of ease of carbon dioxide capture, but these
have not been proven in practice. In any event, the vast majority of
coal-fueled power plants in the U.S. and elsewhere are combustion-
based, and it is likely that most plants built for the next several
decades will be combustion-based. Relatively little research has been
done on the important issue of carbon dioxide capture, particularly
from combustion sources, but some promising approaches have been
identified, and there is reason for optimism.
Once captured, the carbon dioxide must be stored or ``sequestered''
for geologically long times to avoid its emission to the atmosphere. A
number of opportunities for ``terrestrial'' sequestration (i.e.,
biomass accumulation) exist. However, in all likelihood, large-scale
carbon management would require injection into suitable geologic
formations. There are some relevant examples of this, such as the
injection of carbon dioxide into oil-bearing formations to stimulate
production, and a project in the North Sea in which carbon dioxide
recovered from a natural gas production facility was injected into a
saline aquifer. These examples are encouraging, but the sheer volume of
carbon dioxide that would need to be sequestered worldwide to eliminate
global emissions is staggering, about 25 billion tons per year.
Therefore, there is an urgent need for large, long-term tests to assess
the economic and technical feasibility of carbon dioxide sequestration
in variety of geologic and geographic sinks. Projects like the U.S.
FutureGen initiative, which would involve sequestration of about 1
million tons of carbon dioxide per year, are a step in the right
direction. However, considerably more needs to be done in both
fundamental, research and practical application testing before carbon
sequestration can have an assured place in energy and environmental
policy decisions.
I call your attention to a report prepared by the National Coal
Council in May 2003 entitled ``Coal-Related Greenhouse Gas Management
Issues.'' The report is available on the NCC web-site at: (http://
www.nationalcoalcouncil.org/Documents/fpb.pdf). This report describes
in more detail the principal approaches to carbon dioxide management
described briefly above, discusses current research and public policy
actions addressing the issue, and makes recommendations to the
Department of Energy in the three areas of implementing, developing and
demonstrating greenhouse gas management technologies.