Because the feds are spending $ 2.5 billion on carbon capture

Energy Secretary Jennifer Granholm answers questions during a media briefing at the White House in Washington, USA, November 23, 2021.

Evelyn Hockstein Reuters

The U.S. Department of Energy announced Thursday that it was taking the first steps to provide more than $ 2.3 billion for carbon capture technology included in Biden’s bipartisan infrastructure law. which the president signed in Novemberfor carbon capture technology.

Carbon dioxide emissions are the result of burning fossil fuels and are a primary cause of anthropogenic climate change, and the amount of carbon dioxide in the atmosphere has been consistently higher trend over the past 60 years.

Carbon capture technology targets carbon dioxide where emissions are generated or more generally from the atmosphere. The industry is still nascent and critics say the best use of resources is to upgrade clean energy infrastructure.

But Energy Secretary Jennifer Granholm thinks there is room for both.

“Of course our first preference is to make sure we’re powered by clean, zero-carbon energy. And we’re doing all of that. But you can walk and chew gum,” Granholm told CNBC in a video interview Thursday. (She used the same metaphor in a conference earlier this year to describe the contradiction between pursuing green energy policies while asking oil and gas companies to increase their production to counter the rise in pump prices.)

Granholm knows there is skepticism about carbon capture technologies. Critics say it is mainly used by polluting industries as a way to delay the work needed to reduce emissions.

“There is criticism that something like this – carbon capture and sequestration – simply prolongs the resources that the fossil [fuel] the industry would use, “Granholm said.” I’ll say this: anything we can do to decarbonise is a good thing. “

In particular, carbon capture technologies will be important to offset sectors of the economy that are difficult to decarbonise, such as heavy industry and steel and cement manufacturing, he said.

He also said that fossil fuels will be part of the global energy infrastructure for a while.

“We have a net zero target by 2050. And you know, the IPCC has said that fossil fuels will be in circulation during this transition,” Granholm said. “So we have to start now with these technologies.”

Carbon capture technology is in its early stages and remains quite expensive.

the The Department of Energy aims to reduce costs of carbon removal technologies as part of its Carbon Negative Shot, or Earthshot. Earthshot’s goal is to be able to remove gigatons of carbon dioxide from the atmosphere and store it for less than $ 100 a ton by 2050.

“The advantage of being the energy secretary is that I can see what the 17 national laboratories are working on,” he says. “And that makes me extremely optimistic about the future, because technology will eventually be our friend to solve this big problem.”

But in order for carbon capture technology to truly grow and scale, some investors believe there must be a price for carbon.

The closest the US has to a financial incentive is a tax credit called 45Qoffering up to $ 35 per ton for carbon dioxide or carbon monoxide stored as part of advanced oil recovery projects and up to $ 50 per ton for gases if they are stored in geological formations outside the projects EOP.

For now, Granholm is content to rely on the private sector to create this market.

“In America, we have historically allowed the free market to make these decisions, but other countries have partnered with their state-owned enterprises and subsidies and have said that we will take control as a government and make sure we make ourselves more competitive. This is what we are doing. China does. This is what other countries do. Well, we don’t do it in America, “he said.

“But what we do is create public-private partnerships and invest in early-stage technology to help lower those costs across scale.”