Coal usage continues to fall, and the coal industry wants to do something about that. So does the Trump administration. Their proposed solution to the problem of waning coal usage is carbon capture and sequestration (CCS)—a technology that has been around for a long time.
The basic idea behind CCS is to remove the carbon dioxide from the exhaust stream after burning the coal. Then the “captured” CO2 can be redirected. But in the US, the Southern Company and others attempted to develop an additional process. Their ultimate goal was to use cheap and plentiful Mississippi lignite and convert it chemically into clean-burning synthetic gas. The CO2 produced from combustion would also be captured. One actual use is to pump CO2 into older, less productive oil field reservoirs to enhance oil recovery. One suggestion is to replace the oil with CO2 storage after the field has been depleted.
Abroad, the giant coal miners (as opposed to the smaller American ones that have been skirting bankruptcy) launched Coal21 in Australia (where coal mining is a huge business) to do research and lobbying. The International Energy Agency argues that half the world’s coal-fired power plants are under 15 years in age, so sequestration will be required in order to reduce the world’s carbon emissions (one-third of which are from burning coal).
Leaving aside the question of whether past (not fully depreciated) power plant investment should influence future decisions (the sunk cost issue), the real policy question is: what are we doing—limiting greenhouse gas emissions at the lowest possible cost or saving the coal industry?
The problem simply is that electricity produced by coal-fired plants using the latest CCS technology is several times the cost of other existing carbon-free technologies. With respect to a commodity product like electricity, these numbers are politically and financially untenable. To overly simplify, coal is already losing on price to wind. The CCS advocates propose to double the price of coal (from about 3 to at least 6 cents per kWh).
At the end of the day, sequestration technologies fail to answer a simple question. Why add sequestration technology and the attendant costs when coal is already becoming increasingly uncompetitive as a boiler fuel relative to wind (which only costs 2 cents/kWh to produce)?