To Clean Up Coal, Obama Pushes More Oil Production
22 December 2013
By The Associated Press
By Dina Cappiello
DE KALB, Miss. -- America's newest, most expensive coal-fired
power plant is hailed as one of the cleanest on the planet, thanks
to government-backed technology that removes carbon dioxide and
keeps it out of the atmosphere.
But once the carbon is stripped away, it will be used to do
something that is not so green at all.
It will extract oil.
When President Obama first endorsed this "carbon-capture"
technology, the idea was that it would fight global warming by
sparing the atmosphere from more greenhouse gases. It makes coal
plants cleaner by burying deep underground the carbon dioxide that
typically is pumped out of smokestacks.
But that green vision proved too expensive and complicated. So the
administration accepted a trade-off.
To help the environment, the government allows power companies to
sell the carbon dioxide to oil companies, which pump it into old
oil fields to force more crude to the surface. A side benefit is
that the carbon gets permanently stuck underground.
The program shows the ingenuity of the oil industry, which is
using government green-energy money to subsidize oil production.
But it also showcases the environmental trade-offs Obama is
willing to make, but rarely talks about, in his fight against
Companies have been injecting carbon dioxide into old oil fields
for decades. But the tactic hasn't been seen as a
pollution-control strategy until recently.
Obama has spent more than $1 billion on carbon-capture projects
tied to oil fields and has pledged billions more for clean coal.
Recently, the administration said it wanted to require all new
coal-fired power plants to capture carbon dioxide. Four power
plants in the U.S. and Canada planning to do so intend to sell
their carbon waste for oil recovery.
Just last week former Energy Secretary Steven Chu announced he was
joining the board of a company developing carbon capture
The unlikely marriage of coal burners and oil producers hits a
political sweet spot.
It silences critics who say the administration is killing coal and
discouraging oil production. It appeases environmentalists who
want Obama to get tougher on coal, the largest source of carbon
It also allows Obama to make headway on a second-term push to
tackle climate change, even though energy analysts predict that
few coal plants will be built in the face of low natural gas
prices and Environmental Protection Agency rules that require no
controls on carbon for new natural gas plants.
"By using captured man-made carbon dioxide, we can increase
domestic oil production, promote economic development, create
jobs, reduce carbon emissions and drive innovation," Judi
Greenwald told Congress in July, months before she was hired as
deputy director of the Energy Department's climate, environment
and energy efficiency office.
Before joining the Energy Department, Greenwald headed the
National Enhanced Oil Recovery Initiative, a consortium of coal
producers, power companies and state and environmental officials
promoting the process.
But the environmental benefits of this so-called enhanced oil
recovery aren't as certain as the administration advertises.
"Enhanced oil recovery just undermines the entire logic of it,"
said Kyle Ash of Greenpeace, one of the few environmental groups
critical of the process. "They can't have it both ways, but they
want to really, really bad."
That has become a theme in some of Obama's green-energy policies.
To promote new, cleaner technologies, the administration has
allowed companies to do things it otherwise would oppose as
harmful to the environment.
For wind power, the government has shielded companies from
prosecution for killing protected birds with giant turbines.
For corn-based ethanol, the administration underestimated the
environmental effects of millions of new acres of corn farming.
The government even failed to conduct required air and water
quality studies to document its toll on the environment.
The administration wants to make similar concessions to make
carbon-capture technology a success.
The EPA last week exempted carbon dioxide injection from strict
hazardous waste laws. It classified the wells used to inject the
gas underground for oil production in a category that offers less
protection for drinking water.
Oil companies using carbon to get oil also aren't subject now to
the tougher reporting and monitoring requirements that experts say
are necessary to ensure the carbon stays underground, and they're
fighting an EPA proposal that would require them to be if the
carbon comes from power plants covered by the new federal rules.
"It amounts to looking the other way," said George Peridas, a
scientist with the Natural Resources Defense Council, which
supports using carbon for oil extraction. The group believes it
replaces dirtier oil or oil produced in more environmentally
sensitive places and reduces carbon in the atmosphere.
The administration also did not evaluate the global warming
emissions associated with the oil production when it proposed
requiring power plants to capture carbon.
A 2009 peer-reviewed paper found that for every ton of carbon
dioxide injected underground into an oil field, four times more
carbon dioxide is released when the oil produced is burned.
"There is no form of energy that is free of impacts. It is always
about trade-offs and someone will always be unhappy," the paper's
author, Paulina Jaramillo, the assistant professor at Carnegie
Mellon University, said in an interview.
Administration officials counter by saying the oil was going to be
extracted anyway, so the policy should only be seen as reducing
carbon dioxide from coal plants.
The administration also promotes the benefits for energy security.
Every barrel of oil produced here will mean one less produced
"We are taking carbon dioxide that would have gone to the
atmosphere in coal plants, storing it and displacing imported oil
with domestic oil," said Energy Secretary Ernest Moniz, asking a
question posed by The Associated Press on C-SPAN's "Newsmakers"
program in September.
In Mississippi, where Southern Company's Kemper County power plant
eventually will supply two oil producers with carbon dioxide,
Denbury Resources Inc. says it would not be able to produce oil
Denbury is already using carbon dioxide trapped beneath a salt
dome near Jackson to produce oil in the state. But it can use more
carbon dioxide than nature can provide. That's where the power
plant comes in.
The federal support for Kemper lowers the cost of installing the
carbon capture equipment, and ultimately, the cost of carbon
dioxide for the oil producer.
The company has entered into a long-term contract with Southern
for carbon dioxide. It will permit Denbury to recover a total of
between 3.5 million and 4.2 million barrels of oil, a tiny
fraction of the 91 million barrels of oil the world consumed daily
last month. But for the oil companies, it still means millions of
dollars more in revenue.
The nearly $5-billion project received $270 million from the
Energy Department, prior to the Obama administration, and $279
million more in federal tax credits.
A member of Mississippi's Public Service Commission, Brandon
Presley, bristled over what he described as pressure from
Washington to approve the project, which already has meant a 15
percent increase in utility bills for Mississippi Power customers.
Secretary Chu wrote Presley a letter in May 2010 that said without
the Kemper County project, the U.S. government might not be able
to use the technology anywhere. The commission approved it over
"The (Energy Department) is knee deep in this," Presley said. "I
don't think you'll find anywhere in the country where you've found
more heavy-handedness by the federal government or by elected
officials than what went on here to try and get this passed."
In an interview with the AP, Chu said pairing oil production with
pollution reduction is an imperfect method for "developing the
capture and ramping up the technologies."
"It's not one for one," he said. "You are not sequestering all the
While Kemper is the first, it's not the only one.
The Energy Department has provided $1.1 billion to six projects
that capture carbon and sell it to oil companies. Four of those
projects are power plants.
The EPA recently highlighted two of those projects, with a
combined $858 million in federal money, as a way to reduce power
plant emissions. Both plan on selling the carbon dioxide to oil
"We sold the carbon dioxide immediately," said Laura Miller, a
spokeswoman for Summit Power's Texas Clean Energy Project, which
is still working on getting the financing needed to break ground
on the 400-megawatt power plant in West Texas. "The projects that
are still alive are the ones that are selling the carbon dioxide."
Despite billions in federal aid, coal projects that simply stored
carbon dioxide failed to take off.
In 2010, a plan for a $1.8 billion power plant in Illinois was
replaced with a scaled-back project after it couldn't secure
private financing. In July 2011, American Electric Power, shelved
a project in West Virginia that had received $334 million in late
2009, in part because a Democrat-controlled Congress failed to
enact legislation, backed by the administration, that would have
created a marketplace for carbon dioxide.
Oil recovery provided a market for carbon dioxide in the absence
of federal legislation or regulations that put a price on it. For
power plant operators, it could help offset the cost of the
technology to capture it.
But the marriage was rocky from the start.
Oil companies want to use the least amount of carbon dioxide
possible to extract oil, not exactly what is desired in a strategy
to reduce pollution. Oil producers, no stranger to federal
regulations, don't want to deal with any more rules, such as
strict and costly monitoring and reporting requirements aimed at
verifying that the carbon doesn't escape.
On the coal side, it takes more energy, and thus more coal and
more carbon dioxide pollution, to run the equipment needed to
capture carbon and compress it to be sent down a pipeline to an
It's the other environmental effects that have local
There still is a 31,000-acre surface mine, and the other
pollutants that power plants emit that could sully the air
locally. Southern Co. was recently cited by the state for
discharges from its reservoir on site, which the company blames on
excessive rainfall and the fact that equipment that draws water
from the reservoir for use in the plant was not ready.
"If you add up all the environmental costs, this is not going to
be green," said Stan Flint, a Jackson-based consultant who works
with environmental groups.
In June, the Energy Department and California Energy Commission
raised serious environmental concerns about a California-based
carbon capture-enhanced oil recovery project funded by the Obama
administration and recognized by the EPA when it released its
power plant standards.
In a preliminary environmental evaluation, state and federal
officials found the Hydrogen Energy California Project would fail
to comply with laws and standards in eight out of 16 environmental
areas evaluated. The concerns included whether the project would
comply with state landfill rules and its impacts on the
blunt-nosed leopard lizard, a protected species.
Other studies have looked at the association between carbon
dioxide injection and earthquakes. A peer-reviewed study published
in November linked for the first time earthquakes in Texas to the
injection of carbon dioxide in oil fields.
Another potential risk is blowouts. Many oil fields that are ideal
candidates for carbon dioxide injection have many old and
abandoned wells that may or may not be plugged properly.
Denbury Resources has had a series of uncontrolled blowouts in
recent years, as the pressure created by injecting carbon dioxide
tests the cement plugs in long-shuttered wells. The largest, and
one that was responsible for one of the largest environmental
fines in Mississippi in the past decade, occurred in 2011 at the
Tinsley Field, one of several old oil fields that will receive
carbon from Southern Co.'s power plant.
The company paid $662,500 for a blowout that vented carbon
dioxide, oil and drilling mud for 37 days. So much carbon dioxide
came out that it settled in some hollows, suffocating deer and
other animals, Mississippi officials said. The company ultimately
drilled a new well to plug the old one, and removed 27,000 tons of
drilling mud and contaminated soil and 32,000 barrels of liquids
from the site.
The company still claims it's green because of the carbon it is
storing as part of its oil production process.