Carbon capture and storage (CCS) technology has been recognized as offering significant potential for controlling carbon dioxide emissions from coal-fired power plants, if it can be cost-effectively deployed on a commercial scale. Recognizing this potential, President Obama established an Interagency Task Force on Carbon Capture and Storage on February 3, 2010. The President directed the Task Force, jointly led by the Department of Energy and the EPA, to propose a plan to overcome barriers to the widespread, cost-effective deployment of CCS within 10 years, with a goal of bringing five to 10 commercial-scale CCS demonstration projects online by 2016.

The Task Force released its report on August 12, 2010. Although finding that "there are no insurmountable technical, legal, institutional, or other barriers to the deployment of CCS," the report acknowledges that CCS differs from other low-carbon technologies, in that deployment of CCS is "entirely dependant on adoption of [legal] measures to limit greenhouse gas emissions...." According to the Task Force, the absence of comprehensive climate change legislation means that the market has not set a price on the societal cost of carbon emissions, which would encourage emission reductions though CCS.

The Task Force identified several other significant barriers to near- and long-term commercial deployment of CCS:

1. Market failures due to "knowledge spillover," i.e., insufficient dissemination of lessons learned from project development experience to allow others to avoid the same mistakes due, for example, to the unwillingness of private sector developers to share with competitors, potential investors, and other members of society at large;

2. The absence of a legal and regulatory framework for CCS projects that facilitates project development, protects human health and the environment, and provides public confidence that carbon dioxide can be stored safely and securely;

3. A need for clarity on the potential long-term liabilities associated with carbon dioxide sequestration (i.e., liabilities that arise after closure of a carbon dioxide storage site); and

4. A need to integrate public information, education, and outreach to overcome general societal resistance and localized "not in my backyard" opposition to new CCS projects.

However, the report notes analyses by the Obama administration suggesting that even if comprehensive energy and climate change legislation were enacted to set a price on greenhouse gas emissions, CCS technologies would not be widely deployed within the next 20 years without supplemental financial incentives. The Task Force proposes financial incentives that (a) are coordinated horizontally and vertically within local and federal government agencies, (b) adjust to changing circumstances and information over time, (c) address knowledge spillover from demonstration and initial deployment projects, and (d) allow the private market to decide which technologies should be developed. Providing flexible incentives that adjust to market conditions to prevent both under- and over-subsidization is a theme of the Task Force's analysis.

In addition to increased cooperation and collaboration among relevant agencies, the Task Force proposes establishment of a federal agency roundtable and technical committee to support development of early demonstration projects. This agency would act as a single point of contact for project developers seeking assistance with financial, technical, regulatory, and social barriers.

The Task Force also recommends development of an enhanced framework to address long-term liability and stewardship issues associated with CCS projects, based on further study of several potential approaches that the Task Force considered viable for addressing this barrier (including combinations or hybrids of those approaches): (a) reliance on the existing regulatory framework, (b) adoption of substantive or procedural limitations on liability claims, (c) creation of a fund to support long-term stewardship, and (d) transfer of liability to the federal government after site closure, if certain contingencies are met.

The Task Force recommended that its constituent agencies undertake certain near-term rulemaking, including:

  • By late 2010, EPA should finalize its proposed rule on geologic sequestration wells under the Safe Drinking Water Act and greenhouse gas reporting for carbon dioxide storage facilities under the Clean Air Act.
  • By late 2011, EPA should finalize a rule on the applicability of federal hazardous waste regulations to carbon dioxide captured from an emission source for purposes of sequestration.
  • EPA, the Department of Agriculture, and the Department of the Interior should immediately formalize coordination among those agencies to develop regulatory frameworks on the use of federal land for sequestration of captured greenhouse gas emissions, and prepare their strategy for developing that framework.

If implemented, the measures recommended by the Task Force that are within the purview of the DOE, EPA, and the other constituent agencies of the Task Force should ensure that these agencies are well-positioned to support widespread deployment of CCS in the decade ahead—if greenhouse gas regulation ultimately delivers the carbon "price signal" on which the economic viability of such deployment depends.