US investigative office concerned about funding for CCS projects

The US Government Accountability Office (GAO) said only three of the 11 carbon capture and storage projects funded by the Department of Energy (DoE) since 2009 were operational – and only two still are.

The GAO released a report assessing the success of DoE funding and the money that could have been wasted. The DoE has invested approximately $ 1.1 billion in projects under three initiatives to demonstrate and commercialize carbon capture technology.

Coal CCS projects have been particularly less successful than CCS projects in industrial factories. Of eight funded CCS coal projects, only one became operational, until it ceased operations in 2020 due to low oil prices.

Two of CSC’s three industrial projects have become and remain operational.

The report found that coal projects were unsuccessful due to facility competition with natural gas, uncertainty over the future of carbon markets and tax incentives, and expected project costs. students.

However, the GAO was more concerned with the amount of DoE money spent on projects that turned out to have a likelihood of success.

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Compared to industrial CCS projects, the DoE spent less time negotiating agreements for coal CCS projects and did not use a downward selection process, which would choose a group of projects for initial funding. , then conduct further reviews to determine which projects would be complete. funding.

The DoE ended up spending $ 472 million on the first phases of four of the ultimately unfinished coal projects, nearly $ 300 million more than originally planned.

The ministry has a process of withholding funding until certain technical advancement phases and milestones are completed, but senior management would have allowed funding to be spent before milestones were reached.

GAO recommended that Congress put in place increased oversight of DoE’s fundraising activities, such as requiring the department to report regularly on project status and funding in order to protect taxpayer dollars.

The report also recommended that the DoE more closely monitor established scopes, timelines, and budgets to mitigate its financial exposure if projects run into difficulties, especially as new funding from the bipartisan infrastructure bill has emerged. been allocated to CCS and hydrogen projects.

The DoE also launched two Earthshot initiatives this year – the Hydrogen Earthshot Initiative and the Earthshot negative carbon initiative – reduce the costs of producing clean hydrogen and capturing carbon.

In response to the report, the ministry disagreed or disagreed with GAO’s recommendations.

Last week, the DoE launched the new Office of Clean Energy Demonstrations, which it says will be best suited to address GAO’s concerns.

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