Release Date: July 3, 2001

WASHINGTON, DC - With President Bush citing the promise of new cutting-edge technology as a way to counter the buildup of greenhouse gases, Energy Secretary Spencer Abraham announced today that the U.S. Department of Energy will help co-fund eight new exploratory projects to study ways to capture and store carbon gases.

The eight projects emerged from a nationwide competition that attracted 62 proposals from private companies, universities, local governments, and environmental organizations. The winning proposals came from BP, Alstom Power, Praxair, Consol, Dakota Gasification, Advanced Resources International, The Nature Conservancy, and Yolo County, California.

Each offers an approach to "carbon sequestration," a promising class of technologies that remove global warming gases from the exhausts of power plants or from the atmosphere itself, and securely store them.

"Carbon sequestration is an important option to study because it offers a way to address the global warming issue without having to make radical overhauls of our existing energy systems," said Energy Secretary Spencer Abraham. "This becomes especially significant as we craft energy and environmental strategies that draw upon all of our available energy resources, sustain economic growth, and, at the same time, respond to concerns about the long-term health of our planet."

Last month President Bush cited carbon sequestration as a key part of his strategy for addressing climate change concerns. "We all believe technology offers great promise to significantly reduce emissions - especially carbon capture, storage and sequestration technologies," the President said.

Projects announced today will study ways to capture the gases and store them in underground geologic formations or in terrestrial vegetation such as forests. Most of the projects will focus on carbon dioxide, but one will collect natural gas from a landfill before it seeps into the air.

The Energy Department's Office of Fossil Energy, which will oversee the research, has set a goal of developing sequestration approaches that cost $10 or less per ton of carbon - equivalent to adding only 0.2 cents per kilowatt-hour to the average cost of electricity. Currently, only a limited number of sequestration options are available, and most can cost as much as 30 times more than the department's goal.

Private sector response to the Energy Department's efforts to develop an expanded menu of environmentally safe and affordable sequestration options has been overwhelming. Prior to the 62 proposals received in the recent competition, the Energy Department had evaluated a similar number of proposals in an earlier round of competition, eventually selecting13 projects.

Also, the private sector proposers have offered to fund an average of 40% of total project costs, well above the 20% minimum cost-sharing that the Energy Department required.

"Government research should be focused on those areas that industry tells us are worth pursuing," Abraham said. "Clearly, the large response and significant cost-sharing from the private sector is a clear message that carbon sequestration is an option worth examining."

The new projects added today were in the following categories and were submitted by:

Separation and Capture

• BP Corporation, Anchorage, Alaska, will head a seven-member international team to demonstrate the feasibility of capturing carbon dioxide (CO2) from a variety of fuel types and combustion sources and storing it in unmineable coal seams and saline aquifers. Proposed DOE cost: $5.0 million; cost share: $8.8 million.

• Alstom Power Inc., Windsor, Connecticut, will test a way to produce concentrated CO2 by firing oxygen (rather than air) in an advanced boiler. The company will also evaluate ways to use the CO2 to produce saleable byproducts, such as enhanced oil recovery. The first phase would include small scale testing, and if it successful, a second phase will be a pilot test of the concept. Proposed DOE cost: $510,000 (Phase I)/$1.4 million (total); participant share: $128,000 (Phase I)/ $350,000 (total).

• Praxair, Inc., Tonawanda, New York, will develop a novel "oxy-fuel" boiler -- a new boiler design that incorporates a membrane to separate oxygen from the air which is then used for combustion. Because it produces a concentrated CO2 exhaust, it could reduce the complexity of CO2 capture, reduce the cost of carbon sequestration, and offer increased thermal efficiency and reduced pollution. Proposed DOE cost: $4.1 million; participant share: $1.8 million.

Sequestration in Geological Formations

• Consol, Inc., Research & Development, South Park, Pennsylvania, will demonstrate a coal bed methane production technology known as "slant-hole" drilling to drain natural gas from unmineable coal seams, then use the gas production holes for sequestering CO2. Proposed DOE Share: $6.9 million; participant share: $1.9 million.

• Dakota Gasification Company, Bismarck, North Dakota, will use new reservoir mapping and predictive tools to develop a better understanding of the behavior of CO2 in a geologic formation, including the way it moves through reservoir rocks, the quantity that can be stored in a reservoir, and how long the CO2 could be expected to remain trapped in the underground formation. Proposed DOE Share: $4.0 million; participant share: $22.5 million.

• Advanced Resources International, Inc., Arlington, Virginia, will study the way CO2 is trapped naturally in U.S. deposits and determine if the knowledge can be adapted for sequestration applications. Proposed DOE share: $898,000; participant share: $599,000.

Terrestrial Ecosystems

• The Nature Conservancy, Arlington, Virginia, will develop and implement various forestry sequestration projects and refine the tools and methods for measuring their long-term carbon storage potential. Proposed DOE share: $1.7 million; participant share: $337,000.

Advanced Concepts

• Yolo County, Planning and Public Works Department, California, will demonstrate full-scale application of a new waste landfill "bioreactor" approach that was tested at a smaller scale in an earlier DOE project. Methane emitted from degrading wastes in the landfill will be trapped by special membranes on the surface and transported to collection points. Methane is an even more potent greenhouse gas than CO2. Proposed DOE Share: $553,000; participant share: $1.2 million.