Coal companies who once thought president Donald Trump an ally in the search for next-generation technology are now looking to Congress to save them from the White House.
In his first budget proposal to Congress, Trump shocked coal advocates by suggesting a steep cut to carbon capture and storage (CCS) research funding. In all, Trump floated a 77% cut, down to $31 million in fiscal year 2018.
Meanwhile, Trump’s announcement of a withdrawal from the Paris climate deal last week has thrown up barriers between US companies and a potentially lucrative international market for CCS projects that some agencies say are necessary to meet climate goals.
The moves contrast with campaign images of Trump touting coal miners as the archetypal American worker and repeated references to “clean coal” on the campaign trail.
Since the announcements, coal companies are being deferential to the White House, but quietly shifting their emphasis to Congress to save CCS funding in the budget.
Rick Curtsinger, a spokesman for coal company Cloud Peak Energy, said that Trump has been “extremely supportive of America’s coal miners” and that he “has a difficult task in prioritising issues and balancing the budget.”
But, Curtsinger added in an email: “We are hopeful that Congress will support the further development and commercialisation of the carbon capture technology that we believe is necessary for coal to be able to play a long-term role in providing secure, reliable, and affordable electricity while addressing concerns about CO2 and climate.”
US lawmakers are keen on maintaining research. The White House proposal, after all, is merely that – a proposal. It’s Congress that decides spending levels.
“The president’s budget is a key step in the process, but it is an early one,” said Ashley Berrang, spokeswoman for senator Shelley Moore Capito, a Republican from West Virginia. “She will use her role on the Senate Appropriations Committee to work to see that those programmes and others that are important to West Virginians are funded at adequate levels.”
Even Democrats have come to the aid of CCS in recent years, heeding calls from non-governmental organisations like the International Energy Agency (IEA) that the technology will be needed to meet climate goals (the IEA predicts CCS will account for one-sixth of carbon emissions reductions by 2050).
Last Congress, a bill to extend tax incentives for CCS attracted diverse co-sponsors, ranging from senate majority leader Mitch McConnell, a Republican from coal-heavy Kentucky to senator Brian Schatz, a Hawaii Democrat who chairs the Senate Climate Action Task Force.
Still, Trump’s withdrawal from the Paris climate accord last week has made matters more difficult for US-based CCS efforts no matter the funding situation, said Josh Freed, vice president of clean energy at centre-left think tank Third Way.
The US has now effectively removed itself from the UN’s Green Climate Fund. Trump has called the body a “slush fund”. But it at least allows CCS projects that US companies could have won contracts to build in the developing world.
Coal companies such as Peabody Energy and Cloud Peak publicly urged the White House to stay in the Paris deal and push for the GCF to include high efficiency, low emission coal-fired power plant projects and to encourage other CCS-friendly policies.
US negotiators are simultaneously pushing for CCS-friendly policies in G20 dialogues, according to a person with knowledge of the negotiations. The draft language includes a footnote that reads, “We encourage countries that opt to use carbon capture, use and storage (CCUS) to continue to undertake RD&D [Research, Development and Demonstration] and to collaborate on large-scale demonstration projects,” though the final version won’t be released until after the July leaders summit.
The state department would not comment on the G20 discussions. But the ability for the US to pursue diplomatic wins, especially on climate and energy, has been severely weakened by Trump decision to leave the Paris accord.
Similarly, whether the US would be invited to participate in demonstration projects is questionable as it retreats from the international scene. Countries rapidly building CCS-equipped power plants – China and India, for example – are investing in homegrown industries.
Meanwhile, the chances for scaling CCS production domestically remain bleak without a consistent federal research program and natural gas pricing out coal. Trump’s domestic roll back of climate policies also threatens to undermine the commercial case for the technology. Howard Herzog, a senior research engineer at Massachusetts Institute of Technology told Bloomberg earlier this year that CCS needed tough regulations to be constricting carbon emissions for the projects to make financial sense.
US companies might find themselves locked out of other international financing mechanisms, like the Global Environment Facility. That’s key because the US private sector often won’t pursue riskier CCS projects against state-backed or -subsidised competitors, so developers rely on those institutions, Freed said.
“There is going to be a lot of money invested in that and a lot of money that can be made when carbon capture is commercialised. The US is going to be at a significant disadvantage,” Freed said in an interview. “The international cooperation that gives American countries access to overseas markets is being dismantled.”
But cutting federal CCS spending doesn’t disappoint everyone – even friends of coal.
Some saw government programs buoying CCS as rife with waste and corporate welfare. Tom Pyle, president of the fossil fuel-friendly Institute for Energy Research who ran Trump’s energy department transition, noted electric utility Southern Company’s Kemper power plant has attracted hundreds of millions in federal subsidies only to suffer billions in cost overruns.
“Some of my donors are like, ‘What the hell?,’ the [West Virginia Democratic senator Joe] Manchins of the world are scratching their heads, but at the end of the day the budget reflects the priorities of the administration,” Pyle said in an interview. “It’s not as shocking or surprising to me that these agencies all took a hit because that was sort of the tenor for which we went about making our agency plans.”
Those priorities send a loud message, said Christopher Smith, who led the energy department’s Office of Fossil Energy under president Obama. It signals to federal researchers that their work isn’t valued, potentially feeding a brain drain that’s hard to reverse, Smith wrote recently in Forbes.
Still, CCS spending actually might not stumble significantly, said watchdog Taxpayers for Common Sense. The group said the omnibus spending package Congress passed to fund the government through 30 September is likely a prologue for the impending fiscal 2018 budget battle. That bill elevated funding for “transformational coal technologies” while canceling $240 million from other CCS projects.