CERAWeek notebook: Politics, not tech, is top climate hurdle

Source: By Corbin Hiar, E&E News reporter • Posted: Monday, March 8, 2021

The United States has the technological know-how to hit net-zero emissions by 2050. The real question is whether Washington has the sustained political will necessary to achieve that feat.

That was the takeaway of energy executives, federal regulators and climate experts who participated in this year’s CERAWeek by IHS Markit conference, which ended Friday.

“It’s not just the individual technologies that matter in the end,” said Robert Armstrong, director of the Massachusetts Institute of Technology’s Energy Initiative. “It’s how you put those together to bring the kind of services to consumers that they expect out of the energy system.”

Many CERAWeek attendees argued that putting a price on carbon emissions would be a logical first step to incentivize the decadeslong shift to a net-zero carbon economy, a transition that scientists say is necessary to avert catastrophic global warming.

“Market participants will then adjust their actions around that cost,” said Rostin Behnam, the acting chairman of the Commodity Futures Trading Commission, the independent agency that regulates the derivatives market. “Because as long as [carbon pollution] is something that’s free, certainly, it’s not going to help in addressing climate change.”

During the oil-friendly Trump administration, Behnam sponsored a groundbreaking report that examined the market risks posed by climate change. Establishing a price on carbon was the report’s first recommendation (Climatewire, Oct. 2, 2020).

Now that Democrats control Washington, Behnam said he expects newfound support for carbon pricing.

“I think there’s going to be a lot of conversations in Congress over the next few months about potentially implementing or drafting bills about a carbon price and the carbon tax, more specifically,” he said.

The oil industry — which has long opposed market-based efforts to combat climate change — is coming around to the idea. The shift comes as Democratic lawmakers are considering a national clean energy standard and the Biden administration hints at prescriptive climate regulations (Climatewire, March 3).

Some experts suggested the White House should leverage newfound industry support for carbon pricing as a way to build GOP backing for a climate bill.

“Crazy as it sounds in today’s dysfunctional Washington, Biden also needs to reach across the aisle and try to work with Republicans on climate change,” Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy, said during a discussion on energy diplomacy. “We need comprehensive climate legislation like the carbon tax or some other comprehensive kind of policy.”

Bordoff, who was a special assistant to President Obama and served as senior director for energy and climate change on his National Security Council, cast doubt on the potential to get a major climate bill through the evenly split Senate with only Democratic votes.

That would require some creative legislating. In one scenario, Democrats would have to move such a package via reconciliation — a budgeting trick that only requires a simple majority but restricts the scope of legislation. In another, they would have to end the filibuster, a procedural rule that requires legislation to get 60 votes. That would be hard to pull off because the filibuster has the support of some conservative Democrats.

“We are going to need Congress to act, and that’s challenging,” he said. “But that needs to be a really important priority for the administration.”

Beyond a carbon price

Even if a climate bill were to pass this Congress, there are other hurdles future lawmakers and administrations will face on the way to net zero, CERAWeek panelists said.

Many oil and gas executives — and credible net-zero road maps — don’t foresee a world without hydrocarbons. That means some level of carbon capture and storage, or CCS, deployment likely will be necessary. The technology mainly involves pulling concentrated carbon out of smoke stacks and then injecting and permanently storing it underground. But other companies are exploring ways to suck carbon out of the atmosphere and ocean.

While a carbon price would incentivize the development of all types of CCS projects, difficult questions remain around the permitting and regulation of injection wells, pipelines and other infrastructure, experts said.

A related hurdle: Some legal entanglements make it hard to build wind, solar and electric transmission projects as quickly as some energy companies would like, executives said. The same is true for corporations looking to build out pipelines for hydrogen, which is shipped at higher pressure than natural gas and can cause existing gas lines to become brittle.

Further complicating the decarbonization process is the interdependent nature of the technologies involved, experts said. Renewable energy is intermittent and often most plentiful in areas that are far from where most people need power. That requires transmission lines to move the clean energy and grid-scale storage so emission-free electricity still can be deployed when the sun has set and the wind isn’t blowing.

Meanwhile, massive amounts of renewable energy are required to produce emission-free “green” hydrogen. Energy experts believe that green hydrogen could one day be used to power difficult-to-decarbonize energy users such as airplanes and to heat steel mills. But at this point, the dominant shade of hydrogen is “gray,” which means it was derived with natural gas-fired electricity and therefore has limited emission-cutting utility.

“I don’t see really a larger-scale commercial viability anytime before 2025, or even at the end of the decade,” Christian Bruch, the president and CEO of Siemens Energy AG, said of green hydrogen.

“It’s not the silver bullet which solves all problems,” he said. “You need more technologies, more different solutions.”

‘They will scale, eventually’

One potential climate fix involves nuclear fission, a proven but costly commercialized technology in which energy and radioactive waste are created by breaking apart the nucleus of an atom.

At CERAWeek, advocates for the industry promised cheaper reactors were coming. They made the case that nuclear would be essential for meeting the electric system’s longer-term carbon reductions needs, which their modeling says can’t be met through renewables and storage alone.

The conference also featured the heads of several companies attempting to create energy via nuclear fusion. That process, in which two atoms collide and form heavier atoms, is the same that powers the sun, but it hasn’t yet been re-created in a commercial reactor.

“There is going to be success in fusion. It’s not going to be decades and decades more before we see some really exciting things happening,” predicted Jonathan Carling, the CEO of Tokamak Energy Ltd.

“The prime time is actually beginning for fusion,” said Carling, who predicted that Tokamak or one of its competitors would crack the code for fusion in the next five years.

All of these decarbonizing technologies are more likely to succeed with immediate political support and a durable U.S. commitment to climate action in the decades to come, experts said. Yet after the whiplash-inducing climate policy changes of recent years, that outcome seems far-fetched to some.

“Can we reach net zero by 2050? We can. Will we reach net zero by 2050? That’s much more in doubt, because that depends on the political situation,” said Howard Herzog, a senior research engineer at MIT’s Energy Initiative.

“There’s a lot of nice talk,” he said of CCS and other decarbonization technologies touted at CERAWeek. “But I’m not so sure that the political situation is there that’s going to get these things to scale.

“I think they will scale, eventually,” Herzog added. “But maybe not in the time frame that we’re all hoping for.”

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