Carbon Capture and Storage: Actions Wanted to Strengthen DOE Administration of Demonstration Tasks

What GAO Found

The Office of Energy’s (DOE) expenditure of $1.1 billion in carbon seize and storage (CCS) demonstration projects resulted in varying stages of good results. Largely because of to external factors that affected their financial viability, coal CCS assignments ended up typically a lot less prosperous than CCS projects at industrial facilities, these types of as chemical vegetation.

Coal tasks. DOE presented just about $684 million to 8 coal tasks, ensuing in one operational facility. A few initiatives ended up withdrawn—two prior to receiving funding—and just one was constructed and entered functions, but halted functions in 2020 because of to transforming economic situations. DOE terminated funding agreements with the other four initiatives prior to design. Job documentation indicated and DOE officers and task associates informed GAO that economic factors—including reduced normal gas price ranges and uncertainty regarding carbon markets—negatively impacted the financial viability of coal electrical power crops and so these projects.

Industrial projects. DOE furnished roughly $438 million to three assignments intended to seize and keep carbon from industrial services, two of which were being built and entered operations. The 3rd task was withdrawn when the facility onto which the job was to be included was canceled.

GAO discovered significant dangers to DOE’s management of coal CCS demonstration projects. These threats involve the pursuing:

Higher-danger selection and negotiation procedures. DOE’s method for picking coal tasks and negotiating funding agreements greater the risks that DOE would fund tasks unlikely to triumph. Especially, DOE thoroughly committed to coal assignments at their preliminary assortment as opposed to permitting time for further evaluate, as it did for picked industrial CCS tasks. Also, according to DOE officers, the section utilised expedited time frames for coal job negotiations—less than 3 months as opposed to up to a year—based on DOE’s need to get started spending American Restoration and Reinvestment Act of 2009 cash rapidly. These steps decreased DOE’s means to recognize and mitigate technological and economical pitfalls, a theory cited in DOE direction.

Bypassing of charge controls. DOE, at the route of senior leadership, did not adhere to value controls designed to restrict its economical publicity on funding agreements for coal assignments that DOE eventually terminated. As a end result, the agency put in virtually $472 million on the definition and style and design of four unbuilt facilities—almost $300 million far more than planned for these undertaking phases. According to DOE documentation and officials, senior management directed steps to assistance assignments even although they have been not meeting required important milestones. DOE documentation also indicates that experienced Congress licensed an extension on the use of the cash, DOE could possibly have ongoing funding some of these projects. By running foreseeable future CCS jobs towards established scopes, schedules, and budgets, DOE would be improved positioned to mitigate its financial exposure if tasks wrestle. Furthermore, absent a congressional system to provide better oversight and accountability—such as demanding regular DOE reporting on challenge standing and funding—DOE might danger expending substantial taxpayer funds on CCS demonstrations that have small chance of results.

Why GAO Did This Examine

Vital scientific assessments have underscored the urgency of cutting down emissions of carbon dioxide (CO2), the most important greenhouse gas, to enable mitigate the adverse results of local climate transform. CCS technologies have the prospective to decrease CO2 emissions from resources this sort of as coal vegetation and industrial facilities. Since 2009, DOE has sought to establish the viability of CCS technologies by different demonstration tasks. The 2021 Infrastructure Investment decision and Work opportunities Act licensed and appropriated billions of bucks in new investments in CCS demonstration initiatives.

Congress bundled a provision in the Energy Act of 2020 for GAO to evaluation DOE’s procedures, successes, failures, and any enhancements in executing CCS demonstration tasks. This report examines (1) the results of DOE-funded CCS demonstration projects and the components that affected them and (2) DOE administration of all those jobs. GAO reviewed legislation, rules, direction, funding agreements, and other job documentation, and interviewed DOE officers and task associates.