Key Issues in Ensuring Access to Energy, Protecting Energy Security, and Enhancing Environmental Performance

1. Victor Der , General Manager - The Americas
Atlantic Council – Global CCS Institute Forum
9 September 2013
Advanced Fossil Energy Technologies - Key Issues to Energy Access
& Security and Enhancing Environmental Performance - Role of CCS

2. Fossil Fuel’s Role in Meeting Future Energy Demand
in a Carbon-Constrained World
 Fossil Energy will continue to be the dominant energy
resource used globally - relatively affordable, geographically
diverse and abundant => provides energy security
 Challenge: Using fossil resources wisely across global
economies – affordable & environmentally sustainable
 CCS/CCUS - a key role in meeting the challenge WITH:
 Properly structured policies, regulatory frameworks
and incentives - sustainability and certainty for markets
 Continued Technology RD&D investments -- cost and
performance improvement
 Gain understanding and acceptance –market and
public.
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3. DRIVERS FOR CCS
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TECHNOLOGY
POLICY &
MARKETS
UNDERSTANDING
& ACCEPTANCE
1. International developments and opportunities in these areas
2. Importance of US Leadership and Collaboration in the global
development, demonstration and deployment of CCS
3. Global CCS Institute – Knowledge Sharing; Advising; Creating Favorable
Conditions for Global CCS Implementation

4. CCS: A VITAL PART OF OUR LOW-CARBON
ENERGY FUTURE
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5. CCS TECHNOLOGY – INTERNATIONAL
DEVELOPMENTS
ASSESSMENT
 Individual CCS components broadly understood
 Many CCS aspects already technically mature
 Safe storage displayed by CCS projects operating over the past decade
 Pilot & larger scale test facilities are important contributors to knowledge
 Confidence that remaining technical/economic challenges can be met
OPPORTUNITIES
 Successful demonstration of integrated operation at large scale in power
and additional industrial processes is key:
o Establishes positive acceptance of CCS as a „proven‟ technology
o Pass on „learning by doing‟ cost savings
o Build public trust that CO2 storage is safe.
 R&D to mature 2nd generation capture technologies as a „game-changer’
 Identification of viable storage sites to facilitate CCS deployment post 2020
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6. POLICY & MARKETS – INTERNATIONAL
DEVELOPMENTS
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ASSESSMENT
 International policy discussions consistently acknowledge importance of CCS -
continued progress at UNFCCC, CEM, CSLF and ISO, but …
 Industry highlights that national climate and energy policies do not provide long
term clarity to support widespread adoption of CCS projects (high capex & long lived)
 CCS is often not treated equivalently to other low carbon technologies
 National regulations have advanced but critical uncertainties remain (storage)
 Existing CCS funding programs for demos mostly exhausted
OPPORTUNITIES
 Certain governments are considering approaches to re-invigorate funding
programs – need urgent support to maintain momentum for demonstrations to 2020
 U.S. – Potential support mechanisms (CURC & NEORI – Rockefeller Bill)?
 Continued development of low carbon future roadmaps: sustainable policy
outcomes and market mechanisms which are technology neutral
 Post Kyoto 2020 agreement for decision in 2015

7. UNDERSTANDING & ACCEPTANCE –
INTERNATIONAL DEVELOPMENTS
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ASSESSMENT
 Stakeholder relationship management critical to project delivery
 Global awareness and understanding of CCS and CCS energy context is low
 CCS communication focused on risks and challenges; not value and opportunity
 Persistent views of CCS as experimental, not cost competitive and associated
with fossil fuel instead of role in low carbon energy
 Building trust with key stakeholders is critical for project acceptance
OPPORTUNITIES
 Successful global demonstration program is critical to establish public and political
confidence in CCS – highlights urgency in progressing CCS demonstration projects
 CCS projects are demonstrating improved sharing and use of best practice learning
 Encouraging public advocacy of CCS from trusted groups like academics and
environmental NGOs to raise awareness and credibility of CCS
 Improve access to education materials and experts – particularly on topics like CO2
transportation and storage.

8. Opportunities Created by Large Scale Projects with
Advanced FE Technologies
 Integrated CCUS projects like Kemper – valuable enablers
for CCS along the value chain (learn by doing via demos; drive
R&D for better capture technology; create transport
infrastructure; build skilled human capital; increase understanding
and acceptance of CCS) – Southern Co. a leader in CCS/CCUS
 Six of nine operating projects are CO2-EOR and are in North
America (U.S. and Canada) - U.S. is a global leader
 China a new entrant with 11 projects announced -
CCS/CCUS- with emphasis on Utilization aspects of CO2
 Advanced FE technology demos can offer platforms for next
generation CCS to lower cost and energy of capture especially
in fossil power (not just about coal) and energy intensive and
process industries (cement, steel, iron, aluminum)
 BUT more incentives and support needed
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9. ACTIVE LARGE SCALE INTEGRATED PROJECTS
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Some progress, significant gaps, urgent call to action

10. Lessons from the Past on Energy and Environment-
Successful Deployment of New Technologies
 Technology, Policy/Regs and Market/Public Acceptance
must move in concert – informing decisions with broad input;
creating drivers, opportunities and acceptance
 Initial costs always high: advancing the technology and
creating demonstration opportunities with incentives and
sustainable policies key to successful deployment
 Workable approach to phased-in compliance is important
to success of acceptance and market penetration
 Similarities and differences in compliance experience with
criteria emissions and that expected for carbon emissions
 Similarities: Initially high cost; RD&D needed for commercial adoption
& competitive tech => market choices; initially faced future regulatory
uncertainties– timing and emission reduction mandates “debated”
 Differences: lacking carbon valuation policy; magnitude of emissions;
global nature (sustainable policy frameworks; collaboration and capacity
building especially in developing economies); stakes are much higher
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11. Technology – Importance of RD&D in Deployment
 Creates Shared Knowledge - technology performance and
applications:
 Cutting-edge Capture R&D in several countries –
opportunities for collaboration (e.g., TCM Mongstad
International Test Facilities Network - several U.S. pilot test
facilities-e.g., NCCC)
 Capacity development in non-OECD countries- e.g.,
CCS demo experience; next generation technology;
policy/reg/legal frameworks and general acceptance;
 Continued funding for CCS R&D and pilot testing is vital
 Technology suppliers - key to assuring technology
maturity; change perceptions about CCS being ‘experimental’
 Warranties and performance guarantees help projects.
 FOAK Demos like Kemper-IGCC/CCS – provide a “learning
curve” for future projects – better, faster, cheaper
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12. IMPROVED ENVIRONMENTAL
PERFORMANCE
0
1
2
3
4
5
SO2 NOX PM
1970
1997
2005 (Projected)
0
5
10
15
20
25
Coal Use for Power
Generation in the U.S.
Average Emission Rate from
U.S. Coal-Fired Power Plants
QBtu/yr
Emissions
(lb/mmBtuCoalBurned)
Emissions Per Unit of Coal Burned Have Decreased Significantly

13. SOX AND NOX TECHNOLOGY-
CLEANER AIR AT LOWER COSTS
Bef ore
CCT
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$0
CapitalCostPerPlant
SCR
Before
CCT
SCR
Af ter
CCT
CCT
Low NOx
Burn ers
Af ter
CCT
$75M
$40M
$10M
$100M
$200M
Savings to
Consumers:
$5 0 BILLION
Savings to
Consumers:
$2 5 BILLION
Scr ub ber s
For a Typical
500MW Plant
NOx Co ntrol
Through 2005
Through 2005

14. 14
KEY TAKE-AWAY: CCS HAS ESSENTIAL ROLE IN CLIMATE AND
ENERGY SECURITY PORTFOLIO STRATEGY
 Fossil Fuels continues to be dominant energy source in future
 Technology, Policy/Markets and Acceptance must move in
harmony and sustainably for successful outcomes
 CCS in a clean technologies portfolio with equitable incentives
and treatment allows competition – provides added pathway.
 Shared Knowledge from more Demos is important to
accelerating CCS progress – [GCCSI has mission to help enable]
 Encourage CCS capacity building in developing economies –
major future emissions due to reliance on fossil energy
 Critical funding and incentives for CCS projects can leverage
big benefits – potential $2T cost savings with inclusion of CCS
 Need CCS to meet GHG targets – stakes are high

15. Networking capabilityExpert support to Members
Comprehensive resources Best practice guidelines and toolkits
THE GLOBAL CCS INSTITUTE – WHAT WE CAN DO

16. GLOBAL STATUS OF CCS: 2013, SEOUL
 Annual Global CCS Institute Member event
 10-11 October, 2013 with site tours 9 October
 Meeting content to be translated to Japanese
 Release of annual Global Status of CCS report
 Contact events@globalccsinstitute.com for information
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