The United States Department of Energy last Friday announced $99 million in grants to study technology that removes carbon from industrial exhaust and uses it for other purposes, like manufacturing. More than half that money went to Wyoming’s Integrated Test Center, a facility based out of the Dry Fork Power Station in Gillette.

The same day, the DOE also announced a $3 million grant to support Wyoming-based research “focused on expanding and transforming the use of coal and coal-based resources to produce coal-based products, using carbon ore, rare earth elements and critical minerals,” delivering on a December letter of support co-signed by Wyoming Congress members Sen. John Barrasso and Rep. Liz Cheney.

The funding did not arrive in Wyoming unprompted. For roughly half a decade, state leaders and the private sector have lobbied for federal buy-in to the idea that with the right investment, the technology called carbon capture utilization and storage — or CCUS — could play a role in combating climate change and become a viable facet of the nation’s energy portfolio.

CCUS has also been touted by leaders like Gov. Mark Gordon and his predecessor, Matt Mead, as a means to revitalize the state’s declining coal industry, which is facing cheaper, cleaner competition from renewables and other fossil fuels. CCUS, they’ve claimed, offers a bridge between coal country and a world in transition.

“Federal and state regulatory policies and consumer choice is contributing greatly to the decreased market for thermal coal,” Gordon told the Senate Energy and Natural Resources Committee — co-chaired by Sen. Barrasso — in testimony on the technology last month. “Many of these policies have painted a bullseye on the chest of coal. That target is misplaced.” 

Yet for all the momentum around CCUS, some critics doubt that increased federal support will result in more viable projects or heightened competitiveness for coal and other fossil fuels. 

“…the technology is iffy and the subsidies aren’t high enough to make most projects pencil out,” Clark Williams-Derry, an energy finance analyst for the Institute for Energy Economics and Financial Analysis, wrote in an email.  

CCUS refers to the process of removing carbon particles from industrial exhaust streams and using that carbon for other uses, like manufacturing and enhanced oil recovery or storing it far away from the warming atmosphere. Proponents tout CCUS as a way to help reduce the world’s carbon footprint without substantially reducing the current demand for energy, a need policymakers argue renewable energy currently cannot meet alone. Making fossil fuels cleaner to consume, proponents argue, is the most pragmatic way to meaningfully fight climate change.

The global pursuit of lower carbon emissions represents an existential challenge for leaders in Wyoming, which has long relied on coal and other fossil fuel industries to drive its economy and fill its coffers. The fight to save coal is a challenge that has largely defined the state’s relationship with the federal government in general and President Joe Biden’s administration in particular. Biden has pledged to slash U.S. CO2 emissions. 

Wyoming put its support behind an engineering competition called the XPRIZE to help spur innovation in the sector and demonstrate that the technology can have practical applications.

XPRIZE winners were announced in April, and Wyoming took the results to Washington, D.C. Last month. One of the winners, Dr. Gaurav N. Sant, testified before Barrasso’s committee about CCUS, its potential, and the hurdles keeping it from achieving that potential. Sant’s research team developed a method to store carbon from the ITC-adjacent Dry Fork Power Station in an industry-strength form of concrete, which some boosters saw as a sign CCUS can one day play an integral part of reversing rising CO2 levels.

But carbon capture is also a technology in its infancy, with its practical applications and immediate return on investment yet unproven.

And questions still linger around CCUS’ prospects for long-term economic viability. 

To-date, high-profile, private sector ventures into carbon capture technology like the PetraNova facility — a large-scale carbon capture project on a coal plant in Texas — have failed to achieve profitability. The federal government has invested relatively little funding into carbon capture research compared to other areas of the budget, according to a 2019 analysis by the Bipartisan Policy Center and the Energy Futures Initiative.

But momentum has been building toward a warmer Congressional reception to CCUS. In the last Congress, Sen. Barrasso’s bipartisan legislation, the Utilizing Significant Emissions with Innovative Technologies Act, was signed into law. That bill helped eliminate a number of regulatory and financial hurdles by making CCUS projects eligible for streamlined permitting under the Council on Environmental Quality and extending the duration of a critical tax credit for CCUS projects, known as the 45Q credit, by two years.

Getting the fledgling industry to take flight fully will require more help,  industry officials say.

“Speaking from a business perspective, we are acutely aware of the need for balanced investments from both the public and private sectors in this area,” The American Energy Innovation Council wrote in a letter to Congress in December, calling for an immediate tripling of federal research dollars into technologies like CCUS. “But we also know that federal funding fills crucial gaps where the private sector cannot profitably invest, and that the U.S. government played a direct role in facilitating some of the greatest energy advances of the past century.”

While Sant’s testimony detailed the possibilities for carbon capture, the focus of the question-and-answer period of the hearing turned to the need for federal funding to make the technology financially viable and begin the process of retraining workers and retooling the nation’s energy economy. 

“Without having the early state support that’s needed to really have full commercial deployments, we’re not going to be able to scale up fast enough,” Sant told committee members.

Carbon capture boosters view the recent period of renewed interest as an inflection point for the technology’s future, even as Biden’s administration seeks to roll out what is arguably the most ambitious climate agenda in U.S. history.

“I think, among people in Congress, interest is growing,” XPRIZE’s Vice President of Climate and Environment Marcius Extavour told WyoFile. “There are more people interested in discussing it. There are more external groups who would never be caught dead saying the word ‘CCUS’ five years ago who have issued positions on it because of the climate connection.”

During the April congressional hearings on CCUS, Sant and others working on carbon capture technologies argued that the 45Q tax credit that was extended by two years under Barrasso’s carbon capture bill is critical in supporting their work. Observers support that assessment. 

“Proponents of (CCUS) maintain that incentives are essential to help commercialize the industry,” a team led by UC San Diego researcher Ahmed Abdulla opined in a December research paper for the Environmental Research Letters journal. “That’s because, as an industry, (CCUS) systems sit firmly in the so-called valley of death. They are stuck between a small number of early demonstrations that have received government support and later mass deployments that would stand on their own financial merit.” 

Researchers argued in the same paper, however, that the 45Q tax credit may be a less effective incentive than less politically palatable methods like loan guarantees or federal appropriations.

Beyond that tax credit, the majority of funding for CCUS has come from a mix of state and private partners with a vested interest in the arrangement — states like Wyoming and the Canadian province of Alberta, a major coal producer. 

And doubt remains about the ability of increased federal incentives to make CCUS viable. 

“I really do believe that there’s a role for carbon capture, particularly in heavy industries (steelmaking, cement) that produce a lot of carbon as a process byproduct,” Williams-Derry of the Institute for Energy Economics and Financial Analysis wrote in an email. “However, real-world progress on financially and technically viable carbon capture projects has been poor.” 

CCUS is technically difficult and mostly has been proposed to extend the life of coal power plants, Williams-Derry  said,  which often aren’t financially viable without carbon capture, “and are extra-unviable with the cost of carbon capture.”

But advocates for the technology say the upside of CCUS is too great to ignore, even if the benefits aren’t immediately apparent.

As the Biden administration pursues regulatory reforms to reduce carbon emissions from the U.S. power grid, boosters like Extavour see possibilities to incorporate carbon-capture breakthroughs like Sant’s in addressing the nation’s crumbling infrastructure, or for businesses looking for green alternatives in their construction or manufacturing efforts.

Success for those ventures, he said, relies not only on incentives and investments in the technology, but also in applying the proper regulatory pressure to drive the market. Jason Begger, managing director of the ITC, used the passage of the original Clean Air Act as an example of the federal government using a mix of incentives and regulations to reduce the presence of certain particulates from the air.

“There was a need for government support to get those things across the goal line,” Begger said.“Seeing these big grants like this is a welcome shot in the arm to hopefully move some of these projects to the next level.”

Today, Wyoming holds a prominent seat in the carbon capture universe. Millions of dollars have been invested in the industry here, from initiatives like the XPRIZE to grants from a variety of private and public sources to the University of Wyoming’s School of Energy Resources. One of the most powerful figures in energy policy, Sen. Barrasso has helped give the technology a high-profile platform in Congress.

But with thousands of jobs eliminated in recent years — particularly in the coal fields of the Powder River Basin — can new investments in CCUS revive coal and create employment opportunities? And will Wyoming eventually capitalize on the fruits of the research it helped cultivate?

Business leaders have long-noted that Wyoming’s significant workforce and logistical challenges already inhibit investment in manufacturing enterprises that rely on captured carbon, despite the clear political will. Then there is the uncertainty about the industry itself.

“The goal of our administration is to start seeing some investment from DOE and now we are, which is encouraging,” Michael Pearlman, a spokesman for Gov. Gordon, said. “As far as on the ground, I’m not sure I can speak to that. I certainly think we’re looking for opportunities, and the Biden infrastructure bill could certainly present an opportunity to the state. But all of these are certainly speculative at this point.”

Extavour says the potential for carbon capture is worth the investment. While it may not necessarily save coal, he said, it provides options for an energy economy in desperate need of them.

“CCUS can be an entry point into kind of a new way to think about CO2 emissions, a new way to think about managing carbon,” he said. “Yes, it might be applicable to coal power, and it might even keep some power stations running longer than they might otherwise … that’s a pretty hard thing to promise but it’s not inconceivable that could happen.”

Others, like Begger, see CCUS not as a silver bullet to save the state’s traditional industries, but as an opportunity for Wyoming to become a pioneer in an emerging technological field supplemental to the state’s long-standing relationship with fossil fuels. And that technology, he noted, can be exported.

“People don’t come to San Francisco because there’s low taxes, low regulations or because it’s a really cheap place to live,” he said. “They go there because there’s a knowledge base there, one that started with companies like Apple and Google that helped it become this sort of Ground Zero.”

If we can really get some of these first technologies on the ground here and going, maybe we can become that sort of anchor, attracting more and more people in that space.”

WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.