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Wyoming Ready To Take Advantage Of Massive Federal Carbon Capture Support

Jupiter Oxygen Corporation has plans to set up shop right here in Wyoming.

"We looked at Texas. We looked at North Dakota. We looked at Colorado, New Mexico... We homed in on Wyoming for a number of, I think, right reasons," said Steve Krimsky, senior vice President of operations for Jupiter Oxygen.His company hopes to retrofit Pacificorp's Dave Johnston power plant in eastern Wyoming with a form of carbon capture technology. The coal-fired plant is currently set for retirement in 2027.

"Dave Johnston will shut down if CCUS [carbon capture utilization & storage] is not deployed," he said.

Krimsky said Jupiter Oxygen expects construction to begin as soon as 2022, though Pacificorp has no operating or construction contracts in place; the utility hasn't decided if it will implement CCUS technology at all. That will be determined in its next Integrated Resource Plan. At this point, Jupiter Oxygen has completed a feasability study. Several other carbon capture firms are also interested in working with Dave Johnston.

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Credit U.S. Energy Information Administration
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Net generation of US Electricity via coal since 2001.

To get to this point, the company has had to take advantage of federal dollars. Not only did they work with the U.S. Department of Energy for a decade, but they also are using the 45Q federal tax credit.

"If you do not have 45Q, carbon capture will not happen," he stated.

Among other qualities, the credit provides $35 per ton of carbon dioxide captured.

A massive federal bill that's set to fund the government and provide stimulus checks to Americans extends the 45Q credit. It also provides unprecedented support for carbon capture writ large. Krimsky expects his company to take advantage of it.

"We're looking at seven different projects right there in the state of Wyoming. That's going to result in a total of capture of about 6 million metric tons of carbon on a yearly basis. [That's an] investment cost of approximately $2 billion," he said.

Wyoming leaders are expected to actively pursue many new projects beyond Jupiter Oxygen. Krimsky said Wyoming has positioned itself to attract companies like his by building up infrastructure around carbon capture for years: developing a CO2 pipeline network, a storage project, and a carbon capture standard passed in the 2020 legislative session to push the tech.

The state views it as a necessary means to keep coal-fired electricity going.

"Strategically, we're very well positioned to take advantage of it," said Dr. Glen Murrell, executive director of the Wyoming Energy Authority, which he describes as a quarterback for Wyoming's carbon capture efforts.

The federal omnibus package authorizes more than $6 billion for research, development and demonstration of CCUS, though the government would still have to appropriate that money.

In several sections, the bill extends a tax credit, improves a loan program, reduces risk of projects, lays out plans for more support, and makes way for several new commercial-scale demonstrations, including adding carbon capture to coal-fired power plants. That's something Wyoming is particularly interested in, as it works with companies like Jupiter Oxygen.

Wyoming's U.S. Senator John Barrasso was instrumental in pushing support for the tech. The bill included the Barrasso-led USE IT Act which seeks to find profitable uses for captured CO2 and simplify the process for building CO2 pipelines.

Murrell's organization and Gov. Mark Gordon's office expect to take advantage of the potential funds.

"We will do anything we can to encourage and incentivize companies and corporations to invest within Wyoming," said Murrell.

Gordon's office agreed, saying its goal is to have the next carbon capture facility be built in Wyoming.

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Credit Great Plains Institute
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Brad Crabtree, director of Carbon Capture Coalition.

Brad Crabtree, director of Carbon Capture Coalition, an advocacy group for the tech, said this bill is a big vote of confidence for the young technology and marks a sea change.

"This is the first time that the federal government in terms of research, development and demonstration of new energy technologies, has started to put carbon capture on an equal footing with other critical energy technologies," he said.

Global CCS Institute, a think-tank devoted to deploying more carbon capture, says the tech is vital to achieve climate change targets. It finds the tech would need to reduce roughly 10 percent of cumulative emissions by 2050 to reach those climate goals, but that it's just not there yet.

"The deployment of CCS [carbon capture & storage] is not happening quickly enough for it to play its role in meeting emissions reductions targets at the lowest possible cost," read its 2019 annual report.

Bloomberg article asks, "Will COVID stimulus be the breakthrough carbon capture has been waiting for?" Brad Crabtree said it's certainly important, but probably won't be the breakthrough.

"It's a huge first step that puts us on that path of further progress," he said. "That's my honest assessment."

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Credit U.S. Environmental Protection Agency
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Location of the Dave Johnston Power Plant

As Wyoming doubles down on carbon capture as a means to help resolve coal's woes, Dennis Wamsted, an analyst with the renewable think-tank Institute for Energy Economics and Financial Analysis, doesn't think any amount of support will change the resource's fate at this point.

"If the coal industry had started this work in 2010, we would be in a different place, but for any number of reasons, it didn't get started in 2010. So, now in 2020, we have a whole different set of facts on the ground," he said.

Wamsted said his group is pleased to see carbon capture support though, like direct air capture and reduction of industrial emissions, in order to address climate change.

He also echoed the others in saying it's early. Congress may appropriate all the funds for carbon capture, or none of it. And word-on-the-street is: Biden supports carbon capture, too.

Carbon Capture Coalition's Crabtree said even if funds are appropriated, there's still a lot of work before carbon capture will be widely profitable. First, these funds would need to help lay the groundwork for new projects.

"With that then, we'll have the ability between 2030-2050 or 2035 and 2050, to scale it up to the levels that we need to meet those really challenging climate goals," he said.

However, it's hard to say where coal will be by 2050. The U.S. Energy Information Administration predicts coal will continue its precipitous fall in providing American electricity dropping to 13 percent of net generation down from roughly 50 percent back in 2001.

January 15, 2021: A previous iteration of the story made it appear that Jupiter Oxygen would be setting up shop in Wyoming, when Pacificorp does not have any operating or construction contracts in place with them. 

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