economically with coal plants with CCS. In such a world, the cheapest way to gain large reductions in CO2 would be to use natural gas combined-cycle plants plus CCS to replace existing and future coal units over time. These cost estimates are subject to uncertainties regarding fuel costs, capital costs for first-of-a-kind plants, and the costs of CCS technology. In addition to these current options, coal combustion with pure oxygen instead of air is a possible option that would simplify CO2 capture and that might be competitive in the future.
If CCS is adequately developed, demonstration fossil-fuel CCS plants providing 10 GW could be operating by 2020, with strong policy incentives in place. One such incentive would be a CO2 emissions price of about $100 per metric ton. Given similar assumptions, 5 GW per year could be added between 2020 and 2025, and a further 10–20 GW per year from 2025 to 2035. This expansion would result in a total of 135–235 GW of fossil fuel power with CCS in 2035. The AEF Committee did not make a judgment about the mix of natural gas combined-cycle, pulverized-coal, and integrated gasification and combined-cycle plants with CCS that would be appropriate. Potentially, all existing coal-fired power plants could be replaced by those with CCS by 2035. Whether any coal plants and natural gas plants without CCS will still be operating in 2035 will depend on the policies in place at that time for limiting emissions of greenhouse gases.
The widespread use of fossil fuels in the United States has significant environmental impacts, many of which have been addressed over the past few decades by a broad array of laws and regulations. The notable exception is the emission of greenhouse gases. A continual challenge is to keep policy instruments—especially those affecting greenhouse gas emissions—up to date and enforced as fuel consumption increases.
All of the pertinent environmental issues need to be fully considered in assessing the real costs of different energy options. Agencies, stakeholders, and investors concerned with environmental impacts must also prepare for future challenges. Increasing the use of coal, oil shale, and tar sands will intensify environmental and safety concerns surrounding extraction and emissions. Expansion of liquefied natural gas imports may raise concerns about potential impacts of storage facilities on coastal areas, impacts of pipeline enlargement, and infrastructure vulnerability to terrorist attacks. Burning more fossil fuels for electricity will increase power plants’ use of freshwater and negatively affect water quality, aquatic life, and surrounding ecosystems.