The US Government Accountability Office (GAO) said only three out of 11 carbon capture and storage projects funded by the Department of Energy (DoE) since 2009 were ever operational — and only two still are.
The GAO released a report evaluating the success of the DoE’s funding and what money may have been wasted.
The DoE invested about $1.1 billion into the projects as part of three initiatives to demonstrate and commercialise carbon capture technology.
Coal CCS projects were particularly less successful than CCS projects at industrial plants. Out of eight coal CCS projects funded, only one became operational, until it terminated operations in 2020 due to low oil prices.
Two out of three of the industrial CCS projects became and remain operational.
The report found that the coal projects were unsuccessful due to the facilities being in competition with natural gas, uncertainty in the future of carbon markets and tax incentives, and high expected project costs.
However, GAO was more concerned by the amount of DoE money spent on projects that proved to have an unlikelihood for success.
Compared to the industrial CCS projects, the DoE spend less time negotiating the agreements for coal CCS projects and did not use a down-selection process, which would choose a group of projects for initial funding, then conduct further reviews to determine which projects get full funding.
The DoE ended up spending $472 million on the early phases of four of the ultimately uncompleted coal projects, almost $300 million more than initially planned.
The Department has a process of holding funding until certain phases and technical progress milestones are completed, but senior leadership reportedly allowed the funding to be spent before milestones were reached.
GAO recommended the Congress to set up more oversight on the DoE's funding activities, such as requiring the Department to regularly report project status and funding in order to protect taxpayer dollars.
The report also recommended the DoE more closely follow established scopes, schedule, and budgets to mitigate its financial exposure if projects are struggling, especially as new funding from the bipartisan infrastructure bill has been allocated to CCS and hydrogen projects.
The DoE has also launched two Earthshot Initiatives this year — the Hydrogen Earthshot Initiative and the Carbon Negative Earthshot Initiative — to reduce the costs of clean hydrogen production and carbon capture.
In response to the report, the DoE did not agree or disagree with GAO’s recommendations.
Last week, the DoE launched the new Office of Clean Energy Demonstrations, which it said will be best suited to address GAO’s concerns.