Vice President of Market and Climate Policy

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Steve Corneli NRG Energy, Inc.
Vice President of Market and Climate Policy
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Carbon Captureand Carbon SequestrationCritical
Issues on the Critical Path
Steve Corneli VP Market and Climate Policy
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Hobsons choice? -- economic development or a
stable climate
Technology transformation is the only way to
achieve a livable world
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Technology transformation focus on fossil fuel
CO2
10 GT
Source US EIA International Energy Outlook
2007, NRG
Global CO2 from coal and oil could easily double
by 2030
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Mostly from growth in the developing world
Transformative technologies must quickly reach a
China price
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CCS is the biggest potential source of low CO2
power
Nuclear and renewable sources also play
supporting roles
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The US power sector can help lead the way
Source EPA analysis of S.280
The US shares many economic drivers for coal use
with the developing world
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And the entire global power sector must play a
key role
10 GT
With CCS the power sector can contribute bulk of
2030 reductions
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What does CCS need to succeed?
Carbon Capture
Sequestration

• Business-friendly regulatory, commercial and
  technical regime
• Guide resource selection, development and
  management
• Find the right site, and put it there using best
  practices
• Monitoring and mitigation
• Track plume and be prepared
• Long term responsibilities
• Transfer to entity that can carry out
  responsibilities over century or more
• Facilitate permitting and risk management for GS
  component of first projects

• Rapid deployment of existing technologies to
  reduce cost and enhance performance
• Expand supply
• achieve economies of scale
• Induce OEM competition
• prevent monopoly supply pricing outcomes
• Fully commercialize technology
• Learning by doing in field
• 5 10 early full scale commercial CCS projects
• Competitive, but with cost and risk support

Solve the chicken and egg problem by incubating
enough eggs
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Harness American capitalism to create solutions

• US cap and trade system starting ASAP
• Initial mix of auction and net compliance cost
  allocations
• Limit windfall potential
• Preserve balance sheet strength for companies
  that need to invest in CCS and other low carbon
  technologies
• Bonus allowances and other support for
  competitive early CCS technologies to rapidly
  increase demand
• Initial CO2 prices do not need to be high to
  drive initial deployment of CCS
• Transition to full auction and full market
  pricing as technology becomes fully deployable
• Cost containment measures fade, more aggressive
  reductions, and full auction
• EPA rule(s) for CCS that allow safe, timely and
  efficient sequestration development
• UIC-based for earliest projects
• Seamless transition to new rule for first wave
  of policy-driven projects
• Coordination with / delegation to state or
  regional jurisdictions
• Provide for efficient long term repository and
  risk management

Key steps must start now and proceed in parallel
to provide needed reductions
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Ideas matter -- and so do words

• CCS essential to solve climate change
• Geologic Sequestration will be safe and
  commercially viable
• New technologies can and do achieve scale
  economies and market penetration
• Leadership at the federal, state, local and
  corporate levels is needed to solve problem

• NUMBY
• Liability
• Too expensive, will never work
• Scientists dont agree...it costs too much...it
  isnt green enough

The biggest challenge is to make realistic
solutions as attractive as the problem