AUSTIN, Texas — In the global effort to reach net zero carbon emissions, the 2022 Inflation Reduction Act substantially increased federal subsidies to Carbon Capture, Utilization and Storage (CCUS) technology. However, a new study finds that some CCUS installed on natural gas power plants and large industrial emitters to remove most of their greenhouse gas emissions can disproportionately harm the health of Hispanic and Black communities living in the Texas and Louisiana Gulf Coasts. The study, which is forthcoming in the Journal of the Association of Environmental and Resource Economists, shows that ammonia emissions from these facilities, unless regulated with pollution control technology, could result in local health damages in the Gulf region comparable to the global benefits of reduced greenhouse gases from captured carbon dioxide.
The research, conducted by experts from The University of Texas at Austin and Cornell University, examines the implications of widespread CCUS deployment on human health, particularly in communities already burdened by industrial pollution and builds on a longer strand of research from the LBJ School and the University of Texas at Austin on the economic impact of CCUS. Researchers focused on three types of facilities: industrial plants, coal-fired power plants and natural gas power plants.
While researchers found that the sign and magnitude of LAP impacts from CCUS deployment are highly variable by facility, the study points to air pollution impacts of net zero CCUS efforts in the U.S. Gulf, and shows that by reducing sulfur dioxide emission from the three coal-fired power plants in Texas and Louisiana, can actually lower the LAP damages from these facilities. This is a “win-win” for climate and human health. This has important policy implications given that the Biden Administration revised rules last April for pollution control on fossil fuel-fired power plants that requires coal plants planning to continue operation with CCUS past 2040 will need to capture 90% of their CO2 emissions. This requirement will thus substantially reduce LAP impacts from these coal plants.
“The Biden administration recently released new regulations regarding new and existing power plants that include a requirement that so-called "long-term" coal plants expected to continue operations after 2039 will need to have CCUS by 2032,” said LBJ School professor Andrew Waxman. “It turns out CCUS dramatically reduces the LAP from coal plants, which is good, but some environmental advocates remain concerned that this simply extends the life of coal technology that would otherwise be ended earlier.”
The study focuses on the Texas and Louisiana Gulf Coasts, where the blend of industrial activity and generous federal subsidies of as much as $180 per ton of CO2 captured has spurred significant interest in and incentivized CCUS technologies. This region, home to seven of the eight largest U.S. oil refineries and most of the current and expected future U.S. liquified natural gas export capacity and the “highest collective concentration of petroleum refining and petrochemical production capacity of just about anywhere in the world” (Dismukes et al., 2019a) represents a crucial testing ground for scaling up CCUS infrastructure.
Key findings from the study highlight the potential trade-offs associated with CCUS deployment between global climate benefits and costs to local communities:
Clusters: Large industrial facilities and power plants cluster together geographically in industrial districts like the Houston Ship Channel, the shores of Nueces Bay in Corpus Christi, and the Calcasieu Ship Channel in Lake Charles, LA. The CO2 storage and pipeline infrastructure needed for CCUS also necessitates proximity, and is part of the impetus for regional initiatives for CCUS hubs such as the Houston Carbon Hub. Given the need for massive industrial infrastructure for these facilities, this is economical, but it also means that the local air pollution impacts are concentrated on the communities nearby. Traditionally, these neighborhoods have been populated by Black and Hispanic households, who bear a disproportionate burden of the health impacts from these facilities. This study shows that CCUS could exacerbate these disparities.
Racial and Socioeconomic Disparities: The research underscores disparities in health impacts, illustrating that Black and Hispanic households may face disproportionately higher risks from CCUS-related air pollution damages compared to White households. The research finds that the mortality impacts of LAP from CCUS deployment at industrial facilities are likely to be 57-73% higher for Black and Hispanic households than for White households. This disparity reflects historical patterns of environmental injustice in the region.
Policy Implications: The findings suggest a need for federal and state regulators to augment their approach to the “Best System of Emissions Reduction” to address not only pollutants directly regulated by National Ambient Air Quality Standards of the Clean Air Act, but also ammonia. Additionally, CCUS is currently subsidized by a generous federal tax credit under section 45Q of the Internal Revenue Code. That subsidy may prompt significant CCUS development in the Gulf region and beyond, so it’s important to understand the degree to which this federal policy is likely to impact LAP regionally and overall. However, researchers caution that the challenge for regulators, fenceline communities, and other stakeholders may be the degree to which study results vary not just by sector but also by sub-sector and facility.
“Our findings neither advocate for or against CCUS technology or the federal and state programs and subsidies that promote this technology,” said Professor Waxman. “Instead, we point to the fact that federal regulations around local air pollution emissions under the Clean Air Act need to address the additional channel of local air pollution impacts.”
Researchers used a 5-step methodology to establish a baseline level of emissions and simulate the effects of CCUS on emissions and air quality across different types of industrial and power generation facilities. They then calculated the hypothetical tradeoffs between C02 abatement likely to be incentivized under current U.S. policy with potential LAP. Next, researchers identified facilities in the Gulf where CCUS technology would be economically feasible. They used an engineering model to project how emissions from power plants and industrial facilities translate into pollution concentrations that households breathe by accounting for prevailing winds, temperature, air chemistry and population density relative to the dispersion of pollution. They then used epidemiological estimates of the impact of air pollution on mortality across different ages, races and ethnicities. across U.S. counties and parishes. Finally, researchers identified the extent to which the LAP impacts of CCUS vary with the racial composition of affected communities.
“Fortunately, there are several technologies that can reduce ammonia emissions from capture plants and researchers at UT have spent decades developing them,” said Waxman. “If these are installed on new capture facilities, they are likely to dramatically reduce ammonia emissions and the particulate matter that hurts humans. However, these pollution control measures are expensive, and plants may choose not to install them unless regulation incentivizes them to do so.”
The research aims to inform future policy decisions surrounding CCUS deployment and environmental justice considerations in the Gulf region. The research is published through the Journal of the Association of Environmental and Resource Economists (JAERE).
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