distribution and use gas as a primary fuel for cooking, for -- and, perhaps, even for appliances. that's a thought that we're exploring and looking at investing a lot more in gas distribution. the second part of the three-legged stool is environmental sustainability, right? i like also -- secretaries topic. he called the presentation today, the role of coal in all the above strategy. i think with asia, it really has to be all of the above. there is no panacea for this energy security. it has to be all of the above. and investments in renewables, wind, solar, geothermal. it's an important resource, has been overlooked at indonesia. very underdeveloped. and something that really could be done. and there's a lot of that. and there's wind in the philippines, and the wind is

viable in the philippines. again, human behavior. it's taken them ten years to pass the renewable energy act. it's taken them another five years. human behavior effects this. and i think there's a lot of opportunities where asia can do better. biofuels, and i call this more efficient use of coal. when i was in charge of the clean energy program, i got hammered -- i used to get hammered all the time by grease peace, because it was called the asian dams and bridges bank and we finance a lot of coal, they say it's changed. but they use to hammer us all the time and say, no, you can't use clean coal because you're whitewashing the problem. there's no such thing as clean coal. coal is dirty. and so we -- in the peace treaty we decided that whenever we talk about clean coal, supposed to call it more efficient use of coal. when i say more efficient use of coal, i mean ccs.

and we have some funding from the ccs institute. and we've been working in india, china, vietnam and chio on the for ccs. and we've been working hard for the last three or four years to develop the structure for ccs. a lot of times in asia, when new technology gets adopted, it's really delayed because the regulations aren't in place. we work to get the regulatory structure in place so when ccs is available and commercially viable that the regulatory structure's already in place. we were there at the inauguration, r.t. met with the deputy assistant secretary. we brought in a delegation from china to look at the power plant. and, again, just like it's being a demonstration project in the u.s. and north america, it's also a demonstration project for asia. so there's a lot that we can do

and the greater use of clean energy and more efficient use of energy. another thing that where we can get a lot of efficiency is developing an integrated regional market, right? central asia was an integrated market at one time. where they could use hydropower from uzbekistan. i think, and in the summer months, and in the winter months, use the gas and electricity from kazakhstan. same in the mekong countries where you have cambodia, vietnam, where you can get efficiencies from there in the system. we finance a lot of that in central -- in the mekong countries and central asia. we're financing between malaysia and indonesia. so we're looking at interconnection in the grid. in south asia, we've been trying to do that. but it's much more difficult because south asian countries

aren't connected. they're only connected through india. very difficult. bangladesh has been wanting to buy power for a long time. but through india, it's been problematic. if we can get a regional structure on this, that would be very, very efficient way to use the natural resources that are indigenous. and finally, because we're an organization focused on reduction of poverty, we cannot forget the whole access issue. you brought up the issue of electrification. and we cannot talk about an issue without talking about access to energy to the poor. the first point there is, yes, the governments all have energy access to energy programs. but if you look at the countries that still don't have access to electricity, a large india, bangladesh, indonesia is only 60% electrified. and i've had conversations with officials because i'm an indonesian, i can say this. i say to them. you know, apparently, the government gets elected without

providing access to electricity to people. until that becomes an important part of the political agenda, it's never going to happen in indonesia. that doesn't happen, how do we do it? in our work, we've been trying to get a lot more of the private sector involved. vendors, and to get them to invest in solar charging systems. mini grids, microgrids. a lot of that has to be that. and i think that's an important part of the equation. we cannot forget about access in asia. so those are the three sort of pillars i wanted to highlight to keep in mind sort of the importance of, human side of behavior, the human side of policy making and decision making. thank you very much. >> thank you, samuel. i'd like to just make a few points and then we'll try to get it to the floor rather than ask extensive questions of the panelists. the one area that as one who has

worked in a lot of asian countries for many years on various world bank and asian development projects, i think we have not had enough discussion of is the whole institutional make-up of too many asian countries where there is simply no respect for the rule of law. so you can talk about greater involvement by the private sector, but the private sector has to be assured that once they invest, the rules of the game won't change. even where with financial assistance from donor agencies we set up regulatory regimes, too often there's no real regulatory enforcement. too often, when a regulator does make a decision that a new law may say he or she has the right to make, the reality is, when they try to go cut off somebody's power for nonpayment, they can even be met by guns at the gate of a factory. i've had that happen to me personally. it's rather intimidating.

we have endemic corruption. to either falsify their bills or other things holding down electricity usage. we have fiscal realities confronted by most asian utilities that too many people don't pay their bills, or in fast-growing cities where new addresses are popping up every day. bills don't get to where they're supposed to go. we have the classic case of, as i mentioned nonpayment of bills. and interestingly, when you really do some of these studies, the nonpayment of bills is usually not the little guy or the small homeowner. it's the big industrialist, it's the army, the navy. often times the ministry of finance. and it really is that i think asia has to come to grips with if they're really going to see serious reform.

i'm glad samuel, particularly, but several others touched on the energy access. i think a critical question is how do we bring the literally hundreds of millions of people without even access to one lightbulb or probably several hundred more people who have limited access to energy. how do we get them up to a modicum of a reasonable amount of energy to improve their standard of living at the same time do that in the context of ensuring we aren't exacerbating the problem because fuel usage, particularly of fossil fuels is going up. one of the big problems also about reform, particularly in the coal sector is the whole issue of employment. you know, in india, it's often the case that a major coal-producing states are often in political when congress was at least in power for many ye s years -- are in political opposition to the congress party when it rules, so any reforms of

the coal sector that are seen as hostile immediately becomes politically charged. but there are tens of millions of people throughout asia that work in the coal sector or the logistic sector to move coal. and as you talk about reforming coal, i think you need to keep up with the realities of how you deal with this. i think we have the impact on looking at our discussion on coal. the impact of what happens if lng prices continue to tumble? do they undercut coal? and if so, what does that mean for enhanced demand? which right now looks pretty glutted. is that going to last? and, the whole question of eliminating subsidies is important. but it's important how you eliminate subsidies. it's the danger if you use the money perhaps legitimately so to build new infrastructure or

something, you may increase energy consumption rather than reducing, clearly eliminating subsidies in the sense of giving the right pricing signals as was noted is extremely important to promoting efficiency, but not as simple as the analysis suggests. now, with that rant, we can now turn to the audience for questions to the panelists. floor is open. yes, sir? please identify yourself, and wait for the mike, please. >> i'm bob hershey, i'm a consultant. what can be done to raise money for these things in the private sector, especially by holding meetings online and getting some >> i think we've talked about this previously.

you know, the process is an important part of this. i think the inputs, the discussions on how we might do this. one very recent example that we've been talking about to indonesia as they cut the subsidy on fuel is direct payments to the poorest of the poor. how do we get direct payments to the poorest of the poor? the world bank, been piloting a program of direct payments with the caveat that the children of these people continue to get health checks and the children of the people go to school. and if we can get an electronic system that goes in where you have identification. electronic identification, the kids go to school, they get checked up twice a year, they get all the immunizations, there's a direct payment to the government as a subsidy. and so we're working on those programs. i don't have specific knowledge on how they're doing it, but this -- this is something that

we're moving more and more towards on the electronic side of the consultations. >> john hopkins university. question for laslow. as we think about gas competing with coal, especially the unconventional gas, does the -- is there a rapid decline rate in unconventional gas similar to what we heard about unconventional oil, it won't last as long? >> there is a rapid rate of nonconventional gas. this has been very known from the north american experience. which means, you have to drill continuously in order to maintain. if you stop drilling, then production will fall very, very rapidly. now, at the same time, i have to say that outside, outside north

america, the only country where noncommercial gas has an even money chance to make an impact is china. even in the case of -- now, there's a huge -- of noncommercial gas in china, because that's -- china so far has drilled, in the entire country. so the understanding in china is like compared to the united states 15 years ago. so nobody knows, but in china, reasonable people can put together a very bullish share. we did that. we did that. unfortunately for india, if i combine the population density, the lead use problems, the road

infrastructure, you know. there's a big issue with india roads. you have to really, really stretch your imagination in india. same goes in indonesia, the best-known in regions of swamps, jungles, very, very difficult infrastructure access problems in europe, shared gas lost the political fight. so i have to say that -- i have to say that if china share gas could potentially have a meaningful impact on the outlook of coal, but even in china. for the rest of the world, i don't see it having a really big impact.

>> thanks. i'm an independent consultant. sam, you mentioned that subsidies and, you know, way back long, long ago in september of 2009, the g-20 meeting in pittsburgh. there was an agreement to phase out fossil fuel subsidies. could you comment on that? and maybe also link it back to u.s. government schizophrenia or amnesia, maybe, is the right word. anybody else can comment on that, too. >> yeah, i think, i think it it's -- i've been following this fossil fuel subsidy, asked the imf to lead the work on looking at subsidies and fuel and fuel subsidies. and there were, i think for a year or two, a lot of consultants running around looking at the fuel subsidies and where they were and the time i was in manila and consultants would come by and say what are

you doing on fuel subsidies and this and that? my view is that the fuel subsidy issue hasn't moved as an international issue. and perhaps, those of you in the think tank community can add more to this. i don't think it's moved as much as sort of the g-20 has wanted. it's all got to do with local sort of politics, local will. i think the indonesian, i track indonesia because i'm an indonesian, has been one of the few where they have taken the large chunks of the subsidy out. anybody else can add on that, thad be very helpful. thanks. >> oil politics is local. it's not -- it is not the underlying economics, which is difficult in the substantive issue. what is difficult is to make sure the government survives. because it can be, you know, it can be a politically very, very painful process. and no wonder, no wonder in india, a landslide election and

very powerful, determined prime minister to make real progress recently. in nigeria, it was a big political crisis. so i don't think, i don't think that -- there's a very clear clear consensus on it. and i'm not of one single government, no, no, we think this is a good idea, we're going to maintain it. it's just that the prime minister and the energy ministers are looking for the appropriate political tactics. and, again, if you consider that in this country we are talking about are very substantial proportion of the income of the average person, you shouldn't be surprised that it is a politically complicated process. but i do think that we made progress. i think -- i wouldn't characterize it as a stalemate. >> if i could just share an anecdote, each year at the national press club, there's a meeting where all of the various energy trade associations come

and make presentations on the state of the industry. a year ago, i got up and asked a question. i said, how many of your industries would agree to give up all of the subsidies you receive if we got rid of all of the subsidies and put on a carbon tax. everybody would have a level playing field. not one hand was raised. this issue of subsidies isn't just something that pertains to asia. we've got plenty of them right here at home. >> thank you so much for all of your excellent presentations. excuse me. so i guess to somewhat build on charlie's sort of question of comment during the keynote. so, you know, currently there is sort of a momentum building from the u.s. and, i guess, the western europe to sort of severely limit the public

financing for coal technologies. but we've already sort of, you know, covered some of the key indicators and they suggest that a coal may still be the only viable option. in that light, for asia, at least, i'm not really talking about the u.s. or europe or even, say, let's put china and india side because there's enough of a private financing. is public financing really irrelevant for asia? >> you know, typical asian country, the industry is -- so there are no real competition of even who is competition in most asian countries. that you might have private investment into merchant backed by long-term contracts bid the

government or the dominant. more often than not, more than half in the industry. and more often than not, that state of the industry has a previous relationship with banks. now, if this is in a country where the overall conditions are right and the institutions reasonable, let's say malaysia, for example, going to put that into the category. and the malaysia, in a contract like that, they can do pretty much whatever investment they want because they have strong cash flows due to the nature and the access to capital from various sources. now, if you have countries that there is a big subsidy problem, or burning cash or you have an

overall functioning financial system so the banks are strong enough on its own. the thing that the number, very large a very large portion of could be mobilized by this country's size or the private sector or by the government, again, if you have which is quite popular in some asian countries. if you have a long-term contract with the government and that government has a proper capital markets, then that long-term typically enables the investor to raise capital. >> let me add, i think it's going to be very different depending on the asian countries. because i think you have the lower-income countries, laos, cambodia.

bangladesh, then you got the middle-income countries. correct where you have some depth in the financial. you've got utilities decently managed. therefore there is appetite to invest in these things. but the lower, and the lower income countries. it's very hard to get the private sector to invest anyway in laos, nepal or cambodia. and that's where institutions have a large role to play. i think it's in the -- it's in the middle income countries where the play is very, very interesting. because on the one hand, you, the long-term strategy should be. the development of the financial institutions. the first part we do should be that policy dialogue to address all those things that charlie

discussed. the governance in the power sector. how it's done, should we unbundle the utility to transmission generation. can we help them set up a regulator? once we do that, then the development financing institution should come in with technical assistance to do some capacity building. to help establish that regulator. to help establish the regulations. then only should we come in with the financing after that. and so, in those countries, i think we play a very important role. we should also play this role in the -- and i should have said this first, but we should also play that role in the lesser developed countries. but for the larger countries, the other part of that, your question, which i think was very pointed, and you disguised it very well is, you know, it's the question of whether the -- and the question, i think the value

edition in china or -- is an interesting role. we land maybe $1.5 billion. that's a rounding error for their national budgets. we don't really mean anything. they don't need our financing to build roads, transmission lines. that's not where our value addition is. it's not financing for them. for them, they want us to do things that they have never done before. so they want us to do ppp for toll roads, in some cases. which they have done, but they want to do more. in the power sector, they want to be super critical. they want us to do this more efficient use of coal. ccs, sort of thing. and that's the value addition they have. it's not just the financing, but the knowledge we bring to our projects to try out new things they haven't tried. it's fundable, right, they frees up their capital to do some of the things we can't finance. i think those are the plays there.

>> we have to keep in mind that the really large amount is not to give lightbulbs to very, very poor people in slum or very poor village. that is increasing, but as -- and that's -- and that's a major improvement in the quality of life of these very, very poor people. the really large, when you move up in human capital and they go and have money to buy a refrigerator and next step, they go for air conditioner, you know, city of singapore, 97% of the buildings have air-conditioning. neighboring indonesia, the same climate, 35. so they -- so the really, really large amount is not at the bottom of the pyramid. for comprehensive in africa and south asia. it's not -- it's not a large

amount. and it's completely unfair to frame it as a big part of the climate change debate. the really large amount is when you acquire the middle class lifestyle. that's when the numbers become very, very large. >> i think we would be remiss if we didn't draw on the expertise as one of the leading energy geopoliticians, i think, in asia. so i'm going to ask a question. i think if you were advising the japanese government, which i'm sure you've done before, but today, what would you say are the most critical things japan needs to do to get on a sound energy path for 10 to 20 years. where, if anywhere in your opinion does russia fit in as a supplier to not only japan but the rest of the far east? how serious do you think the perception is in japan that

china's bellicosity in the south and east china seas really is a serious issue for people concerned about energy geopolitics in japan.ghç >> thank you for the question. first of all, -- my personal capacity, though. as many as possible. this is no question about it. because, you know, it's just easier. it's such a -- no island country with no domestic reserves. we are completely dependent on

gas oil imports. if it takes place -- [ inaudible ] japan -- all the time. of course, it's easy to, you know, conceive the percentage f of, that kind of possibility. we have to beprepared for all sort of cases. especially when we come to the question of crude oil imports. natural gas, the story is a

little bit different. thanks to u.s. shale, japan's expected to import as much as up to about 20% from north america by early 2020. and japan's also interested in the alaskan project. in my personal analysis projection up to the end of 2020 by 2030, japan increase its import of lng from north america, including the u.s. up to even 30% or so. plus, we are importing. so we, you know, our energy

import is shifting toward the pacific side. we cannot expect much the same scenario with crude oil. for many to come. unless you export -- this is one for us, this is very sensitive. and the story can be different. russia doesn't have capacity to export. they have only one project in operation. it takes many more years/$y to build something new. and it takes more and more time.

and the russian gas pipeline contract. it stabilizes the region of supply/demand balance of natural gas. and, basically japan's very happy about it. >> thank you. >> i think we --wbó2ñ5iáñ6ala4

the conference on coal on energy strategy taking a break before the next panel. when the event resumes, the discussion of coal in a climate change debate. while we wait, a portion of today's keynote speech by the deputy assistant energy secretary for clean coal. >> sort of instinctively understand but don't explicitly understand or state is that we are in an era of fossil energy abundance right now. that was not obvious ten years ago at all. ten years ago, there was a lot

of discussion around peak oil. ten years ago, we had imagined a nation and a world in steep natural gas decline. not that way anymore. the united states is having record oil and gas productions for both. in fact, a natural gas is now, i think, about 60% unconventional production, something like that, well above 50. we're now the number two oil producer in the world. we're going to eclipse saudi arabia some time next year. that's a little different. from many perspectives, this is very welcome news. there's a lot of good news in this. not so much in terms of the atmosphere. not so much in terms of the global climate system, and spending more time talking about that. but from a number of perspectives, from economics, geopolitical stability, a number of b?(,ñthings. this era of fossil energy abundance is not only important to recognize, but internalize as we go thinking about our business. thankfully, we're not the only people who do this. i never thought we'd see coal on the cover of "wired" magazine, but it is.

and it gives a sense of the fact this is starting to enter into the sight a bit. the persistence is one of the things that has to be recognized and managed. because, in fact, the future and the global demand sees an awful lot of fossil use and coal use specifically.w/mb under most scenarios, certainly within the eia, the default scenario, 75% of global primary energy by 2035 is still fossil. a majority of that is coal. coal is about to surpass oil as the number one energy fuel worldwide. even with robust natural gas growth, coal remains a major fuel. in the u.s., everywhere. in the context of the united states, even given sort of robust scenarios of low price natural gas and high abundance,

we're still looking at 25% coal use for the indefinite future. that is a lot of coal. and it's a lot of emissions with that. fossil energy remains the dominant power supply. it's always a mix of coal and gas up to about 70% in the united states, again. that is expected to be that way for a long time. with that continued use, we will continue to see greenhouse gas emissions grow, as well. and that is, in fact, the hard part. coal has come a very long way. the first use of the phrase clean coal was somewhere in the 1830s. people were talking about the fact that clean coal was about getting your linens dirty. that because coal was dumped into people's houses, clean coal meant it wouldn't get all over your apron. i think the industry's moved quite a bit since then. we had in the past couple of decades, something on the order of 90% reduction in socks and knocks. we've figured out a whole technologies to recognize all of these other kinds of things.

carbon is the hard one, and it's the central issue in terms of what will the role of coal be in the united states, how do we think of that carbon profile? and how do we manage it? for the rest of the world, coal use is still there. continues to grow in china and europe and japan. europe, i think, may have been a surprise for some. it is, in fact, the fastest growing coal market in part because germany is shutting down nuclear power plants and gas wasn't what it used to be in europe these days for a number of reasons. so they find themselves using more coal. same thing in japan with the closure of the nuclear power plants, japan is building gas plants and coal plants and expects to be using them for a while. the way china thinks about the work. the robust energy

infrastructure. same thing in eastern europe. it's not just poland. poland, romania, ukraine. hungary, a number of eastern european countries and adjacent countries really rely heavily on coal for their energy supplies. and, of course, with all that dramatic increasing carbon dioxide emissions. carbon capture utilization storage, this is the key technology for an era of fossil energy abundance. if you actually want to deeply reduce emissions, if you want to stabilize atmosphere concentrations, it's one of the things you need to do. this has been recognized formally in the president's climate action plan. in fact, it is central to the -- literally central, if you open the middle of the document, that's where the ccs piece is. a number of things that have flowed from that. there's a certain amount of controversy surrounding the

draft regulations. ccs is listed as compliance option for both of those and people are busily going about trying to figure out whether or not that makes sense for their state or region. in addition to that, there's an important technical findings, the most important technical finding is the climate change is real and continues to be a persistent issue. the panel on climate change's recent report has doubled down on that says, yes, we really, really understand this and it's ve very. things like resilience, resilience in the face of weather threats or climate threats, some of that is issues that has to do with new renewable loading. that's a good challenge to have. and that has, we've learned a series of things from that. in doing so, though, how you actually maintain resilience as part of the mix is a new and important question.

the department of energy has not been idle about this. my program has put $6 billion into this effort since president obama took office. it is a massive investment in trying to keep coal part of a clean energy future. and central to that, again, is carbon capture and storage. for those of you who aren't necessarily familiar with it. it's not that hard. there's two parts, carbon capture and carbon storage. it's basically, you take carbon dioxide from dilute streams, 12%, 14%, from a coal plant, maybe 3% to 7% from a natural gas plant and concentrate up to 95%. and the reason why for storage. you inject deep underground, it has to be highly concentrated for that to work properly. but once it goes down, it stays down. the earth's crust is well configured to store carbon dioxide. it's not rocket ó)f0science, i rock science. and we know that. there's a lot we know about that. to a first cut the united states

is not just the saudi arabia of coal. it's the saudi arabia of everything these days for oil, for gas, it turns out for co-2 storage volume. we've got somewhere between i think 1600. an all of the above scenario. in terms of lo cost, diverse supply, and a whole number of things. if you're really going to be serious about climate change, you do need to do all of the above. includes coal, but it's not just coal. very robust finding from these kind of general equilibrium models. this is the eias, stanfords, or

any other group. if you look at 13 different vintages and bases for these kind of models around the world, you get a similar result, which is you always do efficiency, you always do renewables, you always do nuclear, and you always do carbon capture and storage and always do fuel switching. you always have all of those things. and the numbers are surprisingly robust. this analysis has ccs at about 14%. that's a robust result typically between 12% and 20% of the solution set is ccs. one of the things, the iea, the international energy agency made a point of in their 2014 outlook was to say we've come a long way on a whole bunch of other things, we could go farther and there's grounds for it. one of their ways of thinking about it is this. i\o:ñ you look at all -- if you take ccs off the table.

half the models don't converge, they don't solve the problem at all. a typical estimate from this kind of thing is if you take ccs off the table, the cost of hitting that target goes up about 150%. so more than doubles. and the international panel on climate change has actually put more emphasis in this, and this is from david victor at u.s. san diego, the cost goes up about 50%. it really goes up between 30% and 80% for 550. if you want to hit a 450 target, the cost triples. goes up between 200% and 400%. that's a lot of money, and it's just because in some markets coal with ccs is the cheap option. not everywhere, maybe not in california, maybe not in arizona, but in a whole bunch of markets, and a whole bunch of places in the country and around the world. ccs is the cheapest option for

deep abatement. more costly or less efficient. the good news is we've made a lot of progress on this. this slide is actually a little old. basically the lower two bars are stuff that's built and operating or will be operating soon because it's being built. so right now, we're here at 2015, we're putting about 50 million tons of carbon dioxide a year under ground. that is a decent volume. that's real abatement, that was co-2 going in the atmosphere and it's not anymore. by the end of this decade, we should be at 100 million tons. 20 large projects worldwide, we're on track to have another 20 or so by the end of this decade. that's awesome. we want that knowledge, we want that demonstration. we want the technical findings that come from that kind of undertaking it advises decision makers very, very well. this is an important one. this was the birth of a new species. and i was happy enough to

witness this october 1st, boundary dam up in canada became the first place where someone's retrofit a coal plant to capture the emissions using basically off the shelf technology. this is canadian technology can solve, fully owned subsidiary. but it's similar to mitsubishi's technologies, similar to the norwegian technologies. it's an aiming solution. basically the steam coming out the top means it's operating. that was venting 1.1 million tons a year, it's not anymore. it's all going under ground now. another one of these, or another two of these. and they've learned enough from the first project to cut the cost on the second. that is a very important finding. and it's something we find robust across the portfolio as people deploy these things, they all come to us and say we know how to cut the cost on the first project a lot. we'll do the second project instead. because the second project is always cheaper than the first by

a lot. 20% to 30% is very typical kind of number. i want to dwell on this for a moment because it helps make the point i made earlier. an environmental group approached at the beginning of this project and said you're going to spend $1.4 billion on this project. that's a lot of money. we got a different idea. reason -- >> maybe. let me see. good? okay. so thank you so much for, well, i guess staying with us. i'm a senior fellow with the energy and national security studies, security program here. and it's my true pleasure to moderate the second panel which

will examine the role of technology in addressing coal-related carbon emissions challenge. i think that, you know, the panel, the first panel very much some key sort of consensus type of messages in that coal will e be, will stay as part of the power generation mix. certainly for developing economies. but then, also for the u.s. it has important role in economic development but then also for energy security, as well. supply security and diversification. but then at the same time, you know, carbon challenge is something that everyone has in mind. and i think for some of the countries that really is the overarcing message. i think for some other economies, perhaps, the supply security is the overriding concern as opposed to climate. but generally i think public

awareness on the climate challenge is rising around the world. excuse me. technology as one of the every solution and make our discuss n discussion -- during this panel, i'd like to invite our panelist to sort of discuss with us some of the challenges and opportunities associated with the development and deployment of clean coal technologies around the world. and also some key issues that e we, there are key issues we may explore in this technology area such as, what are the relative advantages and disadvantages of ccs versus super critical ultra super critical clean coal

technologies both from the climate, but also economic perspectives. and also, you know, i would be interested in hearing panel perspectives on, you know, commercial viability for ccs, especially, you know, without the option. and it's not to say it's not important, it varies from market to market, economy to economy. to have some sort of time line that we can start thinking as we look to technology being one of the solutions. then also, you know, maybe we can spend a little more time on the r & d side of it. certainly dr. friedman talked a little bit about it. what's the framework? right framework and what are some of the key ingredients and successful road map for ccs r & d. perhaps in some of the other leading economies that are experimenting with ccs deployment.

and it's my true pleasure to introduce the excellent panel here to my immediate left. he'syukihada. the washington office of nado. new office of technology and development industry of japan. this is japan's largest project management operation. it is an affiliate of the trading ministry. managing existing bilateral technology demonstration projects among others. his previous roles include drafting and implementing policies in such areas as waste computer recycling and biofuel quality regulations. so he's certainly not a stranger to the energy-related technology opportunities and challenges here.

to his left is mr. bob percippian. he's the president of the center of c 2 ef. this is a widely recognized agency in the united states. it's perfect to have him. and it probably doesn't need -- i don't really need to mention this, but he was most recently the deputy administrator of the u.s. environmental protection agency from 2009 to 2014 and during his time as the deputy administrator he did epa set stricter auto emission standards and mileage standards, streams and rivers, and developed carbon emission standards for power plants. his previous public service was the secretary of environment for the state of maryland in the early '90ed and an urban

planning official for the state of baltimore. to his left is mr. mamagata. his practice is federal, legislative issues in the area of energy, environment and natural resources. he represents clients before the u.s. congress as well as various federal agencies including but not limited to d.o.e., epa and interior. he deals with programmatic issues that relate to technology issues and deployment relating to the use of the renewable energy resources. he serves as the executive director of the coal utilization research council which is a coalition of industry with an interest in promoting clean coal technology. so we could not have had a perfect -- more perfect panel

than these three leading practitioners and thinkers as we try to take a closer look at what clean coal technology can do in our efforts to address the carbon emissions challenge. i'm going to invite each speaker to speak for 20 to 25 minutes. hopefully we can take a lot of great questions and certainly open up further discussion. please. >> thank you. welcome, ladies and gentlemen. it's a great honor for me to be joining this important panel even though i had to postpone my florida vacation one week. today i am happy to brief you on what coal technology can do in order to reduce global c o2 emissions. as introduced, my name is

hiro hatada. before getting started, let me just briefly introduce naido to you. this is the technology development agency under the jurisdiction of the japanese ministry of economy, trade and industry. and we are the -- japan's largest public technology project management agency so we formulate our technology development projects and we manage those projects. and we have a consortium of project performers who work on our projects for us. we do not have a level of our own. the scope of our activities is pretty diverse and that ranges from energy related technologies to non-energy related technologies. to give you some examples,

renewables, renewable energies and robotics, electronics and materials and of course clean coal technology. now finally getting started. speaking about coal, we have seen this kind of a chart a couple of times today, but this is the forecast of iea for the growing consumption of coal, and the one point i want to draw your attention to is this chart is called a new policies scenario, which means this chart has already taken account some new policies of different countries even though policies that are not yet implemented. so this means that coal consumption will go even though we have some proposed poll six for administrative measures. and then another point is a

measure portion of the increase will come within ten years from now. so we have to be, you know, thinking about what we can do, you know, in years. well, today i want to talk more about the coal-fired power plant as opposed to coal itself. so this is a chart and the same kind of chart from the coal plant. the coal itself, coal-fired power plant will increase as well and capacity addition projected in the world for 2040 will be 1,360 giga watt. to give you basic idea, my impression is that when a coal-fired power plant is about .5 gigawatt, it is called a large scale power plant so that will -- you know, you can

just, you know, simple calculation will show you how many power plants this will transfer into. in 2014 he would are going to have 2600 of the gigawatt capacity. so now the forecasts say the coal consumption and coal power plants will increase, we have to think how we could increase c o2 emissions from coal, coal-fired power plants. so these are the three points that i am going to talk about today. this is pretty much my agenda for today. number one, capture and sequestration and enhanced oil recovery and two the higher efficiency on coal-fired generation technologies and lastly i want to talk about making sure that this technology is available today, actually

used today. so, first item, the carbon capture and sequestration. this technology is one of the most important technologies that we should be working on as the technology agency. however, the point is that we are still working on this. the small scale projects, what we call higher up projects, is complete, which is the left-hand picture. that is an 8 megawatt scale. we are complete with it but we are still working on the middle scale project on the right-hand picture. the 50 megawatt scale. this won't be operation al until 2019 so we are working hard on this. that's pretty much about it

capturing technologies. even after being successful with capturing technologies, there will be some other issues, i mean some things that we have to work out, like a transport and sequestration, but the transport might not be -- technology that hard but sequestration has some issues technologically. those take a lot of technology development. and, you know, there are other concerns that we have to overcome, namely, you know, limited occasions, like somebody said in the previous panel, not everywhere is suitable for sequestration, so depending on where you are and depending on where you have to carry your c o2 to, you know, the sequestration the transportation

link might be long and then even after sequestration, even after you put your c o2 into deep underground, there is still a concern about a long-term storage. what will happen when we try to store c o2 deep underground over a long period of time? and then on top of that some are there$"( but for bugs for the environmental effect. what might be caused. because of the c o2, we have things underground. there's somebody on a previous panel. lastly, what we want to think about also is economic incentives. we have to think about how this system could work economically

profitably, financially. so, speaking about economic aspects of ccs, at nedo we are working very hard to reduce the cost of ccs. there are some, you know, technologies that might contribute but, still, you know, ccs will add significant amount of cost to the operation, cost of the coal-fired generation power plant. our estimate says capturing it plus there will be transport and sequestration which is unknown, that will be different depending

on what environment you are doing ccs. i'm not saying ccs will not work but you have to think and work on a good way to make ccs environmentally workable. when speaking about this -- there is a -- one way that could make ccs work economically, which is you are already there today. it's like putting your c o2 into the old -- you know, old oil fields or maybe dead or dying oil fields so that you get more oil than originally accepted from the oil field, right? so by producing more oil, that makes economical sense.

however -- so it's a very good technology. that makes it economically viable. but the issue is it only works -- the left picture is the locations of the oil fields that are suitable for the u.r., c o2 u.r. then the right picture is the, you know, distribution of stationery c o2 emission sources. as you see this, they do not really match with each other so where it works, but there are so many places where u.r. does not work. that's why we have to continue to work to come up with other ways to utilize -- you know, utilize c o2 from carbon capture

or maybe some other ways to make sure ccs makes economical sense. by the way, the u.s. -- this was done as well. the u.s. is one of the few countries where even in the u.s. you have that. that's my first item. moving onto the second point. before getting into detail, you know, about higher efficiency of coal-fired power plants, let me do something. this is pretty necessary. coal-fired technology, one to one. by the way, this is very simple. too simple. maybe inaccurate. when i talked to one of my experts he said he didn't like this, but that is okay. that's okay. you know, as you go down, the

top is critical. if you go down from the top, the critical. if i say only he will be mad but the difference is you get the higher pressure of steam from boiler so that your steam turbine gives you more electricity. so the urber super critical is the technology that's commercially available at this point in time. speaking about the upcoming technologies, two in the bottom -- the second from the bottom is -- you somehow turn coal into gas which goes into gas turbines which is a generator, the first generator. before the steam going into steam turbine which is your second generator. the last one on the bottom, the

igcc is the gas. after you turn coal into gas, that gas goes through your cell before getting into the gas turbine here. that's right they did the most efficient on promising. technology. having in mind this inaccurate summarization, this won't match it here. this is the map we are logging hard to go with this trend and you see the arrows here. we are around 40 something persons. commercially speaking the best efficiency, that is today, is 43%. our plan is to achieve absolutely 65% by 2015.

we are working very hard to achieve this goal. however, the point is why we are working very hard on technologies for the future, people -- you know, the many friends are standing up today. right? and that is why, to make sure -- i have to talk about using what is available today. that's a sad point. now moving onto the third point. a used one is available today. so, first of all, how does the best trends today look like? this is a picture from the best coal plants in japan and also in the world. this is a -- what another future

was toned down. there is a reason i did prefer this picture. the plant was beautiful in air totally different light. i don't know the exact distance there. you see there are so many houses close to coal power plants. this means that they're not only beautiful that far from the screen and also hiding. not sure how much being beautiful matters here, but if the picture is not enough, i will reiterate how efficient is the current best technology.

if we use usc critical technologies for all the replacements and all the annuities to the plants, the reduction will be 1100 million tons per year compared to another scenario which is subcritical technology and now how big is 1100 million tons per year? to give you an idea, by the way, gentleman upon's total c o2 emissions -- not all the coal-fired power plants, wlug oil plants, everything. 1200 million ton per year.

so by choosing the uber surp err critical as opposed to subcritical, you know, this is like japan's disappointment. yeah. this is like japan totally stopping fuel emissions. this is how efficient this technology is. in addition to c o2, well, before c o2 started to be called a pollution, traditionally when we about the one i like. this is about the same system. it was

around half of the world using subcritical. around 1/3 of china is subcritical. in india almost all of the new plants are using subcritical.

the reason is easy. if you look at this table on the bottom, the reason is the subcritical is the cheapest. the cheapest is -- the down side is it is least efficient, 34%. what least efficient means, they need more fuel. how much more fuel. 20% more fuel compared to usc. by choosing the cheapest they are losing money. you might not care if they lose money but what is important is they are producing more c o2 that be is necessary by choosing

this. that is why we have to help them for them and for us. for this purpose providing financial assistance can be an option. being from nedo i'm going to talk about something else today. that is the study assistance that we are providing to different countries. so far there have been 19 projects in 11 countries. now analyzing, you know, how the new technology would work in the country, we are helping those countries make a right decision in terms of what technologies to use. again, i think everyone is looking at the triangle but this is the -- because we started the project in california. i have thought about this later.

another part of the coal-power plant technology is maintenance. after building a new plant, you have to use this for over like 40 years, right? so the keeping up the plant's performance over time is important. this example, take several plants, several power plants, it is too new to do this. there are several power plants has been operating around 40%. originally designed efficiency over 40 years compared to another plant that has dropped off quickly. i can't say what country but there is one. this is the difference. that's why the maintenance technology is important as well. this is going to be the last slide. the u.s./japan operation is

going on in some examples here. number one, the project is located in california. and because of which japanese companies are participating in construction, they're in construction and hoping to see completion. the second one construction is going on from retrofitting one project on the u.s. existing plant for the sake of pollution reduction. then we are happy to reach out for potential partners and the picture is from the recent tour we had with the west virginia university and national energy technology arm of d.o.e. hopefully there will be more opportunities to cooperate. if you have something, let me know. with that i will conclude my

presentation and will be happy to take any questions you have later. thank you very much. >> i'd like to ask just a quick qualifying question. there's definitely some substantive questions later. your slide on -- excuse me. slide number 13, just wanted to make sure i understood this correctly. the average from the coal, oil and gas pipeline. >> average. >> average from coal, oil and gas. >> right. average. coal-fired plant is much greener. >> average.

>> and quickly the -- this -- oops, sorry. the blue line just to make sure, when you say a certain coal-fired plant for comparison, you mean a non-japanese, is that what you mean? >> not from japan. i don't think you can say. >> no, just wanted to make sure. it sounded sort of mysterious. great. next spot please. well, again, thank you, jane, for the introductions earlier. it's a pleasure to be here with everyone. thank you for that presentation. i'll try not to duplicate all the information you had on the efficiencies of the different technologies and lay out a little bit of history as well as where i think we need to go. if you think of all the -- if

i'm going to say a power plant i'm going to mean a site where there's more than a power plant. there can be a generator or boiler at the site. let me use power plant here. in the united states there was 557 coal-fire power plant sites. in china there's 620. in the world there's 2,300 so china and the u.s. have 51% of the power plants. i'm not counting units again. probably close. so u.s. and china have 51% of the coal-fire power plant sites in the world. and then we know some of the reports we received from iaea

and others that we currently -- in the last couple of years and you had similar data, we got about 1.6 -- 1,600 -- i'm sorry, 1,600 gigawatts of coal-fire capacity. it's expected, i think this matches your chart pretty well, to grow by 2035, 2040 to about 2,600. you had 2,630. so we're -- you know, so this is current growth. so that's a 60% growth between today and let's say 2040. mid 2030s. and a lot of that growth is going to be in asia and india and other parts of the developing world.

less so in the u.s. but there will be some growth in the u.s. as heat rate is improved in the u.s. and some additional technologies are built in. and the global coal demand is expected to rise just over the next five years from 7.8 billion tons in 2013 to a little over 9 billion tons in 2019. so there's going to be continued growth in the demand for the fuel as well. and i put these numbers out here because i think you might have heard some of them today. they're very similar to what you might have had. what it shows is that the world is making a huge commitment in this fixed infrastructu we're talking about 40 -- 42, something like that, percent of the world's electricity being

generated from this type of fuel, and i'm not counting in natural gas which is another big hunk, but when you look at these fossil fuels, we're probably in that 50% zone of the world. so electricity being generated from it for at least another several decades, which is getting us into the middle part of this century where we're supposed to be making substantial reductions in greenhouse gas emissions. but at the same time we're trying to as a world, and you may wonder sometime whether we're able to think about this stuff or not from all the world events you hear, but as a world we're trying to raise everybody's standard of living and quality of life, and in order to do that, there's over 1 billion people on earth that do not have electricity. so you have to think through that we have that other conflicting characteristic of our modern thinking in the world is that we want people to have a better quality of life.

i think most of us would agree that although sometimes i think a tent in the woods would be good, a quality of life in modern society includes having some electricity. and so these conflicting or at least let's say challenging -- mutually challenging goals that we have as a planet to reduce our greenhouse gas emissions but at the same time try to grow the quality of life of all of our citizens on the planet is a very difficult contextual thing that we have to think about. so if the reality is -- and this is where, you know, i think maybe why you asked me to be here, if the reality is we're going to have this kind of power generation on earth for quite a while in this century, we need to figure out how we're going to deal with the emissions. so i actually often say it's not

the fuel, it's the emissions that we have to deal with. and the history piece that i want to lay in here, jane, is that in the u.s., this is pulling back into the u.s., and you saw the performance of the u.s. plants aggregately compared to some of the high performing plants in japan, we have some of those high performing plants in the u.s. also. those are averages. we have plants that are getting very, very low. i'm going to say very close to zero almost in sulfur dioxide emissions and nitrous oxide emissions. that's a phenomenal achievement. when i first started in air pollution control 30 years ago, you know, we had things like low nox burners where we'd hope to get a 20 or 30 or maybe if we were really lucky a 40% reduction. i remember having conversations with engineers and they'd say, what's wrong with you, bob, the air is 80% nitrogen.

i can't burn something and not have it be exposed to nitrogen. today we have selective catalytic reduction. we've developed catalysts and changed it into a different kind of gas and a different kind of product. so we've made some fantastic -- and i have to say fantastic reductions in pollution from coal-fired powered plants, and this is the thing i always like to look at, our current average cost per kilowatt average in the united states is 10.5 cents. in 1985 our average cost per kilowatt hour was 6.5 cents. in today's dollars that would be 14 cents. the 6.5 cents would be 14 cents today. our average today is 10.5 cents. you could say we're starving our infrastructure here by not charging the same amount of money in buying power than we did in 1985, but what we've done

over the last 20 years is invested in pollution control that has had a fantastic reduction in pollution and an amazing impact on public health. and so when i talk to my colleagues in the industry, in the power industry and even in the mining industry, i say, well, this is an amazing technological achievement in the last 30 years. what makes you think we can't do that with carbon dioxide in the last 30 years? of course, what we were seeing are some of the emerging technologies to make the plants more efficient which, of course, who's opposed to that? and second, trying to capture it. when you look at what we've been able to do and how it's affected the average consumers, commercial, residential,

industrial, we've been able to hold the costs. there's anomalies, higher in new england than it is in alabama, but the average. i'm looking at the average. so how do we take that next step and what are the emerging technologies? i'm not going through them in detail. let's talk about what's happening on the ground. we now have in north america a carbon capture storage plant operating at sask power at their boundary dam location. it's been operational i believe since october of this year, and it's coupled up with enhanced oil recovery. and one will say, some of my colleagues on the environmental side, oh, we don't want to have this enhanced oil recovery. you're pushing more hydrocarbons out of the ground and burning them in cars or trucks or airplanes so, yes, indeed, there is a penalty there, you know, in

terms of hydrocarbons, but there's still a 30, 35% benefit of doing it. the key is what hiro said and i want to reiterate it. we don't have an economic model right now to help us finance carbon capture and storage. and the economic transition i'll call it model of being paid for that carbon to do the oil -- the enhanced oil recovery is a very good transition concept because what it will do is it will enable us to build more carbon and capture and storage in plants. the more we build, the cheaper they will become. and that's what's happened with the air pollution i just mentioned earlier, with all of those. we went from big wacko wet scrubbers down to injection and -- you know, so we've reduced the costs there. and so -- and i'm going to coat from bob watson from sas power

ceo in an article a couple of weeks ago. he said, we fully expect to build another unit at the same location, but we expect it to be 20 to 30% cheaper to build because of what they learned just building the first one. so i think that this is a pretty important component of it. finding that bridge period and how we do it. and i agree with what hiro said in terms of a use of elr as that potential model. of course, you know what the economic model is in the long term. there has to be a price on carbon so you'll get paid to stick it in the ground. i'm just saying. and you have to do it in places that are not -- i'm pointing out not at the camera but at the map that was on the wall before, you'll have to do it on the places that were white on that camera that don't have -- on that map that don't have enhangsed oil recovery opportunities, otherwise we'll be building pipe lines all over the place. so -- now the other good thing

besides the fact that we have one operating, we have one under construction in mississippi. actually, the map showed some of the pipe lines and opportunities in the mississippi and the southern u.s. by the southern power company at temper. that isn't operational yet but it is under construction. in china while there were 12 commercial scale projects being discussed, none of them are yet under construction but green gen will likely be the first project, and that's an agreement between lemming and peabody but it will be a while, maybe toward the end of this decade before that is actually running, but that's also going to be elr. and then there's also between lemming and summit power who are actually part of a dialogue that i've been involved with called the national enhangsced oil

recovery initiative. that's where we're using it not only to improve the efficacy of oil wells that are not producing anymore but also to build more carbon capture and storage technology to learn how to do a better job of it. and so this mou is in terms of sharing data as we were trying to do these projects so that we can share it. now i told you how many power plants we're going to have in the world that are based on coal and then how many we're going to have in the world that are based on natural gas. at the end of this century all of them we're going to have to be -- if we want an 80% reduction by the end of the century or sooner in greenhouse gas emissions, we're going to have to be doing something with that carbon whether it's capturing it or sequestering it or capturing it and using it in some other kind of economic

activity, we're going to need to do that. i'm going to stop there in that high level discussion. you see the challenge of the amount of investment we're making and the balancing goals of improving the quality of life on earth and at the same time trying to deal with greenhouse gases. and the fact that we've had success in the past of reducing the unit costs of substantial treatment on power plants and we are at the beginning of that process now. i see somebody helpfully put the map up there. you can see mississippi over there. i can't, but anyway. i'll stop there. >> thank you so much. [ applause ]

>> thank you so much, and let me start by apologizing to you because a number of my slides i noticed when i was sitting here earlier today, i used a font that was so small that it's going to be difficult for you to see, but i want you to take heart because i have about 50 slides and i'm going to move through them so quickly you won't be able to read the slide anyway. now in truth, the slides will be available, jane tells me that that's the case, and so if we don't see some things, they will be available. let me first of all thank jane and also the center for having me here. i appreciate that and i appreciate the discussion. i want you to know, bob, that because i'm a big coal guy on the technology side we are absolutely parallel.

and i thank you for that. and you have a long reputation of being fair and realistic, and it's a pleasure for me to be here with you. let me also say that while jane noted that i'm the executive director of the so-called coal utilization research council, circ as we like to call it, i'll be making reference to our studies and conclusions, the views i'm about to express to you are entirely my own. that's like an anti-trust statement, i think. i did want you to know that. let me begin by making two points. first of all, as i think both of my fellow panelists pointed out, the c o2 cannot be effectively addressed without carbon capture and sequestration, just a point.

second point i want to talk about is our country needs energy options. we need all energy options. this is one of those slides i was talking about, but if you can see it, in 2019 in china and india, coal plants planned or under construction will emit annually as much or more c o2 than the entire u.s. coal fleet currently emits annually. emphasize, this is only the c o2 emissions from plants to be built in those two countries in the next half dozen years. i think i'm just augmenting a point that our panelists have already made. both the eia and the iea are also expecting africa to

increase coal use by 50 to 70% between now and about 2040 at the african summit that was held in washington, d.c., several months ago i thought the african leaders made it abundantly clear that they will use coal for the 600 million people on that continent that have little or no electricity. india at the u.n. climate conference in new york city late summer made similar points. this past summer the leaders of brazil, russia, india, china, and south america launched the new development bank with $50 billion in subscribed capital and authorized capital of approximately $100 billion as an operating bid to finance infrastructure and sustainable development projects, coal being

one of those kinds of projects. so let's be clear. if you eliminate coal use in the united states, eliminate all the coal-using power plants in the united states, we will achieve a 3% reduction in greenhouse gas emissions globally. the eia and the iea representative who was on the previous panel noted this new medium term outlook that the iea has just released this past week and indicating that the world's coal consumption will continue to climb for the next five years despite the agreement between china and the united states, the you it leaders of those two countries, and i think it's important to note, and i quote from the executive director of the iea, maria van derhoven who

said, quote, coal use in its current form is simply unsustainable. we need to radically accelerate deployment of carbon capture and sequestration. i think that's the point that i would want to make to you as it relates to c o2 in the world arena. let me also talk a bit about the importance of energy options. i'm not going to spend any time on this. all of you, i am certain, have gone through this litany of the benefits and the costs of all of these energy options that exist. what i want to emphasize is each one of them has their benefits and their drawbacks. let me simply say that the japanese know all too well the price being paid for great reliance on one fuel soufrs. this next slides is to simply

depict that. the degree of reliance that exists both in japan and the consequences of fukushima but also what has happened in germany with respect to renewables, we haven't talked very much about that day and i don't intend to use it as a whipping boy, but let me just say that in 2013 the installed capacity of wind and solar and germany nearly equals the installed capacity of fossil fuels. that's good. but wind and solar energy producers got a guaranteed price usually well above market price and this electricity is dispatched to the grid before other conventional resources. as a result, in germany electricity prices have more than doubled and are 40 cents per kilowatt hour compared to the u.s. average as bob pointed

out, about 10 cents per kilowatt hour. what does that really mean? that means we have a competitive advantage because of the price of electricity and, frankly, the price of the existing fleet that delivers that electricity. important metric i want to point out with respect to the costs of electricity to the american consumer, at least some economists say that a 10% increase in electricity costs lead to a 1% decrease in gross domestic product and a loss of as many as 1.5 million jobs. now whether you believe or not that, of course, is part and central of the debate that's taking place even right now as we look at the proposed epa regulations called 111 b and 111 d. so options matter.

ccs is critical to effectively addressing global c o2 emissions. my point here with this chart from the department of energy is do we have a demand pool that will allow this country to be a leader in both the development and then the use of c o2 in newly constructed units and for that matter the same question applies to the existing system and the existing fleet. how are you going to address new projected demand? all of us in the previous panel have come to the same conclusion. it's not hard. it's certainly not rocket science. it is really more rock science, and that is we're going to at least primarily use natural gas. eia and its aeo 2014 early release report projected that in

order to use all that natural gas, which is that orange line, i don't know what it looks like up here but if you look at the monitors over here you can better see it, the orange -- orange hash marks are natural gas. you don't see nicole up there of course between now and 2040. but to use that natural gas it will be 130 gigawatts of natural gas cycle. it will be 8400 watts to be down street and that points to 2.1 incremental units. let me just say a primary reason again as other speakers have said for this increased gas capacity is both price and availability. you just can't avoid that. it's worth keeping in mind that in 2004 natural gas used for power production, however,

nearly doubled in price in two years to reach 550 dollars perfect ncf. then it doubled again in 2008 if you'll recall to reach 12.41. and then in 2012 it dropped to 80 cents. right now it's around $5 and $6. i think the point is pretty obvious. adding to the fact that we don't have any new projected demand for coal, what we're trying to show here is that the existing fleet is getting old. in 2020 the average time of existence of the existing fleet will be about 42 years old. it's important to understand that this existing fleet, according to the eia, is still expected to provide about 38% of all of the electricity

requirements through 2040 in the u.s. here's my point, i guess. we have an existing fleet that provides low cost electricity, it's reliable, and after full implementation of mats and the mercury rule, generally i would say this fleet will be compliant with most of our existing environmental requirements for criteria, pollutants save c o2 but the point here being it's a clean fleet. the point is it's going to be a clean fleet. those who have performed economic impacts to the economy and to families with higher electricity prices and these increases are going to happen, particularly with the retirements that are projected, both as a consequence of matts which is wherever you can say, it's between 50 and 60 gigawatts and one scenario that epa has provided under the 111 d rule if

it's promulgated as it's been proposed, there might be as much as 49 additional gigawatts. if you add that up there's 100 to 110 gigawatts of capacity in the u.s. as opposed to a 310 gigawatt facility. so i think the importance here, again getting back to the issue of the existing units, in 2040 -- in 2040 that fleet -- keep in mind we're not going to build any new ones. that fleet is going to be about 62 years old. so i want to come back to the importance of the existing fleet and talk about this really in the context of how complicated all of this is. and i really do think that bob did an excellent job of indicating that it is very

complex and that you need to find some sort of symbiotic relationship between these seemingly divergent requirements in our society for more and more abundant and lower cost electricity but also with attention to the need for environmental stewardship. we don't need to talk about these, but i want to remindx,fl about some of the things that have happened in the last 12 months that remind us not just about the value of the existing fleet but, frankly, the need to keep in mind that as we retire elements of that fleet and others have talked i think a lot about the potential reliability of the grid as we continue to retire this fleet. we talked in germany about renewable energy and what i guess i would have to call the

market distortions that are a consequence of too much, in my mind, subsidy in some places in the world. limiting options is just what it is, whether it's nuclear, natural gas price volatility. as i said earlier it's our duty, in my view at least, that we be good environmental stewards. i personally consider c o2 a major challenge, but generally if you look at the american consumer, the only thing he or she expects is power when they put something into the ubiquitous outlet, and i think that's one of the challenges that we have as we think about the complexity of the system that we're trying to deal with and the regulatory regime that we're trying to create.

what i now want to talk about is what i think is a timely issue here. it's time. it's been time for a long time to really focus upon technology or as the iea executive director said, radically accelerate deployment of ccs technology. let me just say again at the outset that you've seen some of the estimates, made comment about the cost and cost comparisons as well as dr. freedman, the circ. this is where i will wander back into the circ and my role in circ and that is that the simple -- the simple conclusion here, current status of carbon capture technology, it costs too

much. we at leastiñgs" argue we haven't integrated all of this. we haven't integrated all of this technology. we know about it, but we haven't integrated it into functioning commercial size power systems. we'll get there but we're not there yet but the biggest impedime impediment, i think all of us agree on this, is that the driver, the market driver here isn't there with low cost, very abundant, very affordable gags and it's not there because our economy isn't bubbling at 90% also so when you put all those factors together, it's not hard to conclude that the drivers here for technology development don't really exist for a variety of reasons, particularly with respect to something that at least the users of that technology at least in this

country view it as pretty risky stuff. and i want try to go into the costs and the values of all of that, but i would like to spend just a minute echoing what bob said before. we have been very successful in using technology as the fulcrum to ensure that we have a more environmentally pure world or environmentally sustainable world. you just have to look at -- these are epa charts, by the way. the metrics are the same, everything. it takes a picture of 1990 s o2 concentrations. the white vein down through the u.s. in that one slide is because there were no monitoring stations there, but picture in 1990 and a picture in 2009, and i don't think i need say any more than technology, in part, was responsible for that

reduction, those rather dramatic reductions. i mentioned before that i am involved with the co-utilization research council and circ as we call >> for more than a decade been updating core technology road map. the last it ration was in august of 2012. we are updating it again because things are constantly changing and improving. i wanted to show you these two charts. hopefully you can see them. what we can do with technology in the context of efficiency gains. and as others have said, if you get greater efficiency, you're going to lower the amount of co2

emissions. that left hand side says 48% or more. the right hand chart, which we also represent is the need for pursuing research and development. to do so at least in the context of how we think technology ought to be developed. could result in prevention or control of conventional emissions in a particular matter. so we can clean up emissions to even greater levels than we had today, than we have today. and those bars represent even greater emission decreases as a consequence we also are looking at water. if you were here earlier today,

assistant secretary or deputy assistant secretary had a chart similar to this. his was more updated. cy want to make one comment about this. we all are very supportive and hopeful that every one of those projects will be developed and finally built. we all focus on bondry dam and the project. a little bit, i think, on the archer daniel midland project. there are several other projects up there where at least in my judgment, it's a challenge. and it's mostly a financial challenge, not necessarily a technology challenge. because those projects are living in a world where the market doesn't yet exist. those projects are living in a world where there's a lot of cheap natural gas and there is no driver for at least again in

my judgment, where the technology is going to be able to survive. we talked a lot about the importance of -- let me underscore this by saying without very significant support we're not going to get there. and i'm talking about the support that exists or doesn't exist within the current administration and i don't mean and i do not talk about the really superb efforts at the department of energy in an effort to sustain a program and develop a program around advanced technologies. let me just walk you through this for a second. the president's request was $302

million. last year congress provided $392 million. you can see what the administration question have been. in terms of trying to increase the amount of funding for technology, research and development. not talking about demonstrations. it's really been the congress. i'm not saying that the administration has not been helpful but it's the congress that has moved the money up to a level where at least some believe we need to be in order to achieve the kind of goals that i had in that frame back a ways that you probably couldn't see. earlier this week you probably know that the house and senate agreed upon the bill.

but the agreement in the congress is around the million dollar mark. i will conclude by saying that ass a organization that is current, we have tried to look at what required in the technology development world specifically focused upon approximate coal in order to insure that coal has a place in the future as part of one of our important energy options. we have looked at what needs to be done with an existing fleet and we have got to improve the efficiency of those units. that's going to require some technology. we have to improve the flexibility of those units.

we have to improve the reliability. we are asking them now to cycle with respect to using the it is significantly important because it is a revenue stream in the context of technologies that can't make it without additional revenues or sources of revenues. we are very supportive of technology, r & d programs that

look not just at trying to improve existing technology, low cost electricity coming from that but also transformational technology. that is new power cycles and new ways to use coal cleanly and cost effectively. a part of our discussion is that technology not only addresses future environmental concerns just as successfully done for decades in the past. low cost electricity. including people's lives. and making possible modernization. that's the 1.3 billion people in the,wñ world who have inadequat supplies of electricity or no electricity at all let me

finally say with respect to this we call it a three part technology program. it is actually introduced legislation with a number of our colleagues. i believe her intention is to introduce that again. that is certainly our hope and expectation. i thank you for your attention. again i apologize for the small fonts. i only had 19 slots not 50.

>> sit not just coal. it could be used for natural gas as well. is it something viable for the natural gas industry?

or it needs a closer effort to support whether it's the increased budget for r & d. >> you have a greater dilemma. so they are distributed more widespread. i think the general feeling is they're going to have to capture some of that carbon as well. but i think there is also a sense that if you could solve the problem for the high volume and with some of the impurities that you