trending Market Intelligence /marketintelligence/en/news-insights/trending/p9-rknqdrb16mwq11j9uug2 content esgSubNav
In This List

Carbon capture, inland waterways receive spending bumps in FY'18 budget


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

Carbon capture, inland waterways receive spending bumps in FY'18 budget

Funding for carbon capture and storage technology increased 13.5% in Congress' fiscal-year 2018 omnibus spending bill compared to the previous year's budget, while inland waterways projects in coal country also received important financing.

The Consolidated Appropriations Act of 2018 released March 21 would provide $481.1 million for carbon capture and storage and power systems, an increase from the $423.8 million enacted in the Fiscal Year 2017 Consolidated Appropriations Act and more than quadruple the $114.8 million in the Trump administration's fiscal-year 2018 budget request.

The bill provides $726.8 million for fossil energy research and development and directs the U.S. Department of Energy to develop a "cohesive policy and technology strategy" to guide the discovery or advancement of technological solutions "that incorporate lessons learned for the future of research, development, and demonstration efforts on advanced carbon capture and storage (CCS) technologies."

Some of the funds are directed toward both coal and natural gas research and development, as long as the research does not occur at the expense of coal. The bill includes $35 million to solicit two large-scale pilots that focus on transformational coal technologies, $12 million for carbon use and reuse, $45 million for storage infrastructure and $25 million for gasification systems.

The bill also provides for $20 million for coal utilization science, $34.5 million for plant optimization technologies and $18 million for the Advanced Ultrasupercritical Program, and will continue to fund the National Carbon Capture Center.

Erin Burns, senior policy adviser in Third Way's clean energy program, told S&P Global Market Intelligence that the self-described center-left think tank is happy to see an increase in carbon capture spending.

"Carbon capture is a vital climate technology that we're going to need in both the power and industrial sector. To that end, we hope to see funding not just for coal and natural gas plants, but also for industrial applications in future appropriations," she said.

The legislation directs the DOE to focus the funds for advanced energy systems on modular coal technologies capable of distributed generation. The direction follows DOE plans to help companies develop smaller, high-efficiency coal plants, but some are uncertain power companies will want to pursue this plan.

The bill also provides $15 million for DOE's National Energy Technology Laboratory to develop technology to extract and recover rare earth elements and minerals from U.S. coal and coal byproduct sources.

Waterways infrastructure

The spending bill provides a record $6.83 billion in funding for the U.S. Army Corps of Engineers, a 13.1% increase from the fiscal-year 2017 appropriations and a 36.5% increase above the Trump administration's budget request for fiscal year 2018.

The funding will allow priority projects for waterway infrastructure such as the Olmsted Locks and Dam;the Monongahela River Locks; and Dams 2, 3 and 4 in Pennsylvania, and the Kentucky Navigation Lock to move forward. Stakeholders have said these projects, when completed, will help alleviate some of the delays and inefficiencies that delay the delivery of coal and other commodities.

"[Waterways Council, Inc.] is grateful for the bipartisan action by the House today in passing the record funding levels for the Corps of Engineers to continue its critical work on construction of four priority navigation projects across the inland waterways transportation system. We hope there will be quick passage in the Senate and then the president will sign the bill into law," said Michael Toohey, president and CEO, in a March 22 release.

The council also said the bill did not include a user fee to be paid by commercial operators on inland waterways as requested by the Trump administration. Stakeholders said the fees could have driven up costs for coal shipments on U.S. waterways.

MSHA, OSMRE and black lung

Funding for coal management by the U.S. Department of the Interior increased by $1 million in the recent budget, to $11.9 million but was about $7.1 million less than the total requested by the Trump administration.

The new bill offers the same funding for the U.S. Mine Safety and Health Administration as enacted in the 2017 budget and increases the funding for the Black Lung Disability Trust Fund by $43.5 million. Special benefits for disabled coal miners will drop by several million dollars in 2018.

The U.S. Office of Surface Mining Reclamation and Enforcement will receive $2.3 million more than the previous fiscal year.

In the Interior spending section, the legislation also recommends the U.S Environmental Protection Agency revise its rules to provide a separate category for coal refuse-fired power plants to ease regulations on the specialty plants' sulfur dioxide emissions.

House representatives have recently focused attention on bills to help coal refuse-fired power plants.