It has been a year since California's Carbon Capture & Storage (CCS) Review Panel released its recommendations. The Panel, composed of members from industry, trade groups, academia, and environmental organizations, was asked to:

1. Identify, discuss, and frame specific policies addressing the role of CCS technology in meeting the State’s energy needs and greenhouse gas emissions reduction strategies for 2020 and 2050.
2. Support development of a legal/regulatory framework for permitting proposed CCS projects consistent with the State’s energy and environmental policy objectives.

It has certainly been an eventful year with landmark developments of relevance to the state’s low-carbon energy future. In March, 2011, The California legislature passed a Renewable Portfolio Standard that will increase electricity procurement from renewable energy sources to 33% by 2020. The Air Resources Board (ARB) adopted the final Cap & Trade regulation in October, 2011. Also in January, 2012, ARB voted unanimously to move forward with its landmark clean car standards and to dramatically strengthen its Zero Emission Vehicle program.

What has happened on the CCS front though? A quick answer would be not as much, or even not all that much, but a closer look is more informative than a quick answer. The first development of relevance concerns Hydrogen Energy California (HECA) – a gasification plant proposed for the Bakersfield area which would have generated low-carbon electricity from petroleum coke by capturing and sequestering the bulk of its emissions. After years of development, the project as we knew it came to an end. The price of power that was required to make the project viable (reported to be in the region of $300/MWh) was, unsurprisingly, not one that tickles the interest of local utilities. Subsequently, the project changed ownership and management (from Rio Tinto/BP to SCS Energy) and is now undergoing design changes before proceeding with the permitting process afresh. Reportedly, these entail the co-production of fertiliser at the plant, and the use of out-of-state coal for the majority of its fuel needs. It is not yet clear if and how fast the new version of the project will proceed, but we will likely know more in the coming months.

The delays in the HECA project were felt to some extent on the policy front. Combined with the previous cancellation of Shell’s plans to implement CCS at its Martinez refinery, the state was left without any immediate prospects for a large scale CCS plant (those that are publicly known, at least). As a result, other priorities have occupied agency and stakeholder time. Nonetheless, the pieces are in place for progress to be made. ARB, adopted a resolution in December, 2010 agreeing “to initiate a public process to establish a protocol for accounting for sequestration of CO2 through geologic means and recommendations for how such sequestration should be addressed in the cap and trade program”. At the time of writing, ARB is in the early stages of the process of developing the protocol, and the timeframe for completing it will likely be accelerated if prospects for a project heat up again. Senator Rubio is also expected to release a new version of a bill (SB 669, introduced last year) that would assign regulatory responsibilities to various aspects of the CCS chain to state agencies, and would also deal with pipeline siting (at the time of writing, the updated bill had not been formally introduced). Finally, on the issue of what the state might do to assist pioneer CCS projects, it has been suggested that part of the proceeds from California’s Cap & Trade auctions could go to low carbon power, including CCS.

In summary, not a whole lot of progress on the CCS front to showcase since last year, but developments are expected soon.