U.S. watchdog urges better oversight of publicly funded carbon capture

Dec 20 (Reuters) - The United States needs to do a better job vetting which carbon capture projects to support with public funds and improve its oversight once the projects are underway, a government agency watchdog said on Monday. The Government Accountability Office report comes after the U.S. Department of Energy spent over $1 billion on the technology - meant to keep carbon from the atmosphere to fight climate change - with little success to show for it.

“As DOE and Congress consider investing billions more in a new round of CCS demonstration projects, it is crucial that they take into account lessons learned from past projects in order to reduce risks to future projects’ success and taxpayer funds,” the report said.

The DOE invested $1.1 billion to support nine CCS projects between 2010 and 2017, including six at coal plants and three at other industrial facilities, the report said. Of the nine, none of the coal plant projects and only two of the industrial projects are currently operational, it said.

This low success rate was due in part to unexpectedly high costs for the projects, and uncertainty about carbon markets and other incentives, DOE officials told GAO, according to the report.

The GAO said DOE should improve its selection and management of CCS demonstration projects, and Congress should create a mechanism for greater oversight of the projects, like regular reporting.

Without better Congressional oversight, “DOE may risk expending significant taxpayer funds on CCS demonstrations that have little likelihood of success,” the report said.

The recently passed infrastructure plan appropriated more than $2.5 billion for CCS demonstration projects, which the Biden administration hopes will advance the technology into a crucial tool to fight global warming.

DOE said its new Office of Clean Energy Demonstrations would respond to GAO’s recommendations. The agency did not respond to questions about the findings of the report. (Reporting by Leah Douglas; Editing by David Gregorio)