1. Regional Carbon Sequestration Partnerships… “Pathways to Sustainable Use of Fossil Energy”

2. Portfolio Overview – FY2004  Diverse research portfolio  Strong industry support  ~ 36% cost share  Total portfolio ~ $140M Fiscal Year Budget (Million $) Breakthrough Concepts MMV Non-CO2 Capture Sequestration Regional Partnerships

3.  Baseline region for sources and sinks  Address regulatory, environmental, outreach issues  Establish monitoring and verification protocols  Validating sequestration technology & infrastructure  Phase 1 – Planning  Phase 2 – Proof of Concepts  Determine benefits of sequestration to region Regional Carbon Sequestration Partnerships Developing Infrastructure for Wide-Scale Deployment These partnerships - 4 to 10 across the country, each made up of private industry, universities, and state and local governments - will become the centerpiece of our sequestration program. They will help us determine the technologies, regulations, and infrastructure that are best suited for specific regions of the country. Energy Secretary Spencer Abraham November 21, 2002

4. Break- through Concepts Measurement, Monitoring & Verification Non-CO 2 GHG Mitigation Sequestration Capture of CO 2 Partnerships Are Critical Program Component… Integration FutureGen Integrated Sequestration and Hydrogen Initiative Infrastructure Regional Partnerships Core R&D

5. Project Development Operation 2002 2004 200820062010 CY Program Component Relationships in Time… Phase 1 Phase 2 Regional Partnerships R&D Advances Geologic Sink Oppor- tunities Deploy- ment Oppor- tunities MMV Protocols MMV & Capture Technologies Permitting, Safety, Regulatory, Outreach FutureGen 2012

6. Major Sequestration Issues…  Health, safety, and environmental risks  Permanence and large-scale verification  Capacity evaluation  Infrastructure  Uncertain regulatory frameworks  Protocols for identifying amenable storage sites  Direct CO 2 storage  Enhanced natural sinks

7. Requirements for Sequestration:  Environmentally acceptable  No legacy for future generations  Respect existing ecosystems  Safe  No sudden large-scale CO 2 discharges  Verifiable  Ability to verify amount of CO 2 sequestered  Economically viable

8. Sequestration  Field experiments / demos  Protocols for identifying amenable storage sites  Capacity evaluation studies  Underlying science Issues:  Health, safety, and environmental risks  Uncertain regulatory framework  Site selection Pathways:

9.  40 States  154 Organizations  3 Indian Nations  2 Provinces Seven Regional Partnerships Network of Partnerships to Determine Technologies, Regulations, Infrastructure Needs for Each Region Big Sky South- west Plains West Coast Midwest Southeast Illinois Basin Illinois Basin

10. Partnership Program has a Two- Phased Approach… Current Phase I (Planning)  7 Projects  18-24 months  ~$1.5 million per project  Overall ~ 40% cost share  2 exceed 50% cost share Proposed Phase II (Proof-of-Concepts) - about 8 years duration - up to about $4 million/year-project - 20% cost share (minimum)

11.  Regional Carbon Sequestration Atlases  Regional Sequestration options, potential, and prioritization (direct and/or indirect)  Sources of CO2  Existing infrastructure and requirements  Incorporate Regional Atlases into National Repository Courtesy of Tim Carr, KGS, MIDCARB (now NATCARB) Project Phase I Outcomes…

12.  Action Plan for Regulatory Compliance  Existing or future regulations that will impact sequestration program  Identify risk assessment and liability issues  Timeline for permitting regional projects  MMV and Reporting Requirements  Responsibilities  Action Plan for Public Outreach and Education  Methods to engage the public  Tools to educate stakeholders  Regulatory requirements for public outreach Phase I Outcomes…

13.  Regional Project Implementation Plan(s) Phase I Outcomes Form Basis of Phase II Concept…  Cost/benefit analysis to support project  Public Education and Outreach Action Plan(s)  Regulatory Compliance Action Plan(s)  MMV Project Requirements  Identify the most promising technologies/ approaches to sequester carbon directly or indirectly and/or capture carbon in the region

14. Phase II of Regional Partnerships NB: Details Still Under Development Tasks  Perform proof-of-concept field tests for technology & infrastructure concepts  Establish, implement, and refine:  Measurement, monitoring & verification protocols  Accounting, regulatory & liability action plans  Continue characterization efforts  Implement outreach mechanisms  Assessment of regional feasibility and integration of components Not a technology development program!

15. General Phase II Characteristics…  Scale: Dependent upon FY05 appropriations; current planning is for each selected Partnership to be funded at about $4M/year, but subject to actual appropriations and other programmatic considerations.  Cost Share: As the contractual instrument will most likely be Financial Assistance (Cooperative Agreement), there will be a cost share requirement as there was in Phase I; anticipated to be at least 20% but not finalized as of this time.  Duration: Expected to be on order of about 8 years; subject to budgets, programmatic needs, and other considerations.  Not a “more study” focus; Focus on implementing plans; drilling and other tangible efforts expected.

16. Draft Phase II RFP… At this point in time, the actual details of the RFP in terms of required tasks, specifications, and evaluation criteria have not been finalized; RFP is currently a work in progress… …having said that:  RFP anticipated to be issued January 2005  Applications anticipated to be due to DOE-NETL in March-April 2005 timeframe  Selections and Awards are planned to be made by the end of FY05 (August-September 2005)

17. Details to Follow Stay Tuned…

18. Visit the NETL Sequestration Website… www.netl.doe.gov/coal/Carbon%20Sequestration/

19. Carbon Sequestration E-mail Newsletter