---
title: Carbon Recapture: A Risky Subsidy - Wyoming Liberty Group - Wyoming Liberty Group
description: Wyoming invested millions in carbon recapture research; WyLib examines evidence that carbon capture projects are not commercially viable without subsidy.
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*by Philip Baron*

It is no secret that coal provides a large chunk of the Wyoming's tax revenue. The coal industry in Wyoming was responsible for about $1 billion in tax revenue to state and local governments in 2013, according to the [Wyoming Mining Association](https://www.wyomingmining.org/economics/). This revenue has been shrinking since [2015 with the declining demand](https://trib.com/business/energy/wyoming-coal-is-likely-declining-faster-than-expected/article_be851caa-22df-558a-b7f5-51b24f077282.html) for coal. Coal is under increased competition from lower cost and more efficient sources such as [natural gas](https://www.eia.gov/todayinenergy/detail.php?id=38612).

In [2018, more electricity](https://www.eia.gov/todayinenergy/detail.php?id=40013) was generated from natural gas than coal, with coal having a steep decline in use for electrical generation. The competition from natural gas and other sources is responsible for the decrease in demand for coal in the U.S. This reduced demand has led people to suggest a way to make coal a cleaner generation source to keep it competitive.

[Governor Mark Gordan](https://www.laramieboomerang.com/news/local_news/gordon-uw-should-be-leader-on-climate-change/article_f132b6e7-637e-5785-9630-76ccc578328b.html) spoke several times this year about the [state's role in carbon recapture](https://www.wyofile.com/can-mark-gordon-save-coal-and-stop-climate-change/). In May of 2019, he discussed with the University of Wyoming's Board of Trustees how Wyoming can use its coal products and make them a solution for our climate. The Governor hopes that the University of Wyoming School of Energy Resources can help improve the state's finances by revitalizing the coal industry to provide more tax revenue.

The University of Wyoming School of Energy Resources received [$5 million](https://www.wyoleg.gov/2019/Enroll/HB0001.pdf) in 2019 for the construction of a pilot project to develop advanced, coal-based technology to capture carbon emissions. In 2014, Wyoming put [$15 million](https://www.hcn.org/issues/49.16/energy-can-coal-remain-a-linchpin-of-wyomings-economy) into the development of the [Wyoming Integrated Test Center](https://www.wyomingitc.org/) – a facility for research into carbon capture. The state is using tax dollars to fund an experiment that has not proven to be commercially and economically viable in other places. The carbon capture and storage must generate revenue to be economically viable.

Three carbon capture and storage projects in North America are not economically viable and have been abandoned. In a report from [David Schlissel of Institute for Energy Economics and Financial Analysis (IEEFA](http://ieefa.org/wp-content/uploads/2018/11/Holy-Grail-of-Carbon-Capture-Continues-to-Elude-Coal-Industry_November-2018.pdf)), he studied four attempts at carbon recapture in North America and found they were not practical or economically viable. The cost of capture and storage from these attempts was about $60 per ton of carbon dioxide that was removed from the power plant emissions.

In 2019, there is only one operating carbon recapture plant, the [Petra Nova](https://www.scottmadden.com/insight/billion-dollar-petra-nova-coal-carbon-capture-project-financial-success-unclear-can-replicated/) plant in Texas. Just like other attempts at carbon recapture and storage, this plant uses a significant amount of electricity to run the equipment that captures the carbon dioxide. The plant has its own small natural gas power plant to power it. This electricity allows the capture of carbon dioxide from about 37% of the power generated by the coal-fired power plant. The Petra Nova plant is only able to keep operating financially because the captured carbon dioxide is then used to help extract oil from a nearby oilfield that is owned by the same company. The oil is then sold to help fund the project. The Petra Nova plant is also highly subsidized and has received $190 million in a grant from the Department of Energy to indirectly subsidize the oil and gas industry and help them achieve higher oil production.

The carbon recapture projects in Wyoming are still in their beginnings. The Wyoming Integrated Test Center is not even operational, nor has the proposed carbon capture power plant with the University of Wyoming School of Energy Resources broke ground. For something like the Wyoming Integrated Test Center to break even financially, they could replicate a project like the Petra Nova Plant where the project can generate revenue through the extraction of more oil. Carbon capture and storage is a heavily subsidized industry that makes coal-fired powerplants less competitive because of the amount of energy that is needed to run the carbon capture plan — in some cases, this is about 20% of what the power plant generates. The operating costs are [$96 a megawatt hour](http://ieefa.org/wp-content/uploads/2018/11/Holy-Grail-of-Carbon-Capture-Continues-to-Elude-Coal-Industry_November-2018.pdf) for a coal plant with carbon recapture compared to a combined-cycle natural gas plant (that has fewer carbon emissions) with costs at around [$50 a megawatt hour](https://www.eia.gov/todayinenergy/detail.php?id=38612).

In Wyoming, carbon capture and storage would make coal-fired power plants uncompetitive. The technology is too costly to be competitive with other generation sources. The State of Wyoming is subsidizing an industry that is going through a changing market. The state would be better off letting the market for electricity generation in Wyoming turn over. Yes, there will be a loss of jobs from the closing of coal-fired power plants. There will also be new jobs when power companies decide to build new sources of generation to replace those plants.