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Stimulus Puts 'Clean' Coal Projects On Faster Track

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By MATTHEW L. WALD

The New York Times

Published: March 22, 2009

EDWARDSPORT, Ind. - Near the middle of a dusty construction site here stands a patch of land, about the size of two football fields, notable because it is empty.
Duke Energy has high hopes for the 2 acres: If all goes right, and there is a happy convergence of technology, money and federal energy policy, the construction project could become the first environment-friendly, coal-fired power plant in the nation.

The company is studying a method for capturing the carbon dioxide produced by using coal and storing the gas underground, preventing it from entering the atmosphere. Machines to separate carbon dioxide from other elements in the coal may someday stand on the land.

For years, scientists have been experimenting with ways to "clean" coal, a carbon-heavy fuel that countries around the world increasingly rely on. But the technology for carbon capture and storage has only been tried only on a small scale. Governments have not required companies to do what Duke is proposing, in part because costs were so uncertain.

The allocation of $3.4 billion in the federal stimulus bill for carbon capture and sequestration, as carbon storage is often called, has allowed Duke Energy and other companies to consider mounting full-scale projects.

The federal money is the latest sign of a growing interest worldwide in clean-coal technologies, which backers say could prove one of the most significant ways to tackle global warming. The projects are being watched closely by environmentalists, engineers and energy officials.

The Duke effort, said John Thompson, a coal expert at an environmental group, the Clean Air Task Force, "may be the first commercial carbon-sequestration site in the United States."

If Duke is successful, the plant could be capturing about 18 percent of its carbon dioxide emissions within four or five years, and an additional 40 percent a few years after that. Carbon dioxide is the main heat-trapping gas linked to global warming.

Duke received some money under the Energy Policy Act of 2005 to build a $2.35 billion coal-burning power plant, the largest new construction project in Indiana. The site here is already crawling with workers and heavy machinery.

The new plant will differ from conventional coal plants in significant ways, cooking the coal into a fuel gas rather than burning it as a powder, and then thoroughly cleaning the gas and burning it in a jet engine, similar to that used to burn natural gas. Emissions of conventional pollutants, such as sulfur, soot and smog-forming nitrogen, will be extremely low.

Polk Plant In Operation

Two other such "gasification" plants already operate - Tampa Electric's Polk County power plant near Mulberry and another in Indiana. Duke's first addition to the traditional setup would be to use a machine to strip the carbon dioxide out of the fuel gas.

Duke is conducting a $17 million study of that idea and has asked permission from its regulators to study a second step, to capture an additional 40 percent or so of the carbon dioxide produced at a later stage. The carbon would then be stored in a deep well on the site or sent by pipeline to an old oil field, where it would stimulate oil production. Part of the test is meant to demonstrate that carbon dioxide can safely stay put underground.

Other companies across the country also are exploring carbon capture and storage projects. According to a recent report by Emerging Energy Research, a consulting firm, Illinois has passed legislation that could require its utilities to buy electricity from plants that sequester their carbon. Six other states are considering legislation to help pay for carbon capture or ease the way for carbon storage.

Projects Need Proving Time

There are several competing technologies for carbon storage - more than the money in the stimulus bill can pay for. And experts say that before new methods can be commercialized, projects need three to five years of planning and construction, followed by eight to 10 years of actual pumping of carbon dioxide into the ground.

"We need to get off the dime with this and build some full-scale projects to demonstrate this technology at scale," said Edward S. Rubin, a professor of environmental engineering at Carnegie Mellon University in Pittsburgh, "but the price tag per project is $800 million to $1 billion."

The Duke venture might prove a little cheaper. The first step, capturing the carbon dioxide created when coal is turned into a fuel gas, would add 5 percent to 15 percent to the initial $2.35 billion cost, according to W. Michael Womack, vice president of Duke in charge of the project.

In the second stage, one of the components of the fuel gas, carbon monoxide, is mixed with water to make hydrogen, for fuel, and carbon dioxide, for sequestration. The cost of that is "a little fuzzier," he said, and probably higher than the first step.

Until the beginning of last year, the Energy Department had backed a more ambitious effort, the FutureGen gasification plant in Mattoon, Ill., that would have sequestered 90 percent of its carbon dioxide, compared with a maximum of less than 60 percent at the Duke plant. Companies from the United States, Britain, China and Australia were to contribute.

But in January 2008, the Bush administration decided that the price for FutureGen had grown too high and withdrew financing, proposing instead to finance add-ons such as the ones contemplated at Edwardsport. A recent report by the federal Government Accountability Office found that because of a math error, the Energy Department had greatly overestimated the cost increase for FutureGen.

At Peabody Energy, one of the FutureGen partners, Fred Palmer, a spokesman, said that the $1 billion in the stimulus bill that seems directed toward a project such as FutureGen is not enough to finish that project, but that the partners could seek another appropriation in a couple of years.

An independent expert, Sarah Forbes, head of the carbon capture and storage project at the World Resources Institute, an environmental group, said that FutureGen had a tremendous strength, demonstrating the integration of capture and of storage at a large scale. But the project was so big, she said, that it could squeeze out others.

"Perhaps it's smarter to do four rather than one," she said.

Proponents of smaller projects hope that there is enough money left in the stimulus bill for them. For example, energy company Babcock & Wilcox has a different approach for capturing carbon: Remove nitrogen from the air going into the boiler, so the output is nearly pure carbon dioxide.

A project that has been estimated to capture 92 percent of its carbon dioxide would cost nearly $1 billion, and the company is hoping the government will pay half, said Donald C. Langley, vice president and chief technology officer of Babcock & Wilcox. The company expects to make an announcement a utility as a partner soon in the project.

Later this year, American Electric Power will begin capturing carbon dioxide from 2 percent of the smokestack gases from its mammoth Mountaineer plant in New Haven, W.Va., by using ammonia, and injecting the gas into a $4.2 million well nearly two miles deep.

If the ammonia works well, and if the carbon dioxide flows underground as expected, the company will try using the method to treat about 20 percent of the plant's smoke and seek government help to do so. The approach is important because it is intended for old plants.

Greenpeace Opposes Plan

Some environmentalists oppose carbon capture from coal under any circumstances. Greenpeace argues that the energy required to capture the carbon, pressurize it and pump it underground is too extensive and the risks of underground storage too high. The effort, the group says, would divert money from more promising alternatives. Others argue that making coal safe to burn would simply encourage damaging mining such as mountaintop removal.

But energy experts say that countries around the world are certain to keep using coal, so someone had better find a safer way.

"With a big lump of money, the No. 1 priority is moving out with urgency," said Ernest J. Moniz, a professor at MIT and a former undersecretary of energy. "If we want sequestration to have a serious market share in managing the climate problem by 2040, we have to start yesterday."

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