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31 May 2012

Can Environmentalists Learn To Love a Texas Coal Plant?

A planned carbon capture and storage plant in West Texas is being billed as the “cleanest coal plant in the world.” But can the $3 billion project help move the global power industry toward the elusive goal of low-carbon electricity, or is it just another way of perpetuating fossil fuels?
By marc gunther

As mayor of Dallas from 2002 to 2007, Laura Miller helped lead the charge against a utility company called TXU that wanted to build 11 coal-fired power plants in Texas. Miller and her allies, including the Environmental Defense Fund and the Natural Resources Defense Council, stopped the coal plants, and in 2007 TXU was sold to two private-equity firms that promised to steer the company onto a greener path. Their story inspired a documentary film produced and narrated by Robert Redford that showcased Miller, as one magazine writer put it, as a “tough, smart and camera-friendly environmental heroine.”

Today, Miller, 53, who was a newspaper reporter before entering politics, again finds herself in the thick of a big Texas story about coal. This time, she’s trying to get a coal plant built — one that she says would be “the cleanest coal plant in the world.” As director of Texas projects for Summit Power, a Seattle-based energy firm, Miller has spent three years working on behalf of the Texas Clean Energy Project, an unusual $3 billion power facility that would capture carbon dioxide emissions and produce oil as well as coal.

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Marc Gunther discusses the proposed carbon-capture-and-storage plant in Texas.

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Coal is, of course, the bane of climate-change activists. But Miller has secured the tacit support of environmentalists, including her old allies at the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund (EDF), for the Texas coal plant. They say the plant could help move the global power industry toward a goal that has proven elusive: low-carbon electricity made from coal.

“With 300 years of coal in the ground, the United States needs to find out how to use it in a clean way,” Miller says. “This will raise the bar on all the other coal plants being built. It’s just a matter of spending the extra money to make something that was once dirty become clean.”

John Thompson, the director of fossil transition for the nonprofit Clean Air Task Force, agrees. “This is a globally significant project,” he says. “Carbon capture and storage is so important that I don’t think we can avert the worst aspects of climate change without its wide-scale adoption.”

That may well be true, but the prospects for clean coal remain uncertain at best. To understand why, it’s important to distinguish between carbon capture and storage (CCS) and what the coal industry and some electric utilities tout as “clean coal.” The industry uses the phrase to describe state-of-the-art pulverized-coal plants, which crush coal into a fine powder before it is burned; these plants emit fewer conventional pollutants (sulfur dioxide, particulates and mercury) than older plants, but they are big emitters of CO2. The average U.S. plant emits 2,249 pounds of CO2 for every megawatt hour (MWh) of electricity it generates, according to the U.S. Environmental Protection Agency. Capturing and storing CO2 could reduce those emissions dramatically, but it’s expensive.

Click to enlarge
Coal Gasification Pilot Plant

Photo courtesy of llnlphotos.
The U.S. Department of Energy’s Rocky Mountain Test Facility, where coal gasification technologies being used in the Texas Clean Energy Project were demonstrated.
Summit Power’s Texas project is planned for a 600-acre plot of land in the ghost town of Penwell, near Midland-Odessa in west Texas. (The site was previously a finalist for the U.S. Department of Energy’s ill-fated FutureGen clean-coal plant.) The company intends to build a 400-megawatt power plant that would all but eliminate conventional pollutants and capture 90 percent of its CO2 emissions, according to Eric Redman, the company president. He says CO2 emissions would amount to about 200 pounds per MWh, making the Texas plant far more climate-friendly than even the best combined-cycle natural-gas plants, which emit about 850 to 1,000 pounds per MWh.

The technologies to accomplish this are well established. “There’s no breakthrough here,” Redman says. Coal can be “gasified” using a thermo-chemical process that strips it of pollutants including sulfur and mercury and separates virtually all of the CO2. This produces a flammable low-carbon synthetic gas, or syngas. (“A gasifier is like a refinery for coal,” Redman says.) The syngas is then burned to make electricity, and the captured CO2 is compressed into a semi-liquid. Compressed CO2 can be sold for enhanced oil recovery (EOR) in the oil-rich Permian Basin, where the project is located — just a mile from a 3,000-mile network of pipelines dedicated to CO2.

The potential transformation of CO2 from a greenhouse gas pollutant into an asset is one reason why the Department of Energy awarded the plant $450 million in grants. “If I’m venting CO2 from a plant, and I can use it as a product and not as a waste stream, I’m going to do it all day long,” says Charles McConnell, assistant secretary for fossil energy at the DOE. Texas has used CO2 to extract oil from hard-to-reach underground
Carbon capture and storage will require subsidies or carbon regulation to compete with conventional plants.
formations for decades, but most of it is piped in from elsewhere — Mississippi, New Mexico and Colorado — and natural supplies are limited.

What’s most innovative about the Texas plant, in fact, is a business model that depends on three major revenue streams, buttressed by the government grants and more than $1 billion in potential tax benefits realizable over a 10-year period. One source of income is the sale of CO2, for which demand is growing briskly in the oil patch. A second source of revenue, according to Summit, will be sales of urea fertilizer, which will be produced from syngas not burned for power.

Finally, the plant will sell electricity, although only about 200 MW of the plant’s 400MW capacity will flow into the grid; the rest will be used to power the project’s operations, including the urea plant and CO2 compressors. Summit has contracted to sell the electricity to the city of San Antonio, the CO2 to an oil company called Whiting Petroleum (among others), and the fertilizer to an unnamed buyer. It also intends to sell carbon credits, potentially in California’s regulated carbon market.

Click to enlarge
Gasification Process

U.S. Department of Energy
The gasification process breaks down coal into its basic chemical constituents that can be used for many commercial purposes.
Despite all this, the plant is not yet fully financed, and its prospects are uncertain. RBS Securities, a unit of the Royal Bank of Scotland, has been hired by Summit to raise money; its offering says that “an estimated $700 million of additional equity and $300 million of debt” will be needed to complete construction. Most of that is now lined up, Redman says, but the company still needs a lead equity investor. Construction is expected to take three to four years.

Howard Herzog, an expert on carbon capture at the Massachusetts Institute of Technology (MIT), says the Summit project could help move the industry closer to low-carbon coal. But, he says, carbon capture and storage will require either government subsidies or carbon regulation to compete with conventional coal or natural gas plants. “Ultimately, if you’re going to see CCS in the market, you're going to have to some kind regulatory forcing,” Herzog says.

Maybe the most remarkable thing about the Summit plan is that it sailed through the Texas regulatory process with no opposition, at a time when groups including the Sierra Club were running hard-hitting campaigns to shut down existing plants and stop new ones. To be sure, none of the
The U.S. needs to develop lower-carbon technology and sell it to China and India, an NRDC official says.
environmental groups has formally endorsed the plant. Bruce Nilles, director of the Sierra Club’s Beyond Coal initiative, said activists have more important battles to fight. “We’re not against demonstrating new technology,” he noted. More enthusiastic is David Frederick, an environmental lawyer who has worked for the Sierra Club and agreed to represent Summit Power in its effort to obtain an air permit. Why? By email, Frederick replied: “There is a Saudi Arabia of coal in the US, and, in the fullness of time, folks might use it. The Summit plant, if successful, would offer an incredibly low-CO2 way to use it.”

There’s another big reason why environmentalists favor efforts to develop carbon capture: China, and its vast reserves of coal. “If no other country in the world existed other than China, it would warrant the development of CCS [carbon capture and storage],” says David Hawkins, director of climate programs at NRDC. Jim Marston, who leads EDF’s Texas office and directs its national energy program, told me: “We probably don’t need coal plants in the U.S. But China and India are likely to build coal plants, and we need to demonstrate that there is much lower carbon technology out there at an affordable cost. In fact, we ought to develop that technology and sell it to them.”

Summit’s Texas project is one of three big coal plants under development in the U.S. that intend to capture carbon and use it to recover oil. Tenaska, a Nebraska-based energy company, wants to build a 600-MW plant near Sweetwater, Texas, that uses a post-combustion capture process to cut CO2 emissions by 85 to 90 percent. In Kemper,

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Mississippi, construction has begun on the Southern Co.’s 582-MW plant that will use coal gasification to reduce its emissions by about 65 percent. The Sierra Club has opposed those plants, citing water issues in Texas and land use, cost and pollution issues in Mississippi. Meanwhile, China, Canada, the Netherlands and the UK are developing their own large-scale CCS-EOR projects, according to an MIT CCS database.

If all these projects pan out, carbon-capture proponents contend, “clean coal” could emerge as a climate-friendly source of base-load electric power. Meantime, vast reserves of domestic oil in places like the Permian Basin could be unlocked by the newly produced CO2, easing pressures to drill in pristine areas like Alaska.

“It’s the beginning of a new industry,” says John Thompson of the Clean Air Task Force. “As soon as these projects go online, everything that’s in operation seems obsolete. These are game-changers.”

ABOUT THE AUTHOR


Marc Gunther is a contributing editor at Fortune, a senior writer at Greenbiz.com and a blogger at www.marcgunther.com. His book, Suck It Up: How Capturing Carbon From the Air Can Help Solve the Climate Crisis, is available as an Amazon Kindle Single. In a previous article for Yale Environment 360, he wrote about emerging technologies to remove carbon dioxide from the atmosphere.
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COMMENTS


What about the pollution caused by extracting the 300 years of coal left in the ground? Or the men who suffer from working the jobs to get it? Any one asking the communities with coal how the feel about this? Just another form of fracking.

My biggest question is how much are they paying the so called green expert?

Posted by Dena P on 31 May 2012


Let me get this straight — this coal-burning plant is supposed to be environmentally sound because the carbon dioxide it emits can be used to pump more oil out of the ground? What am I missing here?

Posted by John C. Berg on 31 May 2012


How about the other environmental groups you didn't mention here: like the ones most responsible for the 2007 fight against those TXU plants?

Namely Public Citizen, SEED Coalition, and Sierra Club?

How about others such as Greenpeace who have since joined the efforts against carbon-based energy in Texas? Perhaps in the future you might be well served to dig a little deeper on these stories.

http://www.citizen.org/Page.aspx?pid=694

There is no such thing as "clean" coal. Even if projects like this were even remotely economically feasible in comparison to renewables (without the massive subsidies) there are still many grave concerns with the entire premise of CCS that you haven't covered here.

Posted by Ryan R on 31 May 2012


One only has to look at the Duke Energy project in Edwardsport, Indiana to see the big lie that CCS perpetuates. Originally, Duke used the same hyperbole to sell the plant to Hoosier politicians and said that the 618 MW plant would be CCS ready and would cost only $1.2 billion. Today, the plant is ready to begin operating (time will tell if it even works or not) and there are no plans to do anything to control carbon emissions but yet the cost has risen to more than $3.3 billion.

Why? The answer is simple.

According to DOE, CCS adds about 50 percent to the capital cost of building such a plant, a cost that makes electricity generated from the plant the highest cost electricity in the nation.

Further, DOE and the Kentucky Center for Applied Energy Research, an ostensible supporter of new coal, says the "parasitic" energy consumption of capturing CO2 and sequestering it, uses from 25-40 percent of the energy produced by the plant, thereby reducing the overall efficiency of the plant greatly and costing the ultimate consumers of the energy even more.

Groups like the Clean Air Task Farce want to appear altruistic and concerned for the health of the planet but in fact, have sold their souls to supporters of coal in exchange for large donations from some very large pro-coal foundations. But hey, that is the American way, is it not?

Posted by John Blair on 31 May 2012


Re using CO2 to extract oil, unless CO2-EOR scales up hugely, it won't effect oil consumption or prices. If anything, it could replace imported oil and ease pressure to drill in sensitive areas.

Re other green groups, I reached out to Public Citizen which like the Sierra Club chose not to oppose the Texas projects.

Re Clean Air Task Force, I believe they are respected (as are EdF, NRDC and Sierra Club.) I'd be very interested in seeing evidence that they are funded by pro-coal foundations.

The other question that opponents of CCS need to ponder is: do you really believe the world's supply of coal will not be burned. I personally would like to see it left in the ground, but that seems highly unlikely to me.

Posted by Marc Gunther on 31 May 2012


It appears from your article that all the CO2 “captured” is injected into oil wells. This means that this CO2 will bubble out in short time frame. Thus is not really captured.

Please include this in any future articles as it is misleading without it. People assume the CO2 is locked away. Now if they pump to deep geological structures (& monitor them for 500 years) then that is different.

Posted by william Haaf on 01 Jun 2012


Thank you for your excellent article and for the insights offered regarding the need for sustaining revenue streams for 'clean coal' energy generating plants.

In Canada we have seen the collapse of a large scale Carbon Capture and Storage initiative in Alberta. Due in part to the lack of a viable market or a viable price for CO2 Transalta announced the Pioneer CCS Project linked to the Keephills 3 coal fired electricity plant west of Edmonton will not proceed.

This $1.4 billion scheme that would have piped emissions from that plant into oil wells to enhance petroleum production.

Clearly more is needed to make such projects viable, and new technologies as well as viable markets are key. Government subsidies are not enough.

Posted by Frank Came on 01 Jun 2012


Ultimately, there needs to be progress in the battle to support the world's energy needs and the efforts to protect and secure a healthy environment. So those that question the "clean coal" and "CCS" efforts towards securing this, need to be patient. Its an effort forward, not necessarily the answer. Steps in technology change are just that, steps, not silver bullets and new technologies indefinitely spur from their predecessors. Our advancements in the human race have quickly become "arguably" our own nemesis. That doesn't mean we just simply halt all efforts in the name of the environment. There has to be balance and I think the energy industry acknowledges this and is embracing it. A transitional phase is amongst us no doubt.

Posted by David Munn on 01 Jun 2012


Let me see if I understand this correctly.

You have a coal-fired power plant that will require more coal per electricity produced, is more expensive to run, will need to be at peak production all the time, and generates concentrated sulphur and mercury in one output, and marketable CO2 that will be sold to extract more fossil fuels?

How does that even make money, let alone sense?

Posted by ZA_SF on 01 Jun 2012


Marc - All the CCS and clean coal drama tend to overlook the emerging reality: multiple feedstock gasification, improved thermal recovery technology and distributed power generation offer real promise to transition from 200 million year-old coal to real-time biomass.

Swapping the relatively few jobs in underground coal for a much larger above-ground biomass economy is the future. Smart utilities, agroindustrial and chemical companies are forming new consortia to make this happen but innovation and investment has been hampered by the coal industries strangle hold on utility rate structures and commisions. Of course the foolish Federal subsidies into wind and solar (and complete exclusion of combined cycle biomass) ignored levelized energy cost reality making things worse and wasting time relearning the obvious.

The EU's overt commitment to phase coal out and biomass in through the Renewable Energy Directive and subsidized feed-in tarrifs offers a much more honest approach which has already given them a head start on these technologies and consortia. There are risks but many of the rewards have already accrued to the eastern US where wood pellet exports to the EU have doubled every year since 2008 and exceeded two million tons in 2011.

Most "green jobs" will be on forests and farms, not in solar manufacturing and certainly not down in the Medieval coal mines. It's time for biomass' day in the sun.

Posted by Dave Gibson on 02 Jun 2012


Mr. Gunther, For many years the CATF and NRDC have been supported with hundreds of thousands of dollars from CHicago based Joyce Foundation. You can look them up and verify their generous gifts designed to pursue there precious but elusive "clean coal" projects.

In Indiana the CATF and the Indiana Wildlife Federation (also funded by Joyce) actually
intervened in a regulatory proceeding on behalf of Duke Energy and against the coalition of actual environmental health and consumer groups as they fought to make sure that Duke ratepayers had to assume the risk for the Edwardsport lemon that is not even using the guise of CCS any longer.

Posted by John Blair on 02 Jun 2012


Sounds like black washing the issue to me. Even if they manage to use the coal in a cleaner way that does not take into account the environmental damage done removing it from the ground and cleaner does not mean clean. These kind of "solutions" do nothing to challenge our energy consumption or dependence.

Posted by Amy B Jolly on 04 Jun 2012


To address challenges in attaining operational excellence for clean energy plants with carbon capture, such as the Texas Clean Energy IGCC plant, the U.S. Department of Energy's (DOE) National Energy Technology Laboratory (NETL) has launched the world-class Advanced Virtual Energy Simulation Training and Research (AVESTAR) Center ( http://www.netl.doe.gov/avestar ).

The AVESTAR Center brings together state-of-the-art, real-time, high-fidelity dynamic simulators with operator training systems (OTS) and 3D virtual immersive training systems (ITS) into an integrated energy plant and control room environment.

NETL launched the AVESTAR Center in March 2011 with the deployment of a real-time dynamic simulator and OTS for an integrated gasification combined cycle (IGCC) power plant with 90\% pre-combustion CO2 capture. A 3D virtual ITS is scheduled to be deployed next month.

The IGCC OTS/ITS simulation technology is used to deliver comprehensive workforce training, enhanced engineering education, and collaborative, innovative, internationally-recognized R&D on the operation and control of IGCC plants with carbon capture.

Posted by Stephen E. Zitney on 21 Jun 2012



 

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