The New York Times (Section 3, pg. 3)  [Printer-friendly version]
May 22, 2005


By Kenneth J. Stier

Almost a decade ago, Tampa Electric opened an innovative power plant
that turned coal, the most abundant but the dirtiest fossil fuel, into
a relatively clean gas, which it burns to generate electricity. Not
only did the plant emit significantly less pollution than a
conventional coal-fired power plant, but it was also 10 percent more

Hazel R. O'Leary, the secretary of energy at the time, went to the
plant, situated between Tampa and Orlando, and praised it for ushering
in a "new era for clean energy from coal." Federal officials still
refer to the plant's "integrated gasification combined cycle"
process as a "core technology" for the future, especially because of
its ability -- eventually -- to all but eliminate the greenhouse gases
linked to global warming.

Since that plant opened, however, not a single similar plant has been
built in the United States. Abundant supplies of natural gas -- a bit
cleaner and, until recently, a lot cheaper -- stood in the way.

But even now, with gas prices following oil prices into the
stratosphere and power companies turning back to coal, most new plants
-- about nine out of 10 on the drawing board -- will not use
integrated gasification combined-cycle technology.

The reason is fairly simple. A plant with the low-pollution, high-
efficiency technology demonstrated at the Tampa Electric plant is
about 20 percent more expensive to build than a conventional plant
that burns pulverized coal. This complicates financing, especially in
deregulated markets, while elsewhere utilities must persuade
regulators to set aside their customary standard of requiring
utilities to use their lowest-cost alternatives. (A federal grant of
$143 million covered about a fourth of the construction cost of the
Tampa Electric plant, which was originally a demonstration project.)

The technology's main long-term advantage -- the ability to control
greenhouse gas emissions -- is not winning over many utilities because
the country does not yet regulate those gases.

That could be a problem for future national policy, critics say,
because the plants being planned today will have a lifetime of a half-
century or more. "It's a very frightening specter that we are going
to essentially lock down our carbon emissions for the next 50 years
before we have another chance to think about it again," said Jason S.
Grumet, the executive director of the National Commission on Energy

The commission, an independent, bipartisan advisory body, has
recommended that the federal government spend an additional $4 billion
over 10 years to speed the power industry's acceptance of the
technology. In a recent report, the commission concluded that "the
future of coal and the success of greenhouse gas mitigation policies
may well hinge to a large extent on whether this technology can be
successfully commercialized and deployed over the next 20 years."

Mr. Grumet was more succinct. Integrated gasification combined cycle
technology, combined with the sequestration of carbon stripped out in
the process, "is as close to a silver bullet as you're ever going to
see, " he said.

Until Congress regulates carbon emissions -- a move that many in the
industry consider inevitable, but unlikely soon -- gasification
technology will catch on only as its costs gradually come down. Edward
Lowe, general manager of gasification for GE Energy, a division of
General Electric that works with Bechtel to build integrated
gasification combined-cycle plants, said that would happen as more
plants were built. The premium should disappear entirely after the
first dozen or so are completed, he added.

Even now, Mr. Lowe said, the technology offers operational cost
savings that offset some of the higher construction costs. And if
Congress eventually does limit carbon emissions, as many utility
executives say they expect it to do, the technology's operational
advantages could make it a bargain.

James E. Rogers, the chief executive of Cinergy, a heavily coal-
dependent Midwestern utility, is one of the technology's biggest
industry supporters. "I'm making a bet on gasification," he said,
because he assumes a carbon-constrained world is inevitable. "I don't
see any other way forward," he said.

The operating savings of such plants start with more efficient
combustion: they make use of at least 15 percent more of the energy
released by burning coal than conventional plants do, so less fuel is
needed. The plants also need about 40 percent less water than
conventional coal plants, a significant consideration in arid Western

But for some people, including Mr. Rogers and other utility leaders
who anticipate stricter pollution limits, the primary virtue of
integrated gasification combined-cycle plants is their ability to
chemically strip pollutants from gasified coal more efficiently and
cost-effectively, before it is burned, rather than trying to filter it
out of exhaust.

Proponents say that half of coal's pollutants -- including sulfur
dioxide and nitrogen oxides, which contribute to acid rain and smog --
can be chemically stripped out before combustion. So can about 95
percent of the mercury in coal, at about a tenth the cost of trying to
scrub it from exhaust gases racing up a smokestack.

The biggest long-term draw for gasification technology is its ability
to capture carbon before combustion. If greenhouse-gas limits are
enacted, that job will be much harder and more expensive to do with
conventional coal-fired plants. Mr. Lowe, the G.E. executive,
estimated that capturing carbon would add about 25 percent to the cost
of electricity from a combined-cycle plant burning gasified coal, but
that it would add 70 percent to the price of power from conventional

Gasification technology, although new to the power sector, has been
widely used in the chemical industry for decades, and the general
manager of the gasification plant run by Tampa Electric, Mark Hornick,
said it was not difficult to train his employees to run the plant.
Tampa Electric is the principal subsidiary of TECO Energy of Tampa.

Disposing of the carbon dioxide gas stripped out in the process,
however, is another matter. Government laboratories have experimented
with dissolving the gas in saline aquifers or pumping it into geologic
formations under the sea. The petroleum industry has long injected
carbon dioxide into oil fields to help push more crude to the surface.

Refining and commercializing these techniques is a significant part of
a $35 billion package of clean energy incentives that the National
Commission on Energy Policy is recommending. The Senate considered
some of those ideas in a big energy policy bill last week, but it is
doubtful whether Congress will approve the funds to enact them because
they are tied to regulating carbon emissions for the first time,
something that many industry leaders and sympathetic lawmakers oppose.

Still, the energy bill may have some incentives for industry to adopt
gasification technology, and the Department of Energy will continue
related efforts. These include FutureGen, a $950 million project to
demonstrate gasification's full potential -- not just for power plants
but as a source of low-carbon liquid fuels for cars and trucks as
well, and, further out, as a source of hydrogen fuel.

REGARDLESS of the politics of carbon caps, the Energy Department has
made it clear that it intends to push the development of integrated
gasification combined-cycle technology. Last month, for example, Mark
Maddox, a deputy assistant secretary, said at an industry gathering
that the technology "is needed in the mix -- needed now."

Some industry leaders are skeptical, to say the least. "We would not
want to put all of our eggs in one basket as far as a single
technology is concerned," said William Fang, deputy counsel for the
Edison Electric Institute, a trade association whose members,
shareholder-owned utilities, account for three-quarters of the
country's generating capacity.

Besides, he added, many of his members think that mandatory carbon
controls, in place in much of the world since the Kyoto Protocol came
into force in February, can be kept at bay in the United States --
possibly indefinitely.

It's a risky strategy -- for industry and for the climate. "Coal-
fired plants are big targets," said Judi Greenwald of the Pew Center
on Global Climate Change, "and if we do get serious about climate
change, they are going to be on the list of things to do quite