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April 18, 2009

A PLAN FOR U.S. EMISSIONS TO BE BURIED UNDER SEA

By Kate Galbraith

In an ambitious proposal to counter global warming, an upstart power
developer wants to build a coal-fired electric plant on the outskirts
of New York City that would capture its emissions of carbon dioxide
and pump the pollutant 70 miles offshore. The gas would be injected
into sandstone a mile beneath the ocean floor in the hope that it
would stay there for eons.

Experts have thought for years that capturing the emissions from power
plants will be a crucial technology for limiting climate change. But
high cost projections and scientific uncertainty have meant that
progress on the technique has been limited, even as the effects of
global warming are starting to be felt around the world.

Now SCS Energy, based in Concord, Mass., contends not only that it can
build the world's first such plant and get it to work, but also do so
profitably, despite costs that could approach $5 billion. If it
succeeded, the plant might become a model that could be copied
elsewhere.

A key to the proposal is location: an old industrial site near the
shore in Linden, N.J., just across the Arthur Kill waterway from
Staten Island. Generating power there would allow the company to sell
it into one of the country's most expensive markets, and injecting the
gas deep beneath the ocean floor, where pressure would help keep it
down, would eliminate some of the uncertainty that might attend a
similar project on land.

The proposal raises many environmental and political questions, and it
is far from clear that the company can overcome the opposition that
seems to crop up to any new power plant in the Northeast. But if the
proposal wins approval and if it succeeds in burying 90 percent of its
carbon dioxide emissions, as planned, it could be a major step toward
finding a technological fix for global warming.

"If this succeeds, it's going to be very hard for utilities to say,
'Oh no no, you can't do this,' " said Daniel Schrag, a Harvard
geochemist whose work inspired the proposal.

The plan may get an attentive hearing in Washington, where President
Obama has installed a team at the Energy Department and other agencies
that is determined to put new clean-energy plans into effect.

The Linden proposal builds on the work of Mr. Schrag and one of his
graduate students, Kurt Zenz House. In a paper in 2006, they argued
that layers of rock beneath the ocean floor might be the best place to
bury the huge amounts of carbon dioxide that industrial societies emit
into the atmosphere.

SCS Energy, which hired Mr. Schrag as a consultant after learning of
that work, has specialized in tricky projects. Despite intense
opposition, it succeeded in building a power plant fired by natural
gas that began operating in Astoria, Queens, in 2006.

The company has struck a deal to pay $95 million for an old DuPont
chemical factory site at Grasselli Point in Linden. The site is near
rail lines and barges that can deliver coal. More than a dozen permits
are needed from state and federal agencies, and those are likely to
take years.

In an unusual twist, SCS says it intends to bolt a fertilizer plant
onto the power plant to improve the economics. When power prices are
high, the plant would concentrate on making electricity, but when they
are low, it would also make nitrogen fertilizer.

Richard J. Gerbounka, the mayor of Linden, said he was "very excited
about the project," which would help redevelop a desolate industrial
area.

A buried steel pipe, two feet in diameter, would transport liquid
carbon dioxide from the power plant to a site 70 miles offshore,
beneath half a mile of water. A well would inject the carbon dioxide
to a depth of about a mile below the sea floor, into a layer of
ancient sandstone. Mr. Schrag said the carbon dioxide would stay there
for millions of years, kept down by a thick layer of mud and the
weight of the sea. Not even earthquakes or underwater landslides would
be likely to dislodge it, he said.

"The worst thing that could happen is a little bit of CO2 escaping
into the atmosphere," said Dean Malouta, the manager of technology for
exploration and production for Shell's Americas region, which has
financed some related research.

A well would be drilled to reduce the pressure and release the
seawater displaced by the carbon dioxide, providing a better way to
manage pressure than is possible on land, Mr. Schrag said.

Already, some oil companies pump carbon dioxide into their drilling
fields in places like Texas, to help squeeze out more oil. The carbon
dioxide put underground has mostly remained there, preventing it from
re-entering the atmosphere.

But capturing carbon dioxide from power plants is expected to be
costly, adding 25 percent or more to operating expenses, in addition
to higher construction costs. In this country, utilities are planning
only modest demonstration projects. One larger project in Illinois,
FutureGen, was abandoned by the Bush administration as costs
escalated.

Worldwide, more than a dozen projects are under way to store power
plant emissions. Norway is the only country to have undertaken a large
project to bury greenhouse gas emissions under the sea floor, at the
Sleipner gas field 155 miles off the coast in the North Sea. That
project has been going safely for 13 years, but it buries less than a
quarter of the amount of carbon dioxide as proposed in New Jersey.

Environmental groups have been divided over whether this approach is a
good idea. "The burden of proof is clearly going to be on the project
developers" to prove the geological suitability of undersea storage,
said Mark Brownstein of the Environmental Defense Fund.

Partly because of tight regulations and environmental opposition, no
coal-fired plants have been built in New Jersey since the mid-1990s,
and even renewable energy projects can be hard to site along the East
Coast because of the difficulty of obtaining permits.

"It's an exciting project, but it's an unproven technology at the
scale proposed," said Elaine Makatura, a spokeswoman for the
Department of Environmental Protection in New Jersey, which has had
preliminary meetings with the developers.

The company sees the main hurdle as financing. SCS has begun
informally talking with banks, and hopes to sidestep the credit crisis
because it will not need large sums until about 2011. "As a business
investment in the electricity industry, it's an attractive
investment," said Frank Smith, a founder of SCS.

The company hopes to tap close to $100 million a year in federal tax
credits for its technology and says it believes it can turn a profit
without additional grants. The plan features not only the fertilizer
plant, but also other aspects that would improve the finances.

For instance, the carbon dioxide disposal pipe would be large enough
to carry emissions not only from the power plant but also from
factories nearby, a potentially valuable service if the government
cracked down on emissions.

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