OnEarth (Natural Resources Defense Council magazine)  [Printer-friendly version]
November 1, 2005

HOW TO CLEAN COAL

by Craig Canine

I was traveling along a remote highway in North Dakota about 80 miles
northwest of Bismarck when an enormous black V suddenly appeared on
the horizon, looming above a vast, empty sea of straw-stubbled fields.
As I drove closer, the V resolved itself into the twin towers -- the
mast and boom -- of a crane-like contraption of startling proportions.
The angled boom rose about 20 stories into the prairie sky, attached
at its base to what looked like a rotating warehouse big enough to
cover a baseball field. Somewhere inside, an operator controlled the
movements of a scoop bucket suspended from the boom with steel cables.
The operator plunked the bucket down a hundred yards from where he
sat, then reeled it in with a horizontal cable. This was the dragline,
from which, I soon learned, the machine gets its name. Biting into the
side of a 100-foot-deep valley of its own making, the bucket scooped
up 10 ordinary dump trucks' worth of rock and dirt -- a portion of the
"overburden" above a buried layer of coal. Hoisting a 160-ton chunk of
earth into the sky, the dragline performed a pirouette, then upended
its bucket atop a ridge of artificial mountains off to the side.

The dragline was one of two such machines that work 24 hours a day at
the Freedom Mine, one of the dozen largest coal mines in the United
States. The sheer scale of the spectacle was awe inspiring, but I also
found it deeply unsettling. Coal, as the petroleum geologist Kenneth
Deffeyes writes in his recent book Beyond Oil, "is the best of fuels;
it is the worst of fuels." It is best because it's the most plentiful
and least expensive U.S. domestic energy source. It is worst, Deffeyes
writes, "for a long list of reasons: killer smog, acid rain,
atmospheric carbon dioxide, mercury pollution, acid mine drainage, and
a choice between hazardous underground mines and surface-disturbing
open-pit mines." For many people in the environmental movement, coal's
liabilities far outweigh whatever assets it may have. Yet the use of
coal has increased every year, without a pause, for two centuries.
Last year, the world burned more than five billion tons of coal,
spewing 10 billion tons of carbon dioxide into the atmosphere. (The
multiplication of mass occurs because each atom of carbon from the
burned coal combines with two heavier atoms of oxygen from the
atmosphere, thereby more than doubling the weight of the original coal
in CO2 emissions.) Coal-fired power plants are the single largest
source of man-made CO2, accounting for one quarter to one third of the
world's total.

We now stand at a watershed moment. An entire generation of obsolete
coal-fired power plants built in the 1950s and 1960s needs to be
replaced, and U.S. utility companies have announced their intention of
building more than 100 new coal plants over the next 10 to 15 years.
Unless something happens soon to tilt the balance toward more
environmentally benign alternatives, nearly all of those power plants
will use the old-fashioned, intrinsically dirty technology known as
pulverized coal. The largest plants will have generating capacities of
around 1,000 megawatts (MW), enough to supply electricity to as many
as 900,000 homes. Such a plant costs close to $1 billion to build and
has an operating expectancy of 60 years or longer. Every year of its
lifetime, it will spout six million tons of CO2 into the atmosphere --
about the same as two million cars.

Each of these high-carbon investments is "a Pandora's box that we are
handing to our kids," says David Hawkins, director of the Climate
Center at the Natural Resources Defense Council (NRDC). "If the plants
are not designed up front to capture their CO2, they will lock us into
large amounts of global-warming emissions for their entire operating
lifetimes."

The threat of massive carbon lock-in becomes truly staggering when the
rest of the world enters the picture. Although the United States now
emits more CO2 than any other country, accounting for 20 percent of
the world's total, China is catching up fast and will probably take
the lead by 2020. It has already overtaken the United States as the
world's largest coal consumer. Coal fuels 90 percent of China's
electricity demand. That demand is increasing so rapidly that China
expects to expand its generating capacity over the next 30 years by
300,000 MW, or almost half of America's current consumption. As
matters now stand, nearly all of China's projected new capacity will
use standard pulverized coal technology.

These projections are alarming enough to convince some
environmentalists that coal simply has no acceptable future as a major
energy source. "Coal is the enemy," says Roel Hammerschlag, a widely
respected energy analyst who runs the Institute for Lifecycle
Environmental Assessment in Seattle. "It's worse than oil. We're going
to run out of oil in the next century, but it's easy to synthesize
methanol and other liquid fuels from coal. So coal will replace oil.
And there's at least 300 years' worth of coal still in the ground.
That's enough to raise atmospheric CO2 to insanely high concentrations
-- 10 times preindustrial levels."

Before the Industrial Revolution, the atmosphere contained about 270
to 280 parts per million (ppm) of CO2. That level has risen to more
than 380 ppm today. With polar ice caps and arctic permafrost melting,
ocean levels rising, and climate patterns changing at the present
atmospheric CO2 concentration, what might happen at 450 ppm, 600 ppm,
or higher still? "We cannot put the world on hold while we figure it
out," Hawkins says.

In spite of this grim outlook, Hawkins is far from ready to concede
defeat. He's among the most prominent and outspoken advocates of a
bold scheme that would take advantage of the nation's abundant coal
resources while at the same time curbing CO2 levels in the atmosphere.
This scenario relies on a combination of technologies that would
enable a new breed of coal-fueled power plants to "capture" CO2 and
other pollutants efficiently and economically. The captured CO2 gas
would then be piped deep below the earth's surface for permanent
storage. This concept, often referred to as "carbon capture and
sequestration" (CCS, for short), has in recent years gained a great
deal of currency in the halls of Congress, in the boardrooms of
utility companies, and nearly anyplace else -- even the White House --
where energy policy and responses to global warming are discussed.

The National Commission on Energy Policy, a bipartisan panel of 16
energy experts from industry, academia, government, and nonprofit
groups, released a landmark report last December that includes carbon
capture and sequestration among its key policy recommendations. "In
addition to our own domestic coal reserves, which are the largest in
the world, China and India have enormous resources of low-cost coal,"
says Sasha Mackler, a senior analyst with the commission. "It's hard
to imagine them not using it. Developing systems with which these
countries can continue to utilize their coal, but in a way that does
not increase carbon emissions, is a huge priority. Carbon capture and
sequestration is the most viable pathway for that."

On the Carbon Trail

I decided to take an exploratory journey down that pathway, in effect
following coal's carbon trail from cradle to grave. That's what took
me to the Freedom Mine near Beulah, North Dakota. The mine serves as
the fuel source for a sprawling complex that includes two large coal-
based energy plants: the Dakota Gasification Company's Great Plains
Synfuels Plant, which gasifies coal to produce a form of natural gas,
and the Antelope Valley Station, a 900-MW traditional coal-fired
plant. Together, these two plants, and a third generating station
nearby, consume the Freedom Mine's annual output of 16 million tons of
a type of coal called lignite. "We call it dirt that burns," said
Floyd Robb, my guide to the complex. "It's as soft and as low in
energy density as coal gets. Any less than that and it's peat."

Most coal started out as peat -- plant debris that accumulated over
many thousands of years in moist bogs. Deep beds of peat were
eventually buried under sedimentary deposits, which gradually
compressed the peat and subjected it to geothermal heat for a few
hundred million years. In general, the longer coal bakes in its
geologic oven, the harder and blacker it gets. Lignite, the youngest
and brownest type of coal, occupies the bottom rank of the coal
hierarchy. Next up, in terms of hardness, carbon content, and heating
value, is sub-bituminous coal, found largely in the Powder River Basin
of eastern Wyoming and Montana, which is now home to the largest coal
mines in the country (all open-pit surface mines, the domain of
mammoth draglines like the ones at the Freedom Mine). Bituminous coal,
the rank above sub-bituminous, is typical of the eastern half of the
United States, from Illinois to Appalachia. It has a higher sulfur
content than most western coal but packs a bigger energy wallop, pound
for pound. Hardest and hottest-burning of all is anthracite. So black
it's iridescent, anthracite comes mainly from those shaft mines in
western Pennsylvania that haven't already been exhausted and
abandoned.

Unlike hard, dry anthracite, lignite has a high moisture content. "Our
lignite here is about 35 percent water," said Robb, vice president of
communications for the Basin Electric Power Cooperative, which owns
the coal from the Freedom Mine as well as the two energy plants
adjacent to it. "You can't economically ship it, because you'd be
shipping so much water. That's why the power plant is right next to
the mine. The only way to ship lignite economically is on wires, as
electricity."

Basin Electric is shipping its lignite a second way as well: through a
pipeline, as "synthetic natural gas" (an oxymoron of the energy
business). The Great Plains Synfuels Plant is a product of the Arab
oil embargo of the early 1970s. Not only was oil in short supply, but
predictions of a natural-gas shortage made America's energy situation
seem all the more precarious. Building an ambitiously large-scale
facility in western North Dakota would take some of the region's
cheap, abundant lignite and convert it, through a carefully
orchestrated series of chemical reactions, into synthetic gas -- a
process known as coal gasification. (The process is not new: It
fueled, for example, the German Luftwaffe in World War II.) Plans,
permits, and financing came together in the late 1970s; construction
of the North Dakota plant began in 1980.

By the time it started operating four years later, however, the plant
was already a white elephant. It was a technical success, capable of
gasifying enough coal to produce 150 million cubic feet of synthetic
gas per day, enough to keep 300,000 houses toasty through a North
Dakota winter's night. But the price of natural gas (that is,
"natural" natural gas, which consists mainly of methane and comes from
underground deposits, much like oil) had come down to the point where
the plant's synthetic product was no longer cost-competitive. The U.S.
Department of Energy operated the plant at a loss for a few years,
then Basin Electric bought it at auction for a bargain price.

When you gasify coal, you don't actually burn it. You heat it to about
2,000 degrees Fahrenheit in a sealed chamber. Along with adding some
steam, you inject a bit of oxygen, but not enough to allow the coal to
burst into flames. Instead, the coal breaks down into its chemical
building blocks. Dozens of chemical reactions occur in the gasifier.
The gas that emerges is made up mostly of carbon monoxide, hydrogen,
sulfur, and nitrogen compounds, plus smaller amounts of elements such
as mercury. Most of the gasification facility at Basin Electric -- a
square mile covered with a Brobdingnagian rat's nest of pipes,
minaret-like distillation towers, storage tanks, and mustard-yellow
steel buildings -- is devoted to cleaning up the synthesis gas,
removing impurities from the methane stream, which is the desired end
product.

Many of the impurities are, in fact, valuable by-products, and Basin
Electric has greatly improved the finances of the plant by finding
markets for them. It sells anhydrous ammonia and ammonium sulfate as
agricultural fertilizers. A steady procession of railroad cars and
semitrucks hauls the stuff away. The plant sells phenol, mainly to a
Canadian company that manufactures resins for wood products, such as
plywood. Naphtha and liquid nitrogen leave the plant by the millions
of gallons.

The gasification plant also produces carbon dioxide -- 200 million
cubic feet of it per day, or just over four million tons per year. In
that respect, the plant is no different from the 900-MW pulverized-
coal power plant next door: Whether you burn coal outright in a boiler
or break it down chemically in a gasifier, there's no getting around
the CO2 problem. But there is a crucial difference between the two
ways of producing it. Capturing the CO2 from a conventional power
plant, while theoretically possible, is prohibitively expensive and
impractical. With a gasification plant, by contrast, separating CO2
from the rest of the synthetic-gas stream is a straightforward
chemistry project that requires little or no added expense. The North
Dakota synfuels plant did not capture its CO2 stream, however. For its
first two decades of operation, it had nowhere to put it except up a
300-foot-tall stack.

That changed in the late 1990s, when Basin Electric actually found a
customer for its CO2. PanCanadian Petroleum, one of Canada's largest
oil and natural-gas producers, operated an oil field near Weyburn,
Saskatchewan, about 200 miles northwest of the Beulah gasification
plant. Production from the Weyburn field was declining, and its owners
were interested in extending the field's life using a technique known
as enhanced oil recovery -- basically, pumping CO2 into the ground to
push more oil out of the source rock, 4,600 feet below the surface.
Enhanced oil recovery by means of CO2 had been a standard practice for
more than 20 years in the aging oil fields of west Texas. But these
operations used CO2 from naturally occurring reservoirs of the gas in
southern Colorado -- a natural "recycling" that did not result in a
net reduction of greenhouse gases escaping into the atmosphere. The
Weyburn project would represent the first time in North America that
man-made CO2 destined for atmospheric release would instead be pumped
deep into the earth, where it might potentially be sequestered for
thousands or even millions of years.

PanCanadian Petroleum (now called EnCana) agreed to pay handsomely for
the CO2 (it's now paying $2.5 million every month for what was
formerly a waste product). But Basin Electric first had to transport
the gas, so it built a 205-mile pipeline from Beulah to Weyburn. Basin
Electric also had to pressurize the CO2 so it would arrive at Weyburn
compressed to just over 2,000 pounds per square inch, the force
required to push it nearly a mile below the ground and make the oil
flow. This would require some of the most powerful gas compressors of
their kind ever built.

I saw these brutish compressors during my tour of the gasification
plant. There were two of them, housed in a hangar-like yellow
building, each powered by a 20,000-horsepower electric motor. They
appeared to be the size of the jet engines on a Boeing 747, and were
just about as noisy. "When you compress the CO2 that much, it gets
very hot," said Daren Eliason, a chemical engineer who showed me
around the plant. "We have to bring the temperature down with air-
cooled units." We walked around behind the battleship-gray coolers. A
white pipe the circumference of a watermelon emerged from the coolers,
made a 90-degree bend, and disappeared into the brown gravel,
beginning its underground trip to Weyburn.

Burial Chambers

Weyburn, a town of 10,000 in southeastern Saskatchewan, was the next
stop on my journey as I followed the trail from carbon capture to
carbon sequestration. North Dakota, much of which is impressively
flat, looks like Tibet compared with this part of Canada's prairie
provinces. The horizon was a ruler-straight line where the ocher grain
fields met the big topaz sky. "It's so flat here that if your dog runs
away, you can see him for three days," one oil roustabout told me,
repeating a favorite local one-liner. I didn't spot any running dogs,
but I did see lots of oil wells, each one marked by a pump jack that
bobbed its iron head like a thirsty horse. "This oil field, the
Weyburn Unit, measures 10 miles by 7 miles," said Dave Craigen, an
EnCana community relations representative. "Over that 70 square miles,
there are about 700 producing oil wells."

Craigen and I, both clad in protective EnCana coveralls, safety
glasses, and hard hats, stood outside a tall, barbed-wire-topped fence
enclosing the white CO2 pipeline where it emerges from the wind-
whipped prairie. It wasn't much to see, really -- just a bit of
industrial plumbing. I had to remind myself that this was no ordinary
bit of gas pipe. This was ground zero in the first large-scale test in
North America of geologic sequestration of CO2 from gasified coal.
"Over the life of our CO2 injection project on this oil field,"
Craigen told me, "20 million tons of CO2 will be sequestered. That's
20 million tons of CO2 that would otherwise be going up the flue stack
at the gasification plant."

We got into Craigen's black pickup truck and drove a mile or so down
an asphalt road, then turned into a gravel driveway that led to a
brown igloo-shaped structure. "This is one of our CO2 injection
wells," my tour guide said as he opened a gate in the fence, then
unlocked a door in the plastic igloo. "We have 88 of these distributed
around the Weyburn unit." He stepped inside the dark dome. It housed a
stack of bolted-together pipeline fittings as tall as he was -- an
iron Christmas tree bristling with star-shaped manual shut-off valves.
"We inject 110 million cubic feet of CO2 per day," he said. At that
rate, EnCana is burying more CO2 in a year than 100,000 cars release
in their operating lifetimes.

"A 50-year-old producing oil field is practically unheard-of," Craigen
explained. "But with the CO2 flooding, we expect to recover an
additional 120 million barrels over the next 20 years or so."

I realized I was witnessing a burial of sorts. Fossil carbon, which I
had seen extracted from the ground as coal at the Freedom Mine and
wrung of its energy value at the gasification plant, was here being
recommitted to the earth. Ashes to ashes, dust to dust, carbon cradle
to carbon grave. If coal is to have a future as a major fuel in the
twenty-first century and beyond, this is what it might look like:
smokestacks effectively turned upside down, shooting CO2 into
subterranean rock formations rather than up into the sky.

But if the CO2 in question is used to produce oil, which in turn will
lead to more greenhouse-gas emissions, is there a net benefit to the
planet? Sasha Mackler, the analyst for the National Commission on
Energy Policy, believes there is. "If the sequestered CO2 were just
promoting more oil consumption," he says, "then you'd have to question
how much good it's doing. But by enhancing oil recovery, you're not
necessarily increasing the demand for oil. You are basically
offsetting oil production that would happen elsewhere, perhaps in the
Middle East. You also have to consider that enhanced oil recovery
using CO2 is happening now, and will continue to happen in the future.
If, instead of using naturally occurring CO2 from a well, you can use
CO2 from things like the combustion of coal, then you are very
substantially decreasing what would otherwise be emissions to the
atmosphere. From a climate standpoint, that's clear progress."

That assumes, of course, that the sequestered carbon is staying put. I
asked Craigen if the CO2 would remain in its mile-deep burial vault.
"Since we started the CO2 flood in 2000," he replied, "we've been
cooperating with a consortium of scientific organizations led by the
International Energy Agency to study that question." In June 2004,
researchers presented a report from a four-year study. In a nutshell,
they said that sequestration is working. "In this particular oil-field
geology," Craigen summarized, "the CO2 is staying down there."

Although results from Weyburn are encouraging, it's too soon to
conclude that geologic sequestration can play a major role in solving
the world's climate-change problem. For one thing, relatively few of
the country's largest population centers, and the power plants that
serve them, happen to be located near oil fields. But researchers are
considering other types of geologic formations as candidates for CO2
sequestration. The most plentiful and widely distributed of these are
called saline aquifers, or brine formations. "Brine formations are
found where there's the same kind of highly porous rock where you'd
find oil and gas reservoirs," says Sally Benson, head of the carbon
sequestration program at Lawrence Berkeley National Laboratory in
California. "But there was no source of hydrocarbons in these sponge-
like reservoirs, so they ended up being filled with water instead of
oil or gas. The water can be up to five times saltier than seawater,
because of salts that have dissolved out of the surrounding rocks. The
high level of salinity suggests that these formations are isolated
from sources of circulating fresh water," and thus pose little risk of
contaminating aquifers.

The evidence collected so far in about a dozen small-scale monitoring
projects around the world, Benson says, supports the viability of
geologic CO2 sequestration in deep brine aquifers. "If you have a
good, isolated formation with an impermeable cap rock as a lid to keep
the CO2 from escaping upward, then the gas should stay down there
indefinitely. The bigger question now is, how much CO2 could you put
in these brine formations? Some rough calculations done in the 1990s
came up with some very large capacities -- as much as 50,000 billion
tons of CO2." That would be enough to entomb every last ounce of
projected CO2 emissions for centuries.

Europe is ahead of the United States in testing large-scale CO2
sequestration. That's because there are already mandatory restrictions
on greenhouse-gas emissions in most of Europe. (The European Union and
several additional countries in Eastern and Western Europe ratified
the Kyoto Protocol limits on greenhouse-gas emissions in 2002, and the
terms of the agreement went into effect early this year.) Even before
Kyoto, Norway's state-owned oil company had begun capturing about a
million tons of CO2 per year from offshore petroleum platforms and
injecting it into a geologic formation deep below the bed of the North
Sea.

So far, though, nobody is capturing and sequestering CO2 from an
electrical power plant. In June 2005, British Petroleum and three
partnering companies announced an ambitious project to change that.
The partnership plans to add equipment to an existing natural-gas-
fueled power plant near Peterhead, Scotland, that will convert natural
gas to CO2 and hydrogen. The CO2 will be piped to a nearly depleted
North Sea oil reservoir, where it will be injected 2.5 miles beneath
the ocean floor for enhanced oil recovery. The hydrogen will be used
as a "decarbonized" fuel to generate electricity. When the project
fires up (current plans call for a 2009 start), it's expected to
capture and store around 1.4 million tons of CO2 each year and provide
carbon-free electricity to the equivalent of 250,000 homes.

Generating carbon-free electricity from coal is somewhat more
complicated and expensive than the natural-gas-based process to be
used in the Scottish project. But it can be done, using a combination
of technologies known as integrated gasification combined cycle
(IGCC). Four IGCC power plants are up and running today -- two in
Europe and two in the United States. One of the U.S. plants is located
on the Wabash River in Indiana; the other, a newer, state-of-the-art
facility, sits on land reclaimed from an abandoned phosphate mine near
Tampa, Florida. After saying good-bye to Dave Craigen at the Weyburn
oil field one chilly May afternoon, I headed down to Tampa to warm up
and to see how IGCC might fit into coal's future.

Into the Future

The most striking thing about Tampa Electric's IGCC facility is that
it looks nothing like a power plant, especially not one that uses coal
for fuel. It appears far too clean and shiny for that. The most
prominent feature of a standard coal-burning plant is its smokestack
(or, more typically, two or three stacks, one for each of the plant's
towering boiler units). Here, however, I had to look hard to find a
vent stack. When I finally did spot it, I had to look even harder to
see anything coming out of it.

"Occasionally, you'll see some steam coming from a relief valve on the
side of the stack," said Vernon Shorter, a retired energy company
employee who gives tours of the power station. We craned our necks,
squinting up at the mouth of the gray steel flue vent. "You're looking
at 300 MW of power from coal," he said. "Before we gasify it, we
combine the coal with some petroleum coke, the gunk that's left at the
bottom of the oil barrel after you refine out everything else. That's
nasty stuff, but you can't see anything coming out of the stack. It's
as clean as a natural-gas power plant, but the fuel's a lot cheaper
and it's more efficient."

From our vantage point on an open steel deck about 40 feet above the
ground, we could see most of the plant. Looming high above our heads
was its most dramatic feature, a 300-foot-tall gasifier tower. It
looked like a rocket gantry at Cape Canaveral. We could also see a
hundred square miles of surrounding Polk County. The landscape was
nearly as flat as the Saskatchewan prairie, but far more lush. A pair
of ospreys fussed over a big twig nest perched on the crossbars of a
utility pole. Tampa Electric had severed the wires to the pole and
built a wooden platform to support the nest. Shorter gestured toward a
distant citrus grove. "Some of the electrons from this plant are going
up there to Disney World, 30 miles north, and powering Pirates of the
Caribbean."

Shorter led the way down several flights of stairs. As we walked, he
delivered a primer on coal-fired power generation. "With a traditional
coal plant," he said, "coal is introduced to the boiler and ignites.
The heat converts water to pressurized steam, which turns a steam
turbine that generates electricity. Here it's a little different."

By now we were standing on the ground next to a barn-size metal
structure that contained something resembling a rocket engine turned
on its side. "In any IGCC power plant, there are two turbines,"
Shorter said, "a gas turbine and a steam turbine. This is the gas
turbine. It works like an aviation jet." The gas turbine, he
explained, takes purified syngas from the coal gasifier and combusts
it. Heat from the burning gas creates a stream of rapidly expanding
hot air, which spins the turbine's blades and powers a generator.

"But there's lots of heat left over in the combustion turbine's
exhaust," Shorter said. "You capture that heat to make steam, which
drives the second turbine. It's a very efficient system -- 15 percent
more efficient to run than a conventional pulverized-coal plant. And
you can't beat it, environmentally."

Compared with conventional coal-burning power plants, the Polk power
station produces only a fraction of the pollutants currently regulated
under the Clean Air Act, such as sulfur dioxide (SO2), the main cause
of acid rain; nitrogen oxides (NOx), which lead to ground-level ozone
and brown haze; particulate matter; and mercury.

"IGCC has the ability to achieve much higher capture of SO2, NOx, and
mercury than you can get with a traditional coal-fired unit," said
Charles Black, president of Tampa Electric, when I talked to him at
the company's headquarters in Tampa. "That's because of the advantages
of removing them before the coal is combusted." The technology can
reduce these regulated pollutants by more than 90 percent -- a level
that's unattainable by pulverized-coal plants, even after they have
added sulfur scrubbers, bag houses to filter out particulates, and
other pollution-control devices.

But CO2 is not regulated as a pollutant in this country, so Tampa
Electric's IGCC plant is not compelled to capture it. The greenhouse
gas goes up the flue pipe, invisibly but surely. "We could be
recovering CO2 from the gas stream at that plant in pretty good
quantities," said Black. "It's not a need now. But if there were ever
any legislation with respect to CO2 removal, IGCC is better suited to
that than any of the other, more traditional coal-fired technologies.
As we look at building power plants for the future, we try to
anticipate what regulations might be, then evaluate the options based
on their ability to meet those future regulations. IGCC looks pretty
good if you do that."

If IGCC power plants look so promising, why haven't more of them been
built? The short answer is the low price of natural gas in the 1990s.
Rosy talk of nearly endless supplies of domestic and Canadian natural
gas, combined with the clean-burning attributes of the fuel relative
to coal, led utilities to invest heavily in natural-gas-fueled
generating capacity. Predictably, however, all these new gas-fired
power plants caused an upsurge in demand for the "fuel of the future."
Prices reacted accordingly, tripling from around $2 per thousand cubic
feet in 1999 to more than $6 currently. Scores of pristine natural-gas
power plants suddenly couldn't produce electricity at competitive
rates. Today large numbers of these plants stand idle, repossessed by
the banks that financed them. Utility companies have turned back to
coal -- not to carbon-capture-ready IGCC, which they view as untried
and risky, but to old-fashioned pulverized coal.

U.S. utilities have been slow to warm up to IGCC and carbon
sequestration technology for the same reason they opposed the Kyoto
treaty: Higher costs for environmental protection, they say, would
handicap the country's ability to compete with India and China. And
yet some industry leaders have broken ranks, calling for the United
States to take the lead in embracing technologies and policies that
acknowledge the enormity of the global-warming challenge.

One such forward-looking utility executive is Paul Anderson, CEO of
Duke Energy and soon-to-be chairman of the mega-utility resulting from
the merger of Duke and Cinergy. "It frustrates me to hear some folks
say, 'Why should we spend money to reduce emissions when China and
India aren't part of the effort?' "Anderson said in a speech to
business leaders last spring. "That is akin to begrudging a modest
meal to a neighbor while you are sitting down to a sumptuous feast."
He went on to say that he favors mandatory legal controls on
greenhouse-gas emissions.

Other large utility companies have followed suit. Cinergy and American
Electric Power (AEP), two of the largest coal consumers in the United
States, have both announced plans to build IGCC power plants. James
Rogers, Cinergy's chairman and CEO, is one of the utility industry's
most vocal boosters of the technology. Carbon constraints are
inevitable, he believes, and IGCC is the most financially prudent way
for a coal-dependent company like Cinergy to prepare for their coming.
"I have a sense of urgency," he said during a meeting of leaders from
the energy industry and government last fall. "We need gasification
now." Both Cinergy and AEP are looking at the geology underlying their
prospective IGCC plant locations to determine the sites' suitability
for eventual CO2 storage.

Pressure to get the IGCC ball rolling is also coming from businesses
that supply utility companies with equipment such as gas turbines.
Chief among these is General Electric, the largest publicly traded
company in the United States. Last May, GE announced an initiative
that it is marketing with the label "ecoimagination," to address
global warming, energy conservation, and other environmental issues.
The company has pledged to reduce its own global-warming emissions and
to double its investment by 2010 in developing more environmentally
benign products, including efficient jet engines, hybrid locomotives,
and clean-coal technologies. GE built the turbines used in Tampa
Electric's IGCC plant. It also owns the coal-gasification technology
used in the plant, having purchased it in 2004 from Chevron, which
developed it. GE has teamed up with engineering and construction giant
Bechtel to offer utility companies a turnkey IGCC package.
ConocoPhillips and Shell market competing coal-gasification processes
and have also aligned themselves with large power-plant contractors.

Until recently, said Neville Holt, a technical fellow at the Electric
Power Research Institute (EPRI), an industry-supported R&D
organization based in Palo Alto, California, "the lack of a single
supplier who could put everything together and guarantee the results
has been a barrier for potential utility customers. But now there are
three teams offering IGCC plants with commercial guarantees," a signal
that IGCC is ready to make the leap from small demonstration projects
to large-scale adoption.

Ironically, among the biggest remaining obstacles are the state
utility commissions whose job it is to protect the public from
overreaching utility companies. In 2003, the Wisconsin Public Service
Commission (PSC) rejected an application from Wisconsin Electric Power
(known as We Energies) to build a medium-size 600-MW IGCC plant on the
shores of Lake Michigan, near Milwaukee. The commission ruled that
"IGCC technology, while promising, is still expensive and requires
more maturation." Its main objection was that We Energies might have
to raise electricity rates to cover the premium cost of building the
plant. Consumer-protection and environmental groups have appealed the
panel's decision, which is now under review by the state supreme
court. It's widely seen as a bellwether case for scores of new power
plants across the country that are now in the early planning stages.

In neighboring Minnesota, a private energy-development group called
Excelsior Energy is doing its best to tilt the regulatory debate in
favor of IGCC. Tom Micheletti, Excelsior's co-president (a title he
shares with his business partner, Julie Jorgensen), maintains that
IGCC's reputation of being more expensive than conventional coal-
burning technology is based on flawed reckoning. Excelsior has won
strong bipartisan support at both the state and federal levels to
build a 600-MW IGCC plant in the Mesaba Iron Range area of
northeastern Minnesota, to begin operating by early 2011. "If you
consider only the up-front cost of putting the plant in the ground,"
Micheletti says, "then yeah, IGCC probably costs between 10 and 20
percent more than pulverized coal. But if you do a life-cycle cost
analysis, my view is that IGCC is the best bet from a purely economic
point of view, because you're never going to have to worry about
putting on additional pollution-control equipment. Anyone who takes a
look at where the country's going knows that we're going to end up
with more stringent control requirements for mercury, particulate
matter, CO2, you name it. If you figure all that in, IGCC is a better
deal."

Another objection to IGCC often raised by traditional coal-plant
operators -- a change-resistant group Micheletti refers to as "the
boiler boys" -- is that the newer technology will inevitably be more
finicky and less reliable than the tried-and-true standard. But Tampa
Electric's operating experience over the past 10 years does not bear
that out. "Last year, Tampa Electric's IGCC facility was the most
reliable coal-fired plant on its grid," Vernon Shorter said. "This is
the most consistently available and lowest-cost electricity on its
system."

The Bush administration has made support for clean coal technologies a
highlight of its energy policy, even as it continues to resist
mandatory greenhouse-gas limits. The Energy Department's Clean Coal
Power Initiative provides joint government and industry financing for
selected projects that demonstrate new power-plant technologies,
including IGCC. (Under this program, for example, Excelsior Energy was
awarded $36 million toward the estimated $1.2 billion cost of the IGCC
plant it's planning to build in northeastern Minnesota.) The
department has also earmarked $100 million to support a handful of
carbon-sequestration R&D projects around the country. But these are
just warm-up acts for the administration's 10-year, $1 billion
FutureGen project. When it's built late in this decade at a site
that's yet to be determined, FutureGen will be the first power plant
in the country, and possibly the world, to combine IGCC electricity
production with the capture and geologic sequestration of CO2.

The Bush administration cites FutureGen as evidence of its commitment
to sustainable energy production. Others wonder if it's a case of too
little, too late. "When put up against things like the National
Commission on Energy Policy's recommendation to deploy 10,000 to
20,000 megawatts of IGCC plants across the country in the next 10
years, one FutureGen project, which sometimes gets funded and
sometimes doesn't, is extremely disappointing," says Rusty Mathews,
senior legislative adviser at the Washington-based law firm Dickstein,
Shapiro, Morin & Oshinsky, and a former Senate staffer who worked on
the 1990 amendments strengthening the Clean Air Act.

The long-awaited energy bill that Congress passed just before the
summer recess contains tax incentives and subsidies to produce
electricity using clean-coal technologies. It also contains small
incentives for power generation from wind, solar, and other
renewables, as well as energy efficiency and conservation. But it
fails to impose limits on greenhouse-gas emissions and provides
generous subsidies for the oil and gas industry at a time when crude
oil is selling for near-record prices. "The bill misses so many
opportunities to change the fundamental direction of energy policy in
this country," says Karen Wayland, NRDC's legislative director. "If
it's not going to reduce the price of oil, address global warming in a
serious way, or increase our energy security, what good is it?"

The Grand Bargain

The question "What good is it?" could also be leveled at any policy
recommendation that encourages more coal mining over the next century.
Widespread adoption of coal-fueled IGCC power plants coupled with
carbon sequestration might lead to good things for the atmosphere, but
what does it portend for the earth's already scarred surface? The
coal-mining industry has changed dramatically over the past three
decades. It has, in general, moved from the iconic shaft mines of
Pennsylvania and Appalachia, manned by legions of black-smudged, pick-
wielding men, to enormous surface mines in western states, where
relatively few laborers operate the largest machines on earth, such as
the dragline excavators I saw working the lignite beds of North
Dakota. About 20 of these super-mines, most in the Powder River Basin,
now produce more than 400 million tons of coal a year, about 40
percent of all U.S. production.

While these mines can to some extent be remediated, the same cannot be
said of mountaintop removal, a method of surface mining practiced in
the eastern United States, which causes grotesque and permanent
damage. Approximately 600 Appalachian strip mines, including
mountaintop removal operations, unearth 145 million tons of coal a
year, about 15 percent of the nation's annual total. In mountaintop
removal, draglines, dozers, and huge dump trucks blast and scrape off
summits and push the displaced earth into the valleys below. The
procedure creates an eerily unrelieved, amputated landscape, filled
with muddy stumps, acid mine runoff, and piles of toxic coal sludge.

David Hawkins, NRDC's clean-coal visionary, is acutely aware of the
downsides of coal mining. "Even if some form of grand bargain were
struck with the coal industry on dealing with the downstream effects
of carbon emissions," he says, "the environmental community is not
going to walk away from concerns about the upstream side, where the
coal comes out of the ground.

"As far as I know, it's a matter of economics that causes people to
decapitate mountains rather than mine the coal in a less abusive
fashion. So if we're going to use coal, we should pay the price that
is needed in order to avoid ruining the landscape. The way to do it,"
he suggests, "is to have a policy that says, 'Here are the rules.' And
the coal industry will say, 'Well, those rules mean it's going to cost
more.' And the answer has to be, 'Yup, that's right: Here are the
rules.' "

The coal industry's response to a Hawkins-style vision of responsible
coal use is mixed at best. On the bright side, the United Mine Workers
of America voiced its acceptance of the need for restrictions on
carbon emissions last December, when it endorsed the report of the
National Commission on Energy Policy. (The report recommends phasing
in a mandatory cap on carbon emissions based on a gradual reduction in
the carbon intensity of the U.S. economy, starting in 2010.)

Kennecott Energy, the nation's third-largest coal producer, has also
acknowledged the severity of the global-warming problem. Kennecott is
one of 10 private-sector parties that have volunteered to participate
in the FutureGen project, pledging $20 million. But Kennecott is an
exception in the coal industry. "The other major coal companies are
staunchly opposed to anything that has to do with carbon management of
any kind, under any circumstances," says Rusty Mathews. "They're not
willing to acknowledge yet that there's some writing on the wall."
Only a groundswell of public and political pressure to end the era of
pulverized-coal power plants seems likely to budge the industry from
its intransigence.

Can we hand down to future generations a world that is not
irreversibly compromised by a failure to accept the consequences of
our choices? There may be no single answer. Ingenious ways of avoiding
the worst consequences of coal combustion, such as IGCC and carbon
sequestration, are necessary parts of the solution, but they are not
sufficient by themselves. "There are three big tools in the global-
warming toolbox: efficiency, renewable energy, and carbon capture and
storage for fossil fuels," David Hawkins says. "We need to use all of
them. It will take all three to put together national and global
recipes that can bring the problem of global warming under control."