Environmentalists hit Mesaba Energy proposal on carbon issue

The process has succeeded in reducing several types of greenhouse gases that contribute to global warming.

Coal gasification's greatest promise, however, is its potential to all but eliminate, or "sequester," the most common and pernicious greenhouse gas of all - carbon dioxide, or CO2 - from the smokestack stream. That's a major reason why the U.S. Department of Energy is funding a $1 billion effort to help advance the technology.

But CO2 sequestration is not part of the plans for the Mesaba Energy project, meaning its output of carbon dioxide will be similar to that of traditional coal plants.

That's led some critics to conclude the project lacks the ultimate environmental justification for using coal gasification in the first place. They warn the power plant's economic viability could be threatened if carbon "taxes" proposed by the international Kyoto Treaty are adopted eventually in the United States.

Critics also maintain the Mesaba project is diverting the state of Minnesota's attention from its focus on renewables, such as wind and biomass.

Burning coal the traditional way produces three worrisome gases: sulfur dioxide and nitrous oxide, as well as carbon dioxide. Results at operating coal gasification plants - all much smaller than the 2,000-megawatt, $1 billion Mesaba Energy proposal - show the process efficiently removes sulfur and nitrogen wastes from the flue. For that, environmentalists give coal gasification high marks, even though it has not yet been demonstrated on a large scale.

Mesaba Energy's developer, Excelsior Energy in Wayzata, MN, is trying to capatalize upon these positive results.

The company's principals are Iron Range native Thomas Micheletti and his wife Julie Jorgenson. She said there's enormous potential for coal gasification to be an economically viable "real world" compromise between the ubiquitous dirty coalburning of today and an unlikely wind- powered future.

"I'm pragmatic and have to deal in the real world," Jorgenson said. "The one resource we have in great abundance in the United States is coal. And if we're going to use coal, we want coal gasification technology to be the standard bearer.

"It is so superior to old technologies that we would consider it a huge victory for the environment if we could show our plant is cost effective, and to prove once and for all that the days of the boiler technology are over," she said.

Excelsior has parlayed the environmental promise of coal gasification, along with the prospect of 600 new jobs on the Iron Range, into political support in St. Paul.

In May, Gov. Tim Pawlenty signed legislation that requires Xcel Energy to purchase 450 megawatts from the plant on the grounds it is an "innovative energy" as defined by state statute. Excelsior was exempted from most regulatory requirements, including the certificate of need that is required whenever a generation plant is proposed.

A key factor in the project's passing environmental muster with the Legislature was the record of several existing coal gasification facilities. One is the $438 million Wabash River Coal Gasification Repowering Project in Terre Haute, IN. That 296-megawatt facility has succeeded in capturing more than 99 percent of its sulfur dioxide emissions and produced nitrous oxide emissions that exceeded current standards.

Another example is the Tampa Electric Integrated Gasification facility in Florida. A 316-megawatt generator, it cost $300 million to build and has been able to eliminate 95 percent of sulfur dioxide emissions.

Rather than burning coal directly, gasification breaks down coal into its basic chemical constituents. In a gasifier, coal is exposed to hot steam and carefully controlled amounts of air or oxygen under high temperatures and pressures. Under these conditions, carbon molecules in coal break apart, producing a mixture of carbon monoxide, hydrogen and other gaseous compounds.

The coal gases, cleaned of their impurities, are fired in a gas turbine, much like natural gas, to generate electricity. The hot exhaust of the gas turbine can then be used to generate steam for a more conventional steam turbine-generator. Thus, it is dual source of electric power, called a "combined cycle," that boosts the fuel efficiency of a conventional power plant by 50 percent or more.

But to energy policy planners, by far the greatest promise of coal gasification is its potential to also remove much of the carbon dioxide from the smokestack. If oxygen is used in a coal gasifier instead of air, CO2 is emitted as a concentrated gas stream. In that form it can be captured more easily and at lower costs for "sequestration," which involves pumping the gas into underground geologic formations or saline aquifers.

Carbon sequestration is a key part of the $1 billion U.S. Department of Energy "FutureGen" project, which plans a prototype zero-emission coal gasification plant. CO2 emissions were targeted for taxation by the Kyoto Treaty, which was the main reason the United States dropped out of it.

Without the sequestration element, CO2 emissions from coal gasification plants aren't much of an improvement over current plants, and the lack of sequestration at the Mesaba project concerns environmentalist Michael Noble, executive director of Minnesotans for an Energy-Efficient Economy.

"If the promise of coal gasification is to sequester carbon, why would anyone build or finance a project in a location (the Iron Range) that has zero potential to sequester the CO2?" he asked. "As far as we know, in bedrock granite there could be no geologic repository in northeastern Minnesota like a depleted natural gas well."

Noble maintains that despite President Bush's withdrawal from the Kyoto Treaty, caps on CO2 emissions are eventually coming, leaving the Mesaba plant with a potential future dilemma. He wonders if Excelsior will be able to raise the private financing it needs if there's a possibility of a costly future retrofit for carbon emissions.

"Why would the utility industry want to partner up with a massive coal plant that still has the same CO2 liability?" he asked. "Carbon caps, carbon taxes, or international carbon agreements are an inevitability. Who will bear the cost when energy producers will have to pay up to $200 per ton in carbon taxes?"

Excelsior Energy's Jorgenson admits that finding a place to pump CO2 into the ground on the Iron Range will be tough and is not currently in the plans.

"We hope there may be a place on the Iron Range where there could be sequestration," she said. "The preliminary assessment isn't a slam-dunk. But that's part of what we'll be looking at as we move forward."

However, she calls these concerns a "non-issue" with potential investors.

"It's a better investment than other types of plants in terms of carbon," she said. "Right now we have 90,000 megawatts of aging coal plants, and those would be the plants hardest hit by Kyoto-type agreements. We're in the best position to capture carbon."

Another concern that has been raised by environmentalists is the effect the Mesaba project is having on already-established wind power initiatives. David Morris, vice president of the Minneapolis-based Institute for Local Self-Reliance, testified against the Mesaba project at the Legislature partly because it is a huge, capital-intensive project that clashes with the previously set goals of generating energy from small, diverse sources - like wind farms.

"If you build a 2,000-megawatt coal plant, it becomes the largest single power plant complex in Minnesota, and the world's largest coal gasification plant," he said. "It will displace any possibility of wind power becoming a significant source for baseload power. A plant that size would satisfy all of Minnesota's electrical needs for 15 to 20 years, so if you want to generate power from wind, it would be a saturated market."

Morris added, "We worked on an energy policy during the 1990s, and we came out with a coherent plan. Now if this thing goes through we are suddenly taking a policy that focuses on renewables and instead focusing it on coal."

Jorgenson, however, said she finds it "ironic" that Excelsior is getting criticism from environmentalists when coal gasification has the potential to give a major upgrade to air quality now, rather than in future decades.