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From Obsolete to Cutting Edge – Potential Coal Power Plant of the Future

BEULAH, N.D. — Eighty scientists from the International Energy Agency came here in May to see what the power plant of the future might look like. What they found amid Dakota Gasification Co.’s sprawling complex of pipes and pumps also gave them a pretty good view of the past.

By JOHN FIALKA
Staff Reporter of THE WALL STREET JOURNAL

The scientists were most interested in carbon dioxide — and how to get rid of it simply and efficiently. Most plants just push CO2 out their smokestacks, adding to the production of the greenhouse gases blamed for overheating the earth’s atmosphere. Here the gas is carefully collected, compressed and pumped through a 205-mile pipeline to Weyburn, Saskatchewan, where an oil company buys it and pumps it into the ground.

Although the so-called Weyburn Project is a cutting-edge experiment, Frederick R. Stern, 51 years old, the manager here, notes that most of what the scientists were looking at is 1970s technology that has taken a long struggle to perfect. "You always get surprises," shrugs Mr. Stern, a chemical engineer.

Ultimately, the Bush administration’s goal is to develop power plants that can use the nation’s most abundant fuel — coal — and eliminate the environmental concerns associated with it. If scientists succeed, it would be a huge boon economically and politically. The U.S. could ease its growing dependence on imported oil and painlessly eliminate a big source of greenhouse gases.

The technology, though, requires at least a decade more of work, and ultimately may flop. Lessons learned in the Weyburn Project are a starting point for "Future Gen," a $1 billion Energy Department project to develop efficient, nonpolluting power plants sometime after 2010. Specifically, scientists here are trying to learn whether carbon dioxide pumped into the ground will remain there permanently and not leak back into the atmosphere.

Before then, the CO2 experiment may have shorter-term political benefits by demonstrating the administration’s concern for the much-maligned coal industry. It also could help the White House argue that it is taking the global-warming issue seriously, even though it scrapped the Kyoto Protocol, an international treaty that called for mandatory reductions in CO2.

The government has been looking for technological solutions to U.S. energy needs for decades, spending billions of dollars in the process. The North Dakota project, for instance, started as a $1.5 billion public-private venture launched by the Carter administration in the late 1970s, long before environmental scientists worried about global warming. With the Arab oil embargo of 1974 a recent memory, the U.S. hoped to turn coal into a more easily distributed fuel and reduce U.S. reliance on Middle Eastern sheikdoms.

In Beulah, N.D., a consortium of pipeline companies hoped to earn a 15% return producing fuel equivalent to 40,000 barrels of imported oil a day. A giant conveyor still pours in pellets of lignite, a low-grade coal that is so cheap and so abundant here that some energy experts refer to it as "flammable dirt." At the other end, the plant produces methane, a synthetic form of natural gas, which is currently the nation’s cleanest and priciest fuel for heating homes and for making electricity.

If the technology seemed straightforward, the economics weren’t. The facility was designed to produce natural gas at about $6 per thousand cubic feet, but as it was being built the price of gas dropped to around $2 per thousand cubic feet. The pipeline companies said they needed at least $820 million of government price supports to run it for the first 10 years. The Reagan administration rejected the idea and took over the bankrupt project.

In 1988, Basin Electric Power Cooperative, the Bismarck, N.D., power company that sold the project its water and electricity, wound up taking it off the government’s hands for $85 million, mostly because it didn’t want to write off its investment in the plant. Basin already had invested heavily in a power plant, rail and water facilities that served the gasification plant. Since then, it has invested $500 million more to get it running properly.

North Dakota politicians wanted to keep the gasification plant going because it was the biggest private employer in the state. But income projections were dismal. "From day one we recognized that just making gas wasn’t going to make that plant profitable; we needed some new byproducts" to sell profitably, says Floyd Robb, spokesman for Basin.

Truckers already came to the plant to load up with one chemical byproduct, anhydrous ammonia, a liquid fertilizer. Basin’s engineers found that a new scrubber, installed to lessen air pollution, produced another byproduct, ammonium sulfate, which Basin puts in spiffy plastic bags and sells as "Dak Sul," a premium lawn fertilizer. Other profitable byproducts followed.

At first, the 180 million square feet of CO2 rising out of the plant’s smoke stacks every day was considered waste, not a byproduct. But Basin’s marketers found a consortium of oil companies in Canada with a problem: a middle-aged oil field that needed drastic treatment — CO2 injection.

Injecting CO2 into oil fields, which forces the flow of oil that is trapped in rock formations, isn’t a new idea. The Canadians were shopping for a natural source of CO2, but the folks from Basin offered to build a pipeline that delivered the product to their door. Since 2000, Basin has sold the Canadians half its CO2 output.

In the late 1990s, the Clinton administration put thousands of scientists to work to see how industries might dispose of CO2, which can’t be eliminated by conventional antipollution technology. Instead, it must be buried and sealed. Experiments were conducted to pump carbon dioxide into the deep ocean and into underground salt-water formations.

Meanwhile, Basin worked out its own solution: selling the gas to oil companies. "CO2 has become the most valuable byproduct from the plant," says Mr. Robb, who won’t say how much it is paid for the gas — just that it is double the income his company gets from selling fertilizer.

"In the long run, the plant at Beulah may not be a white elephant, but may be more like a life saver," says Kurt E. Yeager, president and chief executive of the Electric Power Research Institute, which does research for the nation’s utilities. The power plant of the future, he thinks, will be a "coal refinery" that turns coal into hydrogen fuel and electricity. It will have "zero emissions," he says.

A lot of the technology to do that, he adds, has been perfected here.

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