Pollution-reducing coal gasification at power plants is held back by cost

Chicago Tribune --Aug. 24

Aug. 24--Everyone speaks well of a technology that could turn Illinois coal into energy, but hardly anyone wants to spend money to use it.

A once-vibrant industry, coal mining in Illinois has lost thousands of jobs in recent years, brought down by clean-air legislation of the early 1990s. The state's coal is loaded with sulfur, forcing the coal-fired generating plants that supply nearly half the state's electricity to buy cleaner fuel from western states.

But a technology known as coal gasification radically reduces the pollutants expelled from the exhaust stacks of power plants. It is those substances -- mercury and compounds of sulfur and nitrogen -- that are among the nation's principal sources of air pollution and acid rain.

Environmentalists and lobbyists for the Illinois coal industry, at odds on many issues, both say coal gasification could sharply improve air quality and make Illinois coal usable again.

But there is no reason to expect it to be used in the state anytime soon. Several power plant developers are toying with the idea, which is being used at plants in Indiana and Florida.

But the two big electric-generating plants expected to open in Illinois in coming years -- one Downstate and one on the former Joliet Arsenal site in Will County -- have rejected it, saying conventional technology is cheaper.

"We believe that long term it represents excellent potential," said Vic Svec, a spokesman for Peabody Energy, which is building the plant near East St. Louis. "It's just not quite ready for prime time yet."

The technology of coal gasification is simple: heat coal to about 2,500 degrees under pressure. The coal's molecular bonds loosen, creating a flammable gas, known as synthesis gas, or syngas, that contains a great deal of energy and burns much cleaner. Coal gasification plants don't need the expensive scrubbers used to partly clean the emissions of traditional power plants.

"It has about 20 percent of the emissions of a regular coal-fired plant," said John Thompson, an activist with the Clean Air Task Force. "That is a huge difference."

"Those are the plants that will be able to meet existing and proposed air regulations," said Phillip Gonet, president of the Illinois Coal Association. "This is the thing I am excited about."

Converting coal into a gas is not a new idea.

In the 1800s, an industry sprang up to supply homes and businesses with gas from coal. The technology was basic: Heat coal in a closed vessel in the presence of steam and a small amount of air and draw off the gas that results. During World War I, German scientists further refined the process.

The chemistry needed to neutralize or draw off sulfur, nitrogen and mercury from syngas is uncomplicated. After the contaminants are removed, the syngas is sent to fuel combustion in a turbine that drives a generator. Waste heat from the process boils water to power a second, steam-powered generator.

Gasification yields more energy from a ton of coal than traditional burning and produces less greenhouse gases.

"You can get dramatically lower levels of emissions from it," said David Denton, business development director for Eastman Gasification Services Co. of Kingsport, Tenn.

For two decades, Eastman has built coal gasifiers for the chemical industry, which uses syngas as a component of many products. Eastman repeatedly has offered to help a utility build a coal-gasifier electrical plant but has found no takers.

"There are some perceived risks, which we believe are not real," Denton said. "Utilities are not rewarded for taking risks."

Companies that generate or deliver electricity are understandably not interested in an unproven way to produce power.

But coal gasification is not totally unproven.

A utility in Florida uses Illinois coal to feed a gasifier there. And in Indiana, a company operates a gasifier built to use coal, though it is now fed with petroleum waste. Both are small facilities, barely large enough to be considered commercial generators of electricity.

Steven Vick is general manager of Wabash Energy Ltd., which operates the gasifier in Terre Haute, Ind. It sells power to Cinergy Corp. and other utilities.

"We look at it as environmental technology," Vick said. "It's 50 times cleaner."

Coal gasification allows for the separation and disposal, or sequestration, as it is called, of carbon monoxide and carbon dioxide, both greenhouse gases. Although that process is not required, some in the utility industry think regulators will require it in the future.

The chairman of Cinergy, an electric utility serving Indiana, Kentucky and Ohio, said he expects his company to seek state permission this year to build a coal-gasification plant in Indiana, in part because he expects the federal government to crack down on the emission of greenhouse gases.

"If you live in a carbon-constrained world, this is your only alternative that offers the potential of carbon capture and sequestration," said Jim Rogers, who also serves as chief executive of Cinergy.

But clean and efficient as it is, coal gasification has one big drawback: It costs more to build and run a coal-gasification plant than it does a traditional coal-fired plant.

Illinois has as many as 10 coal-fueled power plants in the proposal stage, though it is certain that many never will be built.

But two that are likely to come on line eventually won't use coal gasification.

Peabody Energy Corp. wants to build a 1,500-megawatt electric-generating plant in Washington County, about 30 miles southeast of East St. Louis. Indeck Energy Services Inc. wants to build a 660-megawatt plant on the Joliet Arsenal property in Will County.

The plants will feature state-of-the-art pollution controls that will make them far cleaner than the state's existing coal-fired plants. But each could emit fewer pollutants if powered by coal gasification.

"We asked both of those companies to consider coal gasification," said Don Sutton, manager of the permit section at the state's Bureau of Air. "They said it financially could not be done."

Indeck says it found lenders would not finance its $1 billion project.

"Gasification will be commercial some day," said Jim Thompson, senior vice president of Indeck. "We are not there today."

Estimates vary, but industry observers say a coal-gasification plant would cost 15 percent to 50 percent more than a conventional, coal-fired generating plant. That translates to hundreds of millions of dollars in extra cost.

"We have worked extremely hard to bring in [coal gasification] projects," said Bill Hoback, bureau chief of the state's Office of Coal Development. He said nearly everyone concludes it is not financially possible.

Still, some in the electric industry see Illinois, with its cheap coal and growing demand for power, as a logical site for the first large coal-gasification plant in the country.

"We are currently taking a very hard look to see whether we can make it work," said David Schwartz, a partner with Erora Group, a Kentucky company that develops electricity-generating plants.

Erora would like to build a 644-megawatt power plant near the mouth of a coal mine in Christian County, just southeast of Springfield.

"We think [coal gasification] has a lot of promise," Schwartz said. "But there has never been a plant this big in the U.S."

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