Toronto (Platts)--16Jun2008

Large-scale carbon capture-and-storage efforts may be needed to keep
coal-fired plants within future expected greenhouse gas emission limits, but
major obstacles still need to be overcome to implement this technology, US
power industry executives said Monday at an industry conference.

"This [CCS] is an exceptionally daunting undertaking," said Jeff Sterba,
chairman of the Edison Electric Institute at that utility association's annual
convention in Toronto. "I am a bit pessimistic about large-scale retrofits."

Sterba is also president and CEO of Texas and New Mexico investor-owned
utility PNM Resources. He and other US executives were debating plans
announced by Canada's TransAlta in April that it would retrofit 100 MW of its
400-MW coal-fired plant in Alberta for CCS using a chilled-ammonia process.

TransAlta President and CEO Steve Snyder said Monday that the location of
aquifers to store carbon within about 50 miles of the plant will help make the
project possible. Canada's government would need to fund about two-thirds of
the project to make is economically feasible, he said.

The project could be online by 2013 and some 5-10% of the carbon could be
used for enhanced oil recovery, he said.

While the company has not yet released the cost of the project, Sterba
said that it is in the range of "hundreds of millions of dollars, not hundreds
of billions."

The US executives said that a variety of geological, legislative,
regulatory and public opinion issues will likely continue to delay such
efforts there.

"You have to have the geology to do this," said Tom Farrell, chairman and
CEO of Dominion. He also said that a lack of pipelines to carry carbon to
storage areas and unanswered questions about liability and whether landowners'
rights to sell storage space fall under mineral rights or some other area will
continue to hold up progress.

Farrell also said that Canada's unicameral legislature can move more
quickly on issues such as this compared with its bicameral US counterpart.

However, the executives agreed that more CCS investigation is necessary.

"If we want CCS by 2020, we are running out of time," said Steve Specker,
president and CEO of the US-based non-profit Electric Power Research
Institute.

--Carla Bass, carla_bass@platts.com