As emissions rise, US coal steps up push for carbon capture

US greenhouse-gas emissions are rising again after three years of declines, according to a new report, and the culprit is coal.

The carbon-rich fuel is making something of a comeback as prices rise for rival natural gas. The boost in emissions casts a harsh light on the coal industry’s large environmental footprint at a time when the industry is already reeling from federal pollution mandates. But it also throws in relief coal’s best hope for meeting those mandates: carbon capture – either with the potential to permanently store it underground or to use it to enhance oil recovery.

On Tuesday, Mitsubishi Heavy Industries and Southern Company Services announced they had successfully completed an initial demonstration phase of carbon capture at Southern’s coal-fired Plant Barry in Alabama, which was able to recover more than 90 percent of the carbon dioxide, send it through a 10-mile pipeline, and inject it underground.

Mitsubishi says it will now speed up its efforts to make the technology commercially viable.

The industry needs such successes. After falling for three years in a row, emissions in the United States began climbing again in 2013, according to new projections from the US Energy Information Administration. The increase was small – about 2 percent – and emissions are still some 10 percent below their 2005 level, the EIA estimates from incomplete data, but far from the Obama administration’s goal of 17 percent by 2020. The agency pointed to increased coal use as the main driver of the increase.

After losing market share to cheap natural gas for several years, the coal industry is starting to rebound. Future growth will be constrained by tough federal emissions standards on new coal plants. That is why the industry is eager to make progress on carbon capture.

Besides its demonstration plant in Alabama, Southern is partnering with the US Department of Energy to complete this year its Kemper power plant in Mississippi. There, the coal will first be gasified before it is burned, allowing the carbon to be separated before it is used to enhance oil recovery. The public’s contribution is $290 million.

FutureGen is another public-private partnership – one where the Energy Department is paying $1.1 billion, or 80 percent of the cost. It will retrofit an oil-fueled unit in Meredosia, Ill., which would ultimately sequester the carbon. The project is now in its preliminary design and engineering phase.

Such plants are designed to scrub the mercury, nitrogen oxide, and sulfur dioxide before they separate the remaining byproducts: carbon dioxide, carbon monoxide, and hydrogen, which could be used to power everything from cars to power plants. The largest demonstration projects are in Norway, where Statoil is placing 1 million tons of carbon per year into a saline aquifer deep in the North Sea, and in Canada, where the carbon is going into the Weyburn oil field just north of the North Dakota border. If it could truly work at scale, coal would be back in the game. 

“Carbon Capture and Storage (CCS) is a critical technology for reconciling our continued dependence on fossil fuels with the imperative to protect the global environment,” Judi Greenwald, vice president for technology at the Center for Climate and Energy Solutions, said at a congressional hearing this past July. (The nonprofit, nonpartisan center aims to advance practical solutions for climate change and energy challenges.)

Using the captured carbon to enhance oil recovery is closer to reality than permanently storing it underground, she added. Electric power generators, which create about a third of all carbon emissions, could sell their byproducts and offset the financial risks.

Some 80 percent of the world’s energy comes from coal, oil, and natural gas. Under current scenarios, the EIA expects fossil fuels to continue providing 65 percent of this country’s electricity consumption in 2040, with 35 percent coming from coal.

Globally, coal will provide about 60 percent of the electricity generation in 2035, Ms. Greenwald estimates, with most of that coming from developing nations and specifically China and India. While her organization advocates a shift to nuclear energy and to renewable power, she says that the development of CCS is critical. Such technology can store up to 90 percent of the emissions from stationary sources, such as power plants and industrial facilities, she adds.

An Austin, Texas, company called Skyonic Corp. is working on the technologies to capture carbon dioxide and market byproducts of the process: “Emitters that are up against caps can reduce their emissions and continue to expand their businesses,” says Joe Jones, Skyonic’s chief executive, in an interview. “They are not making a dead-loss investment into regulatory compliance. They are, instead, benefiting their bottom lines.”

Nine power companies are interested in his firm’s technology, and have signed “letters of intent,” he says. Skyonic is now retrofitting a coal-fired cement plant that will capture the carbon dioxide and convert it into sodium bicarbonate, hydrochloric acid, and limestone. The company received $28 million in 2009 federal stimulus money.

The company has another demo plant in Texas that is taking carbon and making other minerals at what his business estimates will be a significantly reduced cost. The company is talking to Chinese enterprises. Among the private investors that Skyonic has are ConocoPhillips, BP, and Northwater Capital. 

The technology faces several obstacles, especially the costs. Adding carbon capture is expensive, especially if it is permanently buried underground. Estimates are that the technology would tack on at least 30 percent to consumers’ bills. Asking them to absorb that is hard, particularly because natural gas is on par with coal prices right now.

“It makes absolutely no sense to take coal and make synthetic natural gas out of it,” says Paul Grimmer, chief executive of Eltron Research in Boulder, Colo., in a phone interview. “The processes are too expensive. But if you see a huge run-up in natural gas, it may then make sense.”

American Electric Power is a case in point: It chose to pull back from CCS because of the high price of the tools that would be used to capture the carbon before it would be piped and buried in geological formations. While it also faults the political and regulatory climates, it does say that cheap natural gas is an easy out, for now.

As such, the Columbus, Ohio-based utility says it will complete the engineering phase of that New Haven, W.V., project, then stop. If circumstances change, it says that it is possible that it could eventually complete the ultramodern plant.

Environmentalists also point out the paradox of pumping heat-trapping emissions into the ground only so that they can be used to extract a product that releases even more global warming emissions into the atmosphere.

“Leaving the carbon dioxide underground is of no ultimate benefit for climate stabilization when additional hydrocarbons have been extracted in exchange,” says Jeffrey Michel, an environmental professional based in Germany. He adds that injecting a short ton of carbon dioxide will yield 3.6 barrels of crude oil. That, in turn, creates 1.4 tons of carbon dioxide when refined and burned.

At the moment, the abundance and relative cost of shale gas make it a tough competitor for coal, especially in today’s regulatory climate. The Environmental Protection Agency has proposed new rules that would force all future coal plants to be as clean as the most modern natural gas facilities. But the history of natural gas is that its prices fluctuate. With increasing demands for the fuel both at home and abroad, odds are that its price will surge at some point.

At that juncture, it would make sense for the United States to have a diversified energy portfolio. Like it or not, coal will remain part of that mix, especially overseas. By some accounts, investing in the technologies to make it cleaner would be prudent. That’s a tough sell today, not just because of cheap natural gas but also because coal may never outrun its image as a dirty fuel.