The Costs of Clean Coal

MONTANA, Feb 06 (Neo Natura) - Steve Running, a Nobel Peace Prize recipient and University of Montana professor, isn’t a big fan of what’s termed “clean coal,” which is touted as being environmentally friendly by Montana Gov. Brian Schweitzer.

While it’s technically possible to capture the carbon dioxide emitted by coal-fired plants and sequester the gas underground, the cost and energy involved to do so is “so overwhelming it doesn’t end up as being logical,” Running said on Tuesday. He came to the Queen City this week to lecture on the effects of climate change to Montana.

Running knows that not everyone believes the Earth’s climate is warming, and people point to blizzards on the East Coast and record cold temperatures as proof. But as a scientist, he’s studied the data and firmly believes that humans are significantly contributing to global warming.

“I think there are some well-funded professional deniers who are following the tobacco and cancer lobbies’ model, in a broad sense,” Running said. “They continue to say that in the broad sense, all the data isn’t in. But in reality it is in and no climate scientist comes to any different conclusion. The world is warming up.”

Climate scientists spent 40 years developing models and theorizing whether shorter, warmer winters were due to different earth orbits, sun spots or even a wobbling axis, Running said.

“But no model can recreate the acceleration of global temperatures without including greenhouse gases,” such as carbon dioxide, Running said. “We’re using our atmosphere as a free garbage can.”

Capturing those greenhouse gases and injecting them underground just moves the problem around, he added. Montana’s Legislature is looking at creating rules on carbon sequestration, and during Schweitzer’s State of the State address last week, the governor said sequestration is vital for coal development in Montana.

“I think we’ll end up ultimately with a better solution,” Running said.

But whether the world does that before it reaches the tipping point is the big question.

“We won’t know that we’ve hit the tipping point until we look backward,” Running said.

He does note that it took 100 million years for plants to decompose underground into fossil fuels like gas and coal, but we’re digging it up in only 100 years n an acceleration speed of about 1 million.

“That simple statement says that can’t work for very long,” Running said. “We haven’t moved very far in coming up with solutions in the past 10 years, but I’m hopeful that will change soon. It has to.”

The easiest first step, he added, is to embrace a variety of energy efficient opportunities, like electric cars or simply walking or riding bikes to work.

“In Europe, everything they do reduces their energy consumption,” Running said. “Wouldn’t it be great to be able to ride a train around town?”

Montanans are getting a front-row seat to the impacts of a warmer world, with shorter winters, hotter summers and a beetle epidemic that’s killing all of the lodgepole pines in the forests. Running theorized that in the future, the lodgepoles could be replaced by cactus and sagebrush, and Montana could start to look like Utah.

“Not that there’s anything bad about Utah,” he said, laughing.

Recycling Carbon-Dioxide From Coal

MONTANA, Aug 27 2008 (Neo Natura) - With oil prices seemingly entrenched above long-term averages, Perth businessman Allan Blood has struck a deal with Montana's Crow tribe to look at building a $US7 billion ($8 billion) plant to turn their stranded coal reserves into diesel and jet fuel.

In a twist to local greenhouse gas capture schemes, Mr Blood plans to limit emissions from the project by selling carbon dioxide to Montana oil projects to inject into their fields and improve oil recovery.

If all goes to plan, the project will be profitable at oil prices above $US60 a barrel and could be producing 50,000 barrels daily by 2016.

Mr Blood also has plans to develop a coal-to-urea plant in Victoria's La Trobe Valley.

The deal inked last week, calls for the Crow Nation to provide coal and water, and Mr Blood's unlisted Australian American Energy Co will provide funding and project management.

The coal will be mined above ground and converted to diesel using processes similar to those of South African synthetic fuels company Sasol.

Sasol's process produces more than twice the greenhouse emissions of a normal oil refinery, but the Montana project, known as Many Stars, will minimise these by either storing CO2 or selling it to nearby oil producers.

"We're hoping to sell all the CO2 that gets trapped, as a by-product," he said. There were more than 8000km of dedicated CO2 pipeline in the US, he said.

Both the Crow Nation and Montana Governor Brian Schweitzer gave the project a glowing appraisal.

"The Many Stars project will be a significant contributor to our nation's need for energy security and has the potential for providing superior military fuels to nearby bases," said Mr Schweitzer, who introduced Mr Blood to Crow Nation members after meeting him at a New York conference in 2007.

Crow chairman Carl Venne said the project would help his tribe become self-sufficient and would provide employment opportunities. Mr Blood sold a coal-to-liquids project in Victoria to miner Anglo American for an undisclosed sum earlier this decade.

The project, known as Monash Energy, is being jointly developed with Shell and could cost $6 billion. It is expected to be atleast 10 years before the operation will be in production.

Liquid Coal - An Oil Solution?

MONTANA, Aug 11 2008 (Neo Natura) - The liquefaction of oil, process transforming coal from a solid state into a liquid fuel, goes back to the beginning of the 20th century. However, low prices and abundance of crude oil and natural gas reserves marginalized its application. Only some countries, among which Germany during the Second World War and South Africa since the Sixties, have massively liquefied coal.

Theoretically, hydrogenating coal is the only requirement to get oil products. Two processes coming from Germany exist: addition of hydrogen can either be made directly on coal (direct liquefaction) or on the gases issued from gasification (indirect liquefaction). The products obtained thanks to the first method are of very great quality - in particular the diesel from which sulfur and aromatic compounds are eliminated - and energy efficiency is nearly equal to 50%, against more than 60% for the indirect but with a much lower quality.

Today, 96% of the energy consumed in transport comes from oil products. Its substitution by different alternative energies is justified by the reduction of the dependency with respect to oil.

Until 2003, with a price of the barrel of crude oil around $25, the CTL at $45 did not present any economical advantage. Today, coal is becoming the best option in order to guarantee the energy security of a country and to get away from high oil prices.

Being the two biggest oil consumers in the word, the United States and China are particularly vulnerable to the big rises of the crude and invest thus massively in this technology.

With oil prices at historic highs, Pike County, where coal trucks rumble at all hours and miners blast away at black seams, is moving ahead with a controversial project to turn its vast coal reserves into barrels of liquid fuel. Indeed, the county plans to develop a $4 billion coal-to-liquid plant that would produce 50,000 barrels of liquid coal a day. Pike County joins a growing number of communities across the United States considering such facilities (Alaska, Montana, Indiana, Pennsylvania, Ohio, West Virginia, Louisiana, Kentucky, Whitley, McCracken). Such efforts could help wean the nation from its reliance on foreign oil for transportation. The technology would strengthen national security and be cheaper than petroleum.

Over the last 20 years, the price of coal remained stable ($35 to $50 / ton) contrary to the price of oil which passed from $10 to more than $120 by barrel. In a world where everything depends on economy and where energy is essential for it, this aspect is far to be negligible and still promises great days for coal. Worldwide liquid coal production should rise from less than 200.000 barrels a day today to reach 1.800.000 Barrels daily in 2030.

Environment Permit Regulations

MONTANA, Jun 04 2008 (Neo Natura) - With gas prices breaking records, the national average at about $4 a gallon, energy and energy development is on the tip of everyone’s tongues. From politicians advocating ethanol to windfarms to more national drilling, it seems that any ideas to reduce America’s dependence on foreign oil are being heard as election season heats up.

Around the Bakken Formation, discussions of new oil refineries being built both in Montana and North Dakota have been heard.

A document released by the North Dakota Pipeline Authority on April 22 states the Three Affiliated Tribes of Fort Berthold Indian Reservation are considering building a 15,000 barrel a day refinery. In Williston, a group is considering building a refinery adjacent to the ethanol facility; the document states, “The North Dakota Industrial Commission, through Oil and Gas Research Council, has provided funding to study the viability of the project.”

On the Montana side of the Bakken, these discussions are much less advanced. No grant has been gained to study the viability of a refinery in the area, and talks of building an oil refinery are only talks amongst local persons and politicians. The question of why North Dakota has moved along at a quicker pace of developing their oil has been raised, however, the question must extend to all energy development. In addition to the possible refineries in North Dakota, currently American Lignite Energy is exploring building a coal-to-liquids plant. Great Northern Power Development, L.P. [GNPD] and Allied Syngas are working toward building a coal gasification plant in South Heart, N.D., with an expected starting construction date around the end of 2009.

GNPD owns the largest collection of coal reserves in Northern America beside the U.S. federal government. The company had to decide between two project sites, which one they would move forward with first - the one in South Heart or the one in Circle.

“The question of which site to develop first came up,” GNPD consultant Bill Pascoe said. The company decided to first focus on the site in North Dakota for various reasons - better pipeline infrastructure, better power line, gas pipeline on site, to name a few.

“If all the factors were the same, though, we would have still chosen North Dakota,” Pascoe said. “The reason for this is that business and regulations are more hospitable in North Dakota and this has primarily to do with the permitting process.”

To build almost anything affecting land, a permit is required. The larger the facility with the more effects it will have on a place, the more rigorous and lengthy the process can be. Even so, for most states, this process is regulated by the laws of the U.S. Environmental Protection Agency. In this regard, the process in both Montana and North Dakota would be quite similar. To build a power or energy developing plant, the two main permits a company would have to go through would be water and air quality permits.

“The process is regulated by the state health department…and is long and cumbering to achieve the permits,” director of North Dakota’s Oil and Gas Board Ron Ness said.

“Permit issuance is a long procedure that may take several years, depending on the complexity of proposed management process, quality of the initial application and degree of public participation,” said Moriah Peck, environmental engineering specialist with the Montana Department of Environmental Quality.

A few of the permits set by the National Environmental Protection Agency required for building a large power/energy facility or oil refinery are New Source Review - Prevention of Significant Deterioration, Ground Water Pollution Permit, Title V Operating Permit and more.

However, Montana’s process is rigorous because of the need to prove it complies with all the standards and regulations set out by the EPA.

“There are two things that make getting a permit tougher in Montana: Montana Environmental Protection Act [MEPA] and the constitution which states that everyone is entitled to a clean and healthful environment,” Rep. Walt McNutt, R-Sidney, said.

MEPA requires either an Environmental Assessment [EA] or Environmental Impact Statement [EIS] whenever there is any state action, such as any type of construction requiring issuance of permits from the state.

“If it is determined that the facility will have a significant impact, then an EIS will be needed,” Montana Legislative Environmental Analyst Todd Everts said. “It is a fairly extensive review process.” This MEPA required environmental review is said by Everts and others to go hand-in-hand with the permitting process. Once the draft for the environmental review is completed, then the public is invited to review the draft and give input.

Steve Wade, an attorney for Roundup Power Plant developers Bull Mountain Development, had first-hand experience with some of the delays and complications that can stop or stall energy development projects.

“We were able to go through the permitting process and get a permit,” Wade said. “When we got our permit, we were subjected to an administrative appeal…also the MEPA analysis was challenged in district court.” Wade explained that in the circumstance involving Roundup, the appeals tied the company up in long and tedious litigation.

The company made it through the appeal, but that was appealed. The company also received a favorable judgement in district court, so the environmentalist groups opposing the plant, including Montana Environmental Information Center appealed to the Montana Supreme Court.

“The litigation ties up the move forward under the permit because the outcome of the appeals is uncertain,” Wade said.

“The process ended up taking a couple of years,” Wade said. “After that long of time the project was moot because the time the permit had given the company to commence the project had passed.”

The company had been given 18 months by the permit to commence the project.

“The time given on the permit is too short,” Wade says. “It does not give any time for litigation.”

A similar scenario is happening with the proposed Highwood Generating Station near Great Falls. The Highwood Generating Station would be a coal-fired power plant. In late April, the Montana Board of Environmental Review, a board set up by MEPA, was the first regulatory U.S. body to call for measurement and emissions controls for a tiny-particle pollution PM 2.5.

This decision came after the air quality permit was a result of an appeal made by MEIC, Citizens for Clean Energy and the Sierra Club. In the case of the Highwood Generating Plant, the appeal reached the U.S. Supreme Court. The environmentalist organization argued their case on a 2007 Supreme Court ruling that affirmed, “harms associated with climate change are serious and well recognized,” Massachusetts v. EPA. This ruling makes it possible for the threat of greenhouse gas emissions to be taken as a serious threat to health and the environment, and thus, proper grounds for opposition.

The Highwood Generating Plant has until Nov. 30 of this year to begin construction under the permits issued by Montana’s DEQ. It was announced Saturday that they will begin construction on all parts of the plant except the boiler.

“MEPA alone is not the problem,” Jeff Schaeff, an engineer with Bison Engineering, said. “It often becomes litigation in courts…The judge and court can turn back the EIS, the time and effort and difficulty getting through the litigation.”

Schaeff explained that the MEPA allows organizations who oppose the building of the facility more time and more opportunities to appeal and stall the process through litigation than in other state.

“They [the opposing organizations] know very well how to work with the laws and take advantage of them,” Schaeff said. “Conceptually it’s a good idea, but the process gets exploited by the opposition.”

Brian Schweitzer ran into a permit problem trying to help a CTL plant startup. A Montana Department of Environmental Quality (DEQ) hearings examiner ruled that the state had improperly extended the company’s air quality permit after the original permit had expired. Because of the permit slipup the investors backed out since it would of taken more than 18 months to start construction. The CTL plant planned to have all of it's CO2 emmissions sequestered into underground caverns and unused oil fields around Montana.

DOE Evalution on Water Quality Law

MONTANA, May 08 2008 (Neo Natura) - During 2005, the Montana Board of Environmental Review (BER) announced proposed changes to Montana water quality regulations. The proposal was directed to discharges of water from coal bed natural gas (CBNG) production, and if adopted, could substantially reduce the amount of CBNG production in Montana. Potential impacts could also extend to Wyoming CBNG production through much greater restrictions on water quality that must be met at the interstate border.

DOE’s interest in this proposal stems from the importance of CBNG to U.S. natural gas supply. CBNG currently accounts for 9 percent of U.S. natural gas production and the Powder River Basin, situated in Montana and Wyoming and having a recoverable resource potential in excess of 25 trillion cubic feet, is a prime future source for U.S. natural gas supply. This is especially important in these times of tight natural gas supply and high prices.

DOE conducts technical and regulatory analyses to assist federal and state agencies in developing regulatory requirements that provide environmental benefits commensurate with their economic and energy impacts. These analyses serve to provide a scientific basis for regulatory and land management decision making.

For the proposed Montana CBNG water management rule, DOE tasked Argonne National Laboratory and Sandia National Laboratory to evaluate various aspects of the proposal. Argonne focused on regulatory and policy issues and their interrelationships with technology, and Sandia focused on water treatment and engineering, hydrologic and geologic technical issues associated with the zero discharge requirements of the proposal. The findings of these efforts were submitted for the record to the Montana BER.

Big Sky Carbon Sequestration Partnership

MONTANA, May 06 2008 (Neo Natura) - Montana State University's Big Sky Carbon Sequestration Partnership has received a $157,000 grant from the Montana Board of Research and Commercialization to help fund a study of the potential for geologic carbon sequestration at Kevin Dome in northern Montana.

The study is a part of the partnership's Validation Phase research activities being funded by the U.S. Department of Energy's National Energy Technology Laboratory.

Carbon capture and sequestration (CCS) is a technique that removes CO2 in flue gas from power plant smokestacks and buries it in deep geologic formations. CCS is ready for use now, despite the protestations of grant-hungry researchers. The Shady Point power plant in eastern Oklahoma has been removing CO2 from flue gases and pumping it into depleting oil wells for years. CO2 emissions from a cement plant in Montana are pipelined to oilfields in Canada for sequestration. A busy market buying and selling CO2 operates today in the petroleum industry.

Kevin Dome is a subsurface dome-shaped rock structure. This study, led by MSU geologists David Bowen and David Lageson, will evaluate the potential of the dome as a storage site for man-made carbon dioxide emissions. The scientists will use existing well logs, core samples and a variety of subsurface data, including seismic surveys, to characterize the porosity, permeability, thickness, areal extent, and structural features of the dome.

Thirty years of experience in finding, transporting and injecting CO2 into geologic formations to move more oil out of a reservoir to the surface demonstrates that CCS is a viable, secure way to dispose of CO2.

Until recently, the only source of CO2 for oil recovery lay in naturally occurring geologic traps in New Mexico and Colorado, secure in rocks more than 60 million years old. That ancient leak-proof sequestration history should satisfy even the most skeptical critic.

Trapping mechanisms — porous rocks capped by sealing rocks like salt or shale — are common round the world. Norway says its saltwater aquifer used in sequestration in the North Sea can provide enough disposal space for all the CO2 Europe will produce in the next 100 years. Injection of CO2 works in west Texas; in Oklahoma; in Alberta, Canada; and off Norway in the North Sea. How can we doubt that CCS represents a solution for disposing of CO2 from coal-fired power plants today? Now comes the sticking point: cost. The equipment for removing CO2 from flue gases is specialized and therefore expensive. However, when a huge market develops at coal-fired plants, the price for mass-producing the equipment will come down. The result: a bonanza of new manufacturing jobs in the US.

Geologic studies near the plants will be required to locate one or more sealed saltwater aquifers in which to inject the CO2. In many states, enough wells drilled for oil and gas can provide reliable information about subsurface conditions.

Some concern has been raised about injecting CO2 near populated areas. In west Texas, the cities of Midland and Odessa, with some 250,000 residents, are surrounded by many CO2 injection wells with no escaping CO2 detected for 30 years. A new technology, coal conversion to synthetic gas, or syngas, which is composed of hydrogen, CO2 and carbon monoxide, provides a further boon. This almost inexhaustible supply of hydrogen can power fuel cells, while the carbon gases can be sequestered.

Synthetic Fuel Corporation

MONTANA, Apr 30 2008 (Neo Natura) - Back in 1980, Congress passed the Energy Security Act, which led to the creation of something called the Synthetic Fuels Corp. (SFC). Lawmakers provided SFC with up to $88 billion in loans and incentives to get started (the equivalent of about $230 billion in today's dollars) with the goal of creating two million barrels a day of synthetic oil within seven years.

So why aren't you putting SFC oil into your SUV right now? Well, it turns out that members of the Organization of Petroleum Exporting Countries didn't appreciate the competition so they started bringing down the price of oil. From 1980, when SFC launched, to 1986, when it was shut down, oil went from more than $39 a barrel to less than $8 a barrel. Suddenly, synthetic oil didn't seem so important anymore.

In announcing the SFC's closure, then-Energy Secretary John Herrington said that oil prices had simply dropped too low to make it a viable business.

But the good news is that those economics don't work anymore. The state of Montana, which is leading the synthetic fuel charge, says we can now make it for
somewhere around $55 a barrel. That's more than a 50 percent discount from what it costs to buy the real stuff.

Oil isn't the only resource going up in price, though. The highest price affecting CTL synthetic fuel creation is the price of coal.

There is an abundance of coal in the United States, but like many other commodities its price is increasingly dependent on events elsewhere in the world. Snowstorms this winter cut coal production in China and heavy rain flooded mines in Australia — the world's largest coal exporter. Meanwhile, demand for coal to generate electricity and make steel is rising almost everywhere, especially in fast-growing China and India.

Congress doesn't seem to keen about helping to boost synthetic fuel from coal. The new farm bill concentrates it's investment of renewable energy exclusively towards providing grants and loans to help advance the development of cellulosic biofuels.

Air Force's Domestic CTL Plans

MONTANA, Apr 25 2008 (Neo Natura) - On March 19th, 2008, the Air Force successfully completed another in a series of tests designed to switch their planes over to synthetic fuel blends made partly from a Fisher-Tropsch (F-T) coal-to-liquids (CTL) process. In 2006 the Air Force successfully flew a B-52 using the new fuel mix. The latest demonstration involved a B-1B Lancer, which flew at supersonic speeds over Texas and New Mexico using a blend of F-T and JP-8 jet fuel.

"The goal is to have every aircraft [certified for] synthetic fuel blends by 2011," said Maj. Don Rhymer, assigned to the Air Force Alternative Fuels Certification Office. "By 2016 we hope at least 50 percent of this fuel will be produced domestically."

Will the Air Force's scheme be implemented? Coal-to-liquids conversion emits lots of carbon dioxide but produces a viable substitute for diesel and jet fuel made by refining crude oil. An epic battle is shaping up between those concerned about climate change and those seeking to lower their transportation fuel costs and enhance their energy security. But is this the right battle for Americans to fight?

Although the Air Force program is currently purchasing gas-to-liquids synfuel purchased overseas, they are pushing for a CTL facility to be built in Montana. While coal is plentiful in the American West, natural gas is far too precious in the North American market to be used as the input for F-T conversion.

With every $10 rise in the price of a barrel of oil costing the Air Force $600 million, the service is converting its entire 6,000-plane fleet to run on a synthetic fuel mixture. Tentative plans call for construction of a coal-to-liquid fuel plant at a Montana air base.

Air Force officials have been testing synthetic fuels based on coal or natural gas. They plan to certify the fleet of nearly 6,000 aircraft to fly on a 50-50 blend of synthetic fuel and traditional petroleum-based jet fuel by 2011.

Assistant Air Force Secretary Bill Anderson said the search for affordable, cleaner-burning alternative fuels was driven by economic and national-security concerns. The United States would be all but powerless to protect the American economy in the face of a catastrophic disruption of oil markets, high-level participants in Oil Shockwave concluded yesterday.

Even without a large oil shock like those of the 1970s, relentless price increases and the possibility of declining global liquids output leading to supply shortfalls in the U.S within the next decade has led the Air Force to the coal-to-liquids solution. If the Air Force thought we were going to be swimming in oil by 2016, their target implementation date, they would not be proposing using F-T to meet their jet fuel needs.

Many obstacles stand in the way of the Air Force's plan. The climate change lobby is not going to roll over on the issue, which creates a bad precedent and provides momentum for carbon-intensive F-T operations in the United States.

"I think across the board there is going to be opposition from the environmental movement," said John Topping, the president of the Climate Institute in Washington. "I'd say it's going to be almost universal because of the climate concerns."

As awareness of the climate problem grows in the United States, the economic squeeze brought on by higher oil prices creates pressure to implement supply-side solutions to alleviate soaring diesel fuel costs.

On April 1st, truckers staged a slowdown to protest high diesel prices. Tons of freight idled across the country Tuesday as independent truckers pulled their rigs off the road while others slowed to a crawl on major highways in a loosely organized protest of high fuel prices.

Using CB radios and trucking Web sites, some truckers called for a strike Tuesday to protest the high cost of diesel fuel, hoping the action might pressure President Bush to stabilize prices by using the nation's oil reserves.

"The gas prices are too high," said Lamont Newberne, a trucker from Wilmington, N.C., who along with 200 drivers protested at a New Jersey Turnpike service area. "We don't make enough money to pay our bills and take care of our family."

Last week's A Recipe For Disaster touched on the record-high average price for diesel fuel in the United States, which now stands at $4.025/gallon according to AAA's Daily Fuel Gage Report. The big rigs get only 5 or 6 miles to the gallon, so long-haul truckers' profit margins are now disappearing. Trucker Lamont Newberne told the AP that "a typical run carrying produce from Lakeland, Fla., to the Hunt's Point Market in The Bronx, N.Y., had cost $600 to $700 a year ago. It now runs $1,000".

According to data compiled by the ATA and the Air Transport Association, the 2007 fuel bill for all U.S. passenger and cargo airlines was $41.2 billion, but the diesel tab for moving goods by truck was $112.6 billion. Trucking fuel consumption far surpasses use for air travel.

Clayton Boyce, a spokesman for the American Trucking Association (ATA), says his group "is pushing for a number of measures to keep the prices down or to otherwise help truckers, including allowing exploration of oil-rich areas of the U.S. that are now off limits...."

It would take years and years to get any diesel fuel from the outer continental shelves, presuming there are commercial oil reserves out there. Where is the diesel supply going to come from? With the Air Force paving the way, Anderson said the private sector, from commercial air fleets to long-haul trucking companies, would follow.

"Because of our size, we can move the market along," he said. "Whether it's (coal-based) diesel that goes into Wal-Mart trucks or jet fuel that goes into our fighters, all that will reduce our dependence on foreign oil, which is the endgame."

A beleaguered trucking industry will seize the opportunity initiated by the Air Force to push for coal-to-liquids. It won't matter politically that such production, like drilling on the outer continental shelves, is many years away, thus providing little tangible relief for truckers. It won't matter that the quantities of diesel fuel produced will be relatively small, or that coal-to-liquids conversion using an F-T process is exorbitantly expensive, or that building an F-T plant presents difficult engineering hurdles that must be overcome, despite the success of South Africa's SASOL, which operates the only CTL plant running anywhere in the world today.

A heavyweight bout is coming soon between the climate lobby, who are trying to reduce carbon dioxide emissions, and the transport industry, which wants cheaper liquid fuels. The latest issue of the Oil & Gas Journal contains a comprehensive special report GTL, CTL finding roles in global energy supply that sheds light on the conflict. The coal-to-liquids data buttresses the positions of both the climate and transportation antagonists. The data comes from a National Energy Technology Laboratory (NETL) study for the Air Force.

A 50,000 barrel-per-day CTL plant configured as NETL specified will produce 27,819 barrels of diesel and 22,173 barrels of naphtha, which is a principle component of jet fuels like the Jet-B used in the Air Force's certification tests. The F-T process also produces small amounts of lubes and waxes, which can be hyrdrocracked to make more diesel or naphtha. The naphtha itself "[can] be steam-cracked to syngas and recycled back to the F-T reactor to increase production of high quality diesel" according the Oil & Gas Journal report. These numbers will appeal to the transportation industry.

The NETL data also shows that the envisioned F-T plant will produce 32,481 tons of carbon dioxide every day running at full capacity, a ratio of 1.32 tons of CO2 to every ton of coal burned. Without carbon capture, compression and sequestration (CCS) technology, CTL is viewed as a disaster from the climate perspective. This CTL plant would emit 11.8 million tons of carbon dioxide operating at full capacity over a year's time.

Carbon dioxide emissions in the U.S. declined by 1.3 percent in 2006 to 5,877 million metric tons according to the EIA. The 50,000 barrel-per-day CTL plant would add 0.2% to the U.S. 2006 emissions. On the other hand, the U.S. consumed an average of 5.818 million barrels of jet fuel and diesel in the 4 weeks ending March 28th, 2008 according to the EIA's latest Weekly Petroleum Status Report. The CTL plant's output would be 0.8% of this total.

A number of CTL projects are on the drawing board in the United States. Rentech and Peabody have formed a partnership to look into the feasibility of two 10-30 thousand barrel-per day projects, one in Montana and another somewhere in the Midwest. Only one of the projects listed is larger than the CTL specification used in the NETL study.

None of the projects are anywhere close to implementation because of two main factors: 1) uncertainty about future carbon policy and the CCS option and 2) CTL unit CAPEX costs running between $70,000 and $100,000 per barrel of capacity.

The coming battle between climate activists and those in the transportation industry is oddly disconnected from peak oil concerns. We want to reduce carbon dioxide emissions, right? We want the transportation segment of the economy to function, right? This debate misses some salient points. First, global middle diesel production has been flat for some time now and won't increase much, if at all, in the near future. The further out in time one goes, the more likely declines in global diesel production become. Second, substitutes such as diesel from coal-to-liquids will not become available in a timely fashion to produce significant enough quantities to relieve supply-side shortfalls in the next decade. And there are insufficient railroads to replace long-haul trucking or air freight in the United States.

Looking out a decade from now, carbon emissions from diesel in the U.S. are likely to decrease because overall middle distillate consumption is likely to decrease due to price escalation and constrained world supply. Any carbon emissions coming from CTL are not likely to replace what will be lost from decreased consumption, which is a good thing from the climate perspective. It is a disaster if you want a functioning economy. In the meantime, higher fuel costs will eventually be passed through to consumers, spurring destructive inflation. We will require a functioning economy to fix all of our other problems, including anthropogenic climate change.

Air Force Considers Montana CTL Plant

MONTANA, Apr 07 (Neo Natura) - Although the Air Force program is currently purchasing gas-to-liquids synfuel purchased overseas, they are pushing for a CTL facility to be built in Montana. While coal is plentiful in the American West, natural gas is far too precious in the North American market to be used as the input for F-T conversion. McClatchy's Air Force leads push to liquefied coal fuel (March 30, 2008) tells the story—

With every $10 rise in the price of a barrel of oil costing the Air Force $600 million, the service is converting its entire 6,000-plane fleet to run on a synthetic fuel mixture. Tentative plans call for construction of a coal-to-liquid fuel plant at a Montana air base.

Air Force officials have been testing synthetic fuels based on coal or natural gas. They plan to certify the fleet of nearly 6,000 aircraft to fly on a 50-50 blend of synthetic fuel and traditional petroleum-based jet fuel by 2011.

Assistant Air Force Secretary Bill Anderson said the search for affordable, cleaner-burning alternative fuels was driven by economic and national-security concerns.

Let's state the obvious up front—the Air Force is surely "peak oil aware." Branches of the military and the intelligence services do scenarios planning. "The United States would be all but powerless to protect the American economy in the face of a catastrophic disruption of oil markets, high-level participants in [Oil Shockwave] concluded yesterday."

Even without a large oil shock like those of the 1970s, relentless price increases and the possibility of declining global liquids output leading to supply shortfalls in the U.S within the next decade has led the Air Force to the coal-to-liquids solution. If the Air Force thought we were going to be swimming in oil by 2016, their target implementation date, they would not be proposing using F-T to meet their jet fuel needs.

Many obstacles stand in the way of the Air Force's plan. The climate change lobby is not going to roll over on the issue, which creates a bad precedent and provides momentum for carbon-intensive F-T operations in the United States. "I think across the board there is going to be opposition from the environmental movement," said John Topping, the president of the Climate Institute in Washington. "I'd say it's going to be almost universal because of the climate concerns" (McClatchy). The Congress will probably have a Democrat majority after the fall elections. This likely means tough sledding for the Air Force.

As awareness of the climate problem grows in the United States, the economic squeeze brought on by higher oil prices creates pressure to implement supply-side solutions to alleviate soaring diesel fuel costs.

Zero Emission Coal Plant Nixed

MONTANA, Mar 13 (Neo Natura) - When the Department of Energy announced in January that it would cancel funding for the vaunted FutureGen project (to build the world’s first coal-fired power plant with zero carbon dioxide emissions), the decision was widely viewed as the biggest setback to date for carbon capture and storage (C.C.S.) technologies.

First announced by the D.O.E. in 2003, FutureGen was seen as a prototype for a new fleet of coal plants that would strip the carbon from coal and coal plant smokestacks, and bury it deep underground where it would remain for thousands of years. Working with a coalition of domestic and foreign energy companies, the federal government was to pay 74 percent of the cost – which by the time the concept was scrapped had soared to a projected $1.8 billion, up from $1 billion.

FutureGen also bore the hope of industry and government officials that “clean coal” – long an oxymoron to those who actually mine and burn the stuff – could become a reality. In February 2007, Energy Secretary Samuel Bodman called FutureGen “one of our most exciting projects,” noting that it would build “the world’s first commercial scale, coal-fired power plant that produces no significant emissions of carbon or pollutants into the atmosphere.” In December, less than two months before the D.O.E. backed away, the new FutureGen plant site at Mattoon, Illinois was announced with great fanfare.

Now those plans are in ruins – along with the projections of the most optimistic proponents, who had hoped to build on a grand scale, so that we could significantly reduce carbon dioxide emissions in this country while continuing to rely on coal for most of our electricity.

FutureGen CEO Michael Mudd, for one, hasn’t given up, saying he hopes “to continue to work with the D.O.E.” to salvage the ambitious project, or else to seek new funding from Congress, where members from coal-producing states have been big FutureGen supporters. “FutureGen is too important for the future of coal, and for the advancement of [carbon capture and storage] technology, not only for Illinois and the U.S. but actually for the world, to just to walk away from,” Mudd said two weeks after the D.O.E. decision was made public.

But while it has all the characteristics of a massive government boondoggle – a bloated original concept, ballooning budgets, competing interests focused as much on their own piece of the pie as on the overall goal, and an abrupt and embarrassing pulling of the plug – the FutureGen debacle did not occur within a vacuum. Nor is it the only setback for a viable nationwide C.C.S. system.

Problems with FutureGen had been noted for months, most prominently in a March 2007 report by a research group from Massachusetts Institute of Technology headed by Ernest Moniz, a physics and engineering systems professor. That report characterized the project as overregulated, underfunded, and poorly managed. “The Future of Coal: Options for a Carbon Constrained World” was characterized by the mainstream press as casting a cold eye on the concept of clean coal, particularly on the gasification technology known as integrated gasification combined cycle (I.G.C.C., which involves converting coal into a gaseous state rather than pulverizing it, before it is burned in boilers). That’s not the case: Moniz has stated that I.G.C.C. “looks like the most economic option for using coal and capturing the carbon dioxide for sequestration,” and the report makes it clear that the government should put more, not less, money and muscle into C.C.S. projects.

But the report also states that a single, federally funded “super-project” will be insufficient to prove the technology and attract the investment necessary to make C.C.S. into a reality.

Meanwhile a number of other proposed designs for C.C.S. projects have suffered FutureGen’s fate.

- Minneapolis-based Xcel Energy, an electric utility that serves eight states across the Midwest and the Rockies, said in November it will postpone for at least two years its plans to build an I.G.C.C. plant with carbon capture capability in Colorado.
- Rebuffing a coalition of mayors headed by Laura Miller of Dallas, Mike Green, CEO of Texas energy giant TXU Power, said that I.G.C.C. will not work with Texas lignite or Western coal. Green told The Dallas Morning News that I.G.C.C. and C.C.S. are “not ready for prime time.”
- In 2006, Governor Brian Schweitzer of Montana announced a grandiose scheme for coal plants featuring C.C.S. technology, saying that Montana and three other Rocky Mountain neighbors could produce enough liquid fuel from coal and oil shale to supply America’s oil and gas needs for the next 800 years. But he has been forced to concede that his original vision was overblown, and that none of his envisioned projects have gotten past the press-release stage.

Despite years of glowing pronouncements from politicians and D.O.E. officials, and hundreds of millions in research and development funds from the states and the federal government, not a spade has been turned to build clean coal plants in Montana – or anywhere else in America, for that matter. Does that mean that carbon capture and storage, and its associated technologies like I.G.C.C., are beyond repair? Hardly. But it does mean that we are moving beyond the period of artists’ renderings and enthusiastic press conferences to a phase of hard realities, as the promise and the challenge of capturing and storing large amounts of carbon dioxide are examined in a harsher light. A look at a pair existing C.C.S. projects – one on the Northern Plains and one on the Gulf Coast of Texas and Mississippi – demonstrates that capturing carbon from coal-based power generation is difficult, storing it for hundreds of years is quite feasible, and building the infrastructure to do so on a national scale is going to be very, very expensive.

It is not entirely accurate to say that FutureGen would have been the world’s first coal-based plant with a carbon-capture system attached. That distinction belongs to the Dakota Gasification Plant about 50 miles northwest of Bismarck, North Dakota. However, Dakota Gas doesn’t produce electricity; it just converts coal into natural gas, in the process capturing carbon dioxide from the coal and sending it via a 325-kilometer pipeline to EnCana’s Weyburn oilfield in Canada. There the carbon dioxide is pumped deep underground to aid with enhanced oil recovery (E.O.R.), prolonging the life of the Weyburn wells.

Dakota Gas is actually a remnant of America’s first energy crisis, the 1970s oil shock that lead to a brief flowering of alternative-energy research, and its tangled history gives an idea of how difficult it might be to finance and build a full-fledged coal-fired electricity industry using carbon capture. Planned and funded under President Jimmy Carter, the gasification plant was completed at a cost of $2.1 billion in 1984 and filed for bankruptcy on the first day natural gas from coal began flowing from the plant. Operated by the government for four years, it was sold in 1988 to the Great Basin Electrical Co-op, which also owns two 450-megawatt coal stations adjacent to the gasification plant.

Now run under a revenue-sharing agreement with the D.O.E., the plant sends an annual 3 million tons of carbon dioxide north to the Weyburn field, which has produced nearly 400 million barrels since its 1954 discovery. There, at a rate of around 125 million cubic feet per day, the carbon dioxide is pumped down into the reservoir, where it mixes with the oil and makes it easier to pump to the surface. Carbon dioxide that is removed with the oil is extracted and recycled back into the wells.

By almost any measure, the Dakota Gas/Weyburn project has been a success. It has proven the technological and geological feasibility of stripping carbon dioxide from coal prior to burning and using it for E.O.R. – an increasingly important technique as domestic oilfields face depletion. The economics, though, are a different matter.

“If this thing cost $2 billion in the 1970s, what do you think it would cost today?” asks Gary Loop, the C.O.O. of Dakota Gas. He questions whether such greenfield plants can be built and run to make them commercially profitable. In fact, a Phase 2 plan to build a generating station at the Beulah facility using gas from the Dakota Gas plant has been on the books for years, but Loop says, “We don’t believe Phase 2 is economical.”

“Of course, we’ve got 1970s technology,” he adds. The company is currently looking for a partner – and federal funding, naturally – to build such a generating station nearby, plus an expanded pipeline system that would collect carbon dioxide from other plants in the region and ship it north to Weyburn. “If you took all the carbon being produced in electrical plants in this area – most of which have carbon dioxide that would be more difficult to capture than ours – there’s enough known E.O.R. sites within 300 miles, which is the economic distance, to handle all the output for the next 50 years.”

There are several “ifs” embedded in that statement: if you could find a way to economically retrofit the existing plants; if the utilities could find financing to build the new capture systems; if consumers could be convinced to absorb the added price per kilowatt-hour of their electricity; and if you could successfully store the CO2 underground once you ran out of oil wells needing E.O.R.

That last question is the piece of the puzzle being examined by a team of geologists and oilfield engineers, at the Bureau of Economic Geology at the University of Texas. With funding from the D.O.E.’s Regional Carbon Sequestration Program, which is backing seven such partnerships around the country, the researchers have spent the last 4 years injecting 1,850 tons of carbon dioxide into the Frio formation, about 30 miles east of Houston. Soon they’ll begin scaling up the system for a much more ambitious project near Natchez, Mississippi.

Scheduled for 10 years, with $38 million in D.O.E. funding, this second phase will be the first long-term project in the U.S. to study the feasibility of injecting large volumes of CO2 into underground storage locations. Unlike the Frio project, which stored relatively small amounts, the Mississippi experiment will handle commercial volumes, from a plant owned by Denbury Resources, Inc. of Plano, Texas. According to lead scientist Susan Hovorka, that will come to around 1 million tons of carbon dioxide a year. “We need to go to the next level,” says Hovorka. “We’ll be injecting at a rate of 1 million tons a year in four wells.”

Noting that a typical 450 MW power plant produces 5 million to 8 million tons of CO2 annually, Hovorka says, “The math is easy – you’ll need a well field. If we can get 1 million tons [a year] easily in four wells, and you want to do five times that, that gives you 20 wells.”

So far the data from the Frio tests has been encouraging. The carbon dioxide injections have been stable, and no leaks have been detected – to the extent that even drilling a well and trying to “produce” carbon dioxide (i.e., pump it to the surface) proved difficult. The storage part of capture-and-storage is “in the bag,” says Hovorka. “If you want it, it’s there,” she adds. “The question of whether you want to pay for capturing it also remains open.”

Environmentalists vs. Coal

MONTANA, Feb 04 (Neo Natura) - In federal and state courtrooms across the country, environmental groups are putting coal-fueled power plants on trial in a bid to slow the industry's biggest construction boom in decades. Environmental opposition has sped up since the U.S. Supreme Court decision in April that said carbon dioxide is a pollutant open to regulation.

The case, Massachusetts vs. U.S. Environmental Protection Agency, involved vehicle emissions. Some believe environmentalists aim to use the decision as a fulcrum to leverage regulators to take a harder line on greenhouse gases in several emerging power-plant disputes.

At least four dozen coal plants are being contested in 29 states, according to a recent Associated Press tally. The targeted utilities include giants like Peabody Energy down to small rural cooperatives.

From lawsuits and administrative appeals against the companies, to lobbying pressure on federal and state regulators, the coordinated offensive against coal is emerging as a pivotal front in the debate over global warming.

"Our goal is to oppose these projects at each and every stage, from zoning and air and water permits, to their mining permits and new coal railroads," said Bruce Nilles, a Sierra Club attorney who directs the group's national coal campaign. "They know they don't have an answer to global warming, so they're fighting for their life."

Among the projects being challenged is a 680-megawatt coal-gasification plant proposed by Energy Northwest, a public-power consortium based in Richland.

Industry representatives say the environmentalists' actions threaten to undermine the country's fragile power grid, setting the stage for a future of high-priced electricity and uncontrollable blackouts.

"These projects won't be denied, but they can be delayed by those who oppose any new energy projects," said Vic Svec, vice president of the mining and power company Peabody Energy.

While observers say forecasts of power-grid doom are exaggerated, the importance of coal -- one of the country's cheapest and most abundant fuels -- is undeniable.

Coal plants provide just over half of the nation's electricity. They also are the largest domestic source of the greenhouse-gas carbon dioxide, emitting 2 billion tons annually, about a third of the country's total.

Environmental groups cite 59 canceled, delayed or blocked plants as evidence they are turning back the "coal rush." That stacks up against 22 new plants now under construction in 14 states -- the most in more than two decades.

Mining companies, utilities and coal-state politicians promote coal in the name of national security, as an alternative to foreign fuels. With hundreds of years of reserves still in the ground, they're also pushing coal-to-diesel plants as a way to sharply increase domestic production.

The outcome of the fight over coal could determine the nation's greenhouse-gas emissions for years to come, said Gregory Nemet, assistant professor of public affairs at the University of Wisconsin.

"It's pretty much irreversible," Nemet said. "Once a coal plant is built, it will last 50 years or so. There's too much pressure -- in terms of energy independence and the inexpensiveness of that resource -- to not use that coal," Nemet said.

One of the latest challenges to a utility came in the heart of coal country -- Montana, which boasts the largest coal reserves in the nation.

On Friday, a state panel refused to rescind an air-quality permit it had granted for a plant proposed for the Great Falls area by Southern Montana Electric, despite concerns about the plant's carbon-dioxide emissions. The 250-megawatt plant is projected to emit the equivalent of 2.8 million tons of carbon dioxide annually, as much as 500,000 vehicles.

The Montana Environmental Information Center, which had asked the panel to review the permit, vowed to appeal the ruling.

Nilles said the Sierra Club spent about $1 million on such efforts in 2007 and hopes to ratchet that figure up to $10 million this year.

Meanwhile, coal interests are pouring even more into a promotional campaign launched by the industry group Americans for Balanced Energy Choices. It spent $15 million last year and expects to more than double that to $35 million in 2008, said the group's director, Joe Lucas.

Funding for the group comes from coal-mining and utility companies such as Peabody and railroads that depend on coal shipments for a large share of their revenues.

Peabody's Svec acknowledged a rush to build new plants but denied the goal was to beat any of at least seven bills pending before Congress to restrict carbon-dioxide emissions -- a charge leveled by some environmentalists.

Rather, he said, the construction boom is driven by projections that the country will fall into a power deficit within the next decade if new plants are not built.

Industry attorney Jeffrey Holmstead said that could lead to rolling blackouts as the economy expands and electricity consumption increases. Holmstead was in charge of the U.S. Environmental Protection Agency's air program during the first five years of the current Bush administration.

The power deficit cited by industry officials is based on projections from the North American Electric Reliability Corporation. NERC Vice President David Nevius said his group is "neutral" on what kind of plants should be built to meet rising demand.

"We're not saying the lights will go out. We're just saying additional resources are needed," Nevius said. "We don't say coal over gas over wind over solar."

Utilities now burn more than 1 billion tons of coal annually in more than 600 plants. Over the next two decades, the Bush administration projects coal's share of electricity generation will increase to almost 60 percent.

That projection held steady in recent months even as courts and regulators turned back, delayed or asked for changes to plants in at least nine states.

Some were canceled over global-warming concerns. Utilities backed off others after their price tags climbed over $1 billion because of rising costs for materials and skilled labor.

Is Coal To Gas Viable?

MONTANA, Jan 02 (Neo Natura) - According to the DOE's website on Montana we are actively pursuing alternative methods of energy production. This includes building new hydro-electric sources of power and Bozeman's regional coal sequestration research project. Apparently no one has told them that the last hydro-electric dam built in Montana, completed in 1975, was Libby Dam.

While commercial research into Coal-To-Gas technology continues in surrounding states there are some real environmental and economic questions surrounding the technology.

An essay written in 2006 by Joseph Romm and Ron Erickson address some of the underlying issues related to this not-so-new technology.

First, the process is incredibly expensive. You need to spend over $6 billion just to build one plant, which would produce 80,000 barrels a day - hardly a cost-effective solution when the U.S. consumes more than 21 million barrels a day.

Second, coal-to-diesel requires lots of water, about five gallons of water for every gallon of diesel fuel - not a particularly good long-term strategy in an area that is dealing with drought and water shortages, which will only increase with global warming.

Third, the total carbon dioxide emissions from coal-to-diesel are about double that of conventional diesel. Half the emissions are from the plant, and while you can in theory capture and store that carbon underground, it is expensive. Also, permanent leak-free solutions are not yet proven. And even if the carbon is captured at the plant, you are still left with diesel fuel that is burned in a vehicle and emitted out the tailpipe. We need to reduce our carbon emissions, and coal-to-diesel will increase them. It is not a good use for billions and billions of dollars.

Another argument is that Montana is spending ample time on research, but lacks any new useful legislation to expand energy development.

The sad part is that their tactics are working. None of the bills that would truly improve Montana’s ability to develop energy resources have passed the Legislature. A handful of environmental groups have prevailed over the well-being and livelihood of tens of thousands. I watched our governor’s “energy man” walk in and oppose the first major pro-energy bill of the session, and all it was supposed to do was speed up the permitting process.

NorthWestern Gains Stake In Coal Plant

MONTANA, Jan 02 (Neo Natura) - US-based NorthWestern Energy has paid approximately $133 million to acquire a larger share of the Unit 4 coal-fired generation plant in Colstrip from SGE, a subsidiary of GE Capital.

NorthWestern will gain a further 143MW in the Montana plant having acquired a smaller stake in the coal plant earlier this year.

NorthWestern funded the transaction with available liquidity and a newly formed subsidiary, Colstrip Lease Holdings, which is to finalize a $100 million non-recourse loan to support the purchase.

Accretion to earnings is expected to be approximately $0.6 million in 2007, $1.8 million in 2009, $3.6 million in 2010 and $4.8 million thereafter.