Forget power lines, trains
jacksonholestartrib.com
By DUSTIN BLEIZEFFER
Star-Tribune energy reporter Wednesday, December 17, 2008
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There are enough hurdles for clean-coal technology today. So a few bright people have decided they don't need to add another one: how to finance and build a power line -- or wait on someone who can.
This year Massachusetts-based GreatPoint Energy found an investor and development partner in Peabody Energy, an international coal giant with three surface mines in the Powder River Basin. Peabody has a long-term hold on coal production in the richest coal region in North America. Together, their plan is to use GreatPoint's patented catalyst coal-gasification process that doesn't rely on a mine-mouth electrical generation business model.
Instead, the one-step gasification process refines coal into a commercial quality natural gas which is simply shipped to market in the existing national pipeline network.
On-site electrical generation simply remains an option.
"A lot of advance technologies rely on upgrading infrastructure. And for us it was important to have a model that is commercially viable, environmentally friendly and relies on existing infrastructure," said Sarah Webster, vice president of public affairs for GreatPoint Energy.
The technology
For decades, oil refineries used brute force heat, or thermal cracking, to break down crude into petroleum products. But years of research using various catalysts allowed the industry to refine crude at lower temperatures, gaining efficiency.
GreatPoint's gasification process can be used with low-rank coal, petroleum coke, biomass -- any carbon-based feedstock. In this case, Powder River Basin coal goes into the company's proprietary reactor where it is impregnated with a catalyst under steam pressure. The molecular bonds break down into primarily CO2 and CH4. CH4, or methane, is then piped into the existing natural gas network for commercial sale, and the CO2 is marketed locally for enhanced oil recovery and, eventually, deep underground sequestration.
"It's a significant advantage over typical gasification because our reactor operates at a much lower temperature. Then you have a pure methane stream and a pure CO2 stream," Webster said. "Our process is very good for using the low-end coals. All we need from a feedstock is carbon."
Converting coal to natural gas at mine mouth facility has a huge CO2 advantage compared to shipping coal by diesel-powered trains for hundreds of miles to be burned in power plants -- not to mention a significant advantage in the cost of transportation. Webster said the ultimate goal is to better utilize a resource that is abundant in the United States and all over the world, and do it in a way that doesn't harm other resources.
"There's an inherent recycling nature to our process. We strip out (coal's pollutants) and sell them to the chemical industries for products such as sulfur for sulfuric acid, ammonia and carbonaceous char that can be used in road-building. We're getting more value out of the whole piece of coal," Webster said.
Picking a location
The joint development agreement struck early this year between GreatPoint and Peabody launched a site selection process that's already screened more than 50 locations across the country, according to GreatPoint. Many of the locations quickly dropped off the list due to lack of natural gas transportation and lack of water. But the most common reason a location dropped off the list was not meeting criteria for carbon sequestration.
"Our first best-case is to sell the CO2 for enhanced oil recovery, or we will be committed to geologic sequestration," Webster said.
Both options are available in the Powder River Basin and in southwest Wyoming, according to the Wyoming State Geological Survey, which is currently researching deep saline aquifer formations for commercial-scale carbon sequestration.
GreatPoint said it needs access to about 3,000 acre feet of water per year. Its preference would be to utilize effluent from a municipal wastewater treatment plant, but most towns are too small to provide that volume. So the focus in Wyoming is to find a non-potable water resource.
Site selection has been narrowed down to two locations, but GreatPoint won't say where.
Going forward
In September, GreatPoint signed an agreement with Datang Huayin Electric Power Co. to develop a coal-gasification plant in China's Guangdong Province. Datang is the exclusive financier for the "several-hundred-million-dollar" plant, according to GreatPoint. Datang also plans to use GreatPoint's technology for a facility planned in Inner Mongolia.
GreatPoint said its plan for a U.S. plant will be developed in tandem, and is of the same "several-hundred-million-dollar" scale.
"This is not a test plant," Webster said. "Our intention is to scale up the technology as we go."
The initial phase would include a single reactor processing 1,500 tons of coal per day into about 35 million cubic feet of natural gas.
So far, GreatPoint has raised $140 million. Its investors include Suncor Energy Inc., Dow Chemical Co., AES Corp. and Peabody Energy.
Webster said the next phase -- securing venture capital -- is known in the clean technologies investment world as "the valley of death."
"Many good technologies and ideas have not made it through," Webster said. "We have an idea, and we have a technology that has been borne out. Our very savvy shareholders, like Dow, raked our technology over the coals to get validation. We feel our technology risk is relatively low. The only major obstacle to commercialization is the sheer scale of an energy project."
In that regard, the first phase of development is to build the smallest possible commercially viable operation -- the 1,500 tons of coal per day design.
Nearly every advanced coal technology idea out there faces an uphill battle in regard to the current credit crisis. However, there are still many fundamental forces moving in their direction.
"As a young company, we have the luxury of planning for a carbon-constrained future," Webster said. "Not only can we produce natural gas cheaper than you can with drill bits; we have a smaller carbon footprint, and we capture 90 percent of CO2 emissions from the facility."
Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com. |
