During eight years of U.S. energy policy under the Obama Administration, the media spotlight mainly focused on renewables. In actuality, President Obama’s all-of-the-above energy strategy also involved funding millions in development of so-called “clean coal” electricity generation, considered to be an oxymoron by many. With coal-friendly President Donald J. Trump in office, millions more in funding should be on the way.
There’s just one catch: few, if any, stakeholders in the power generation industry are still interested in taking on the clean coal challenge.
Bad news for clean coal
Coal fired power plants are less polluting now than in the past, but their greenhouse gas contribution is still significant. Capturing carbon from power plant emissions has emerged as the strategy of choice for achieving additional cuts, and significant progress has been made on developing carbon capture technology.
However, scaling up the technology and reducing costs remain significant challenges, as demonstrated by recent history.
One major carbon capture project, FutureGen, shut down in 2015 after five years of development with the help of $1 billion in federal Recovery Act funding. The project was designed to showcase an integrated system of power generation, carbon capture and carbon sequestration.
Another significant project was developed by the Southern Company for its Kemper County, Mississippi facility. This coal gassification project, initially funded under the Bush Administration in 2006, was designed to demonstrated a coal power generation system with carbon emissions comparable to a natural gas power plant.
Ten years and millions in taxpayer funding later, last week Southern announced that it was shutting down the project. Cost overruns were spiraling out of control. With rising rates threatening to become a political wedge, last month the Mississippi Public Service Commission refused to allow the company to pass the problems along to its rate payers.
The facility itself may still continue operating, but only using natural gas.
Mississippi PSC chairman Brandon Presley explained (as cited by DeSmogBlog.com):
“I think it’s high time we finally turn the corner on this project and also strongly protect our ratepayers, who should only have to pay for what actually delivers electricity,” said PSC chairman Brandon Presley in an interview. Presley was, until recently, the lone opponent of a bloated, runaway project that saw costs jump from $2.3 billion in 2010 when work began to $7.5 billion now.
As bad as the news was for coal industry stakeholders, the timing made it worse. Last week’s announcement occurred on Wednesday, June 28. That was right in the middle of the Trump Administration’s “Energy Week,” during which both President Trump and Energy Secretary Rick Perry were trying to make a case for clean coal.
Petra Nova does not help make the case for clean coal
During Energy Week, Secretary Perry made no mention of the Kemper debacle, choosing instead to focus on the Petra Nova clean coal plant in Texas.
On closer examination, that does not appear to be a wise choice.
The Petra Nova facility is another Obama Administration project funded partially with Recovery Act dollars.
At its launch in 2010, the project was positioned as an effort to “use or sequester” carbon dioxide from flue gas from one unit at an existing coal power plant.
From one perspective, the project has a happy ending. Petra Nova went into operation this spring. The launch was deemed a success and the captured CO2 is being put to good use, though that depends on what your definition of “good” is.
Monica Simmons of the San Antonio Current reports:
…What Perry didn’t mention is what happens after that 1.6 million tons of carbon is “corralled” underground. Once CO2 is separated from other byproducts, it will be transported via an 81-mile pipeline to the West Ranch oil field in Jackson County. There, the pure CO2 is used to produce more oil, by a process called enhanced oil recovery.
As with other aging oil fields, capacity at West Ranch has been diminishing. According to Simmons, the injection of CO2 should triple its capacity.
In other words, the Petra Nova project could just be a giant exercise in carbon whack-a-mole. Though some analysts have calculated that recycling coal-sourced carbon through oil fields will cut carbon emissions overall, Simmons cites Environment Texas Director Luke Metzger:
“The fact that they are using carbon to dig up more oil means there’s a net carbon increase, not decrease,” he told the Current. “As a pollution reduction measure it doesn’t help us at all.”
So, who will pick up the clean coal ball?
Environmental advocates are not the only ones questioning the whole concept of clean coal.
NRG is the U.S. developer behind Petra Nova (the project is a joint venture with JX Nippon Oil & Gas Exploration, leveraging technology from Mitsubishi Heavy Industries). In an interview with Forbes reporter Christopher Helman, NRG CEO Maricio Gutierrez put a damper on expectations for the company to build additional plants along the Petra Nova model.
The financials made sense back in 2014, when analysts presumed oil prices would hit a minimum of $75 per barrel. Three years later, the situation is quite different:
“At 50-dollar oil it’s very challenging,” says Gutierrez…He thinks they could build a second one for 15% less. But they have no intention of doing so.
…He’s careful to downplay expectations of new capture technologies, which he suspects will continue to require higher oil prices (or a hefty carbon tax) before the economics work out. If someone does discover the Holy Grail of 100% carbon capture at no additional cost of electricity, he wants NRG to know about it. “I’d be a customer.”
Other factors working against clean coal are low natural gas costs and, more recently, rapidly falling costs for wind and solar energy.
The American Petroleum Institute has also emerged as a force against clean coal. With the interests of its drilling membership at stake, the lobbying organization recently released a report promoting gas fired power plants as the best fit for a more flexible and reliable electricity grid.
Another sign of impending doom for coal emerged last year, when Exxon announced that it would chip in some dollars for a federally funded, cutting edge carbon capture system at a Southern Company coal power plant in Alabama.
The project deploys technology developed by the company FuelCell Energy. It is designed to significantly cut the cost of carbon capture by using some of the captured flue gas to generate electricity in a fuel cell.
No, Exxon is not particularly interested in helping the coal industry survive. Quite the opposite — the company entered into an agreement with FuelCell Energy that expands the clean coal project to include natural gas.
If all goes well, the project will put natural gas in an even more competitive position against coal. Exxon will have all the more reason to support a carbon tax, too.
Adding insult to injury, during Energy Week the Trump Administration went out of its way to promote the nation’s nuclear energy programs. Washington Post reporter Dino Grandoni also noted that Perry has defended proposed Trump Administration budget cuts that would slash the Office of Fossil Energy from $631 million to $280 million.
With all this in mind, Perry’s shoutout to Petra Nova leaves the coal industry with little more than crumbs to pick up from the Energy Week feast.
Photo: Petra Nova carbon capture plant via U.S. Department of Energy.