Carbon Capture Hopes Dim as AEP Says It Got Burned at Coal Plant
On a brittle, blustery afternoon on the outskirts of New Haven, West Virginia, the faint odor of ammonia isn’t the only sour note in the air. New Haven, an Ohio River coal mining town of 1,550, is home to American Electric Power Co. Inc.’s 1,300-megawatt Mountaineer Plant. The plant has a 1,103-foot-tall chimney and burns 12,000 tons of coal a day to generate electricity for AEP’s 11-state grid, which supplies power to 5.3 million customers.
In the process, it annually belches out 8.5 million metric tons of greenhouse gas carbon dioxide. Abutting the plant is an ambitious $100 million experiment: a seven-story, steel-and- fiberglass rectangle, corralled by dull metal catwalks and rattled by motors and pumps. The apparatus traps a portion of the plant’s carbon-dioxide-rich exhaust using an ammonia-based catalyst. (Hence the acrid smell.) The reclaimed CO2 is pumped 8,000 feet underground, where, in theory, it will remain harmlessly out of the atmosphere. The goal of the experiment is to prove that carbon capture and storage technology, or CCS, works, and in so doing, provide one possible solution to global warming, Bloomberg Businessweek reports in its July 25 issue.
This year catastrophic storms, drought, and relentless heat have underscored how welcome such a solution would be. According to the National Oceanic and Atmospheric Administration, 2011 continues the trend of rising temperatures that has seen nearly every year of the 2000s hotter, on average, than the 1990s, and the 1990s hotter than the ’80s.
Coal generates 40 percent of the world’s electricity -- a number that could grow to 60 percent by 2030, according to a 2009 report by the Coal Industry Advisory Board of the International Energy Agency. (Developing countries are expected to account for 97 percent of that growth because they have almost no alternatives.)
Coal is also “the world’s most CO2-intensive fossil fuel,” accounting for more than 40 percent of all energy-related CO2 emissions, the report says. CCS, say climate scientists, has emerged as the lead technology in the race to reduce global greenhouse gases 50 percent by 2050. And when the New Haven project -- hitching one of America’s largest power companies to the U.S. Energy Department’s carbon capture bandwagon -- was launched in 2009, there was a sense of determination and common cause. “It’s time to advance this technology for commercial use,” declared AEP Chief Executive Officer Michael G. Morris. The company planned to replace its pilot with a larger $668 million CCS facility, which would bury more than 1 million metric tons of CO2 a year, splitting construction costs evenly with the Energy Department. Environmentalists heralded the project.
Serve as Bridge
Timothy O’Connor, a climate-change policy analyst for the Environmental Defense Fund, a New York-based advocacy group, says “carbon storage can help serve as a bridge until we get to those zero and ultralow carbon energy sources that wean us from fossil fuels.”
Yet only two years in, the future of CCS is in jeopardy. On July 14, AEP pulled the plug on its CCS efforts, citing a weak economy and the “uncertain status of U.S. climate policy.” CEO Morris said AEP and its partners “have advanced CCS technology more than any other power generator with our successful two-year project to validate the technology. But at this time it doesn’t make economic sense to continue.”
The dimming of CCS’s promise reflects a broader national retreat from the goal of reversing climate change. In private and, to some degree, in public, the company and its executives express frustration that they tried to do the right thing -- only to end up burned.
With the Obama Administration’s political capital spent on a bruising fight to overhaul health care in 2010, the prospects for meaningful climate legislation dimmed. The Republican takeover of the House last November made climate policy even more remote. Outside Washington, interest in funding carbon capture technology has also withered. AEP sought to recover a portion of its CCS pilot costs by asking for a $74 million rate increase from Virginia utility regulators. The reply was no.
“There are currently no laws mandating carbon capture,” stated a brief from the Virginia Attorney General’s office, which advocates on behalf of consumers. “Any potential benefit is speculative and outweighed by the enormous cost of the pilot project.” The rebuffs more than stung, says AEP President Nick Akins.
“This stuff is very expensive to do,” says Gary O. Spitznogle, AEP’s director of new technology development. “Without a regulatory mandate, you won’t see utilities deploy this.”
‘Height of Optimism’
“Two years ago was the height of optimism,” says Howard J. Herzog, senior research engineer for the Massachusetts Institute of Technology Energy Initiative who has tracked CCS technologies and research from the outset. Now, without a price on carbon, “the finances are tough. Every other week you hear of a project being canceled. It’s not a pretty picture.”
It’s easy to see why carbon capture once seemed so appealing. It could significantly reduce carbon emissions while keeping coal, still the nation’s chief source of electric power, central to the energy mix. In 2010, President Barack Obama unveiled a goal to bring five to 10 commercial-size CCS demonstration plants on line in the U.S. by 2016. Leaders of the Group of Eight, which includes the U.S., Russia, and Japan, embraced in 2008 a goal to launch 20 large-scale CCS demonstration projects by 2010 with “broad deployment” of the technology by 2020. All told, governments worldwide committed $22.5 billion to support CCS since the start of 2008, according to Bloomberg New Energy Finance. An MIT website that tracks worldwide CCS projects lists 68 scattered across 15 countries, 45 of them associated with coal-fired power plants.
Yet since the beginning of the fourth quarter of 2010, at least five large-scale CCS projects have been canceled or postponed, while the fate of several others remains doubtful, according to interviews with a dozen project developers by Bloomberg Businessweek and research by Bloomberg New Energy Finance. The government in Queensland, Australia, pulled the plug last December on its long-promised ZeroGen project, which would have created a 530 megawatt coal plant that captured and buried its CO2 emissions underground. Australian taxpayers had spent $150 million funding the project.
In the U.S., Bismarck, North Dakota-based Basin Electric Power Cooperative’s plans to retrofit a coal plant in Beulah to capture some of its CO2 were shelved in December amid the project’s rising costs, despite a $100 million federal grant. One month later, Omaha-based Tenaska Inc.’s plans to build a power plant in Taylorville, Ill., that would capture 50 percent of its CO2 emissions were thrown into limbo when the state senate voted down a proposal that would have required electric utilities to buy more costly power from the proposed $3.5 billion facility.
Duke’s Ready Plant
Charlotte, North Carolina-based Duke Energy Corp. (DUK), meanwhile, is embroiled in a long-running controversy with consumer advocates over its planned $2.9 billion Edwardsport, Ind., coal gasification plant, which is designed to be “carbon- capture ready.” James E. Rogers, Duke’s CEO, has defended the plant -- already $900 million over Budget -- as a forward-looking investment in so-called clean coal technology that will produce “about 10 times the electricity of an existing conventional coal-fired plant yet with significantly less environmental impact than the plant it is replacing.” Critics say the plant won’t capture any carbon to start with, and rates will be four to five times more expensive than even wind energy.
For all its hype and promise, the challenges of extracting carbon dioxide from smokestacks, compressing it, transporting it, and pumping it underground, where it is supposed to stay for eons, remain daunting.
Costs are a core obstacle, notably those related to what’s called the parasitic load, defined as the amount of energy consumed in the process of removing CO2 from power plant exhaust. Estimated to be $60 to $95 per metric ton of CO2 captured, these costs could add 81 percent or more to consumer power bills, according to a November 2010 Energy Department report. The DOE says its goal is to get those costs down to no more than 30 percent of the price of electricity generated by conventional coal plants and 10 percent more than the price of coal-gasification plants.
Why is CCS so expensive? Based on results so far, storage capacity isn’t the driving cost factor. A 2010 DOE report estimated that between underground saline formations, oil and gas fields, and unmineable coal areas, the U.S. and Canada alone have up to 5,700 years of carbon sequestration capacity.
But capturing carbon is another matter. The clattering, odiferous Mountaineer pilot required the company to add the equivalent of a small, energy-intensive refinery on to the side of the power plant. As AEP’s Spitznogle explains, power plant exhaust is sucked into the capture unit, cooled, and mixed with a chilled ammonia-based solvent, causing the CO2 to precipitate out as a slurry that gets reconverted to a gas. It is compressed into a liquid state, and then pumped into deep, porous underground formations by a series of injection wells. All of which increases the parasitic load.
When the AEP project went on line in 2009, the goal was modest: to capture and bury up to 1.5 percent of Mountaineer’s carbon dioxide. When the project shut down, the New Haven plant had captured about 37,000 metric tons of CO2, a fraction of its target. Spitznogle says that separating out the carbon using “complex chemistry” proved challenging.
“We were pretty sure there would be fits and starts. This is an R&D system, with zero redundancies built in. If one piece of equipment fails, the whole system comes down until that piece gets fixed. … This caused us to be up and down a lot.” He adds: “I don’t know anyone who was disappointed with the amount of CO2 we put in the ground in that first year.”
‘Everything in Limbo’
If CCS is to work out in the end, he and others agree, the number of pilot projects must increase. “The only way to bring down the cost is to start building a lot of these projects,” says David G. Victor, director of the Laboratory on International Law and Regulation at the University of California, San Diego. Again, “the absence of a price on carbon puts everything in limbo.”
The fate of CCS technology is inextricably tied to the controversy over clean coal, a debate which has helped drive a wedge in the green community since many environmentalists -- citing the ecological harm in coal’s extraction, including the process of mountaintop removal -- simply don’t believe coal can ever be made “clean.” But perhaps the biggest blow to CCS’s reputation as a clean technology originated at a farm in southeastern Saskatchewan, about 40 miles above the North Dakota border.
Foaming and Bubbling
Starting in 2004, landowners Cameron and Jane Kerr of Weyburn complained of strange foaming and bubbling, as well as poisoned animals and explosions “like cannons going off” on their property, which adjoins the Weyburn oil field. With crude reserves estimated at 1.4 billion barrels, Weyburn doubles as the oldest and largest carbon capture and storage site in North America. Frustrated by what the Kerrs call a lack of response from Canadian regulators and Calgary-based Cenovus Energy Inc. (CVE), which operates the field, the Kerrs had an independent petroleum engineer assess their property.
They went public with the findings in January 2011 only, they say, after sending the report to Cenovus and regional regulators and getting no response. Elevated levels of CO2 were present, the report concluded, and the carbon dioxide is “clearly the anthropogenic CO2 injected into the Weyburn reservoir.” Serious leaks from huge carbon storage sites can be fatal to humans and livestock if not addressed.
Cenovus Plans Study
Denying that they have been slow to respond, Cenovus -- along with the Petroleum Technology Research Center, a nonprofit research group -- have since challenged the Kerrs’ report and plan their own study; the Kerrs have since moved 70 miles away. But the damage had been done. The Kerrs fielded calls from media outlets across Europe, the U.S., even South Korea, fanning alarmist concern when “public confidence in this technology is not well-established,” says George Peridas of the Natural Resources Defense Council’s Climate Center in San Francisco.
Despite the halting progress made toward developing CCS, the coal industry continues to extol its promise. A video clip on the website of the American Coalition for Clean Coal Electricity (ACCCE), a coal industry group that includes AEP, Basin Electric, and Tenaska as members, shows a coal company engineer with short cropped brown hair, an earnest smile, and a blue dress shirt unbuttoned at the collar. He moves about a lab, looking through a microscope and examining a computer screen, as he talks confidently about the future of achieving “clean coal” through the capture and storage of CO2.
‘Make a Difference’
“There absolutely is such a thing as clean coal technology,” he says, as the video pans across an illuminated city skyline at dusk. “I am quite confident that we will capture carbon dioxide at the kind of levels that we’re going to need to make a difference.”
The industry group, with this and other messages, nurtures the impression that CCS is around the corner, yet this can-do attitude has begun to fuel the suspicion of environmentalists, such as Bruce Nilles, deputy conservation director at the Sierra Club. He points out that the ACCCE, according to lobbyist filings, has spent tens of millions of dollars opposing climate- change legislation, including the 2009 American Clean Energy and Security Act, known as Waxman-Markey.
‘No Closer Now’
“CCS is being used as an excuse to delay action on regulating our existing fleet of coal-fired power plants,” says Nilles. “They’ve been talking about it for eight to 10 years, and we’re no closer now than we were then to breaking ground on these demonstration projects.”
At present, no other technology comes close to matching the potential of CCS in the fight against global warming. The International Energy Agency projects that CCS will have to account for 20 percent of all CO2 reductions if the 2050 goal to cut worldwide greenhouse gases by half of current levels is to be met. Without a successful CCS program, the costs will be 70 percent greater, the agency says. “If we don’t implement carbon capture and storage,” says John Thompson of the Clean Air Task Force, an environmental advocacy group, “it’s probably game over on climate change.”
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.