Industry News




 

11/21/2007

A Big Coal Story

Electric utility executives shopping around for alternative fuels inevitably turn to coal, and that is the big story in 2007

By Lew Tagliaferre

 

Lew Tagliaferre

Lew formerly led the Electrical Contracting Foundation organizing team while serving the National Electrical Contractors Association (NECA) as Director of Marketing and Management Services in the '70s. He also served as acting executive director and managed several energy-related Foundation projects. After his retirement in 1998, he organized C-E-C Group as a proprietorship and has continued serving energy users and suppliers. He also completed a Foundation project titled, "Surviving Utility Deregulation" in 1999 (www.ecfound.org)

In addition, Lew has been published in over 180 articles in various trade magazines. He also consults with the Washington, D.C., chapter of NECA and supports its labor-management cooperation committee as an industry relations consultant. He completed engineering and business administration degrees, both with academic honors, and he has published three commercial books. He is a member of the Association of Energy Engineers.

If you watch the news, you can see obvious clustering of topics that seems to form and flow like a school of fish darting about in the ocean of information. When it comes to energy issues, the news recently has been clustered on the rapidly increasing price of crude oil and its related impact on refined petroleum products, including heating oil, diesel, and gasoline fuels. Since there are about 42 gallons per barrel of oil, if oil prices do not fall, it stands to reason that gasoline prices will need to rise above $3 a gallon to pay for transportation, refining, and distributing consumer products – and still leave some money on the table for investors and corporate executives, plus taxes, of course. Since there is very little elasticity in demand for oil (i.e. ability to reduce usage as prices rise is limited), there likely will be some negative economic consequences for the rising costs. Obviously, money spent on refined-oil products cannot be spent on something else. And, prices that cannot rise to cover marginal oil costs will depress profits. The present rumblings on Wall Street could be just the prelude to some rocky times. Oil analysts have been predicting that the world is close to peak oil production, if it’s not there already, so these trends bear some very close watching because flat production meeting rising demand could be catastrophic. Electric utility executives shopping around for alternative fuels inevitably turn to coal, and that is the big story for this time.

The amount of coal it takes to drive half of the steam-electric generators is staggering to the imagination. Since 1970, the use of coal to generate electricity in the United States has nearly tripled in response to growing electricity demand. According to the Department of Energy, the United States mines more than 2.8 million tons of coal each day; if it did not, the nation would have to double its natural-gas usage. Coal remains cheap and plentiful, with 200 years’ worth of reserves. Like oil, coal production may be close to reaching its potential peak because there are un-booked real costs of coal in its human and environmental impacts. Mining it disrupts the earth and takes human lives; burning it produces toxic ash and emits carbon dioxide and other noxious gases, which many scientists claim adds to global warming; transporting it by rail uses up precious petroleum reserves. Coal producers have successfully kept government regulations under control so that coal-rich states (like West Virginia, which has produced billions of tons for more than 100 years) have seen little economic benefit for the consumption of their resources. Left behind when the coal plays out are vast areas of abandoned land often unsuitable for any form of profitable development and lives broken by mining-related diseases and long-term disabilities. For these reasons, it is becoming more difficult to get approval for siting and building any new coal-fired power plants – not impossible, but more difficult.

Opponents of more coal-fueled power generation make some reasonable arguments. A recent editorial writer in the Bangor Daily News took on the proposal for a coal-burning plant in Maine by pointing out that washing the coal slurry for landfill storage could consume $120 million per day in water at the equivalent of $12 per gallon (the price of Poland Spring water), at the rate of 10 million gallons per day. The washed-out heavy metals and cleaning compounds are stored in multibillion-gallon toxic waste ponds – sludge dams – placed precariously above homes, communities, and schools. The writer went on to lament, “As much as 30 percent of a piece of coal is waste material. A bunch of the energy created gets used to dispose of this junk. That non-energy-producing part contains things that are bad for you and other living creatures – even things you like to eat, like tuna. Yep, mercury, cadmium, and arsenic are a few of the leftover components. So, before we even talk about the corresponding air emissions, we know up front that we’ll be stuck with toxic solids that we’ll have to put somewhere … The rain washes through the slurry and runs off into other places that rain goes … including residential well water.” Given such a vocal and persuasive opponent using a public-newspaper forum, you can see the problem facing utility executives who need to depend on more coal for growing needs for electricity. Nevertheless, the rising prices of oil and natural gas, plus the uncertainty in global politics and the rising demands by developing nations, will require the United States to focus more on making domestic coal acceptable, if not preferred, as a fuel source in power generation.

Recent news featured a debate that is worth noting about the benefits of new attempts to produce cleaner coal. “Technology has come a long way,” says Randy Eminger, south region vice president for the Center for Energy and Economic Development, a group that supports and encourages improvements in clean-coal technology. “Emissions have dropped dramatically, and they will only get cleaner and cleaner.” Eminger pointed out that newer coal-fired power plants remove 98 percent of sulfur and up to 75 percent of nitrous dioxide, as well as other harmful chemicals. Experts agree that the immediate goal is to perfect the gasification technologies – the ones that convert coal to fuel gases before the sulfur, mercury, and CO2 would be removed. Right now, that process is expensive and fraught with obstacles. But, if it can be proven, then the CO2 would be more concentrated and, therefore, much easier to capture and store. The coal industry is working on a test project that would grind the coal and use the resulting gas to fire a power plant that would operate more like a natural-gas plant. Four such coal-gasification plants are now operating: two in the United States and two in Europe.

In addition, the federal National Energy Technology Laboratory (NETL) is developing the “FutureGen,” which would be the most advanced coal-fired power plant ever invented. The FutureGen alliance includes major utilities and coal companies. “FutureGen incorporates many of the advanced technological developments we are working on,” says Tom Sarkus, FutureGen project director for NETL in Pittsburgh. “It is the culmination of a number of our research and development initiatives.” FutureGen would be a zero-emission, coal-fired power plant that could also capture and store carbon-dioxide emissions. It is a nearly $1 billion undertaking. Of that, the coal industry will provide $250 million while foreign governments – China, India, and Korea are all involved – will contribute $80 million. The U.S. government will cover the roughly $700 million balance. The initial plant would generate 275 megawatts of electricity, which – if successful – could be replicated around the country. FutureGen was launched in 2004, and the goal is to be running by year-end 2012. There are three basic elements to the project that include the capacity to gasify coal so that it would be cleansed of all the impurities before it leaves the smokestack, as well as the abilities to develop hydrogen and to capture and bury CO2, all of which would address global warming. Pilot projects show that each feature is doable. But, the challenge is integrating each of those attributes into one generation facility. Two sites in Illinois and Texas each have been selected for environmental impact statements, but no selection has been announced yet.

Nevertheless, some critics are not impressed. Google the phrase, “There is no such thing as clean coal,” and you find numerous sources repeating that same mantra. They have a point. It takes years to develop, test, and prove new technology options. In the meantime, the country’s existing coal-fired power plants will continue to burn the black rock while the industry and regulators look at ways of making the existing plants cleaner. The power industry is risk-averse and slow to change. It needs government-sector aid for funding and technical expertise in order to protect its economic profits. “The government must provide financial assistance to advance the technologies to a level that industry cannot do on its own,” observes Ken Silverstein, editor-in-chief at EnergyBiz Insider. The bottom line was expressed by Richard Bajura, director of West Virginia University’s National Research Center for Coal and Energy: “Let’s face it: We are going to use coal.” You can get the coal side of the story at (www.americaspower.org).

 

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