Clean Coal Still a Distant Vision

By Richard Martin, 12-07-07

Just over a year ago, Montana Governor Brian Schweitzer announced a deal that had the potential to change the face of America's energy industry.

Calling it "a great day for Montana," Schweitzer said on October 2, 2006 that Bull Mountain Land Company had entered into an "initial agreement" with DKRW Advanced Fuels, a coal technology company based in Houston, to construct a coal-to-liquid plant at Bull Mountain's mine outside Roundup, north of Billings in central Montana.

Couched firmly in the conditional, the Governor's announcement said that the new plant "could produce up to 300 megawatts of electricity using IGCC (Integrated Gas Combined Cycle) technology, the cleanest and most advanced form of electric power production from coal," and would use so-called "carbon sequestration" technology to store all the CO2 produced in the process deep underground. Furthermore, Bull Mountain coal would be used to produce ultra-low-sulphur diesel fuel via the Fischer Tropsch process.

The resulting clean coal industry would create "thousands of jobs" in a depressed area and be "a major step in converting into a reality America's hope for an alternative to imported oil."

Nearly 14 months later, not a spade has been turned to build clean coal plants in Montana, or anywhere else in America for that matter. Last month the backers of the $1.5 billion coal gasification plant near Roundup abandoned their attempt to use an expired air quality permit to build the station. Not only that, but the companies cited by Schweitzer in his glowing announcement about the coal-to-liquid plant have disavowed all knowledge of the project.

DKRW has "no official connection to the plant," said the company's communications director Kate Perez in a phone interview. "We have looked at a lot of different projects, and we certainly think Montana has a lot of potential, but we have no formal ties to [the Bull Mountain] project."

Asked how Schweitzer got the idea that DKRW had signed an agreement on the plant, Perez said, "I can't really speak for the governor."

Asked about the apparent discrepancies in a phone interview from the Governor's residence in Helena, Schweitzer said he was just relaying what he'd heard and read.

"We're not a partner in these projects -- I just read the papers like you do," Schweitzer told me. "They announced they'd start building in six to 12 months -- they issued a press release. If they're changing directions, it isn’t me."

The DKRW Advanced Fuels Web site, which includes press releases from 2006, shows no such announcement. In any case, the Bull Mountain episode epitomizes the Governor's "clean coal" initiatives for Montana. Like an underwritten Broadway musical, Schweitzer's vision for America's energy future so far has an exuberant opening, followed by little plot development and leading to a lot of tap dancing. Give Schweitzer credit for the vision – but reality is stubbornly lagging behind.



When Schweitzer took office in January 2005, a certain amount of optimism around "clean coal" was understandable. Technologies like the Fischer Tropf process to convert coal to liquid fuel (which was used by the Wehrmacht in World War II when Nazi Germany ran out of petroleum) and carbon sequestration were winning favorable write-ups in the national media. Montana had 120 billion tons of coal reserves, by far the largest of any state, and the lack of federal response to the increasingly obvious energy and climate-change crises facing the United States had left a leadership void that an ambitious Western governor like Schweitzer found irresistible.

Spotting an opportunity to kill two political birds with one lump of coal, Schweitzer – who had spent seven years in Saudi Arabia as a young man, seeing the consequences of U.S. dependency on Middle Eastern oil first-hand – decided that "clean coal" would not only punch Montana's economic ticket but also cure the nation's oil addiction.

Montana plants using the Fischer-Tropsch plants could begin producing synthetic fuels within five years, he told reporters. Since much of Montana’s coal reserves are state-owned, he claimed, the state would have an "equity partnership" in the plants. One ton of Montana coal could produce 1.5 barrels of diesel or aviation fuel, which would mean Montana could produce 180 billion barrels of fuel – enough to fuel America far into the future.

Speaking at a Montana State University energy-and-water conference, he declared that Montana and three of its Mountain West neighbors could produce enough liquid fuel from coal and oil shale to supply America's oil-and-gas needs for the next 800 years.

“My vision is that in a dozen years from now, well after I’ve left office and people don’t even remember my name, that the Legislature will have more money than they know what to do with,” Schweitzer told the Missoula Independent's John Adams in a credulous Sept. 2007 feature, a month before the Governor's ballyhooed Energy Summit.

"This sounds too good to be true," Schweitzer admitted.

And of course it was. Since then, says Richard Barrett, a former economics professor at the University of Montana and a candidate for the state legislature, "the ground has shifted awfully fast" in the energy debate – particularly regarding the possibility of generating large amounts of liquid fuel (diesel, gas, or jet fuel) from coal. Several vaunted clean-coal projects around the country have been delayed or cancelled as the real costs have become apparent.

No one doubts that coal can be burned more efficiently than in current plants, using Integrated Gasification Combined Cycle systems that convert the ore to a gas before burning it. Sequestering the carbon dioxide from coal-fired plants is also theoretically possible, and South Africa, facing oil embargoes in the apartheid era, developed a synthetic fuels industry that today supplies about 40 percent of that nation’s fuel needs from coal.

The question is whether a sizable clean-coal industry is economically feasible – and whether creating liquid fuel from coal can really ever be carbon neutral.

"Much of the momentum building behind IGCC has waned in 2007 as rising capital costs, stabilizing natural-gas prices and an uncertain carbon-policy outlook have undermined IGCC's competitiveness for power generation," analyst Alex Klein wrote recently in a report for Cambridge, Mass.- based Emerging Energy Research.

A year ago the Montana Environmental Information Center published online a long analysis of clean coal technologies that did a thorough job of debunking Gov. Schweitzer's more outlandish claims. Among the findings: the coal-to-liquid transformation produces a "prodigious quantity of carbon dioxide," significantly higher than conventional petroleum production and refining; sequestering the CO2 from an IGCC plant "can increase the overall cost of the project by 40% or more"; and a 22,000 barrel-per-day syn-fuel operation, of the sort proposed for Bull Mountain, would use 1.7 billion gallons of water per year.

In July 2007, an editorial in Scientific American concluded that any coal-to-liquids program "would produce roughly twice the global warming emissions of gasoline."

As a fuller picture of clean coal have emerged, Schweitzer's ostensible allies in this campaign have backed away like Republicans at a Larry Craig fundraiser. The Western Governors Association issued a policy resolution on "Clean and Diversified Energy for the West" (link opens PDF) after a June 2006 conference in Sedona, Arizona that included mentions of clean coal and recommended extending the federal tax credits for IGCC plants, but none of the governors have made clean coal central to their energy policies and none have publicly voiced support for Schweitzer's grandiose vision.

Colorado Gov. Bill Ritter's Climate Action Plan, released earlier this month, includes no concrete proposals for either coal gasification or coal-to-liquids plants in that state. Ritter's fiscal-year 2008 budget proposal includes funds to hire a geological surveyor to research the potential for carbon sequestration in the southern and northwestern parts of Colorado, says press aide Evan Dreyer – a request that's just as exploratory as it sounds.

Ironically, if a coal-to-liquid plant does get built in the U.S., it's likely to be in Wyoming, rather than Montana: in the summer of 2006 Medicine Bow Fuel & Power LLC said it had awarded a contract to Canadian firm SNC-Lavalin to conduct feasibility studies for a $1 billion facility in northern Carbon County.

At this point it's fair to ask, how come? Why, in the face of significant setbacks and a pile of evidence indicating that clean coal is a generation or two off, does Brian Schweitzer continue to flog this flagging horse?

Montana politicos and Schweitzer associates point to two reasons, one political and one psychological.

The first answer is that there's virtually no political cost to backing clean coal at this point. While Schweitzer now has a Republican opponent in the 2008 campaign, his chances of losing, barring a major scandal in the next 12 months, are virtually nil. Environmentalists decry the clean-coal campaign, but having enviros complain about him doesn't hurt Schweitzer's centrist, pro-gun, business-friendly image, and who are they going to vote for – Roy Brown? And moderates on both sides of the aisle credit him with fostering innovation, even if his vision of a coal-fired eco-topia turn out to be so much smoke.

"This discussion is going to help advance the technology one way or another," says a Western Montana political figure who declined to be identified, "and we've got all that coal -- sitting on it would just be naïve."

Pushing the coal revolution allows Schweitzer to portray himself as a visionary unconcerned with immediate political consequences, a quality sorely lacking in today's national politics.

	"I'm trying to change the world, and we're going to start here in Montana. I don’t know anybody who was trying to do that who had as their first concern what the polls said." -- Gov. Brian Schweitzer

"I'm trying to change the world, and we're going to start here in Montana," he says. "I don’t know anybody who was trying to do that who had as their first concern what the polls said."

Quixotic quests against steep odds seem to be as deeply rooted in the Schweitzerian psyche as cowboy boots and beaded bolo ties. One longtime associate points to his campaign, long before Michael Moore and "Sicko," to drive buses filled with Montanans seeking reasonably-priced drugs to pharmacies across the border in Canada. Ultimately the feds shut down that underground railroad, but in Schweitzer's mind it was a triumph.

Similarly, Schweitzer no doubt believes that, engineering and economic obstacles be damned, clean coal can, if not save the planet, eliminate the poisonous U.S. dependence on oil-rich dictatorships (while bringing untold wealth to Montana).

"I've sat with families who buried somebody who went off to fight in an oil war," he says with utter conviction. "Not another generation fighting another oil war. It needs to stop now."

Nevertheless, an element of realism has recently crept into Schweitzer's declarations about the future of coal, even if his public stance has not softened.

"We're at least six-to-seven years from actually producing coal from these clean projects," he says now, dramatically altering his earlier timeline. "But let us recognize that 50 percent of our electricity comes from coal. Well, gosh, we still have lightbulbs in our houses, and those are hooked to dirty coal plants … It's gonna take 20 to 30 years to retire that old portfolio. You can't just sit on your hands. Clean coal can be a bridge to the energy future, and coal gasification is a great opportunity.

"But I'm just the governor. I don't set the timelines."

As Schweitzer rightly points out, new energy projects around the country are stalled by congressional inaction on an energy bill that would include some kind of emissions caps – a long-sought first step in bringing back some reality to the comparative costs of cleaner-burning fuels vs. traditional coal-fired plants.

"I believe categorically that if Congress had finished an energy bill, all kinds of projects would be getting built all over the country," Schweitzer states. "Everyone is waiting to see what incenvitves will be."

Nevertheless, the clean-coal timeline got set back a bit further earlier this month, when the state legislature's Energy and Telecommunications Interim Committee heard from an array of experts about the drawbacks of clean coal projects. Water consumption issues alone could doom the technology, particularly in an arid climate like Montana's. And Chuck Magraw, an analyst with the Natural Resources Defense Council told committee members that a coal-to-liquid plant would likely cost much more to build than the $1 - $2 billion cited by the governor's office – perhaps as much as $4 billion.

Four billion dollars. Think about it. With four billion bucks you could give every licensed driver in Montana a $4000 credit toward a hybrid vehicle, and still have enough left over to build a decent-sized nuclear power plant. Or you could build a 300-megawatt IGCC plant, and use most of that power to make liquid fuel. Which do you think would be better for the atmosphere, and for Montana's economy?



Don't tell that to John Williams. First elected in 1999, and returned to office easily earlier this month, Williams is the only mayor the small town of Colstrip, in southeast Montana, has ever had.

A company town originally built in the 1920s to furnish coal to Northern Pacific Railroad locomotives, Colstrip lies at the heart of Montana's coal country. In addition to the Rosebud coal mine, the town is surrounded by four coal-fired plants that send most of their electricity to the Pacific Northwest. During the coal-plant-construction boom of the 1970s, Colstrip had around 8000 people. Today that number is closer to 2000, and many of the residents – all of whom are dependent in one way or another on coal -- are aging. A clean-coal rush would return Colstrip to whatever glory it once possessed. Needless to say, Mayor Williams – who is also the chair of the state's Coal Board, which oversees funding to mitigate the effects of coal mining on local communities -- is a believer in the Governor's program.

"I think the prospects are excellent for building a clean coal plant" in Montana, Williams says. "The governor has done a super job of making a lot of folks aware of Southeast Montana and the opportunities available here."

	"It's a misstatement of fact to say there's no such thing as clean coal. It may be black in color now, but 300 million years ago it was green." -- Colstrip Mayor John Williams

The Colstrip stations, Williams claims, are "some of the cleanest burning coal plants in the country," and they can be upgraded and retrofitted to virtually eliminate carbon emissions.

According to statistics from the federal Energy Information Administration, the four Colstrip plants have a combined "nominal heat rate" (BTUs per kilowatt-hour, a primary measure of efficiency) of 11,042.41, which is about average for a facility of this size. The plants' annual output emission rate (pounds of CO2 per megawatt-hour, the main measure of greenhouse gas emissions) is 2265.49, slightly above the average.

"These are not new units, and those measurements are pretty decent for their age," says Art Diem, who crunches electricity plant numbers for the EIA. "They're not spectacular, but they're not below the ordinary range either."

Owned by PPL Montana along with a consortium of Pacific Northwest utilities, the Colstrip plants burn low-sulfur coal and employ "state of the art scrubbers," according to PPL, to keep sulfur dioxide emissions below Clean Air Act requirements.

"These folks are very well aware of the [potential] new regulations," Williams asserts, "They anticipate those coming down the road in the future and they're gearing themselves up to address those with continued improvements to the plants.

"The coal industry will still be the cheapest producer of electrical energy" in the U.S.

Like Governor Schweitzer, John Williams is right about one thing: the coal, and the mines and the plants, are not going anywhere. For all the loose facts and misplaced optimism in Gov. Schweitzer's coal campaign, coal is going to be a part of America's energy future one way or another. If you're the governor of a state sitting on 120 billion tons of the stuff, it probably makes sense to be talking about how to burn it without destroying the planet.

"I believe that [carbon] sequestration is possible, and it's possible to use coal do some of these things the Governor is promoting," says state legislator Ron Erickson, a co-founder of the environmental studies program at UM who has been studying climate change, and the effects of coal, for decades. "I know that it's years and years in the future, far after Governor Schweitzer or I are in our present positions."

It's not easy being a visionary. But Schweitzer, a man who never met a boulder he didn't think he could roll uphill, is likely to push forward as long as he has people like Mayor John Williams rooting him on.

"It's a misstatement of fact to say there's no such thing as clean coal," Williams says. "It may be black in color now, but 300 million years ago it was green." [End of article]