"At the heart of discussions concerning the drive to infuse the Kentucky economy — and ecology — with the production of liquefied and gasified coal are two key processes to deal with excesses of the greenhouse gas, carbon dioxide. You're going to be hearing a lot about "capture" and "sequestration." Much having to do with Kentucky's future turns on how successfully these manufacturing processes are balanced against serious environmental imperatives and economic progress.
How would it change the world if the United States didn't have to rely so heavily on an unstable Middle East for oil? And how would it change Kentucky, a state desperate for an economic break, if its vast stores of coal became an alternative to foreign oil fields?
But wait — Coal conversion produces vast quantities of global warming carbon dioxide. What about that?
These questions have driven fierce debate in Frankfort and around the commonwealth over initiatives to make Kentucky more inviting to investment in the processes of converting coal into liquid and gas fuels. At press time, the Kentucky House of Representatives had adjourned only 90-minuutes into a special session called by Gov. Ernie Fletcher to address proposed tax breaks for energy companies that would build coal conversion plants in Kentucky. House Speaker Jody Richards (D-Bowling Green), arguing that the issue did not constitute an "emergency" worthy of the $60,000 daily cost of a special session, offered a letter of intent promising that the legislature would provide, in its regular 2008 session, incentives to any energy company that made a firm commitment to locate in Kentucky. The president of one firm, Peabody Coal, indicated in an early July letter to governor Fletcher that approval of such incentives, while important to the decision making process, would not guarantee such a commitment.
The technology for processing coal into liquid diesel fuel or even gasoline capable of powering trucks, planes and other vehicles has been in existence for over 80 years. The liquid coal process, named Fischer-Tropsch (F-T) after its inventors, fueled an isolated Nazi Germany during World War II. During the Apartheid era, South Africa turned to this technology when it was blocked by international boycott from access to foreign oil.
The conversion of coal into synthetic "natural" gas — Synfuel — in North Dakota has been fueling home heating and other applications since the 1980s.
The challenge of incorporating coal gasification and liquefication into a single plant remains a major barrier for private investment. (The cost of constructing a single coal gasification plant is estimated at $1.5 billion to $2 billion and more than triple that amount for liquefication production.)
The Energy Department's National Energy Technology Laboratory is conducting multimillion-dollar studies on how to satisfy investor concerns about the cost-efficient integration of these technologies.
In an era of concern for America's security related to its dependence on foreign oil, however, the prospect of finding an environmentally sound way to produce alternative fuels resonates with a particular ring in a relatively poor coal state searching for new and creative ways to finance health care, education and other vital public services.
"The fundamental goal is to create value-added products from our natural resources," said Palina Mathews, executive director for the Governor's Office on Energy Policy and a native of Jackson County in Eastern Kentucky. "We've been an extraction economy, shipping our resources to other places where wealth has been made. The question is how can we use what we have in this state and do so efficiently?
"If we can create wealth here, instead of doing extraction, we are increasing our tax base, creating more money for everything we do," she continued. "We are talking about increasing employment and economic development."
As state officials and politicians in this election year sort out appropriate policy and postures on this complex issue, it's enough for everyone else just to understand the science.
A major consideration in coal conversion — underscored by overwhelming evidence of climate change — centers on its enormous output of a byproduct known to contribute directly to global warming: carbon dioxide. Extracting fuel from coal doubles emissions of CO2. Processes for capturing the CO2 escaping from oil and gas wells and recycling the gas to boost well pressure have been in use for many years. Carbon dioxide is also widely used in many other applications, including the beverage industry, as well as in the production of solvents. The gas powers fire extinguishers.
Would gasification and liquefication produce too much CO2 to efficiently recycle? "Yes," said Brandon Nuttall, an expert in carbon sequestration with the UK-based Kentucky Geological Survey. "At some point, you would reach the point where you would overwhelm the market with CO2. That's where sequestration comes in: simply sticking it in the ground and getting rid of it."
A recent meeting of the Kentucky House Appropriations and Revenue Committee heard testimony that any federal incentives for coal conversion production will remain on hold until the question of what to do with excess CO2 is fully resolved.
Jim Bartis, senior policy researcher for the Rand Corporation, suggested positioning the state to become a world center for research and the eventual demonstration of carbon sequestration technology. He compared the concept to the Manhattan Project, the World War II atomic bomb imperative that drew to Arizona with enduring economic impact the world's foremost scientists and researchers.
"It's not going to be as technically difficult as the Manhattan project. That was some pretty complicated physics," said Nuttall. "There are lots of components of sequestration that the oil and gas industry has a lot of experience with. Underground storage of natural gas has been happening since the early 1900s. Enhanced recovery of oil using injected CO2 has a 30-year history. They know how to pipe CO2 from one place to the other."
Indeed, such research has been underway in Kentucky, led by the University of Kentucky Center for Applied Energy Research (CAER), which has been investigating coal combustion by-product utilization for over 25 years. Working with the university are Eastman Chemical and Tampa Electric Co. (TECO), which operate major gasification installations; Charah Environmental Inc., designers and operators of the first successful gasification ash beneficiation plant; and CEMEX Inc., the third largest cement producer in the world and a major consumer of coal combustion by-products.
Studies of potential carbon dioxide storage sites in Kentucky, said Nuttall, have been underway for 10 years. "We've been looking at it very regionally and have found that there seems to be a lot of capacity. Theoretically, we could sequester more than 30 billion tons in a variety of reservoirs that are available here in Kentucky."
A major market for carbon dioxide captured from coal conversion units is enhanced oil recovery, according to Rodney Andrews, director of CAER. "Enhanced oil recovery involves injecting CO2 into depleted, depressurizing oil and gas wells," he explained. "When injected into an oil well, the CO2 preferentially bonds with the substrate, releasing the petroleum. The process does release CO2, but it is recaptured and recycled."
Andrews noted that the Great Plains Coal Gasification Plant in North Dakota sells its CO2 to a pipeline that serves oil fields in Canada.
Harlan native Teri Blanton, spokesperson for Kentucky Friends of the Commonwealth, a social justice organization founded to investigate issues regarding taxes and coal, argues that a Kentucky coal conversion industry would not create as many sustainable jobs as proponents claim and would harm coalfield ecologies. "This technology will cause dramatic consequences to the environment," Blanton said. "Once the mountain is gone, the job is gone and you're left with a mess."
Using current technology, she argues, one ton of coal is required to produce two barrels of fuel. She asserts that it would be necessary to double the amount of coal produced in Kentucky. "We're basically talking about cutting down whole mountain ranges and mining in ways that would be less safe." Also of concern is the additional reliance on another precious natural resource, water. It currently takes 7.3 barrels of water to create one barrel of fuel, she said.
Blanton points to a recent MIT study that estimates it would cost $70 billion to build enough coal-to-liquid plants to replace just 10 percent of American demand for oil. Construction costs were estimated to be $7 billion dollars for each plant.
Geologist Nuttall noted, however, that as long as the United States continues to rely on oil as a primary fuel, captured CO2 actually has high market value. "In West Texas, and in parts of the Gulf Coast into Mississippi, carbon dioxide is a very valuable commodity for enhanced oil recovery. A tremendous amount of Texas oil production comes from old fields that are using CO2 to enhance the production. Here in Kentucky, we've got one operator who has been using nitrogen and CO2 together and has increased his oil production from about 150 barrels a day to over 500 barrels a day over the last 10 years."
Carbon dioxide is essential for life on earth, noted Nuttall, but it also is toxic and even in nature, can be dangerous. He called attention to what happened in August 1984 when Lake Monoun, situated atop a volcano in the African nation of Cameroon, suddenly "belched" a toxic cloud of carbon dioxide that had been accumulating in the lower depths of the lake. 37 people were asphyxiated. Two years later, it happened again at nearby Lake Nyos. In that instance, more than 1,700 people died. The cautionary tale is that not every deep-earth cavity is suited to contain accumulations of carbon dioxide.
"The public has a right to be suspicious about the way people handle materials that can possibly be toxic," Nuttall said. "They need to ask the right questions. They need to understand issues and answers. But they also are going to have to understand, if you want clean air, if you want to vote that the United States does something about CO2 emissions, it's going to cost somebody something and we're going to have to put it somewhere. We can't just ship it all to Canada and let Canada do it."