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Boyce is the top exec at Peabody Energy, the world's largest coal mining company. How un-clean-tech can you get?
But coal won't be disappearing anytime soon. The U.S. derives 49 percent of its electricity from coal. China has been erecting 2 gigawatts worth of power plants a week, according to an oft-heard stat, and most of them run on coal. In 2007, Peabody garnered $4.6 billion in revenue and $421.3 million in net income. And prices for coal are rising.
Boyce, CEO of Peabody, also clearly wants you to know that his company and the coal industry understand the implications of carbon dioxide emissions. Peabody even invested in clean coal expert GreatPoint Energy.
Peabody sat down with CNET News.com at the Clean Tech Investor Summit earlier this month to discuss clean coal technologies, capturing carbon dioxide, and where the market is going.
Q: Why don't you give us a quick overview of Peabody's business at the moment.
Greg Boyce: Peabody is the world's largest publicly held coal company. We're the largest producer of coal in the U.S., as well as a major operating presence in Australia, the Pacific Rim, China, and India. We have a limited operating base in South America. We're also one of the world's largest traders of coal. We've got a trading office in Australia, in Beijing, in London, and then in St. Louis. So we participate in every coal market there is.
What clean coal technologies have you mostly concentrated on?
Boyce: The integrated gasification process is what we've focused most of our time on, and the reason we have is that once you gasify coal you can produce electricity, you can produce hydrogen, you can produce industrial synthetic gas. You can produce aviation fuel, diesel fuel, transportation fuels from that gasified coal, and that gasification process is efficient enough to allow you to capture CO2 and then ultimately sequestrate it.
Does gasification scale well?
Boyce: It does. China gasifies a huge amount of coal and they use it for all of their industrial gas because they don't have a lot of natural gas over there. There are some medium-size coal gasifiers in this country--in Florida, Indiana--that are producing electricity. One of the questions is, what does a gasifier look like if you try and build a 1,000-megawatt power plant? That's the next generation of plants that needs to be built, and there are folks that are talking about doing that.
And then ultimately it's the scalability of large-scale carbon sequestration. Carbon capture and sequestration has been done for 10 or more years in different places, in Norway or up in the Great Plains, but to do it at scale, it hasn't been done and that's the next level of deployment.
Can companies make the case now that coal gasification is economical?
Boyce: Well, if you try and compare it to everybody's electricity cost today it doesn't compare. It's more expensive, but then everything is getting more expensive. So when you look at coal gasification or carbon capture and sequestration, it looks like it will compete with natural gas, the cost of natural gas. It'll compete with new nuclear. It'll compete with all of these other technologies for electricity generation and so that's why everybody wants to very quickly get to a point where we can demonstrate it on a large scale.
One of the things we find very interesting is using gasification to turn it (CO2) into a pipeline quality natural gas and at that point you may be talking about something that's very competitive with today's natural gas prices. And it allows all the existing gas plants to continue to earn when we begin to run out of natural gas in this country, which is going to happen.
You know, we've got a third of the world's coal reserves in this country, and we need to figure out how to use them and use them cleanly going forward. It's the only way we're going to get energy security and I would say energy price stability because we're going to have huge swings on energy costs if we don't get it right.
You often hear the U.S. described as the Saudi Arabia of coal and how it can help energy security. But there is also a lot of opposition out there. Is the opposition to mining or using coal changing?
Boyce: Right now the big issue around coal is obviously CO2 and the climate effect, and so that's the technology that we're focusing on. I mean, when you look at how much additional coal we've used over the last 30 years, and look at our emissions of SO2, particulates, and all the other criteria pollutants, they have gone down over 40 percent over that period of time. So we've got that right. So now the question is how do we replicate that with reducing carbon emissions from the use of coal going forward?
It's a very well-controlled, scientific problem and so it's just a matter of making sure that the technology got developed, growing that technology so that there isn't huge price spikes in the marketplace for electricity and then getting those reductions over time. If everybody says we've got to have immediate reductions next year, I mean, it's just not going to happen. It's how we deploy those new generation technologies over time to get that profile that we've already achieved with the use of coal on SO2 and other criteria emissions over the last 30 years.
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