Green Tech

LAGUNA, NIGUEL, Calif.--What do you get when you put the CEO of a coal-dependent utility on stage with two environmental advocates to discuss whether coal can be clean? A surprisingly civil discussion with more than just straight "pro" and "con" positions.

The CEO of American Electric Power, Michael Morris, spoke on the same panel with Michael Brune, the executive director of the Rainforest Action Network, and David Hawkins, the director of climate programs at the Environmental Defense Council on Tuesday at the Fortune Brainstorm Green conference here.

AEP is the second-largest electricity generator in the U.S. and gets 73 percent of its power from coal. The company is now in the process of building a new coal-fired power plant in Arkansas and investing in a demonstration facility to store carbon dioxide from burning coal underground.

Carbon capture and storage, where carbon dioxide is isolated and pumped underground, is considered vital technology to making coal less polluting. Coal is the source of about half the electricity in the U.S. and about 70 percent around the world. At the same time, underground storage of coal--a major contributor to carbon emissions--is opposed because it is not proven and because coal causes many environmental hazards.

AEP's Morris believes that global warming from the build up of greenhouse gases like carbon dioxide in the atmosphere needs to be addressed through carbon regulations. But to think that coal will stay in the ground in naive in his view.

"It's a prism of answers with energy efficiency and renewable energy. But you're kidding yourself if you think you are taking coal off the board," he said.

The technology, being tested in AEP's demonstration facility, is not fully operational and needs to become more efficient. The company is seeking Department of Energy loans to build a larger facility. Energy Secretary Steven Chu is a "big believer," Morris said.

A climate change law that restricts carbon dioxide emissions is likely to come out in the next year, said Morris, who made clear he intends to meet emissions limits in large part with underground carbon storage.

He estimated that building carbon, capture and storage equipment on coal plants pushes the price of electricity up from three to four cents a kilowatt-hour to five to six cents.

To Michael Brune of the Rainforest Action Network, pursuing carbon, capture, and storage technology diverts valuable resources from cleaner sources of energy while making the climate change problem worse.

"The reality is there is no such thing as clean coal. There is not a single commercial plant in the U.S. that captures carbon emissions and stores them underground," he said. "Within the next 10 or 15 years, we could find a way, technologically speaking (to do it). I'm not saying it can't be done. I'm saying we shouldn't try."

Brune said the technology is not yet safe or economical. Coal also has several other bad pollutants, such as mercury, and the source of many environmental and health problems.

"Where does coal come from? It still comes from mountaintop removal...It still pollutes billions of gallons of water a year," he said.

By contrast, the NRDC supports investments for the development of underground storage of carbon dioxide from coal, said Hawkins. The reasoning has more to do with politics than the environment, though.

To pass a climate change law that sets the U.S. on a path of reducing carbon emissions in the coming decades, members of Congress from coal-dependent states need to be convinced, he said.

"We have two ways to do things. We can change the Congress or we can change the Congress' mind. We don't have time to change the Congress," Hawkins said.

The NRDC, like other environmental groups, is also fighting to address other environmental problems from coal, which Hawkins called "fixable problems."

The other reason to forge ahead with research in underground carbon storage is for the U.S. to take leadership in climate change to other countries, notably coal-dependent India and China.

"The way to get China and India to take this seriously is for the United States to treat this seriously," Hawkins said.

Coal: a difficult conversation. From left: Fotune's Adam Lashinsky, AEP's Michael Morris, Rainforest Action Network's Michael Brune, and NRDC's David Hawkins.

(Credit: Martin LaMonica/CNET)

Manmade coal produced by Carbonscape's Black Phantom machine.

(Credit: Carbonscape)

A new machine dubbed the "Black Phantom" can turn biomass into manmade coal.

Carbonscape, a New Zealand-based start-up, describes its invention as an industrial-sized microwave that can cook plant waste, wood waste, and "even sewage" into coal.

Carbonscape also claims that the machine captures and stores more carbon than the amount of carbon generated by the electricity needed to power it for the process.

Why would anyone want to make more coal when humans are desperately trying to get out from under the carbon dioxide mess we've been making since the Industrial Revolution?

The invention combines two popular environmental efforts: using biochar for carbon capture and storage (CCS), and developing alternative fuel sources from biomass.

While there are issues to be worked out on carbon capture and storage (CSS), it's seen by energy utilities and governments as a possible tool in reducing greenhouse gas emissions. Biochar is coal made from biomass that can be buried in soil as a carbon sink or for use in farming, rather than letting decaying plants release carbon dioxide back into the atmosphere.

Biomass--agricultural and wood byproducts that can be used to make ethanol, or electricity directly--is considered by the EU, the U.S. and others as a possible answer to reducing oil dependence while providing a cleaner and more efficient way to produce and consume energy.

As reported by the Financial Times, Carbonscape's machine turns biomass into a kind of biochar to be stored underground.

Though it's unclear just how clean it would burn, Carbonscape's biochar can also be burned as fuel.

Whether or not the invention is scalable remains to be seen, but judging from who is involved Carbonscape's claims seem legit.

The company's board includes Nick Gerritsen, the director of Aquaflow Bionomic, one of the companies developing algae biodiesel; and Tim Flannery, former Harvard University professor and environmental activist known for his books "The Future Eaters" and "The Weather Makers."

CAMBRIDGE, Mass.--Lars Josefsson is the CEO of an electricity utility and a self-described climate activist.

He leads Vattenfall, a Swedish state-owned utility that has set a goal of making its power generation carbon-neutral by 2050. He delivered the opening keynote address at the MIT Energy Conference here on Saturday.

Lars Josefsson, CEO of Swedish utility Vattenfall, speaks at the MIT Energy Conference.

(Credit: Martin LaMonica/CNET News)

Vattenfall, which means waterfall in Swedish, already gets 22 percent of its electricity from renewable sources, largely hydropower and offshore wind in Sweden, and an additional 31 percent from nuclear energy.

In the utility industry, Vattenfall is well know for being the first to test carbon capture and storage technology at a coal-fired power plants outside Berlin, Germany. When European electricity markets were deregulated earlier this decade, Vattenfall acquired power companies in Europe that rely on coal.

Vattenfall has worked with consulting firm McKinsey on an influential study that examines the most cost-effective technologies for reducing carbon dioxide concentrations in the atmosphere.

Through that work, Vattenfall, like others, have determined that pumping carbon dioxide gas underground at coal-fired power plants--so-called clean coal technology--is necessary to stabilize carbon dioxide concentrations at 450 parts per million. The current concentration is approaching 400 parts per million and was under 300 parts per million before industrialization, said MIT president Susan Hockfield in her conference introduction on Saturday.

Sequestering carbon--an expensive and experimental technology that is still not done at commercial scale--is part of of an economywide transformation that will need to happen to stabilize greenhouse gas concentrations, Josefsson said. If businesses and policy makers wait 10 years to pursue low-carbon technologies, achieving the 450 parts per million target will not be possible, he said.

"This is not a small correction. It's a total redesign of society and the way it's been. It's a totally new infrastructure and for that, you need time," he said. "We think in 40 years, we can change everything as a power company--it's a question of how and in what order."

The company is on a path to reducing its carbon emissions by 3 percent from 2008 to 2010. It projects that it can cut emissions by 50 percent from 1990 levels by 2030 by investing in offshore wind, ocean power, biomass, new nuclear power, and carbon storage at fossil fuel plants, Josefsson said. Those same technologies will allow it to hit its carbon-neutral target by 2050.

At its site in Germany, Vattenfall has found that the oxyfuel technology being tested can effectively cut carbon dioxide emissions by 100 percent by pumping gases underground through pipelines. But it's not clear that this can ever be done economically, Josefsson said.

He argued that the cost of developing carbon storage technology should be shared by government and industry.

"Companies with shareholders and boards cannot take such a loss to get a gain in 20 years. This is a perfect example of a public-private partnership," Josefsson said. "Things will not happen by themselves in the time required if we don't get that match" between industry and government.

In the U.S., there are no functioning carbon-capture facilities. The Department of Energy pulled funding for a research project in Illinois called FutureGen last year. In the Obama administration's stimulus plan and budget, there is $3.4 billion set aside for research in "low-carbon coal technologies," such as carbon storage at coal power plants.

Abatement strategies
To address climate change, the world's economies need policies that manage the "cost and speed of change" to low-carbon technologies, Josefsson said. He mentioned specifically the need for a carbon cap-and-trade system designed to put a price on emitting carbon dioxide.

The European Union has set a goal of three 20s by 2020: 20 percent more efficiency, 20 percent renewable energy, and 20 percent emissions reduction. The government of Sweden recently proposed increasing the country's renewable energy output to 50 percent of power generation.

Josefsson said the McKinsey study found that the cost of emissions abatement by 2030 is about half of 1 percent of global gross domestic product. That's about as much money as a $10 change in the price of oil, which the global economy has shown it can absorb, he said.

Vattenfall CEO Lars Joseffson shows results from a McKinsey study on how to reduce carbon dioxide concentrations and continue economic growth.

(Credit: Martin LaMonica/CNET News)

"It's not a question of money. It's not a question of technology. It's a question of leadership and policy. That is what is in short supply," he said. He argued that businesses need to take an active role in dealing with climate change, not just policy makers.

During her introduction, MIT's Hockfield said that energy technology has "the most immediate potential by far for catalytic innovation" to help revive the troubled economy.

Asked why energy technology cannot change as fast as information technology, Josefsson said that entrenched investment in energy industry means that things move slowly.

"The energy system is such a big system and the inertia so enormous and the investment in it so enormous that the time to change, even if you had innovation, is also very long. So it's not a quick fix," he said.

Researchers are committing billions of dollars to technologies that take carbon dioxide out of the atmosphere and store it underground, as more scientists and environmentalists question the wisdom of these plans.

Researcher Anders Hansson's at Linkoping University's Department of Technology and Social Change in Sweden this week published a study that concluded that the risks and complications of carbon capture and storage are grossly underestimated, according to a report in ScienceDaily.

A Berkeley Lab study identified locations of power plants, oil wells, and geological formations in the U.S. that have the potential to store carbon dioxide. Click on the image to go to the report.

(Credit: Lawrence Berkeley National Laboratory)

"In full scale, this technology only exists in the imaginations of the people developing it," Hansson said. "It's overly optimistic to place such great faith in it, considering all the uncertainties found in the scientific literature."

The technology is being tested but has not yet been done at a large enough scale--billions of tons of CO2--to effectively sequester carbon from the atmosphere, he said.

He argued that there must be more debate over the merits and drawbacks of carbon capture and storage or there could be a backlash against it. In a study last year, the Massachusetts Institute of Technology called for government-backed projects to attach carbon storage to coal plants.

Environmental watchdog GreenPeace issued a statement earlier this week, calling carbon capture facilities attached to coal-fired power plants "dubious technology" and a scam.

Other concerns related to putting carbon underground, which would be stored for decades if not hundreds of years, include the potential for leaking and the impact it could have on soil chemistry.

Moving forward, and underground
Even with reservations, development of carbon capture and storage, or CCS, is moving ahead because it is considered a potentially effective way to mitigate climate change.

On Tuesday, the Department of Energy awarded $126.6 million in grants to test the effectiveness of storing carbon dioxide in geological formations in Ohio and California.

The Department of Energy on Wednesday also communicated its requirements for $1.3 billion in potential funding for its FutureGen project. The DOE restructured the entire program earlier this year, citing escalating costs, in a move that remains controversial among lawmakers and energy companies.

The DOE funding will go to developing the gear to equip coal plants that use IGCC (Integrated Gasification Combined Cycle) technology with equipment that can store carbon underground. The goal is to have a commercial-scale operation by 2015.

The requirements call for each plant to sequester 1 million metric tons of CO2 annually and to capture a minimum of 81 percent of the CO2 emitted. The equipment must also remove 99 percent of sulfur from the coal's content and reduce nitrogen oxide to low levels.

Pumping CO2 is already done commercially to improve oil and gas exploration.

Exxon on Monday announced plans to build a facility that will take carbon dioxide from a natural gas treatment plant, freeze it, and then pump it into gas wells in a high-pressure steam, according to the Dallas Morning News.

VentureBeat earlier this week detailed a number of other carbon storage projects around the world, including China.

The Department of Energy announced on Wednesday that it has pulled out of a carbon-capture technology project in favor of a restructured funding mechanism.

The DOE last year signed an agreement with the FutureGen Alliance, a coalition of coal and oil companies, to spend about $950 million on a demonstration coal-fired power plant that injects carbon dioxide emissions underground. Last December, a site for the FutureGen project in Matoon, Ill., was announced by the Alliance.

On Wednesday, the DOE said that it has scrapped that agreement and issued a new request for information, which will solicit proposals for demonstration plants that generate at least 300 megawatts. The DOE also said that President Bush's 2009 budget will include a request for $648 million in so-called clean coal research.

The reason for the restructuring is a projected cost increase to $1.8 billion, said DOE Deputy Secretary Clay Sell during a conference call with reporters.

The DOE said that advances in carbon capture and storage technology mean that power plants will be able to store 30 percent more carbon dioxide than when the project was first conceived in 2003.

Under the new plan, a demonstration plant will be built by 2015, he said. A decision on funding is expected by the end of this year. Sell said it was conceivable that members of the FutureGen Alliance, who have said they will continue with the project, could participate in the overhauled FutureGen project.

He added that the request for information will not be limited to the integrated gasification and combined cycle (IGCC), the technique anticipated in the original FutureGen plan and the focus on the DOE's "clean coal" research and development.

The DOE will pay 100 percent of the carbon capture and storage portion of projects, Sell said. Under the former arrangement, the DOE shouldered too much financial risk, he said.

The restructured plan "protects the government's exposure and ensures that it is financially and politically viable," he said.

The decision is a bitter defeat for members of the FutureGen Alliance and those who had lobbied to have the project sited in Illinois.

Carbon capture and storage is considered an important technology to reducing overall greenhouse gas emissions, but the technology is unproven at a large scale. A study from the Massachusetts Institute of Technology last year called for government funding of carbon capture projects to work out technical issues.

Also scrapped from the previous FutureGen plans is technology to generate electricity during the carbon capture process.

The U.S. Department of Energy plans to pull its support of a $1.8 billion project to build a power plant that captures pollution underground, according to published reports.

The FutureGen project is meant to test cutting-edge carbon capture and storage technology, which is supposed to dramatically reduce emissions from fossil fuel-burning power plants.

Carbon capture and storage is considered an important technology to reducing overall greenhouse gas emissions, but the technology is unproven at a large scale. A study from the Massachusetts Institute of Technology last year called for government funding of carbon capture projects in the United States to work out technical issues.

In December, the FuturGen Alliance, which includes participation of oil and coal companies, announced plans to build its first facility in Matoon, Ill.

But ballooning costs and a dispute over the location prompted the Department of Energy to pull its support, according to an Associated Press article citing lawmakers who were briefed by the agency. An announcement is expected in the coming days.

A Department of Energy representative issued a statement saying only that the agency needs to reassess the project because of rising prices and technological advances.

Separately, Energy Secretary Samuel Bodman said at a U.S. Chamber of Commerce speech on Tuesday that President Bush's budget proposal next week "will start to deal with" tariffs on imported ethanol. "I think this industry is pretty close to being able to stand on its own," he was quoted as saying.