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Coal’s best hope rising with costliest US power plant

It’s here in Kemper County, 90 miles southwest of Tuscaloosa, Alabama, that utility Southern Co. is building the first large-scale power plant in the U.S. designed to transform coal into gas, capture the carbon dioxide and pump it underground. If it succeeds -- and there are plenty of doubters -- it will boost the fortunes of the fossil fuel that drove the Industrial Revolution but has lost ground to cheaper, cleaner alternatives in the U.S.

“Kemper is a first-of-a-kind plant that could be a game changer,” said John Thompson, director at the Clean Air Task Force, an environmental group that supports the project. “The central reality is that we can’t burn coal the way we have for the past 30 years.”
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Skeptics question whether Kemper will work as advertised when it begins operating later this year, and even if the carbon it captures will stay locked up underground. In 2011, carbon dioxide from a natural reservoir blew out of the oilfield where Kemper’s gas is to be pumped, spewing for days.

“There is no such thing as carbon-dioxide sequestration in an oil field,” said Thomas A. Blanton, a Hattiesburg oil man who is helping lead the opposition to Kemper in Mississippi. “It’s a myth.”
Top Fuel

Despite the best efforts of environmentalists, coal, the world’s most abundant fossil fuel, is still used more than any other source to generate electricity and is even experiencing growth overseas because of its low cost. In the U.S., however, booming natural gas production and looming environmental rules cast a shadow over its future unless technology can come to the rescue.
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The 582-megawatt Kemper project, the only major coal plant being built in the U.S., is a showcase of technology -- and has a price tag to match. It will cost more than twice the initial estimate, making it one of the most expensive power plants ever built.

It is also the linchpin of President Barack Obama’s efforts to spur development of so-called clean-coal technology. The Environmental Protection Agency’s first greenhouse-gas regulations, proposed in September, rely to a large degree on this plant to legally justify that standard.
Cost Effectiveness

Kemper is the only major clean-coal power plant funded by the U.S. Department of Energy that has so far broken ground. Even with the offer of billions of dollars of government subsidies, the other projects have been scrapped, delayed or are facing funding woes that may doom them -- illustrating the troubled history of efforts to cut coal’s environmental impact. Coal generates twice the climate-warming carbon dioxide as natural gas when burned to generate electricity.
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Since the 1950s it’s been the mainstay of electricity production. It accounted for 39 percent of total U.S. generation last year, down from almost half in 2007. It’s use bounced back early this year, as frigid weather and pipeline bottlenecks forced a temporary spike in gas prices.

But utilities are going ahead with plans to shut coal-fired plants. In 2011 and 2012, coal units capable of generating 14 gigawatts of electricity were shuttered. Another 63 gigawatts -- more than a fifth of the coal fleet -- may disappear by 2017 because of rules curbing mercury and other pollutants, according to projections by Bloomberg New Energy Finance.
Emission Limits

And more rules, which aren’t part of that estimate, are coming: EPA’s proposed emission limits would effectively ban the construction of new coal plants, according to industry critics. Separate EPA rules for greenhouse gases from existing plants are coming in June.
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That is why Kemper, the biggest construction project in Mississippi, is so important to the future of coal. Conceived from a two-decade collaboration between the Department of Energy and Southern’s engineers, Kemper was touted when unveiled as a way to boost development of Mississippi’s lignite coal, diversify Mississippi Power Co. away from reliance on natural gas and tackle climate change.

“This is going to produce low-cost, reliable power for Mississippians for decades and decades to come, and it’s going to do it with an absolutely unprecedented technology,” Haley Barbour, a Republican who was the state’s governor, said at the plant’s groundbreaking in 2010.

Source: Bloomberg