TPG Marine Enterprises


Can Coal Still be an Energy “Winner”?

Not “King” Coal or “Dirty” coal, or even “Clean” coal: If it’s going to be a true winner, it must be “Smart” coal.

Friends of Coal covered a vast majority of the U.S. population in the past.  Coal helped fuel the Industrial Revolution and bring prosperity to many. Today, coal’s carbon imprint has made it a perceived environmental pariah so membership in the Friends of Coal club has greatly diminished. The good news is there are recent coal-fired power plant conversions in Canada and the U.S. that offer paths to revitalizing coal and again enlarging this club.

The Boundary Dam Integrated CCS Project

In 2011 SaskPower began the retrofit of the Boundary Dam power plant in Estevan, Saskatchewan, Canada from conventional coal energy generation to post-combustion carbon capture sequestration (CCS) along with coal-fired power generation: the first of its kind in the world. By 2014 the plant was up and running and flaws were being worked out. The targets were aggressive:

  1. Generate 120 MW of power while capturing 90% of the normally atmosphere emitted CO2.
  2. Capture 1,000,000 metric tons of CO2 annually.
  3. Sell the captured CO2 to Cenovus for enhanced oil recovery at a nearby oilfield.

The combined goals not only would dramatically reduce the plant’s negative carbon footprint, but provide an additional income stream for the facility. In addition to CO2, there are opportunities for the sale of other byproducts from the plant conversion. Sulphur dioxide (SO2) would be captured, converted to sulfuric acid and sold for industrial use. Fly ash, a by-product of coal combustion, would also be sold for use in ready-mix concrete, pre-cast structures and other concrete products. Projections were for the plant to be fully and optimally operational by 2017. The cost to construct the CCS aspect of the plant: $436,000,000 in today’s dollars. (An additional $454,000,000 in today’s dollars was spent to modernize the plant, but this would have been spent without the CCS project).

In the early days of operation, the facility achieved 80% carbon capture, but there have been adjustments and shortfalls that occasionally caused the capture rate to fall below 40%. As of February 2016, the final adjustments and optimizations are still a year away. Unfortunately, but not surprisingly, the naysayers are out in force by labeling the project a failure before its actual target date. These too-early and potentially destructive critiques seem ill advised. In year one, the plant captured and sold 400,000 metric tons of CO2. Remember, the goal is 1,000,000 tons. However, this is leading edge technology. It may take some time to get it right.

The larger point is this: SaskPower is innovatively trying to keep coal relevant. The upgrades and CCS program will take this plant more than thirty years farther into the future than its dirty-coal cousins. There is a sense of cooperation and forward thinking here. SaskPower is a true “friend of coal” – at whatever level of success they achieve. They purport a mindset geared for present and future success: “SaskPower aims to use the results of this project to decide on using CCS at its other coal-fired power plants, as well as share its experience with other CCS developers worldwide, through a knowledge-sharing consortium – the SaskPower CCS Global Consortium.”

In the US, two additional large-scale CCS projects , the Kemper County Energy Facility in Mississippi and the Petra Nova Carbon Capture Project in Texas,  are planned to come into operation in 2016. These continue to be steps in the right direction. Research from the Intergovernmental Panel on Climate Change shows that climate action will be 140% more expensive without carbon capture and storage and further that meeting the 2°C target could be impossible without it.

Is Natural Gas a smarter alternative?

The questions are piling up. Should utilities have moved their investment to natural gas, the current popular alternative? Several former coal utility plants have been converted to natural gas (“NG”). NG has about a 9% smaller greenhouse gas production than conventional coal. Yawn. And what about the NG delivery and storage system?

In California’s Alisa Canyon storage field, a natural gas leak sending 2,500,000 pounds of methane into the atmosphere daily took 112 days to cap. That’s more than all of California’s other greenhouse gas emissions combined per day. The network of pipes and caves that store natural gas in the US is creaky and fragile.

“Although California health officials have determined that the leak poses minimal health risks, its danger to the climate is more severe. About 10 percent of U.S. greenhouse gas emissions came from methane in 2012, and 30 percent of those emissions came not from fuel use, but from the extraction and distribution of oil and natural gas. Methane sticks around in the atmosphere for decades, rather than centuries like carbon dioxide, but it absorbs much more heat. On a time scale of 20 years, methane’s effects on global warming are about 84 times more potent than carbon dioxide’s.FiveThirtyEight.

NG creates far more problems than it solves and takes more jobs than it creates. It is a dangerous and non-benenficial energy source.

NG leaks occur everyday and in every region. “Methane is the primary component of natural gas, and it can leak almost anywhere in the natural gas supply chain. Studies show that it is leaking at almost every point in the supply chain — at drilling sites, along pipelines, at compression stations, at storage facilities. About the only thing unusual about the Aliso Canyon leak is its size. “The city of Boston alone had at least 1,868 documented unrepaired leaks in its gas lines as of March 2015, and the oldest has been leaking since 1985. As large as that number may sound, it underrepresents the problem because it includes only known leaks that have been reported to gas companies,” said Audrey Schulman, President of the Home Energy Efficiency Team, a nonprofit group in Cambridge, Massachusetts that focuses on energy efficiency issues and collects data on Boston and other Massachusetts’ cities. If we could figure out how much methane is leaking nationally and worldwide, we’d have an even stronger case for coal usage.

And we haven’t even broached the subject of the method of capturing much of that natural gas in the first place and its devastating polluting effects on the water table.

“Hydraulic fracturing, ‘fracking,’ as it’s colloquially known, involves injecting millions of gallons of water, sand, and chemicals, many of them toxic, into the earth at high pressures to break up rock formations and release natural gas trapped inside. Sixty miles west of Damascus (PA), the town of Dimock, population 1,400, makes all too clear the dangers posed by hydraulic fracturing. You don’t need to drive around Dimock long to notice how the rolling hills and farmland of this Appalachian town are scarred by barren, square-shaped clearings, jagged, newly constructed roads with 18-wheelers driving up and down them, and colorful freight containers labeled ‘residual waste.’ Although there is a moratorium on drilling new wells for the time being, you can still see the occasional active drill site, manned by figures in hazmat suits and surrounded by klieg lights, trailers, and pits of toxic wastewater, the derricks towering over barns, horses, and cows in their shadows. The real shock that Dimock has undergone, however, is in the aquifer that residents rely on for their fresh water. Dimock is now known as the place where, over the past two years, people’s water started turning brown and making them sick, one woman’s water well spontaneously combusted, and horses and pets mysteriously began to lose their hair.” Christopher Bateman

Thanks to fracking, the once pristine Delaware River is the most endangered source of fresh water in the US. Dimock, PA is not the only horror story connected to this relatively new and still partly mysterious extreme extraction technique. It is not impossible to imagine fracking communities around the country serving up drinking water akin to what is happening right now in Flint, Michigan – and worse. Plus — Texas and Oklahoma are experiencing numerous earthquakes tied to fracking impacts. The list of problems is long. Moratoriums may well give way to out-and-out banning of the procedure. While this would not be game over for NG, it would diminish its celebrity. No! Natural gas is not the answer. We should not have to sacrifice the water table for a greater quantity of Natural Gas. How did we get that so wrong?

Back to coal.    

This constructive attempt to provide a revival for coal will require creativity and cooperation, both commercially and politically. As for the costs, enough market cap has been lost by mining concerns over the last five years to have built dozens of Boundary dam styled CCS projects. While the coal industry dozed and ceded the “high ground” to the snake oil we call Natural Gas, we estimate tens of billions of dollars of investable coal value dollars went up in CO2. Now we have a war between energy platforms as the Natural Gas companies dig in to preserve their hard won gains and coal tries to soldier on with fewer generals and a rapidly diminishing arsenal. Coal mining companies are declaring bankruptcy at an alarming rate. (James River – 2014, Arch – 2015, ANR – 2015, Walter{US} – 2015.) We can’t change the past, but we can fight responsibly for a better future. We hope it is not too late.

An opportunity exists to bring together the best energy and government professionals to keep coal in the picture for the next 50+ years in responsible ways that preserve it as a mining industry and an environmentally friendly energy source. Currently, a divided SCOTUS has put an unprecedented hold on President Obama’s initiative to limit carbon emissions from power plants.  It may be 18-24 months before a final ruling is posted. The stay provides a window of opportunity for the coal industry to get busy and make a strong case for innovation, social responsibility and public/private partnerships. The time is now for mending fences and building coalitions.

So, how about a true “Coal for the Future Summit”? Or something like it? Not a meeting to bash the EPA and the EDF, but an actual roundtable event where execs, engineers, energy, mining and transportation professionals (including the EPA, EDF and SC) get together to build teams of problem solvers with the goal of making Coal the “good guy” again. For many, many decades coal fueled creativity and innovation. Now it’s time for creativity and innovation to fuel coal. And yes, the government will have to be involved with funding; heroic and honest labelling of the weaknesses and liabilities of Natural Gas; and oversight. It is late in the game, but this is not quite a Hail Mary. Smart Coal still has the bona fides to make a strong case for its wisely adjusted use. Good jobs and affordable power will result. To be credible, it has to be an effort initiated, championed and spearheaded by Coal, but attended and assisted by all the entities mentioned in this piece. If Smart Coal is looking for advocates and participants, TPG Marine will be happy to be the first to sign up.

Respectfully submitted,

Edward L. Robinson, IV

Chief Marketing Officer

TPG Marine Enterprises, LLC

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