Coal Gasification and Carbon Capture and Sequestration: What and Why? Clean Air Task Force February 2006

2 Overview Technology Description Environmental Profile Status of Carbon Sequestration Why it Matters to Climate

3 hydrogen A partial oxidation process that can convert any hydrocarbon into hydrogen and carbon monoxide (synthesis gas or syngas). (CH) n + O2H2 + CO For example: 2 CH4 + O2 4H2 + 2 CO [ Methane] [Oxygen] [Hydrogen] [Carbon Monoxide] Gasification Technology Overview: The Basic Chemistry Process Conditions: 1,800 – 2,800 Deg F, 400 – 1,000 psig

4 Integrated Gasification Combined Cycle (IGCC): Proven Technology Source: US Dept. of Energy/National Energy Technology Labs (NETL)

5 Nuon (Demkolec) – Netherlands Power / Coal Wabash (Global/Cinergy) – USA Repower / Coal, Pet Coke Tampa Electric Company – USA Power / Coal, Petroleum Coke Frontier Oil, Kansas – USA199645Cogeneration / Petroleum Coke SUV – Czech Republic Cogeneration / Coal Schwarze Pumpe – Germany199640Power & Methanol / Lignite Shell Pernis – Netherlands Cogen & H2 / Visbreaker Tar Puertollano – Spain Power / Coal, Coke ISAB: ERG/Mission – Italy Power / Asphalt Sarlux: Saras/Enron – Italy Power, Steam, H2 / Visbreaker Tar Exxon Chemical – Singapore Cogeneration / Ethylene Tar API Energia – Italy Power & Steam / Visbreaker Tar Motiva LLC – Delaware, USA Repower / Pet Coke Nippon Refining – Japan Power / Asphalt Commercial IGCC Projects (14) Project – Location Start-Up Megawatts Products - Feedstock Total IGCC Megawatts – 3,632 MW Total Experience, Operating Hours on Syngas > 750,000 hours

6 Emerging Technologies Innovative gasification technologies are being developed by several companies: For example, Boeing Rocketdyne, Texas Syngas, Genesis Environmental, Enviro-Power Int. (EPIC), GreatPoint Energy However, these technologies have not yet progressed to commercial demonstration Some proven biomass gasifiers are being offered for coal (e.g. Primenergy) Low rank coal processing systems to make these coals more suitable as gasification feed stocks are under development These technologies may shape third generation IGCC power plants (probably in the time frame). However, these emerging technologies will be introduced into the Coal to SNG and Coal to Liquids market segments first.

US Gasification Target Areas: Midwest/Eastern Coals (Higher Sulfur) and Petroleum Coke Now, Western Coals in Near Future

Power Generation: Differentiators that favor IGCC over boiler technologies Pre-combustion clean-up of fuel prior to power generation Environmental Technology => Greatest potential for future proven lowest NOx, SOx, particulate matter and lower hazardous air pollutants, proven mercury and carbon dioxide removal, lower water usage, lower solids production sulfur and non-leachable slag by-products Proven polygeneration flexibility, now and in future power, hydrogen, steam, chemicals, zero-sulfur diesel Practical opportunity to retrofit carbon capture equipment.

9 Mercury Emissions IGCC is essentially the only coal technology that can effectively remove mercury from the environment. Carbon beds have demonstrated 99.9% mercury removal from syngas (post gas- clean-up). Carbon beds are less expensive and produce vastly smaller volumes of solid waste than activated carbon injection at PC plant. Carbon bed waste is managed as hazardous waste which inhibits re- emission. Initial syngas mercury removal is in gas- clean-up system (before mercury bed). Much of this mercury is captured in wastes managed as hazardous, which inhibits re-emission.

10 SO2 Emissions

11 NOx Emissions

12 Solid Waste and Water Use Solid Wastes Less Volume: IGCC produce about half the solid wastes of conventional coal plants. Better Form: IGCC solid wastes are less likely to leach toxic metals than fly ash from conventional coal plants because IGCC ash melts and is vitrified (encased in a glass-like substance). Water Use Less Water: IGCC units use 20%-50% less water than conventional coal plants and can utilize dry cooling to minimize water use.

13 Key IGCC Market Barriers Unfamiliar and uncomfortable technology to power industry: chemical plant not combustion boiler Currently higher capital and operating costs relative to supercritical boilers Standard designs and guarantee packages not yet fully developed Reluctance of customers to be early adopters, and assume technology application risk Emerging business models: Next IGCC will be each alliances first Few units in operation (14), many located overseas, and most not on coal Environmental benefits threaten existing coal power fleet Lingering availability/reliability concerns (spare train will help, but not eliminate the perceived risk) Questions about feasibility and cost using low-rank coals, particularly lignite IGCC is an emerging industry, vs. established boiler industry Real interest in coal gasification to SNG, zero sulfur diesel, ammonia and other chemicals will in turn assist IGCC development

14 Geologic sequestration options IPCC Special Report on Carbon Dioxide Capture and Storage Summary for Policymakers as approved by the 8th Session of IPCC Working Group III, September 25th, 2005, Montreal, Canada

15 Good fit between likely coal plant locations and geologic storage availability IPCC Special Report on Carbon Dioxide Capture and Storage Summary for Policymakers as approved by the 8th Session of IPCC Working Group III, September 25th, 2005, Montreal, Canada

16 Carbon Geologic Storage Capture: Issues Subsurface issues: Is there enough capacity to store CO 2 broadly? Do we understand storage mechanisms well enough? Could we certify and decertify injection sites with our current level of understanding? Once injected, can we monitor and verify the subsurface CO 2 ? Near surface issues: How might capacity distribution affect deployment and siting of zero- emission projects and new coal plants ? What are the probabilities of CO2 escaping from injection sites? What are the attendant risks? Can we detect leakage if it occurs? Will surface leakage negate or reduce the benefits of CCS? From: S. Julio Friedmann, Lawrence Livermore Laboratory

17 The state of knowledge To a first order, the science supports successful carbon storage. Science and technology gaps appear resolvable and should focus on key problems (e.g., wells) LARGE SCALE tests are crucial to understanding successful deployment of carbon capture and sequestration (CCS) and creating appropriate policy/economic structures. From: S. Julio Friedmann, Lawrence Livermore National Laboratory

18 Experience and Evolution from Oil & Gas Operations Acid Gas Injection Enhanced Oil Recovery (EOR) Natural Gas Storage CO 2 Transport 2000 miles of CO2 pipelines in US

19 Current underground injection practices vs power sector CO2 Mt/year FL Municipal Wastewater Oilfield Brine Hazardous Waste Acid Gas Natural Gas Storage CO 2 for EOR OCS water injected for EOR and brine disposal OCS gases (e.g., NG) Large quantities Long Time Frame Gases ~.5 Gt ~2 Mt ~34 Mt ~28Mt ~150Mt ~2.7 Gt ~6Mt ~1.2 Mt Sub-seabed Source: M. Granger Morgan, Climate Change: State of the science and technology EPRI Summer Workshop, August, 2002; Complied by EPP Ph.D. student E. Wilson with data from EPA, 2001; Deurling, 2001; Keith, 2001; DOE, 2001; DOE, CO 2 from all US power plants ~1.7 Gt

20 Climate Implications of Coal Gasification/GCS Likely a necessary part of long term portfolio Absolutely necessary as an alternative to short term pulverized coal development in US and developing world Possible pathway to lower cost hydrogen

21 Climate: 450 ppm CO 2 means deep cuts in emissions Stabilizing concentrations at 450 ppm after 2100 would require deep global CO 2 emissions reductions beyond these cuts after Every year that emissions go up, not down, makes the possibility of meeting the 450 ppm goal more difficult. Presently, carbon emissions growing > 100 MT/year. Achieving 450 ppm solely from CO 2 means cuts of up to 80% emissions from 2000 levels by 2100 for Annex 1 countries and 40% globally.

22 But new pulverized coal plants are locking in huge future carbon emissions New PC power plants: Are the longest-lived energy system investments being made as they will operate for 50 – 60 years; Are the most carbon-intensive energy system investments being made; and Have little or no practical potential for adding equipment that could capture carbon before it is emitted and then injecting the captured carbon into geologic formations for permanent sequestration. Large numbers of new PC power plants are being built today and are projected to be built over the next twenty five years – primarily (56%) in China and India. If these projected PC plants are built, they will clearly bust the global carbon budget for achieving the EU temperature targets. This batch of new coal plants will burn more coal in their lifetime than has been burned by industrial society to date.

23 New coal in China/India dominates projected carbon growth China coal India coal

24 Projected carbon lock-in from new PC plants through 2030

25 China new PC power plant carbon emissions in context

26 The Scale Issue 500 PPM = 7 GTC/year reductions by mid- century. That would require about 12 TW of clean energy -- about same as all energy consumed on Earth today.

27 Existing commercial low carbon technologies good but not enough to fill the wedges we need Adapted from Pacala and Socolow (2004) Note: Mid-century target of 550 PPM requires 7 GTC reduction from business as usual, or roughly 12 TW of carbon-free energy.

28 IPCC View of Carbon Capture and Storage Recent IPCC modeling sees CCS as providing a considerable portion of total CO 2 least cost reductions during this century. IPCC estimates that widespread availability of CCS will reduce total carbon mitigation costs by 30%. IPCC Special Report on Carbon Dioxide Capture and Storage Summary for Policymakers as approved by the 8th Session of IPCC Working Group III, September 25th, 2005, Montreal, Canada

29 Acknowledgement Thanks to Luke OKeefe of OKeefe Consulting, LLC for assistance in preparing this presentation