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Pros, cons of gasification weighed locally and around the country
Corpus Christi Caller-Times - March 14, 2009

CORPUS CHRISTI — Gasification technology, touted as a cleaner alternative for a $3 billion power plant in Corpus Christi, is the chosen method for a plant proposed in Odessa.

But the company wanting to build that plant says it needs government subsidies to get off the drawing board. The Odessa proposal is much smaller than the proposed Las Brisas Energy Center in Corpus Christi, with one-seventh the electrical output. And it must sell a host of byproducts to be commercially viable.

While gasification technology is not new, its application in commercial-scale power plants is limited in the United States. The technology was the subject of a coastal issues forum Monday night sponsored by the Coastal Bend Bays Foundation.

The process involves super-heating a solid fuel, such as coal or petroleum coke, to produce a synthetic gas. That gas then can be burned to produce power or put through other processes to form chemicals, fertilizers and fuels. Plants that produce power use a process called Integrated Gasification Combined Cycle, or IGCC.

The technology produces fewer air pollutants than burning the petroleum coke directly to power electrical generators, such as in the Las Brisas proposal for a 1,200-megawatt plant on the Corpus Christi Inner Harbor. The Clean Economy Coalition and the Nueces County Medical Society have said they would not support Las Brisas unless it uses gasification. If Las Brisas were to use gasification, the method is different enough that its designers would have to start over.

While opponents accuse Las Brisas of not considering gasification to make the largest profit possible, Las Brisas says there is no profit in gasification.

Managing partners Kathleen Smith and John Upchurch argue gasification is too expensive and would ruin the commercial viability of their plant, especially in a deregulated market such as Texas, where the company must sell its electricity in competition with other producers. A 2006 study by the Electric Power Research Institute found IGCC can raise the cost of electricity by 10 percent to 20 percent or more, depending on the technology and fuel.

Around Texas

At least two IGCC plants are proposed in Texas. One, planned by Summit Power of Bainbridge Island, Wash., would be in Odessa on the same site as the federal government’s defunct FutureGen clean coal project. It is much smaller than Las Brisas, at about 170 megawatts.

NRG Energy has filed an air permit application for another IGCC plant in La Porte, and company spokesman David Knox said the company is working with state and federal officials on a public-private partnership to be economically viable. He did not want to comment further on the preliminary plans.

Summit has hired Laura Miller, a former Dallas mayor who fought 17 proposed coal plants around the state in 2006. Through that effort, she and Houston Mayor Bill White founded the Texas Clean Air Cities Coalition, which several area cities, including Corpus Christi, have joined.

Since then, Miller has visited gasification plants in Florida and Europe to learn about the technology.

“I have come to the conclusion that there should never be another pulverized coal plant built in the United States,” she said. “It is old technology. Gasification technology is more expensive, but we’re evolving into a carbon-neutral society.”

However, Miller and NRG say their plans will require some sort of government assistance, especially in the tight credit market of the current economy.

“Because it’s very difficult to get $1.5 billion from the banks, the government is going to have to do something to get this industry off the ground,” Miller said.

Las Brisas plans to fund its $3 billion price tag privately, and company officials say gasification could double the capital costs.

The gasification plants also can sell all their byproducts, such as sulfur, slag (a glass-like leftover that can be used for concrete and roofing materials) and carbon dioxide for enhanced oil recovery. In enhanced recovery, the carbon is pumped underground and used to pressurize wells to recover oil that otherwise could not be pumped out.

“To make these plants even close to commercially viable you have to sell all of your available products,” Miller said. “Even then, it’s still a close call on the money because you’re adding so much equipment to turn the coal into something clean.”

A bill filed by state Rep. Phil King, R-Weatherford, would waive up to $100 million in franchise taxes for every IGCC plant through 2010 capable of capturing and sequestering at least 60 percent of the carbon dioxide it produces. The measure has been referred to the House committee on energy resources.

The bill also provides tax rate reductions for any oil producer that uses the carbon dioxide for enhanced oil recovery. A bill last session that would have exempted gasification byproducts from sales tax died in a Senate committee.

Around the country

Miller and other gasification proponents are hoping President Barack Obama’s administration will advocate incentives for their projects. As the economic stimulus bill was being debated, the Senate added $50 billion in federal loan guarantees for alternative energy projects such as gasification, but the provision was deleted.

The current Department of Energy program has $2 billion in loan guarantees set aside for coal gasification projects and $6 billion for gasification projects that incorporate carbon capture.

The final stimulus bill did include $3.4 billion for research and development of cleaner coal technologies such as gasification and carbon capture and storage.

Only two commercial-scale gasification plants in the United States, one in Florida and one in Indiana, produce power as their main product. Both were 50 percent subsidized by the federal government’s clean coal technologies program in the 1990s and are about one-fifth the size of Las Brisas. A third small plant attached to a Delaware refinery also produces power.

The other 16 gasification plants in the United States produce mainly chemicals or fuels. About 120 others, including 20 power plants, operate around the world, according to the Gasification Technologies Council.

An IGCC plant was proposed in Corpus Christi, at the Las Brisas site, but the Tondu Corp. abandoned plans because of increased costs. CEO Joe Tondu said Corpus Christi is an ideal location for an IGCC plant but his company couldn’t identify a market willing to pay for the pricier electricity.

The debate heating up in Corpus Christi is not unique. Solid-fuel power plants — whether using conventional technology or gasification — face opposition around the country. The Sierra Club’s Stop the Coal Rush program keeps tabs on 225 proposed power plants. Of those, 93 have been shelved for various reasons, and 82 are listed as active or progressing, including Las Brisas. The others are upcoming or uncertain.

And environmentalists say the possibility of carbon dioxide regulation is coming closer to reality under Obama’s administration. Carbon can be more easily and cheaply captured in the gasification process than in traditional plants. The Electric Power Research Institute found that cost of electricity increased 50 percent to 60 percent for IGCC plants that capture carbon emissions and 80 percent to 90 percent for traditional plants.

Last month the Environmental Protection Agency announced its intent to reopen the possibility of regulating carbon dioxide emissions from coal-fired power plants. A Bush administration memo in December had stated that the federal government would not limit carbon emissions.

Smith, managing partner of Las Brisas parent company Chase Power, pointed out the decision only signals the government will study the issue and said it will not affect plans for Las Brisas. Unless and until Congress passes regulations, Smith and managing partner Upchurch say, it’s unfair to require such of Las Brisas, which meets current state and federal regulations. But they are working on plans with their proposed energy buyers in case legislation is enacted.

The company also says that carbon sequestration technology is in its infancy and that the same environmental groups that champion gasification as an alternative also sometimes oppose it because of the uncertainty of storing carbon underground long term.

“Until the policies are enacted,” Smith said, “you’re not going to see the technologies change.”