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Coal — the king lives Natural gas prices lift hopes for coal-fired power, says TransAlta exec Gary Park Petroleum News Calgary Correspondent
Long a whipping post for environmentalists, coal is staging a comeback in North America, polishing its tarnished image as natural gas prices soar and production sags.
“Forget the images of the past and look ahead to technology that transforms an important asset,” said Jim Dinning, an executive with Calgary-based utility TransAlta and a popular bet to become Alberta’s next premier when Ralph Klein steps down.
He told a July conference of the Pacific NorthWest Economic Region that a key to unlocking coal’s potential is gasification, already used by power plants in the United States to transform coal into synthetic natural gas and other products such as hydrogen, sulfur, chemicals and carbon dioxide.
Dinning said the carbon dioxide byproduct, one of the leading greenhouse gases, could be shipped by pipeline and sequestered in depleted oil fields or used for enhanced oil and coalbed methane recovery.
That is already happening at a North Dakota plant operated by Dakota Gasification Co., which uses coal as a feedstock to produce power and a long list of products, including 200 million cubic feet per day of carbon dioxide that is shipped to southern Saskatchewan for an EnCana enhanced oil recovery project. Gasification not cheap But Paul Clark, TransAlta’s director of fuel supply, cautioned the conference delegates that gasification “is not cheap,” and is unlikely to proceed if there is a belief that cheaper natural gas prices are on the horizon.
Alberta, with Canada’s largest coal deposits, has estimated reserves of 800 quadrillion British thermal units, about eight times the annual U.S. energy requirement.
In the United States, many utilities are switching from gas-fired electricity to surplus power from coal-fired plants, which still represent about 50 percent of the nation’s generation capacity compared with 20 percent from gas plants.
That is a boon for companies such as Duke, American Electric Power and Southern Co., although those utilities are hesitant to make any claims about how much they have benefited.
Whatever the current reality, billions of government and private-sector dollars are being spent in a global race to find the cheapest way to convert coal into energy without the dirty emissions that have accompanied its use since the Industrial Revolution. Gas consumption expected to grow The pressure has been climbing since experts have forecast that gas consumption from power generating will grow to about 33 percent by 2015, involving up to $150 billion in infrastructure investment.
When the lights went out in California, the idea took root that there might be a new future for the dirtiest of fossil fuels.
George White, vice president of Canadian coal producer Luscar, said that if coal could be used as feedstock rather than oil or natural gas “then we’ve got new markets that didn’t exist before.”
He is optimistic that however long it takes, there will be a technology for goal gasification that will open the door to “numerous” different materials, including hydrogen for use in fuel cells to replace internal combustion engines.
Despite coal’s diminished role over recent years, advances in production, technology and transportation are introducing economies of scale.
For instance, a recent study by the U.S. Energy Information Administration estimated that thermal coal values have dropped by $6.27 per ton between 1970 and 2001 and are projected to drop by 0.8 percent a year through 2025.
Sherritt International Chairman Ian Delaney told his company’s annual meeting in May that Sherritt is seeking to boost coal as an alternative electricity source to shrinking gas reserves.
“We have all grown up in an era of abundant and cheap electricity. That is about to come to an end,” he said.
Delaney said Sherritt has had a number of discussions with Ontario government officials and “we hope to convince them to look to clean coal” rather than trying to reopen its two closed nuclear plants.
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