Montana Announces Coal-to-Liquids Plant
Date: 04-Oct-06
Country: US
Author: Laura Zuckerman
The US$1 billion Bull Mountain Coal-to-Liquids Plant is slated to begin producing 22,000 barrels per day of diesel fuel and 300 megawatts of electricity - enough to power 240,000 homes - in six years.
Schweitzer and the companies behind the plant, including chief developers Arch Minerals, part of Arch Coal and DKRW Advanced Fuels LLC, say the production of diesel fuel and electricity at the Bull Mountain site will not release the greenhouse gases - including carbon dioxide and sulfur dioxide - usually associated with coal-generated electricity.
That means the fuel and power produced near the Bull Mountain Mine north of Billings in south central Montana will meet the tighter environmental standards recently imposed by California on imported electricity.
"This is California-friendly energy," Schweitzer said Monday. "California is the 900-pound gorilla in terms of electrons and fuels and we are the 900-pound gorilla in terms of delivering those products.
"They like it without carbon dioxide, we'll deliver it without carbon dioxide. They like it without mercury, we'll deliver it without mercury. They like it without sulfur - gotcha covered."
News of the plant comes at a time when oil is over US$60 a barrel, making low-emission coal conversion economically feasible, say energy experts.
About two-thirds of crude run through US refineries is imported. While the United States has limited oil and gas reserves, it has enough coal to last more than 200 years; that compares to just 10 years of natural gas reserves, said Ralph Barbaro, chief analyst with the consulting firm Energy Ventures Analysis in Arlington, Virginia.
In the two-step process at the Montana plant, coal will be converted to synthetic gas, or syngas, through technology provided by General Electric. Then the syngas will be converted to liquids.
Barbaro said the uncertain world oil market and the fuel's high price has help intensify interest in coals-to-liquids development.
"It's an answer to our energy crisis," he said. "We're relying on foreign sources for most of our oil. This would be a reliable and clean domestic energy source. The plant in Montana is a sign of the energy times and a function of market price."
While a handful of states, including Wyoming and Illinois, are poised to develop similar facilities, Montana has the lead in coordinating environmental permitting and financing coal-to-liquids, industry experts said.
The Bull Mountain plant will inject waste carbon dioxide - a byproduct of gasifying rather than burning coal - into the ground instead of releasing the greenhouse gas into the atmosphere. The stored carbon dioxide will be piped to Montana's oilfields, where producers use it to enhance the recovery of oil.
Some of the nation's leading environmental groups applauded Montana's ambitious alternative energy plan when it comes to electricity but expressed concern about the production of diesel from coal, or liquid fuel.
"We don't support making liquid fuels out of coal even if the carbon dioxide is sequestered because in many ways it's just as dirty as the current process of producing gasoline," said David Hawkins, director of the climate center for the Natural Resources Defense Council. "If we're going to build a plant such as the one in Montana, let's just focus on clean electricity."