Carbon capture makes U.S. coal growth uncertain

By Timothy Gardner

NEW YORK (Reuters) - Growth in U.S. coal use should pivot on the development of a technology utilities may have to adopt to cut greenhouse emissions, the head of the U.S. Energy Information Administration said on Monday.

Billions of dollars are at stake on how much coal the United States will burn in the future. The United States has more than 200 years supply of coal -- the world's largest -- and its production of natural gas, a competing fuel, is flat.

Coal emits more carbon dioxide -- the main gas scientists link to global warming -- than any other fuel. Coal-fired power plants generate about 50 percent of U.S. power and the EIA has forecast that figure will expand to about 57 percent by 2030.

The forecast does not factor in adoption of carbon capture and sequestration (CCS), a technology not in commercial use but which could be added to power plants to siphon off CO2 emissions, stopping them from going up the smokestack.

The EIA forecast of 57 percent coal dependency is "very uncertain given the possible policy changes and possible technological changes," Guy Caruso, the EIA administrator, said via phone from the Reuters Energy Summit in Washington.

"The technology is moving forward, and there may be some carbon restrictions imposed some time between now and 2030," he said.

President George W. Bush has opposed mandatory caps on heat-trapping emissions. But 2008 presidential candidates from both major U.S. parties have said they would support hard carbon cuts in the country, the world's top emitter of heat-trapping gases.

A policy change to mandatory emissions caps could put a price on emitting CO2 that would help pay for the technology, according to a Massachusetts Institute of Technology study, and others.

If the price of emitting carbon rose from zero today, to $25 per tonne, the percentage of U.S. coal use by 2030 could fall from 57 percent to just below 50 percent, Caruso said in an interview after the summit. The price could push utilities to use low-carbon sources, like renewables and nuclear power or natural gas. On the other hand, a steep price drop in the technology over time could bring coal use back up, he said.

There are about 12 U.S. coal-fired power plants being built, the most in decades. Companies have plans to build about 150 new coal plants in total, though how many of those will be built is uncertain.

With CCS, carbon dioxide emissions would be piped into aging oil and natural gas fields, or deep underground in saline formations close to power plants.