New ways to gasify and clean coal emerge

ST. LOUIS (Reuters) - New ways to gasify coal are emerging that could help reduce the cost of managing the fuel's greenhouse gas emissions, officials at small companies said.

A race to develop cleaner ways to burn coal is emerging as the United States hopes to use its vast reserves of the fuel to cut imports of expensive natural gas and oil. But coal emits more carbon dioxide, the main gas scientists link to global warming, than any other fossil fuel.

Big U.S. utilities are beginning to consider using heat and pressure to turn coal into a natural gas-like fuel at power plants because it can reduce pollutants like acid rain and smog components. Technology can be added to the process to siphon off CO2 and bury it underground so that it does not reach the atmosphere.

Adding such technologies to power plants can be expensive. A recent Massachusetts Institute of Technology report said carbon capture and sequestration at the plants could boost power bills by 20 percent.

That leaves opportunities for companies to gasify coal close to where it is mined, send the natural gas via pipeline for home heating or for burning at power plants, and sell the carbon dioxide for pumping into nearby aging oil fields where it can boost production.

"We can save money because we don't have to transport coal via rail all the way across the country to make power," Andrew Perlman, chief executive of GreatPoint Energy, said on the sidelines of a McCloskey Group conference on the future of coal.

Some environmental groups like the Natural Resources Defense Council are optimistic about carbon capture and sequestration. But many others are concerned about whether the gas can be kept permanently underground.

Perlman said the company's gasification process, similar to catalytic cracking at oil refineries, also saves money because it uses lower temperatures than conventional gasification and can process cheaper feedstocks like lignite to make natural gas for $3 per million British thermal units.

GreatPoint, funded by private money from sources including California venture capitalist Vinod Khosla, developed a pilot plant in Illinois. Perlman said the company hopes to produce 1 percent of U.S. natural gas by 2016.

Another method of gasification is being developed by Econo-Power International Corp., which uses a technique from China to turn coal into natural gas to fuel ethanol plants. Bill Douglas, a vice president at the company, said it can be convenient for ethanol plants to receive coal shipments because most of them are already situated on rail lines. The carbon dioxide can be extracted "relatively easily" from the process, he said.

The Underground Coal Gasification Partnership hopes coal can be gasified at formations where the fuel is found. Michael Green, the director of the partnership, said the technology holds promise, as long as it doesn't pollute local water supplies.