Coal plant poses quandary

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BILLINGS, Mont. (AP) — Here in the heart of clean-coal country, old-fashioned “dirty” coal is holding its ground.

Despite Gov. Brian Schweitzer’s national crusade for new technologies that promise to reduce greenhouse gases and curb imported fuels, the largest coal-fired power plant to be built in Montana in 20 years will do neither.

It’s a tale of big energy dreams meeting cold economic reality, and reflects the sizable economic and scientific hurdles ahead in the nation’s fledgling fight to rein in carbon emissions.

The $700 million Highwood Generating Station, proposed near Great Falls, will be a 250-megawatt power plant designed to light up central Montana the tried and tested way — burning raw coal to produce steam that will turn electricity-producing turbines. In the process, the plant will churn out an estimated 2.8 million tons annually of greenhouse gases including carbon dioxide, the prime culprit in global warming.

The technique has been around for more than a century. And Schweitzer’s crusade and public fears of a warming planet notwithstanding, it’s not going away just yet, industry representatives and federal officials said.

Coal-fired power plants account for one-third of greenhouse gases released in the United States, making them an obvious target for climate change activists. Earlier this month researchers from the Massachusetts Institute of Technology released a study asserting that the coal industry faces a “bleak” future if it fails to address the issue.

But new coal plant designs that promise lower greenhouse gas emissions are neither cheap enough nor reliable enough to offer an immediate substitute. No federal laws govern greenhouse gas emissions, and Montana is among the majority of states without laws of its own.

So if Highwood is built, the only nod to controlling carbon emissions will be a space left for expansion, in case future legislation forces the plant to retrofit carbon controls or it becomes cheap enough for the plant to do so voluntarily.

“At the end of the day, the customer has to pay the bill. We have to come up with the most cost-effective alternative to meet the needs of our customers on a day-to-day basis,” said Tim Gregori, general manager for Southern Montana Electric (SME), the cooperative behind the Highwood plant.

The U.S. Department of Energy projects conventional coal-fired plants like Highwood will satisfy the bulk of the nation’s growing energy demands through at least 2030. Those demands will be steep: 260 gigawatts of additional electricity, including for 145 gigawatts from coal — equivalent to almost 600 Highwood-sized plants.

The projections assume wind, solar and other renewable energies will not offer enough generating capacity to offset the need for coal.

That would lead to a 50 percent jump in carbon dioxide emissions from coal by 2030, from 2.1 billion tons in 2005 to 3.2 billion tons. Also, the new plants would simply keep pace with rising electricity consumption, doing nothing to reduce oil and gas imports.

By contrast, emissions of other pollutants, including nitrogen oxide, sulfur dioxide and mercury, are expected to fall as coal plants comply with regulations developed during the past 30 years in response to acid rain and mercury poisoning.

Schweitzer dismissed the federal projections, saying they do not reflect a rapidly evolving policy debate over carbon that could spur more rapid change. He said he plans to introduce a bill to the Montana Legislature in coming days that would give 50 to 75 percent equipment tax breaks to “clean and green” energy projects that capture or reduce carbon emissions.

“You have to have the ability to capture carbon,” he said. “It’s coming, absolutely.”

In recent months, as global warming gained more currency on the international stage, momentum has gathered behind a nationwide carbon cap that could drastically alter the Energy Department projections.

That was seen in the high-profile case of a Texas utility, TXU Corp., that scrapped eight new coal-fired power stations in the face of opposition from environmentalists.

TXU acted under pressure from investors including Goldman Sachs, the Wall Street investment bank. To Schweitzer, the utility’s about-face proved investors can force utilities to address climate change if they won’t do so themselves.

“I just know, because I’ve spent a lot of time on the East and West coasts with people who finance energy projects, that’s it’s increasingly difficult to get financing for a project that doesn’t have the ability to capture carbon,” Schweitzer said. “The more people go to (more advanced) coal plants, the more rapidly that will be adopted.”

There is agreement among many politicians, environmental groups and industry that such regulations are inevitable. Until they are in place, the utility industry and its financial backers face a “chicken and egg” quandary, said Steve Gehl with the Electric Power Research Institute, a California-based industry think-tank.

Curbs on greenhouse gas emissions depend heavily on developing new technologies, which require a substantial infusion of money. But investors will remain reluctant to sink cash into those technologies unless they are confident that they will work, Gehl said.

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