Deal signed on cross-border climate project

May 7, 2009 - Matthew Brown - The Associated Press

The leaders of Montana and Saskatchewan have agreed to develop North America's first large scale initiative to capture and store greenhouse gasses from a conventional coal-burning power plant.

Whether the $230 million effort succeeds could have profound implications for the power industry, which relies on coal for about half the electricity produced in the United States. Coal is also the largest source of carbon dioxide, considered the main driver in climate change.

The Montana-Saskatchewan project would capture carbon dioxide from a Canadian power plant and pipe it across the border into northern Montana. The gas would then be pumped into deep geologic formations for storage.

Montana Gov. Brian Schweitzer and Saskatchewan Premier Brad Wall signed an agreement Thursday to pursue the project.

A top carbon researcher said the project could engender new support for coal, at a time when the "dirty" fuel is under assault from environmentalists and some members of Congress.

"Coal has a bright future in power generation is North America if carbon capture and sequestration works," said Julio Friedmann, head of carbon management at the Lawrence Livermore National Laboratory in California. The Montana-Saskatchewan project, he said, "will help assess that future quickly."

The project differs from a spate of other recently announced climate change initiatives, because it involves retrofitting an existing coal plant instead of incorporating carbon-capture technology into a new facility.

There are about 600 coal-fired power plants operating in the United States.

Montana has some of the largest coal reserves in the nation. Schweitzer said developing that resource is only possible if its contribution to climate change is neutralized.

"For us to significantly develop our coal resources, technologies have to be developed to eliminate the greenhouse gasses," he said. "Ultimately there will be scientists from all over the world that will come here to study what we are doing."

Saskatchewan Premier Brad Wall said the project marks a "new era" of cooperation between the two governments.

The leaders laid out an ambitious schedule that calls for construction to start as early as this fall and for the project to go online in 2011. Both leaders are turning to their federal governments to help cover costs.

"The timeline is aggressive, and particularly important to that is the federal involvement on both sides of the border," Wall said. "We've got a chance to be on the leading edge."

Saskatchewan is putting up the equivalent of $42 million and asking its federal government for $85 million more.

Montana is seeking a $100 million Department of Energy grant for its contributions, a carbon dioxide pipeline and underground storage facilities.

Schweitzer policy adviser Mike Volesky said the state hopes to tap into more than $3 billion in federal stimulus money dedicated to advanced coal and carbon capture projects.

Previous estimates put the cost of the project as high as $250 million. Volesky said the figure is likely to fluctuate as details are worked out.

The carbon dioxide would be captured from a power plant in southern Saskatchewan owned by SaskPower. It would be piped 50-60 miles south into Montana, where the gas would be injected deep underground for storage.

The gas could later be withdrawn for use in oil production, a long-standing industry practice in which carbon dioxide is pumped into the ground to push oil out of aging reserves.

Montana's Poplar Dome geological formation, east of Medicine Lake, appears to offer the best storage site, state officials said.

Other carbon capture proposals linked to proposed coal power plants are in the works in Montana, Wyoming, Ohio, Illinois and elsewhere.

Most involve a process known as gasification, in which coal is turned into a gas before it's used to generate electricity. Gasification - already in use commercially at a plant in Beulah, North Dakota - makes it far simpler to capture carbon dioxide because the greenhouse gas is separated from other gasses early in the industrial process.

But building new, cleaner plants does not resolve the dilemma posed by the nation's working coal-fired power plants. Those produce a cumulative 2 billion tons of carbon dioxide annually

The goal of the Montana-Saskatchewan project is modest by comparison - capturing 1.1 million tons of the gas over the next four years. That equals about 30 percent of the carbon dioxide coming out of the SaskPower plant.

"There will be nay-sayers that say 30 percent isn't enough," Schweitzer said. "But it's 30 percent more than anybody else is doing."