Coal-to-Gas Drawing Fire 01.03.08 Press

link to Globe article

Coal-to-gas plan drawing fire
Activists say Senate's incentive proposal doesn't do enough

By Robert Gavin
January 3, 2008

The Massachusetts Senate is considering incentives worth tens of millions of dollars to boost controversial technology that converts coal to cleaner burning synthetic gas, but would still spew greenhouse gases that contribute to global warming, environmental advocates said.
The proposal is under consideration as Senate bill writers put finishing touches on comprehensive energy legislation, scheduled for debate next week.

A recent draft of the bill would require utilities to purchase an unspecified percentage of power from coal gasification and other alternative energy sources, potentially generating a windfall of $50 million to $100 million a year for power producers using the technologies, according to Environment Northeast, an advocacy group in Boston.

The alternative-energy requirements would be separate and in addition to mandates requiring utilities to buy electricity from so-called renewable sources, such as wind and solar power.

Environmentalists argue that providing similar incentives for coal gas would undermine a key reason for promoting renewable sources: cutting carbon dioxide emissions that contribute to global warming.
Mandating that utilities buy power from alternative sources acts as a subsidy because it guarantees a market for the power, even if it costs more. It can also mean higher rates for customers.

"We've taken such a leading role in climate change policy, and here we are supporting coal," said Shanna Vale, staff attorney at Conservation Law Foundation, an environmental advocacy group in Boston. "It just goes against the goals Massachusetts has set."

If the alternative-energy requirements are adopted, among the biggest winners would be NRG Energy Inc., a merchant power company in Princeton, N.J., which operates a coal-burning plant in Somerset. NRG has proposed using plasma gasification, a technology which relies on extremely high heat to convert coal and organic materials, such as wood and sawgrass, to synthetic gas. The gas would be burned to fuel the power plant.

NRG says synthetic gas burns much cleaner than coal, cutting pollutants such as sulfur and mercury by 95 percent. But environmentalists contend a plant using it would still emit tons of carbon dioxide. The draft bill would require coal gasification to prevent the release of carbon dioxide to qualify as alternative energy sources, but doesn't set specific carbon dioxide reductions. That would be determined later by environmental regulators.

At a minimum, environmentalists said, technologies should produce less carbon dioxide than natural gas to qualify for public support.

Burning coal gas produces twice as much carbon dioxide as natural gas, according to Environment Northeast. At least 60 percent of carbon dioxide would have to be captured to cut emissions below those of natural gas.

"Its not clean energy unless you require greenhouse gases to be reduced," said Sam Krasnow, policy advocate at Environment Northeast. "This is a huge black coal mark that threatens to undo all the progress we're making."
State Senator Michael W. Morrissey, Senate chairman of the Legislature's energy committee, said the final version of the bill remains under discussion. Ultimately, he said, it could set a minimum standard for cutting carbon dioxide emissions, or eliminate the section on alternative energy altogether.

"There seems to be a lot of interest in that section of the bill," said Morrissey, a Quincy Democrat, "and there will be a full and open opportunity to debate it."

NRG's coal-gasification proposal has been the subject of criticism. State regulations require the company to find a cleaner-burning fuel by 2010 or shut down its coal-fired plant in Somerset. In the fall, it received preliminary approval from the state Department of Environmental Protection for its plan for plasma gasification, but the Conservation Law Foundation has petitioned for a more extensive environmental review.

A decision from the Executive Office of Energy and Environmental Affairs on that petition is expected as soon as today.

John O'Brien, senior vice president of government and regulatory affairs at NRG, said plasma gasification is one of several technologies NRG is developing at its power plants across the country as it seeks alternative energy sources while cutting carbon dioxide and other emissions. Renewable materials, such as wood and sawgrass, will account for about 35 percent of the feedstock for the synthetic gas at the Somerset plant, O'Brien added.

"We are working hard to reduce our carbon footprint," O'Brien said.

Another company that could benefit from the legislation is GreatPoint Energy Inc., a Cambridge firm with technology to convert coal to clean-burning methane gas while preventing the release of carbon dioxide. GreatPoint is building a demonstration gasification plant at another site in Somerset.

Andrew Perlman, GreatPoint's chief executive, said he agrees the state should set tough greenhouse gas and pollution standards before providing incentives.

"This would be great for our company," Perlman said, "if the Legislature puts in controls to prevent dirty versions of the technology."