SANTA BARBARA, Calif. -- A carbon capture and sequestration project started in West Virginia last year is working and ready to be ramped up to a level that would pump significant levels of carbon into formations several miles below the Earth's surface, said the chief executive of American Electric Power Co. Inc.

AEP CEO Mike Morris, who presides over the largest utility emitter of greenhouse gases in the United States, yesterday said a pilot project at the company's 1,300-megawatt Mountaineer power plant started in October has successfully captured 90 percent of the carbon from a 20-megawatt portion of the plant's exhaust.

"It's working really quite nicely," said Morris during a conference here sponsored by The Wall Street Journal, adding that he believes the project can be scaled up to 240 megawatts by 2013 or 2014.

The CCS project was started last October at the plant near New Haven, W.Va., in an attempt to demonstrate the feasibility of capturing carbon from a coal-fired generation facility. Ohio-based AEP owns and operates more coal-fired plants than any other U.S. utility.

The captured CO2 from the 20-megawatt "slipstream" portion of the facility's flue gas exhaust, which amounts to less than 2 percent of the power plant's total emissions, has been compressed and piped for storage into geologic formations about 1.5 miles below the Earth's surface.

Looking forward, Morris said the utility plans to inject more CO2 from the plant and is looking at a $660 million project, half of which will be funded by the Energy Department. Such an expansion would step beyond the relatively small 20-megawatt experiment to store CO2 from 200 to 240 megawatts at the same facility.

Still, the executive said CCS technology faces a number of ancillary challenges, among them legal questions about liability if something goes wrong and "not in my backyard" jurisdictional fights stemming from local opposition to hosting the buried emissions. He also fears real estate prices related to subsurface property rights could escalate to "some outlandish numbers" when and if speculators realize there is money to be made.

Morris said he would favor legislation similar to the Price-Anderson nuclear liability law that would protect CCS projects in the event of a major catastrophe, like an earthquake, that could lead to leakage. Such a measure would cover property damage associated with an accident but not the power plant itself, he said, much like Price-Anderson insures damage from a nuclear power incident. Price- Anderson caps the liability of nuclear utilities in a major accident and shifts it to the federal government.

Morris on IPCC controversy

AEP's chief was also asked to address a raging controversy over climate science at the U.N. Intergovernmental Panel on Climate Change, whose conclusions on global warming have been challenged in light of revealed factual errors and e-mails that some say prove the body tried to suppress data that contradicted its findings.

Morris said he is "pleased" the IPCC and the National Academy of Sciences have decided to take another look at the hard data, but he urged lawmakers and other observers to continue pursuing third-party assessments and peer-reviewed reports rather than trusting the same U.N. scientists responsible for the errors.

"I think it's a little silly to have the U.N. people take a look at it," he said. "What conclusion do you think they might come to?"

Pressed further on his view of the link between mankind and warming, Morris said "there's enough data" to justify cutting carbon output and making investments to do so.

"There's no issue that the billions of us who are occupying the globe are affecting things," said Morris, adding that he favors setting a price on carbon to send consistent signals to industry. "Let's do it. If we're wrong, we've made the world better. I think it's the right thing to do."

Following the comments from Morris (and others who called the IPCC corrupt), David Hawkins, director of the climate center at the Natural Resources Defense Council, said he felt that some in the coal industry have focused on the controversy at their own peril. He asserted that studies commissioned by the George W. Bush administration and a National Academy of Sciences report compiled during President Bush's term have confirmed the IPCC's basic finding that global warming is linked to human consumption of fossil fuels.

"Uncertainty is not the coal industry's friend," Hawkins said.