COLUMBUS, Ohio -- Global warming has dramatically changed the daily routine of Michael Morris, chief executive of American Electric Power. It once took up a tiny sliver of his time. Now it consumes a third.
Morris' intense focus stems from his new role as overseer of a major energy first: installation of the world's first carbon capture and sequestration (CCS) system on a large, existing coal-fired power plant. He said he is "very confident" that his Ohio-based utility will begin operating the project in 2009.
With congressional failure to move forward with FutureGen, an ambitious plan to build a near-zero-emissions coal facility, American Electric Power (AEP) finds itself in a peculiar position. As one of the nation's biggest electric power producers, it is one of the few players left with the financial pockets, the agility and the will to move things forward on the ground, and underground.
"It's in our DNA to push the envelope," said Morris, noting that the company has a history of successful scientific firsts. "This technology is going to save the existing [coal] fleet and save the American electrical consumer trillions of dollars."
That technology is a new chilled ammonia process developed by Alstom, a Paris-based maker of integrated power plants. Hopefully, the process will be able to grab carbon dioxide from a belching power plant stack at low cost and without sapping massive amounts of electricity -- the main barrier for existing models.
An internal Department of Energy document last year cast doubt on the science (Greenwire, July 11, 2007), but that is not stopping Morris from trying it on AEP's 1,300-megawatt Mountaineer plant in West Virginia and shooting the captured gas 2 miles underground on-site. Initially, the process will grab about 1 percent of the plant's C02 output, equivalent to 20 megawatts.
"We're all keeping our fingers crossed that this is going to work. This is a big deal," said Judi Greenwald, director of innovative solutions at the Pew Center on Global Climate Change.
It was an easy choice for the 61-year-old businessman, since almost 70 percent of his power plants rely on coal. Although the company did not receive government funding for the project, he said it was not much of a financial gamble. AEP is combining $73 million with money from Alstom and likely will recoup the funds via slight increases in electricity rates.
But as confident as he is, he also has a nightmare scenario in the back of his mind. It "would make the Great Depression look like a joke," he thinks, if Congress imposes a tight carbon emissions reduction regime before CCS technology is ready.
The result would force AEP to shut coal plants and buy electricity from outrageously expensive alternatives, according to Morris. It's not a situation that would hurt him or his company financially, since the utility must supply power no matter what, but it would be electricity that comes with a sticker price that could kill the U.S. economy, in his view.
"Warren Buffett would have electricity. I might have it in my barn," he said. "Others wouldn't be able to afford it."
Many would disagree with his assessment. Supporters of an extra-tough cap-and-trade bill say that a similar scheme worked to control acid rain and that the United States and the world can't afford to watch polar ice caps melt because of global warming.
"From my perspective, trying to develop a technology that is only going to capture 1 percent of a plant's carbon dioxide initially seems like a stubborn move," said Lyndsay Moseley, Washington D.C. representative for the Sierra Club's national anti-coal campaign. "I think that we would better served with investments into renewable sources."
American Electric Power is investing in alternative energy, but Morris estimates that coal plants fitted with carbon capture technology -- which he acknowledges could raise rates in some areas from 5-7 cents per kilowatt-hour to as much as 15 cents per kilowatt-hour -- will still be much cheaper for his customers than power generated from wind and solar farms.
| PROFILE: Michael Morris |
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Position: Chairman, president and chief executive officer of American Electric Power Co. Inc. Past career highlights: CEO of Northeast Utilities, CEO of Consumers Energy, president of Colorado Interstate Gas Co., chairman of the Edison Electric Institute. Education: Bachelor's and master's degrees in science from Eastern Michigan University. Political affiliation: Independent, but "leans Republican." Personal: Married with two children; avid Detroit sports fan and golf player. Quote pick: If carbon capture and storage doesn't work, "then it would mean there's no way to address the global warming issue. The environmental events -- whatever they are -- are going to happen." |
At the West Virginia site where the utility will attempt the retrofit, operators expect to capture 200,000 metric tons of carbon dioxide yearly and inject it into deep saline aquifiers nearby. Drilling began on one of the first injection wells in August, according to Neeraj Gupta, a research leader at Battelle Memorial Institute, which is working with AEP on the project.
If Mountaineer is a success, the company will take the technology to a coal-fired unit in Oologah, Okla., in 2012 and try to capture 50 percent of the carbon dioxide there for use in enhanced oil recovery. Then, Morris said, he will begin retrofitting the largest generators in his fleet.
In his view -- which he concedes is more optimistic than the views of many other utility CEOs -- the U.S. coal fleet can have carbon capture and storage operational by 2015, a full decade before some climatologists warn all coal plants must stop spewing greenhouse gases or be shut down to prevent environmental catastrophe.
Some are skeptical about chilled ammonia's ability to be a savior and say there's a decent chance that chilled ammonia may not work when it is scaled up, leaving the industry where it started.
"We need to see 10 large carbon and capture systems working worldwide over the next decade," said Howard Herzog, a research engineer at the Massachusetts Institute of Technology. "AEP is taking a step in [the] right direction, but their plans at West Virginia still are not at the demonstration level necessary to prove this is the breakthrough."
During a recent interview at AEP's headquarters, company officials emphasized that everything is going as planned at a small test pilot on a Wisconsin power plant owned by We Energies. They compared the process to the development of the first car or airplane, in which things progressed in baby steps.
They must get past several ifs, though. In addition to uncertainty about how much power the carbon capture unit will require, they are not sure how trace pollutants in the post-combusion gas will respond to chilled ammonia on a large scale.
"You can get side reactions that may require you to redesign the system to handle something you didn't expect," said Gary Spitznogle, manager of carbon capture and sequestration engineering at AEP. Even the type of coal -- which often varies from plant to plant -- can come into play, since a different variety can produce a different result.
On the sequestration side of the equation, the site is big enough to allow AEP to avoid most of the prickly details about whose property sits above the stored carbon dioxide or who becomes liable if it leaks from underground. For future projects, though, the federal government needs to step up and put a regulatory structure in place to make CCS a viable option, said AEP senior vice president William Sigmon.
The cost issue also is not going away. Only a handful of utilities have the balance sheets to pull off a project like American Electric Power's without government assistance, said Kevin Book, a senior analyst at FBR Capital Markets. Even the cost of building a pipeline structure to theoretically transport carbon dioxide from power plants to storage sites is an unknown variable, he said.
Morris is looking to a bill sponsored by Rick Boucher (D-Va.) and Joe Barton (R-Texas) to provide part of the answer. It would create a $1 billion fund for CCS deployment, but critics such as Rep. Jay Inslee (D-Wash.) say the idea won't work without an accompanying price on carbon dioxide (E&ENews PM, July 11 ).
If chilled ammonia goes bust, Morris said he will try one of the other CCS technologies floating around, although he alleges that "none of them look as promising" currently as the Alstom technique. Even so, he says climate change is not the biggest challenge of his career, despite its time commitment. That distinction goes to his years as head of Northeast Utilities after it was under investigation by the Nuclear Regulatory Commission.
His optimism extends to the U.S. coal industry. He said the industry will thrive because of ongoing demand from countries like China and India, which he said would be thrilled to watch the United States snuff out its major electricity source while they fire their economic growth with fossil fuels. One upshot, he thinks, is that they will import the U.S. coal and burn it.
"If your goal is to shut down the coal fleet in the U.S. and worldwide, you will lose," Morris said. "In fact, if I were Peabody Energy [a large domestic coal company], I would stop selling here and send everything overseas."
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