CLIMATE:

Big Sky State makes play to be a CO2 importer

Montana Gov. Brian Schweitzer (D) has some big ideas for the role the Big Sky State could play in helping to create cleaner skies in a carbon-limited future.

If the unorthodox statesman gets his way, Montana could become a repository for vast amounts of carbon dioxide currently being spewed into the atmosphere by coal-fired power plants and other industrial sources, not just in Montana but in neighboring states and Canada, as well.

The state is moving to become a CO2 player on several fronts. It is crafting new policy in both the executive and legislative branches to regulate the greenhouse gas, while geologists at Montana State University are exploring the state's CO2 transport, sequestration and reuse capacity at the Big Sky Carbon Sequestration Partnership.

Schweitzer has even proposed that Montana become an importer of CO2 from a coal-fired power plant in neighboring Saskatchewan, where it would be pressurized and pumped 6,000 feet underneath a geological formation called Bowdoin Dome in northeast Montana.

"We have coal. We need to clean up the coal and get the CO2 out of it," Schweitzer told the Great Falls Tribune last month. "We can demonstrate that we can use [CO2] for enhanced oil recovery and along the way we can develop the technology to for geologically storing CO2."

Realizing Schweitzer's vision will not be easy, even in a coal-rich state like Montana, because so many uncertainties remain about both carbon-capture technologies and the environmental implications of pumping billions of tons of the supercritical liquefied gas underground.

Nevertheless, sequestration remains a hot topic in this and other states with potentially favorable geology for storing CO2, especially as the federal government moves to dramatically reduce the amount of CO2 emissions being released into the atmosphere. Congress and the Obama administration are considering a range of proposals for curtailing emissions from both industrial and transportation sector sources, and the federal government will soon dole out more than $1.5 billion for a range of sequestration projects.

Mike Volesky, natural resources policy adviser for Schweitzer, said deep saline formations are the primary targets for carbon sequestration, since many of these formations hold or have held hydrocarbons in the past. "If they held oil or gas or whatever for eons, they'll likely hold carbon dioxide for eons, as well," he said.

Schweitzer's commitment to CO2 capture and storage is not just about revenue generation, though hundreds of millions dollars could be made by the sale of storage permits to CO2 emitters. Rather, Schweitzer counts himself among the coal-state politicians who believe that the fuel must remain part of the nation's future energy mix, even as cleaner renewable energy sources come online. The state is the co-owner of an estimated billion tons of coal that could reap $1.4 billion in royalty payments over the next 40 years if they are opened up to mining.

About half of the United States' electricity is produced by burning coal, which in turn pours more than 2 billion metric tons of CO2 into the atmosphere each year, according to federal estimates. Meanwhile, coal's share of global electricity generation has increased sharply over the past few years, largely due to the rapid expansion of coal-fired power plants in China, India and other fast-developing countries.

Legislative efforts

Capturing and storing all of those fugitive emissions presents both daunting challenges and immense opportunities for states like Montana, which has abundant open space and an economy well-attuned to drilling holes in the ground to exploit subsurface gases. But lately, the focus in Helena, Montana's capitol, has been on the more arcane details of oversight, ownership and liability of underground storage activities.

Last year, lawmakers commissioned a study on the CO2 capture-and-sequestration issue but did not pass legislation establishing a regulatory regime. This year, the discussions have become more acrimonious, as Republicans killed two Democratic proposals to move the issue forward and backed their own proposal instead.

Schweitzer, who supported the Democratic proposals, attacked Republican state Sen. Keith Bales, whose bill was viewed by Democrats as too friendly to industry, saying the senator "doesn't know CO2 from Coca-Cola."

But after multiple amendments to address Democrats' concerns, the Legislature passed a bill that places CO2 regulation under the supervision of the state Board of Oil and Gas Conservation. The measure, which would give surface owners authority over underground "pore space" and require 20-year permits to pump CO2, now awaits Schweitzer's signature.

Volesky said all indications are that the governor will sign the bill. "I think that the consensus is that while it may not be a perfect bill, we've got a bill that's a good start, anyway," he said.

Opponents of the measure remain worried that the state is acting hastily on carbon sequestration, citing unresolved questions about the long-term implications of pumping large volumes of CO2 underground.

"I think the whole bill is unnecessary, unwise and premature, because we're trying to regulate a technology that does not exist," said Rep. Brady Wiseman (D), who voted against the measure.

"It's as if Congress 1,000 years ago, after the Wright Brothers landed, decided to develop safety standards for airlines and airports before there was any industry," Wiseman added.

But others, including companies that expect to have a direct role in developing a CO2 capture-and-storage program, say having regulations governing sequestration in place is vital for future economic development in the state.

Leo Berry, of the law firm Browning Kaleczyc Berry & Hoven PC, represents Great Northern Properties LP, the largest private owner of coal in Montana, with about 15 billion tons of reserves.

Great Northern has ambitious plans for development of that coal, some of which include the conversion of coal into syngas, a mixture that contains varying amounts of carbon monoxide and hydrogen. The conversion process produces carbon dioxide as a byproduct, and the company is considering capturing and reusing that CO2 as part of its business plan.

With a likely carbon tax or a federal cap-and-trade program for CO2 on the horizon, Berry indicated that it is important that Montana law have provisions governing carbon storage.

"The folks that finance these kinds of projects want an explanation of how you intend to address the carbon issue," Berry said.

While not opposed to a CO2 regulatory program, Anne Hedges of the Montana Environmental Information Center questioned whether the Board of Oil and Gas Conservation should oversee sequestration activities, noting that a majority of the board's members have interests in the oil and gas industry.

"The decisions made by the Board of Oil and Gas are always in favor of industry and always at the expense of the public and wildlife," Hedges said.

She said the program should be under the purview of the Montana Department of Environmental Quality, since that agency is well-equipped to regulate and control pollution.

Research and development

In addition to establishing a regulatory framework for CO2, Montana is funding an aggressive research and development program to determine the most effective technologies for making CO2 sequestration a reality.

Montana State University serves as the headquarters for the Big Sky Carbon Sequestration Partnership, a U.S. Department of Energy-funded program exploring the viability of storing CO2 thousands of feet below the surface in Montana and five other Western states.

The program has received about $12 million from the federal government and other sources since 2006, according to John Talbott, the partnership's deputy director. As one of seven regional sequestration efforts nationwide, the Big Sky partnership is mapping potential sequestration sites and carbon dioxide sources, as well as testing how different rock types and formations trap the pollution.

Previous studies indicate that the region's depleted oil and gas fields and saline aquifers could store more than 200 billion metric tons of CO2. By comparison, in 2005, human activity worldwide produced roughly 28 billion tons of CO2.

John Evans, the former head of the petroleum engineering department at Montana Tech, said the Williston Basin -- a sedimentary basin in eastern Montana, western North and South Dakota, and southern Saskatchewan known for its rich deposits of petroleum and potash -- probably is the best reservoir in Montana for carbon sequestration.

The Big Sky partnership's latest research is focused on determining the best approaches for storing CO2 in geologic and terrestrial systems. Researchers are looking at how the gas migrates and reacts in different rock formations after it is injected into the ground.

Talbott said the project's next major effort will be performing a large-volume test to see whether there is capacity in the region to store 100 years' worth of carbon emissions. The region currently emits about 119 million metric tons of carbon dioxide a year, just a fraction of the 7 billion tons of carbon dioxide emitted annually in the United States.

The projected eight-year test will involve capturing carbon dioxide from a proposed natural gas stripping facility and sequestering 1 million metric tons of CO2 in a saline aquifer in Wyoming. The test site in western Wyoming is located on state trust lands and was chosen because of its potential to store large volumes of carbon dioxide, an estimated 10.4 billion tons.

The Energy Department has awarded $66.9 million to the partnership for the research, which will cost an estimated $130 million.

Talbott said ideal CO2 reservoirs have porous rock layers that allow the gas to move throughout the formation but that are topped by impermeable layers of cap rock that prevent the carbon dioxide from escaping. Also important is that the water in the formation is not potable, with at least 10,000 parts per million of total dissolved solids, so that water that would be suitable for drinking is not contaminated.

Other efforts have focused on using CO2 injection for oil and gas recovery.

Ed Deal, director of the Montana Bureau of Mines and Geology, said he would like to reap the economic benefit associated with oil and gas recovery from CO2 injection, but noted, "We probably don't have enough oil and gas reservoirs to handle all that carbon dioxide."

A new revenue source?

But oil and gas production may become a secondary activity in parts of Montana if CO2 sequestration becomes the economic engine Schweitzer and others envision.

Montana's seven coal-fired power units account for more than 2,500 megwatts of capacity, or slightly under half of the state's total electric generating capacity. In 2006, those plants emitted roughly 18.2 million tons of CO2, according to the U.S. Energy Information Administration. The vast majority of those emissions came from one plant, PPL's Colstrip plant in Rosebud County, the second-largest coal-fired power plant west of the Mississippi River.

In 2007, the nonprofit Environmental Integrity Project ranked Colstrip as the 12th-largest emitter of CO2 among U.S. coal-fired power plants. PPL Montana pledged last year to make upgrades to its Colstrip turbines that would improve the plant's efficiency and reduce its carbon intensity, or the amount of CO2 emitted per unit of electricity produced.

PPL is also a member of the Big Sky Carbon Sequestration Partnership and was a supporter of the recently passed Montana CO2 legislation.

Yet even with its significant in-state CO2 budget, Montana is looking beyond its borders to find potential customers for a burgeoning storage business.

The $250 million sequestration project announced last month by Schweitzer and Saskatchewan Premier Brad Wall could pipe as much as 1,000 tons daily of CO2 from SaskPower's Poplar River coal plant near Coronach through a 50-mile line to a geological formation in Montana.

Schweitzer has said he will seek $100 million in federal stimulus money to help fund the CO2 demonstration project, while the Canadian province has pledged to bring at least $60 million to the table.

The project would bear similarities to another U.S.-Canada CO2 sequestration project that pumps carbon from a North Dakota synfuels plant into two aging Saskatchewan oil fields. That effort, known as the Weyburn-Midale project, was established in 2000 and is overseen by the Petroleum Technology Research Centre at the University of Regina.

"It will be good for both places in terms of building research capacity and stature in the increasingly higher-profile world of carbon capture and sequestration," Wall told a meeting of the Democratic Governors Association in Big Sky last month.

President Obama and Canadian Prime Minister Stephen Harper struck a similar tone in February when they touted a "new energy economy" as a key element of broader economic recovery and reinvestment efforts on both sides of the border.

But Hedges of the Montana Environmental Information Center cautioned against viewing the Canada-Montana project as a done deal.

"It is premature to say we are going to allow a Canadian pollutant to be injected into the geology of Montana and potentially contaminate groundwater," Hedges said.

Gable is an independent energy and environmental writer in Woodland Park, Colo.

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