With several utility executives separating themselves from the hype surrounding carbon capture and storage technology, how viable will this and other "clean coal" technologies be in the future? During today's OnPoint, Jim Childress, executive director of the Gasification Technologies Council, explains how gasification technology fits into the broader discussion about the United States' energy policy. Childress addresses some of the major challenges facing his industry, including economic issues, legal issues and public acceptance hurdles. He also gives his take on the Department of Energy reworking its FutureGen project.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jim Childress, executive director of the Gasification Technologies Council. Jim, thanks for coming on the show.
Jim Childress: Thank you for inviting me.
Monica Trauzzi: Jim, gasification, in particular the gasification of coal, has been in the news quite a bit lately. Where does gasification fit into the broader discussion about our energy policy and stepping away from the use of foreign oil?
Jim Childress: Yes, first item is it's not just coal; as a matter of fact, around the world coal accounts for only about 40, 45 percent of fuels used in gasification plants. The rest are petroleum residues such as petroleum coke, waste, things of that sort. Gasification's fit is in where we face energy prices today, which is a high-priced energy environment with extremely tight environmental demands. And it provides a solution for electricity, for fuels, for substitute natural gas chemicals, fertilizers, a variety of products from a variety of feedstocks.
Monica Trauzzi: And so do you think there's a fair amount of discussion at this point about it, a fair amount of attention?
Jim Childress: There is. Well, there are two ways of viewing it. There's the public discussion, the public policy discussion, and then there are the investments that are taking place. And today there are a lot of companies out there that are investing major amounts of money in the U.S. and around the world, particularly in China, to develop new gasification plants to produce a wide variety of products, not just electricity, a wide variety of products that do not need to use petroleum or natural gas in their manufacture.
Monica Trauzzi: There have been numerous questions surrounding DOE's decision regarding FutureGen and members of Congress are now investigating the decision. What's your take on the current project and how this is going to play into the future implementation of IGCC and also carbon capture and storage technology?
Jim Childress: If I would characterize the consensus among our 75 member companies, they believe that the FutureGen project as it was constituted, not that we pick winners or losers, but there has to be an IGCC with carbon capture and sequestration in the U.S. demonstrated, probably more than one. So there is strong support for continuing down that track. And, at the same time, the track that the Department of Energy is taking with smaller scale projects, taking apart pieces of the process and of the plants and funding those also makes sense.
Monica Trauzzi: Several utility executives have come out recently saying that carbon capture and sequestration has been over-hyped as a short-term solution. What's your take on that situation and do you think that the PR is getting ahead of the technology?
Jim Childress: There are no short-term solutions with regard to CO2 with capture and, especially, sequestration. But today, gasification technologies are actually capturing CO2 in the U.S. and around the world for various purposes. It's the sequestration that is the part of the equation where there's some uncertainty because of lack of consistent federal policies with regard to the U.S. But we're doing this today in the oil fields of West Texas. We're sequestering CO2 for enhanced oil recovery. So, it's not a mystery and, as a matter of fact, there are a number of gasification based plants in development along the Gulf Coast that are signing contracts with CO2 pipeline companies to sell them their CO2. So, that can be done, that will be done in the short term. Over the longer term, for a wider scale distribution of sequestration, there needs to be public policies put in place.
Monica Trauzzi: So, what are the major challenges than facing gasification? Is it a cost issue that's getting in the way?
Jim Childress: Well, let's parse what we're talking about here. For the production of fertilizers, chemicals, fuels such as substitute natural gas, it's being done all over the world today. There are projects that are moving forward in development today to make these products. We have to narrow down the discussion and that has to do with integrated gasification combined cycle that has production of electricity from coal generally, but also from petroleum coke. That's where the cost issues arise, but the bigger issue, with regard to coal, is you can't permit or site any coal plant today in the United States, with or without gasification. But the bottom line is gasification is the least cost option if you want to capture CO2 for sequestration.
Monica Trauzzi: OK, so how does this discussion impact the discussion that's happening about biofuels right now, the food to fuels discussion?
Jim Childress: Well, it doesn't. I understand the discussion. What gasification offers is to sort of cut the cord, the Gordian knot between fuel and food because we do not gasify. There are no proposals to gasify any food-based biomass for fuels in the U.S. or around the world today.
Monica Trauzzi: Based on what you've heard so far from the presidential candidates on their energy policies, is there one that you think would do a better job at helping gasification technology along?
Jim Childress: I think there's not enough definition yet. I've heard both of them. I agree with some of what they say. I disagree with other things that they say, but things are not well defined. What gasification needs to prosper in the U.S. is a predictable regulatory framework and, I think in some instances, financial incentives similar to that which is being provided for other technologies.
Monica Trauzzi: We hear the word clean coal tossed around a lot and you've told me that you don't love that phrase. Why not?
Jim Childress: It's a political term. It means nothing. When people refer to gasification as a clean-coal technology I say, "What do you mean by that?" And very often clean-coal technology is a reference, a generic reference, to producing electricity from coal in as clean a manner as possible with a wide variety of technologies. I prefer to talk about gasification as a manufacturing process and it's not just coal, so that clean coal is not something that crosses my lips, except in interviews.
Monica Trauzzi: A recent article in the New York Times pointed out that some utilities were stepping away from gasification projects. Does that speak to the viability of the technology?
Jim Childress: No.
Monica Trauzzi: Or concerns about the cost?
Jim Childress: That speaks to the uncertainty created in those states where the projects were postponed or canceled. One was in the state of Florida, where Governor Crist pronounced that there were going to be no more coal plants in that state unless they captured CO2. Well, there was an IGCC plant proposed by Tampa Electric, which already has one plant running and is very comfortable with it, but the uncertainty of CO2 regulation out in the future closed it down. And they're going to use natural gas.
Monica Trauzzi: So a complete switch over?
Jim Childress: Well, and that's what we are seeing today, a lot more natural gas being used instead of coal. That's going to drive up natural gas prices. That's going to create demand for gasification to produce substitute natural gas. There's a circle here.
Monica Trauzzi: So, you see a way, a route that we can take to make gasification more mainstream at this point?
Jim Childress: Absolutely. There are projects being proposed, with regard to the natural gas substitute, in Kentucky, Illinois, Indiana, Texas, Louisiana, North Dakota, all projects that are being proposed that are going to be very competitive because the price of natural gas is $12 and higher.
Monica Trauzzi: OK. We'll end it right there. Thanks for coming on the show.
Jim Childress: Great, thank you.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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