Coal-to-fuel proposal raises environmental concerns

By WALT WILLIAMS, Chronicle Staff Writer

A fuel supply as plentiful as the oil fields of Saudi Arabia may lie beneath the grasslands Helen Waller calls home, but past experience has taught her to be skeptical of such claims.

A 71-year-old farmer and member of the Northern Plains Resource Council -- a group of green-minded farmers -- Waller has lived near Circle in eastern Montana all her life.

She remembers the North Central Power Study of the 1970s, when politicians and business people alike proposed strip mining Montana's plains to get at the huge supplies of coal there.

She learned then to always challenge what industry had to say. That's why she is wary of plans to turn Montana's huge coal supplies into liquid fuel, a proposal Gov. Brian Schweitzer will pitch at an energy conference in Bozeman later this week.

"I think we need to all seek out reliable facts," she said. "I think much of the interests I see expressed (about coal-based fuels) are based on not the most reliable information."

There are 120 billion tons of coal locked up in reserves across the state, according to the governor's office. Schweitzer has proposed using a process developed nearly a century ago to turn that coal into synthetic fuel for diesel engines and jets.

The governor sees it as a way to boost the economically depressed areas of the state and move the country away from its dependence on foreign oil. But he is meeting resistance from the NPRC and others.

"Synfuel" burns cleaner than fuel from oil, but it still pollutes.

One synfuel facility in South Africa the size of what's being proposed for Montana releases more carbon dioxide into the air than any other single source in the world, Princeton University's Carbon Mitigation Initiative, or CMI, concluded.

And a NPRC memo recently made public found that one coal-to-synfuel plant alone could produce several times the pollution of all the Billings-area industries combined

Schweitzer's proposal is "unworkable" and would be "environmentally destructive," the author, John Smillie of the Western Organization of Resource Councils in Billings, wrote in the memo.

The economic impacts for eastern Montana may make it worth the gamble, especially for the coal-rich Otter Creek Tracts near Colstrip.

A synfuel plant as large as the one proposed could supply 2,000 jobs, Evan Barrett, the governor's chief business officer, said.

"It does allow us to seek some economic growth in areas where economic growth has not been present for a long time," he said.

And comparing a plant built decades ago to one that could be built today may not be realistic. The governor's office is proposing to use new technologies to extract pollutants from the coal and pump the carbon dioxide into the ground.

"Assuming that technology stands still is not a good judgment," Barrett said.

COAL TO FUEL

The method to convert coal into synfuel is known as the Fischer-Tropsch process and was developed in the 1920s.

It has historically been used by countries cut off from oil supplies. Nazi Germany used it to fuel its military machine during World War II, and South Africa used it to soften international embargoes resulting from its policy of apartheid.

In fact, the South African corporation Sasol remains the largest coal-to-synfuel producer today, with one facility in Secunda, South Africa, putting out 150,000 to 165,000 barrels of fuel a day.

Montana officials have met with Sasol representatives to discuss opening a 150,000-a-barrel-per-day plant in the state.

The historic downside of coal-based synfuels is their price. It is only recently, with the price of oil having shot up to above $60 a barrel, that they have become an economically viable alternative.

Montana certainly has the coal to supply the plant. The state's six mines already supply around 40 million tons of coal per year, and it has the largest coal reserves in the nation, Montana Coal Council Executive Director Bud Clinch said.

Those mines pump $32 million a year into the state through taxes, he said. And the largest mine in Colstrip employs around 350 people making an average of $60,000 a year.

"It could be huge," Clinch said of the coal-to-synfuel plan. Not only could it provide thousands of direct and indirect jobs, "it could be the solution to all of our past (state) budget shortfalls."

Schweitzer also has touted the plan as a way to wean the nation off its dependency for oil, although he sees the U.S. military as the main customer for Montana fuel.

Again, the NPRC memo is skeptical. It notes that even if the U.S. produced one million barrels of synfuel per day, that would only supply 5 percent of the nation's annual oil demand, with that demand projected to increase 1.6 percent every year.

CLEAN COAL?

Just how much fuel a plant could produce may depend on how much water it gets, and it turns out Sasol's South African plants are water hogs.

The Sasol plants consume five barrels of water for every barrel of fuel they produce, according to a 1995 Canadian report. A single plant may need as much as 33 times the flow of Otter Creek to operate, the NPRC memo concluded.

The plants are not very clean either. Using company figures, the memo estimated that a Sasol plant could produce nearly more than twice the sulfur-dioxide emissions and four times the nitrous-oxide emissions of all the plants and factories in the Billings area combined.

And Sasol's largest plant releases an estimated 7.7 million tons of carbon a year through the fuels it produces, helping make it the largest point source of carbon dioxide in the world, according to a CMI paper looking at mitigating global warming with current technologies.

The NPRC memo calculates that a similar 150,000 barrel-per-day plant in Montana could put out as many as 30 million tons of carbon dioxide.

The nation's largest coal-burning power plants typically produce around 20 million tons a year per plant, and the synfuel plant would need more coal than any one of them, based on the governor's figures.

"If you just switch to coal-based synfuels you actually make the global warming problem so much worse,“ said Stephen Pacala of CMI.

Yet Pacala is a supporter of coal-based synfuels. One reason is because the world's oil supplies are concentrated in the volatile Middle East. Another is new technology that can be used to capture the carbon dioxide and store it before it's released into the atmosphere.

He doesn't envision just duplicating what South Africa has done, which is based on older technology. The first Sasol plant started mass producing fuel in 1955, and the company's most recent plant went online in 1981.

Instead, as Schweitzer has proposed, he would like to see a newer, cleaner Integrated Gasification Combined Cycle plant that produces synfuels, electricity and hydrogen, and uses much less water than the South African process.

The byproduct from the gasification process would be a concentrated form of carbon dioxide, which could be sequestered underground in oil reserves or other geologic formations, negating the effect on global warming.

In fact, Pacala believes the Intermountain West and Northern Great Plains have a perfect mix of features to become the nation's energy providers. They have the coal, they have the sequestration sites, they have the fields to grow crops for biofuels and the wind to power turbines.

"You're like the Gulf Coast was in its heyday," he said.

Still, farmers like Waller will need some convincing before they're sold on the idea.

Waller, who met with Schweitzer last week, would like to see a cost-benefit analysis done comparing the advantages of synfuels to biofuels, which she thinks is what eastern Montana should really be looking at.

"It isn't going to save the world, but neither is coal gasification,“ she said.

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