DUSTIN BLEIZEFFER Star-Tribune energy reporter | Posted: Friday, October 13, 2006 12:00 am
Dan Fessler says he is the worst of all possible people to suggest what Wyoming should do with its coal industry. He's a lawyer.
But Fessler, principal of Clear Energy Solutions, the son of a Torrington publisher,had a lengthy career in international energy law and was president of the California Public Utilities Commission. He's also got some interesting ideas about the future of Wyoming's coal industry. Depending on Wyoming's own collective will, there are two prominent views of what the future may hold, according to Fessler.
The first is that Wyoming sticks with the status quo and allows the incumbent coal companies and railroads to continue to export Powder River Basin coal to Midwest utilities.
The problem is, those Midwestern utilities sit atop vast coal reserves that have a heating value much higher than Powder River coal. The reason they are willing pay railroads $50 a ton to deliver Powder River Basin coal is because eastern coal has a high sulfur content.
But they've figured out a way to get around the sulfur issue, Fessler warns. If they gasify the coal they can strip nearly all the pollutants - including sulfur - and burn the synthetic gas to generate electricity.
"There is no owner of coal reserves in Wyoming who does not also own great reserves (in the eastern United States)," Fessler said.
If you catch a Powder River miner and a railroad executive in the same room, the miner would look like the poor girl at the prom who doesn't like her date but can't run away.
The reason: only two rail companies transport Wyoming's coal, and both are moving away from long-term contracts with their utility customers. The danger, Fessler said, is coal pricing loses stability and becomes as volatile as natural gas.
That doesn't bode well for Wyoming's coal exports, Fessler said, as utilities are wary about delivery reliability. Increasingly, when Midwestern utilities draw drafts of future electrical generation plants, they are using coal gasification designs.
The answer, according to Fessler, is for Wyoming to build its own plants to gasify coal for power and synthetic aviation and diesel fuels.
"At the mouth of the Powder River Basin we could found an industry, not just build a plant," said Fessler.
Bruce Driver, a consultant to Western Resource Advocates, said he's an environmentalist who sees great potential in Fessler's ideas about coal gasification in Wyoming.
"The biggest environmental problem that the world faces right now is global warming," Driver said, noting that California recently regulated electrical power from plants that emit carbon dioxide, a greenhouse gas.
"If Wyoming does not learn how to use its coal in industrial facilities that deal with CO2, Wyoming will lose the market for its coal, period. It's not a matter of if, but when," Driver said.
Western Resource Advocates issued a study in April that estimates the state would lose $60 million in taxes and royalties annually by 2020 if its coal industry doesn't serve an integrated market.
"We know how to do this, why aren't we doing it?" said Driver.
Fessler said C02 captured in the such a process can be injected into coal seams to increase the production of coal-bed methane gas without the need to pull water from the ground, a major source of controversy in the Powder River Basin.
Fessler said he has tried unsuccessfully for the past five years to launch a coal-to-liquids plant in Converse County and is frustrated at what appears to him to be a collective lack of interest among Wyomingites to guide the future of their coal resources.
Part of the problem, Fessler said, is that coal generates a massive amount of wealth for the state, so people don't think things ought to change. But the world is changing, and so will the nation's utility industry.
Fessler said today's coal export industry in Wyoming "bears a depressing resemblance to a third-world economy."
"We export a raw commodity, and we export a lot of young people," Fessler said. "Yet the Powder River Basin is an infrastructure unrivaled anywhere on earth."
Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dustin.bleizeffercasperstartribune.net.