DUSTIN BLEIZEFFER Star-Tribune energy reporter | Posted: Monday, July 30, 2007 12:00 am
Environmental groups have filed a lawsuit seeking to block the U.S. Department of Agriculture from providing Rural Utilities Service loan guarantees to fund coal-fired power plants, including one in Wyoming.
Seven coal plants across the nation are up for such funding. One is Basin Electric Power Cooperative's proposed Dry Fork Station near Gillette. Other plants are located in Florida, Iowa, Missouri, Oklahoma, Kentucky and Montana.
"We're asking the (Rural Utilities Service) to look at the alternatives and the consequences of global warming," said Abigail Dillen, attorney for Montana-based EarthJustice. "We're not telling the agency what to do, but don't fund every old coal technology that comes across your desk."
Basin Electric officials said the Dry Fork Station project will move forward.
EarthJustice filed the lawsuit last week on behalf of the Montana Environmental Information Center, Citizens for Clean Energy and the Sierra Club. No Wyoming-based conservation groups are involved in the lawsuit.
EarthJustice argues that funding large-scale coal-fired power plants counters the intent of the Rural Utilities Service, which is to aid rural agricultural communities with power and phone service. The plants consume large volumes of water while ranchers struggle with drought, and the additional carbon dioxide emissions would only exacerbate current global warming conditions, the lawsuit contends.
"U.S. contributions to greenhouse gas emissions are slated to increase 40 percent over the next decade rather than decrease, which is what we have to do if we are going to address global warming," Dillen said.
Particularly disturbing for EarthJustice is the level of government funding for the emissions-heavy coal plants. Southern Montana Electric cooperative wants USDA loan guarantees to cover 85 percent of the $700 million project. The USDA portion has climbed incrementally as the cost of materials rises for capital-intensive coal plants.
In Wyoming, Basin Electric has asked the USDA for $750 million - 100 percent of the original cost projection. However, the total estimated cost has risen to $1.3 billion.
Basin Electric spokesman Daryl Hill said the utility has not yet decided whether to reapply with the USDA to cover the difference, or go to private investors.
"We just haven't made a decision on how we want to go yet," he said.
Basin Electric is not a corporation profiting from the federal loan program, but rather a member-owned cooperative - most of whom are rural ranchers. In Wyoming, however, the largest increase in demand for electricity is the minerals extraction industry, including Powder River Basin coal mines that require 130 megawatts of power to mine coal. A megawatt is enough to power about 300 homes.
Dry Fork Station is designed to produce 385 megawatts of electricity and employ 75 permanent workers. Forecast startup is in 2011.
EarthJustice underscored the potential economic risk associated with traditional coal-fired technology due to changing attitudes toward global warming. This month, Citigroup analyst John Hill downgraded several major U.S. coal suppliers, including Peabody Energy, Arch Coal and Foundation Coal - all major producers in Wyoming's Powder River Basin.
Environmental groups say it heralds the end of the last-minute rush to build traditional coal-fired plants ahead of imminent regulations to curb carbon emissions.
The situation is ripe for technologies to keep coal in the game by cleaning it up, according to Evergreen Energy Inc.
"Look at any pie chart of where electricity comes from in this country and the prospects for conservation, renewable or nuclear, and coal clearly is going to remain a major part of the country's energy portfolio for many years to come," said Evergreen spokesman Paul Jacobson.
Evergreen launched its first K-Fuel coal refining plant just a stone's-throw from the future site of Dry Fork Station north of Gillette. The process removes some pollutants and improves the heat value-to-emissions ratio.
Another process, K-Direct, is designed to locate the coal refining facility at the power plant. It would use steam from the plant's turbines to refine the coal, then the water produced from the refining process is used in operations of the power plant.
"It's incumbent upon policymakers to make coal as clean as possible as quickly as possible," Jacobson said. "The refined coal product we make at our plant in Gillette should be part of that picture."
Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@casperstartribune.net.