EPA move threatens plans at
Consumers Energy plant, but company may have way to compete
by Jeff Kart | The Bay City Times
Sunday February 22, 2009, 7:07
AM
http://www.mlive.com/businessreview/tricities/index.ssf/2009/02/epa_move_threatens_plans_at_co.html
Pending climate change regulations
threaten to further delay and increase the cost of plans for a new coal-fired
power plant on the Saginaw Bay.
But the location for the proposed
new 800-megawatt generator, in Bay County's Hampton Township, gives Consumers
Energy a unique advantage when it comes to sequestering carbon dioxide, a
greenhouse gas that scientists say contributes to global warming.
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The EPA on its reconsideration of the Bush policy
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The U.S. Department of Energy has
a video explaining carbon capture and sequestration,
including a field test at a site near Gaylord.
Lisa Jackson, the new head of the
U.S. Environmental Protection Agency under President Barack Obama, said earlier
this month that she'll reconsider a rule from the former Bush administration
that didn't require new plants to control for carbon dioxide.
The latest technology for dealing
with the gas involves a process called carbon capture and sequestration, in
which CO2 is cooled to a near-liquid form and injected into porous rock
formations thousands of feet underground.
The
existing Karn-Weadock complex, to which Consumers plans to add a new $2 billion
generator, just happens to sit on a spot that looks to be perfect for pumping
in CO2, said Dave Barnes, a geologist at Western Michigan University.
"There's certainly a
significant potential for geological sequestration at that site," said
Barnes, who has done preliminary evaluations of the property.
That's because the area beneath
Bay and Midland counties has already been used for extracting oil and natural
gas from rock formations, and extracting and reinjecting brine fluids for
commercial uses.
Consumers Energy has set aside
space at the new plant site for carbon-control technology, should it become
required and commercially available, said Jeff Holyfield, a company spokesman.
Exploratory drilling would need to
be done to explore the possibility further, Barnes said.
But based on the preliminary
assessment, "It's not as if we don't have options," Holyfield said.
The company expects to see some sort
of greenhouse gas regulations for coal plants during the next four years of the
Obama administration, Holyfield said.
He isn't sure what those rules
will look like, but insists the latest move by EPA won't kill plans for the new
plant.
"The bottom line is whatever
regulation comes down, it's going to apply to all coal-fired units," he
said.
"If the price goes up 10-20
percent across the nation (for electricity), we as a company will still be
competitive."
Carbon sequestration also has yet
to be proven on a large scale, Holyfield said, so "the picture is still
very murky."
But the pending regulations are
just another sign that future energy generation plans shouldn't include coal,
argues Anne Woiwode, director of the Sierra Club's Michigan Chapter in Lansing.
The Sierra Club's national office
was one of three groups that successfully petitioned the EPA to reconsider the
Bush-era rule.
"I think Consumers Energy has
an opportunity to go in a different direction, and this provides a really
strong impetus for them to do that," Woiwode said.
"The big thing that I think
the last few weeks have said - from the state's perspective, from the nation's
perspective - is that it makes sense for us to explore all possible renewable
alternatives, energy efficiency and other ways to meet our electricity needs
first."
A record eight new coal plants
have been proposed for Michigan, and five permits have been filed with state
regulators, including the Bay County plant.
Four of five permits that haven't
been granted were recently delayed for an unknown period of time under an
environmental directive from Gov. Jennifer Granholm. The directive says
utilities need to prove there's not a "feasible and prudent
alternative" to coal before a permit is awarded.
The directive has pushed the
estimated operational date for the new Bay County plant from 2015 to 2017.
On Thursday, an EPA appeals board
rejected an air permit issued by the DEQ for a coal plant at Northern Michigan
University in Marquette, one of the eight proposed for Michigan. The board said
the DEQ should consider limits for carbon dioxide and other greenhouse gases,
according to a copy of the order.
Barnes has been involved with a
U.S. Department of Energy project near Gaylord, which is testing sequestration
of carbon dioxide from a DTE Energy natural gas processing plant.
He said he understands the tension
between the need for inexpensive power and the concern over environmental
impacts. He says sequestration can be done safely; the carbon is absorbed by
rock formations like a sponge, and kept out of the atmosphere.
"The potential for
sequestration is a stop-gap transition technology until we can generate the
lion's share from renewables and other non-carbon sources," Barnes said.
The Karn-Weadock site has that
potential, along with three other proposed coal plant sites he's looked at in
Michigan, in Rogers City, Manistee and Holland, Barnes said.
A U.S. Department of Energy map
shows that the Consumers Energy property sits on a saline aquifer with a high
potential for sequestration.
In the region, there is enough
underground space to accommodate