Wy­oming fights to res­cue coal

Statemulls ideas for fad­ing fos­sil fuel in­dus­try.

The Denver Post - - BUSINESS - ByMead Gruver

cheyenne » Pub­lic en­emy No. 1 for cli­mate change and no longer the fos­sil fuel that util­i­ties pre­fer to burn to gen­er­ate elec­tric­ity, coal has fe­wal­lies th­ese days. But one state is still fight­ing to save the in­dus­try: Wy­oming.

From a pro­posal to burn the stuff un­der­ground to host­ing a con­test to find prof­itable uses for car­bon diox­ide from power plants, the top coal- pro­duc­ing state has spent tens of mil­lions of dol­lars for a coal sav­ior— with lit­tle to show.

Big- time state spend­ing was easy in Wy­oming not long ago. Good times for coal, oil and nat­u­ral gas cre­ated huge bud­get sur­pluses.

Now that all three in­dus­tries are suf­fer­ing from low prices, loom­ing deficits in the Cow­boy State are rais­ing an old ques­tion: Is it time to di­ver­sify the econ­omy be­yond fos­sil fu­els?

“They’ve cho­sen to sup­port the coal in­dus­try­whether it­makes any sense or not. I mean, we’re ba­si­cally a coal colony,” said Bob LeResche, chair­man of thePow­der River Basin Re­source Coun­cil landown­ers group.

Some of the coal in­dus­try’s top play­ers, in­clud­ing Arch Coal and Al­pha Nat­u­ral­Re­sources, have filed for bank­ruptcy as util­i­ties switch to cheaper and cleaner- burn­ing nat­u­ral gas and the cost of re­new­able en­ergy keeps fall­ing. The Obama ad­min­is­tra­tion on Fri­day sus­pended the leas­ing pro­gram­for coal on fed­eral lands, most of which oc­cur in Wy­oming and neigh­bor­ingMon­tana.

Will a Su­per­man for coal come to the res­cue in time?

“The odds look pretty slim right now,” said Rob Godby, a Univer­sity ofWy­oming pro­fes­sor.

The stakes for Wy­oming are high. Coal min­ing and di­rectly re­lated busi­ness ac­count for 14 per­cent of the econ­omy and 1 in 5 jobs in the state.

Here’s a look at whatWy­oming has done — of­ten at pub­lic ex­pense — to try to save coal:

Un­der­ground coal gasi­fi­ca­tion: Wy­oming reg­u­la­tors re­cently agreed to let an Aus­tralian com­pany pol­lute ground­wa­ter to ex­per­i­ment with a use for coal that doesn’t in­volve burn­ing it in a power plant.

Un­der­ground coal gasi­fi­ca­tion in­volves par­tially burn­ing coal still in the ground. The process yields amix of gases called syn­gas, which can be burned more cleanly than coal di­rectly.

The process leaves a chem­i­cal brew in the ground. Reg­u­la­tors in Queens­land, Aus­tralia, ac­cuse Linc of caus­ing se­ri­ous en­vi­ron­men­tal harm at un­der­ground coal gasi­fi­ca­tion projects there.

Car­bon se­ques­tra­tion: Six years ago, the Univer­sity of Wy­oming’s Car­bon Man­age­ment In­sti­tute be­gan in­ves­ti­gat­ing whether a 25square- mile area in south­west Wy­oming could trap car­bon diox­ide emit­ted from power plants.

The in­sti­tute spent $ 17 mil­lion of tax­payer money drilling a 12,000- foot- deep well in 2011. But it stopped be­cause re­searchers re­al­ized it would cost as much as $ 750 mil­lion to ac­quire enough car­bon diox­ide to com­plete the ex­per­i­ment.

Coal- to- liq­uid fuel: Turn­ing coal into diesel, gaso­line and other liq­uid fu­els isn’t a new idea. Ger­many did it dur­ing World War II and a com­pany pro­posed it in Wy­oming as oil prices be­gan to creep to­ward record highs in 2007.

The $ 2 bil­lion DKRW Ad­vanced Fu­els plant out­side the tiny town of Medicine Bow in south­ern Wy­oming never got off the draw­ing board — ex­cept for a cou­ple of con­crete pads and $ 1.9mil­lion in state fund­ing to re­build 13 miles of road for the pro­ject.

Car­bon XPrize: Util­i­ties that burn coal might have more of an in­cen­tive to re­move car­bon diox­ide from smoke­stacks if they could put the­gas toprof­itableuse.

That’s the the­ory be­hind a $ 20 mil­lion com­pe­ti­tion or­ga­nized by the XPrize Foun­da­tion. Pri­vate en­ergy in­dus­try is fund­ing the prize, but Wy­oming has pledged $ 15 mil­lion to build a lab at Basin Elec­tric’s Dry Fork Sta­tion, a coal- fired power plant in north­east Wy­oming, near Gil­lette.

Find­ing new­mar­kets: Wy­oming Gov. Matt Mead and oth­erWy­oming of­fi­cials also have been to Ja­pan, In­dia, South Korea, Tai­wan, Aus­tralia and China in re­cent years to pro­mote Wy­oming coal— with no new­mar­kets to show­for their ef­forts.

One prob­lem is that the West­Coast lacks port fa­cil­i­ties to ex­port much ofWy­oming’s coal. Reg­u­la­tors are re­view­ing big coal ter­mi­nal pro­pos­als in Ore­gon and Wash­ing­ton, and last year the Wy­oming Leg­is­la­ture au­tho­rized is­su­ing up to $ 1 bil­lion in state bonds to fi­nance con­struc­tion of those ter­mi­nals.

Mead said he ex­pects the port fa­cil­i­ties to win reg­u­la­tory ap­proval.

“Lis­ten, coal’s valu­able. It’s plen­ti­ful,” Mead said. “It is be­ing used and will con­tinue to be used around the planet, re­gard­less of what we do in this coun­try.”

Con­veyor belts re­move coal from theWy­o­dak Re­sourcesmine in north­east­ernWy­oming. Coal, blamed for cli­mate change and no longer the fos­sil fuel that util­i­ties pre­fer to gen­er­ate elec­tric­ity, has few al­lies th­ese days but still has friends in­Wy­oming. As­so­ci­ated Press file

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