Risky Business

From the Billings Gazette 3/20/07

So if Highwood is built, the only nod to controlling carbon emissions will be a space left for expansion, in case future legislation forces the plant to retrofit carbon controls or it becomes cheap enough for the plant to do so voluntarily.

"At the end of the day, the customer has to pay the bill. We have to come up with the most cost-effective alternative to meet the needs of our customers on a day-to-day basis," said Tim Gregori, general manager for Southern Montana Electric (SME), the cooperative behind the Highwood plant.

Despite Gov. Brian Schweitzer's national crusade for new technologies that promise to reduce greenhouse gases and curb imported fuels, the largest coal-fired power plant to be built in Montana in 20 years will do neither.

"You have to have the ability to capture carbon," Schweitzer said. "It's coming, absolutely." He said he plans to introduce a bill to the Montana Legislature in coming days that would give 50 to 75 percent equipment tax breaks to "clean and green" energy projects that capture or reduce carbon emissions.

"I just know, because I've spent a lot of time on the East and West coasts with people who finance energy projects, that's it's increasingly difficult to get financing for a project that doesn't have the ability to capture carbon," Schweitzer said. "The more people go to (more advanced) coal plants, the more rapidly that will be adopted."

There is agreement among many politicians, environmental groups and industry that such regulations are inevitable. Until they are in place, the utility industry and its financial backers face a "chicken and egg" quandary, said Steve Gehl with the Electric Power Research Institute, a California-based industry think-tank.

Curbs on greenhouse gas emissions depend heavily on developing new technologies, which require a substantial infusion of money. But investors will remain reluctant to sink cash into those technologies unless they are confident that they will work, Gehl said.

From the Great Falls Tribune 3/20/07

SME officials say they can't guarantee they will add the technology. But they've formed a committee to look into it.

The costs of adding technology would be weighed against the expense of a carbon tax, which most industry officials and energy experts agree eventually will be imposed, Gregori said.

My impressions on the above are:

1. SME will not spend money on CO2 sequestration/emissions unless forced to by the government or market in some way. (but I am relieved they will form a committee on it)
2. Future regulations or taxes on CO2 are inevitable.
3. The cost of adding this technology is unknown. ("One key unknown is whether the plant could capture its carbon dioxide emissions and how much that would cost. But such impacts “cannot be determined at this time,” the Beck report said.")
4. This will add to the abruptly rising cost of the plant. (extrapolation=1 billion)
5. Direct questions to city leaders on this topic have been inadequately answered. These outlying issues continue to make the proposed coal plant a risky speculative investment.

"Could the cost of capturing carbon dioxide make the project unworkable?"

They (SME officials) are committed to developing a program," Lawton said. He said it could involve carbon dioxide capture at the new plant in Great Falls. A boiler manufacturer is initiating a demonstration project in Wisconsin.

"Could the cost of capturing carbon dioxide make the project unworkable?"

Lawton said SME also is looking at mitigation efforts to lessen the impact of more carbon dioxide in the atmosphere, a factor cited in global warming theory. Planting trees can mitigate an increase in carbon dioxide.

"Could the cost of capturing carbon dioxide make the project unworkable?"
We hear your concern about the risks and costs of CO2 sequestration and we ... Hey, look.. a pony!!!