Companies Invest in Gasification

COAL gasification is showing promise as a way to burn more cleanly the United States most abundant energy source. One of the likeliest technologies involves turning coal into synthetic natural gas and running it through highly efficient gas and steam turbines to generate electricity.

The process is called integrated coal gasification combined-cycle generation, or IGCC. Several US and European companies have already invested in the technology:

Texaco is buying a 120-megawatt IGCC demonstration plant near Daggett, Calif., that has been operating for five years. The Cool Water plant, which once received federal price supports from the now-defunct Synthetic Fuels Corporation, is showing off a process that Texaco says is already commercially viable. It will turn coal and sewage sludge into synthesis gas, which will power the turbines. Texaco is negotiating to sell the electricity to Southern California Edison.

Shell Oil Company is running a coal gasification project at its large refining and chemical plant outside Houston. Shell's parent company, Royal Dutch Shell, is in the final design phase for a full-scale gasification combined-cycle plant in the Netherlands. It will be the world's largest such plant when it opens in 1993.

Dow Chemical currently operates the world's largest IGCC plant - its 160-megawatt facility in Plaquemine, La. Like its competitors, Dow hopes to interest electric utilities in buying its technology to build new plants. Several utilities are investigating a phased approach, pioneered by Dow, which could overcome some of the objections to IGCC.

The biggest objection to coal gasification is its economics, says Ron Wolk of the Electric Power Research Institute, the research arm of the electric utility industry. The price of natural gas is so low right now that it makes more sense to burn natural gas. If those prices rise substantially, however, IGCC could be attractive. Dow's phased approach, for example, would allow utilities to build combined-cycle power plants first, run them on natural gas, then build a coal gasifier when the economics warranted it.

Eleven years ago, coal gasification looked very promising. Natural gas prices were rising and expected to go much higher (table). Five energy companies formed a consortium and, with federal government help, built a plant to gasify coal as a substitute for natural gas (box). But energy prices slumped, which has caused utility companies to become more cautious about synfuels and energy companies to look for other ways to make gasification feasible.

The newer IGCC technology has become their answer.

``It's a very efficient technology,'' says Chuck Bayens, manager of commercial development of synfuels for Shell. Some conventional coal-fired plants are fortunate to extract 33 percent of their coal's energy and even the most modern designs are 40 percent or below, he says. Current gasification combined-cycle converts 40 to 42 percent of coal's energy. Mr. Bayens thinks future improvements will boost that figure to 50 percent.

IGCC is also cleaner than competing technologies.

``If you want to use coal to make power, this is the most viable way to do it,'' says David Sundstrom, business development manager for gasification at Destec Energy Inc., a Dow subsidiary. ``It's ... the cleanest coal technology.''

For example, modern coal-fired plants emit 10 to 15 percent more carbon dioxide than an IGCC does. Carbon dioxide is believed by some scientists to be a cause of global warming. The gasification process also eliminates 99 percent of the sulfur in coal, while scrubbers and other technologies remove only 90 to 95 percent. Many scientists say sulfur emitted from coal-fired plants is a major cause of acid rain.

Environmental groups point out, however, that IGCC is not as clean-burning as natural gas when it comes to carbon dioxide emissions. ``Natural gas has sort of an inherent advantage,'' says Diane Fisher, a scientist with the Environmental Defense Fund.