Expert sees gasification as wave of coals future

Dan Fessler, principal of Clear Energy Solutions LLC, says he is the worst of all possible people to suggest what Wyoming should do with its coal industry. He’s a lawyer.

But Fessler is also the son of a Torrington newspaper publisher, and a man who had a lengthy career in international energy law and was president of the California Public Utilities Commission. And he’s got some interesting ideas about the future of Wyoming’s coal industry.

Depending on Wyoming’s collective will, there are two prominent views of what the future may hold for Wyoming’s coal, according to Fessler.

The first is that Wyoming sticks with the status quo and allows the incumbent coal companies and railroads to continue to export Powder River Basin coal to Midwest utilities.

Holding vast coal reserves
The problem with that scenario is that those Midwestern utilities are sitting atop vast reserves of coal that has a heating value much higher than Powder River Basin coal. The reason they pay railroads $50 to deliver a ton of Powder River Basin coal is because their Eastern coal has a high sulfur content.

But they’ve figured out a way to get around the sulfur issue. If they gasify the coal, they can strip nearly all the pollutants – including sulfur – and burn the synthetic gas to generate electricity.

“There is no owner of coal reserves in Wyoming who does not also own great reserves (in the eastern United States),” Fessler said.

If you catch a Powder River Basin coal miner and a railroad executive in the same room today, the miner would look like the poor girl at the prom who doesn’t like her date but can’t run away.

The reason: There are only two railroad companies that transport Wyoming’s coal, and both are moving away from long-term contracts with their utility customers. The danger, Fessler said, is that coal pricing loses stability and becomes as volatile as natural gas.

That doesn’t bode well for Wyoming’s coal export industry either, Fessler said, because utilities are becoming increasingly wary about delivery reliability. Increasingly, when Midwestern utilities draw drafts of future electrical generation plants, they are using coal gasification, or IGCC, designs.

Industrial plants seen as solution
The answer, according to Fessler, is to finally pull the economic chain of coal into Wyoming and build its own industrial plants to gasify coal for electrical generation and synthetic aviation and diesel fuels.

“At the mouth of the Powder River Basin we could found an industry, not just build a plant,” Fessler said.

Bruce Driver, a consultant to Western Resource Advocates, said he’s an environmentalist who sees great potential in Fessler’s ideas about coal gasification in Wyoming.

“The biggest environmental problem that the world faces right now is global warming,” Driver said, noting that California recently outlawed electrical power from plants that emit carbon dioxide, a greenhouse gas.

“If Wyoming does not learn how to use its coal in industrial facilities that deal with CO2, Wyoming will lose the market for its coal, period. It’s not a matter of if, but when,” Driver said.

Western Resource Advocates issued a study in April that estimates Wyoming would lose $60 million in taxes and royalties annually by 2020 if its coal industry doesn’t serve an integrated gasification combined cycle market.

“We know how to do this. Why aren’t we doing it?” Driver asked.

Fessler said CO2 captured in the IGCC process can be injected into coal seams to increase the production of coalbed methane gas without the need to pull water from the coal aquifer – a major source of controversy in the Powder River Basin.

Fessler said he has tried unsuccessfully for the past five years to launch a coal-to-liquids plant in Converse County and is frustrated at what appears to him to be a collective lack of interest among Wyomingites to guide the future of their coal resource.

Part of the problem, Fessler said, is that Wyoming’s coal generates a massive amount of wealth for the state, so people don’t think things ought to change. Meanwhile, the world is changing, and so will the nation’s electrical utility industry.

Fessler said today’s coal export industry in Wyoming “bears a depressing resemblance to a Third World economy.”

“We export a raw commodity, and we export a lot of young people,” Fessler said. “Yet the Powder River Basin is an infrastructure unrivaled anywhere on Earth.”