Generating Jobs
Clean coal project could be coming to Navajo Nation

By Kathy Helms
Diné Bureau

WINDOW ROCK — The Navajo Nation and its resources could end up on a short list of potential sites for FutureGen, a $1 billion clean-coal demonstration project sponsored by the U.S. Department of Energy.

FutureGen will generate electricity, produce hydrogen, and capture and sequester carbon dioxide. Since passage of the Energy Policy Act of 2005, several companies have approached the Navajo Nation to pitch various energy projects, including clean coal initiatives which could ultimately produce hydrogen.

U.S. Sen. Pete Domenici, R-N.M., architect of the energy policy, said that because of loan guarantees and nuclear production tax credits, eight utility companies across the United States have announced plans to build 13 new nuclear power plants in the next 15 years.

Due to clean coal provisions in the energy bill, he said, several coal companies also filed applications to partner with the government in building innovative clean coal plants across the country.

The FutureGen Alliance and DOE are seeking an aggressive schedule that includes a site selection process next year, beginning construction within three years, and targeting plant operations in 2012. The alliance includes Peabody Energy and BHP Billiton who have coal operations on the Navajo Nation.

Pilot tests on carbon sequestration (separation) by DOE's National Energy Technology Laboratory are planned for Aneth Field and the San Juan Basin.

The FutureGen initiative to create the world's first near-zero-emissions fossil fuel energy facility is expected to cost $10.2 million in the first budget period ending Jan. 31, 2007. The multiple year project is comprised of several budget periods, with the first focusing on establishing the configuration and cost of the facility and developing a short list of potential sites.

The FutureGen Alliance is a non-profit corporation representing a global coalition of the world's largest coal and energy companies with operations on five continents. Members of the alliance have contributed more than $250 million to help fund project development. The U.S. government would invest about $700 million.

The alliance has agreed to an initial cap on the federal investment subject to review of detailed cost estimates. The alliance approved the agreement based on earlier representations by the Bush Administration to fund fully FutureGen and other coal research and development programs.

Coal represents more than 85 percent of the U.S. energy reserves and about 64 percent of global energy reserves. Globally, coal use has grown more than five times faster than projected in the past three years, according to the alliance.

The FutureGen Industrial Alliance is coordinated by Battelle, a non-profit research and development institution which operates five DOE national laboratories, including Pacific Northwest, Brookhaven, Oak Ridge, National Renewable Energy Laboratory and Idaho National Laboratory.

The players
Partners in the FutureGen Alliance include:

• Peabody Energy is the world's largest private sector coal company with $4.6 billion in revenue in 2005 from the sales of 240 million tons, up from $2.7 billion in 2002 from the sale of 198 million tons. Its coal products fuel nearly 10 percent of all U.S. electricity and 3 percent worldwide.
  
  In 2004, Peabody's Mustang Energy Project near Grants was awarded a $19.7 million Clean Coal Power Initiative Grant from the Department of Energy to demonstrate technology to achieve ultra low emissions. The plants are not expected to be operational until at least 2010.
  
  Gregory Boyce, Peabody's chief executive officer, served as CEO-Energy for international mining company Rio Tinto in London, responsible for coal and uranium operations in five countries. Prior to that he was President and CEO of Kennecott Energy Co. and vice chairman of Standard Oil of Ohio.

• BHP Billiton is the world's largest diversified resources company and an industry leader in major commodity businesses, including energy coal and metallurgical coal, uranium, aluminum, copper and others.
  
  Billiton is expected to provide coal from Navajo Mine for the 1,500 megawatt coal-fired Desert Rock Energy Project, a joint project of Diné Power Authority and Sithe Global Power LLC, to be constructed about 30 miles south of Shiprock.
  
  Billiton also owns Ambrosia Lake uranium mine. On Nov. 29, 2000, Billiton Plc. acquired 95 percent of the outstanding common shares of Rio Algom Limited. On Dec. 15, 2000, Rio Algom Ltd.'s U.S. uranium mining business was sold to Billiton Base Metals, a wholly owned subsidiary of Billiton Plc. In 2001, Billiton Plc. and BHP merged to form BHP Billiton Plc.
  
  Billiton Base Metals owns 100 percent interest in Ambrosia Lake through Quivera Mining Co., as well as the Smith Ranch in-situ leach uranium mine in Wyoming, Reno Creek ISL project in Wyoming, Lisbon in La Sal, Utah, and WMC Resources Ltd., according to WISE Uranium Project. Rio Algom acquired Kerr-McGee's Quivera Mining Co. at Ambrosia Lake in 1989.

• Southern Company of Atlanta, Ga., a leading U.S. producer of electricity. In Wilsonville, Ala., Southern Company hosts the Power Systems Development Facility, the nation's premier facility for testing innovative coal-based power generation and pollution control systems.
  
  Operation of the Power Systems Development Facility is co-sponsored by DOE, Peabody Energy, Siemens-Westinghouse Power Corp., EPRI, Kellogg, Brown and Root, and Southern Company.

• Kennecott Energy Co. of Gillette, Wyo., a member of the Rio Tinto group of companies based in the Rocky Mountains, has strong international connections to Australia and the United Kingdom. Kennecott is actively engaged in Australian clean coal and sequestration research and development.
  
  Kennecott expanded its Antelope mine coal reserves in Wyoming's Powder River Basin in 2004, bidding 75.1 cents per ton, or $146.3 million for the West Antelope tract which contains 195 million tons of premium in-situ coal reserves, according to Kennecott.

• American Electric Power of Columbus, Ohio, the largest electricity generator in the United States, hosts DOE's largest U.S.-based geologic sequestration project related to deep saline formations at its Mountaineer Plant. Experience gained in the Mountaineer Project will be applied to FutureGen.

• Anglo American LLC, is one of the world's largest mining and natural resources groups with operations in Africa, Europe, South and North America, Australia and Asia.

• China Huaneng Group of Beijing, China, one of the top 10 power companies in the world, is the largest coal-based power generator in the People's Republic of China, which has the world's third-largest coal reserve base and uses coal to generate about 70 percent of its electricity.

• CONSOL Energy of Pittsburg, Pa., one of the largest producers of high-Btu bituminous coal in the United States, is the largest exporter of U.S. coal, and one of the largest U.S. producers of coal-bed methane. Under a grant from the U.S. Department of Energy, CONSOL is conducting a $9 million investigation of sequestering carbon dioxide in coal seams. Foundation Coal Corp. of Linthicum Heights, Md., is one of the five largest coal producers with 13 surface and underground mines located in six eastern, midwestern, and western states.

Navajo tests
In September 2005, DOE's National Energy Technology Laboratory in Pittsburgh announced it had selected seven partnerships of state agencies, universities and private companies to form a nationwide network to help determine the best approaches for capturing and permanently storing gases that can contribute to global change.

The partnerships include the Navajo Nation and two other Indian nations, 244 organizations spanning 40 states and four Canadian provinces. Phase II of the four-year program will focus on demonstrating and validating promising carbon sequestration opportunities in the seven regions.

The Navajo Nation is included in the Southwest Regional Partnership, which is led by the New Mexico Institute of Mining and Technology, Socorro, N.M., and includes the states of New Mexico, Colorado, Utah, Oklahoma, Kansas, and portions of Arizona, Wyoming and Texas. The partnership is to conduct five geologic field tests, two locally.

A pilot test is planned at the Aneth Field, Paradox basin, near Bluff, Utah, consisting of both deep saline sequestration testing with 2,000 tons of carbon dioxide, and enhanced oil recovery sequestration testing with 525,000 tons of carbon dioxide from the McElmo Dome.

The San Juan Basin pilot test will examine Enhanced Coalbed Methane efficacy with 75,000 tons of injected carbon dioxide. Also, an Enhanced Coalbed Methane terrestrial pilot test will be conducted. ECBM operations are notorious for producing huge volumes of salt water, according to DOE.

The project proposes to desalinate produced water from the pilot and use the water for irrigating a riparian restoration project. The source of carbon dioxide will be the McElmo Dome. The test site is the San Juan Basin Coal Fairway near Navajo, N.M.