FAQ: All about coal--a necessary evil

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What are some ideas for cleaning up coal?
• Squeeze out the water: CoalTek, which has received funds from Draper Fisher Jurvetson among others, has come up with a way to remove water, sulfur, chlorine, ash, and mercury out of low-grade coal prior to burning it in coal-fired plants. The process thus removes some pollutants and also makes coal more energy intensive, which leads to less coal burned, in turn leading to lower pollutants, said CEO Chris Poirier. It has a 120,000-ton-a-year facility in Kentucky and has plans to expand.

Stanford's Carl points to another potential benefit of CoakTek's process. It makes coal more uniform, which makes it easier to burn in a wider variety of plants. In turn, this can cut down on the transportation required to get coal to plants that can burn it, an indirect carbon dioxide benefit.

"There are a hundred different types of things that are called coal, and they all can't be burned in the same place," Carl said.

• Convert it to natural gas: GreatPoint Energy and EnergyQuest, among others, says it can make coal into natural gas, a cleaner fossil fuel, that sells for around $4 per million BTUs, less than the $7 per million BTUs of today. Carbon dioxide produced during the conversion will get sequestered at plants.

Conversion technologies tend to "leak" energy--not all of the potential energy that's originally in coal gets turned into electricity, but some analysts who have studied the process say it has promise, particularly as natural gas prices rise.

The company has built a small demo plant in Iowa and has raised more than $100 million to build larger factories. The first will go up in Somerset, Mass.

The federal government, meanwhile, will put $1.5 billion into the FutureGen project, which hopes to build a pollution-free coal plant that will produce power via gasification and hydrogen, and sequester the carbon dioxide on site. The prototype won't be ready, however, for at least another six years.

• Better boilers: You don't hear much about Fuel-Tech, but it's come up with an interesting niche (reflected in a fourfold rise in the stock price since 2005). It specializes in boilers, chemicals, and other industrial products that cut down on the amount of nitrogen dioxide, sulfur trioxide, carbon dioxide, and other pollutants that get produced in coal burning. The NOxOut process can cut nitrogen oxides by 25 percent to 50 percent; more than 450 companies have installed it.

• Coal to liquids: It could be called the ol' Hans and Franz process. Franz Fischer and Hans Tropsch in the 1920s coined a way to turn coal into a liquid. First the coal is converted to a synthetic gas (basically, the gasification equation for making natural gas) and then converted to a liquid. The high cost of the process, however, has typically made it interesting to people who couldn't get petroleum. The Third Reich used it in World War II to fuel their tanks, and South Africa cranked up production to avoid apartheid trade barriers.

New catalysts and gasifiers, along with rising gas prices, however, are eroding the price premium. Coal companies have said they can make liquid fuel for around $50 a barrel or less. At the same time, U.S. Sens. Jim Bunning (R-Ky.) and Barack Obama (D-Ill.) are pushing for tax credits. (Syntroleum is trying to use Fischer-Tropsch for animal fat and renewable feedstocks.)

Producing and burning this fuel, however, would result in a massive dose of greenhouse gases. In fact, when the whole process is taken into consideration, liquid fuels derived from coal generate more carbon dioxide than just burning coal itself. If a quarter of the world's coal reserves became liquids, it would increase atmospheric greenhouse gases by 300 parts per million, said Alex Farrell, assistant professor in the energy and resources group at U.C. Berkeley. That would more than double the pre-industrial atmospheric concentrations of greenhouse gases. Even with sequestration, gases would rise by 150 parts per million.

Increasing the amount of oil coming from tar sands--which accounts for 3 million barrels of the 80 million barrels consumed a day--would have a similar effect, he added.

"If we do this, I think we are going to have massive increases in the amount of carbons in the atmosphere," he said. If the costs of sequestration and carbon taxes were added, the economic argument also gets substantially weaker.

• The car coal latte: Silverado GreenFuel takes low-grade coal, pulverizes it and cooks it under pressure with water until it develops a waxy coating. The waxy coal particles are then reunited with carbon-infused water removed at an earlier part of the process to make a liquid fuel. The end result is a liquid fuel that would sell for $15 a barrel, if it were oil, the company claims.

Silverado has signed a memorandum of understanding with the state of Mississippi to build a $26 million demonstration plant capable of producing the equivalent of about 111,000 barrels of its "Green Fuel" a year. (Roughly 2.5 barrels of Green Fuel equal a barrel of oil.) The plant is due to open in three years.

"Coal is 200 years of dirty. The proof will be in the pudding," said CEO Gary Anselmo. But it's also unproven on a big scale.

Researchers at Louisiana State University, meanwhile, are trying to develop catalysts and processes that would allow energy companies to convert coal into a mix of carbon monoxide and hydrogen, and then convert those gases into ethanol.

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