What a difference a decade makes.
In the electricity production industry, coal was not only king 10 short years ago, it was the conquering emperor, and the Powder River Basin was its seat of power.
The PRB saw a record year of production in 2008 when it mined and shipped more than 446 million tons of coal and supplied about 50 percent of all the coal burned to produce electricity in the United States.
And as with any empire, the focus of the local energy industry was holding and increasing that power and not so much on the future line of succession. To that end, the nation’s largest coal producers assumed billions of dollars of debt in acquisitions.
Fast-forward a decade dominated by federal regulation and a global population shifting more toward an anti-fossil fuels philosophy and the crash has been hard.
Three of the world’s — and Powder River Basin’s — largest coal producers filed for Chapter 11 bankruptcy reorganization. The basin has lost thousands of direct and indirect coal industry jobs, and the PRB has seen its share of energy generation plummet from 50 percent to about 30 percent.
The numbers tell the story. From that high of 446.5 million tons of coal produced in 2008, the Powder River Basin was down 36 percent by 2016 at 287 million tons and 32 percent in 2017 at 305 million tons produced.
And as much as the debate over climate change and global warming has impacted coal-generated electricity in the U.S. and abroad, it’s also created a shift in focus for coal and carbon. While thermal coal will continue to be king now and the foreseeable future, the focus has turned to diversifying carbon.
Finding uses for Wyoming’s most abundant resource other than burning it has to be the priority now, said Richard Horner, director of special projects and emerging technology with the School of Energy Resources at the University of Wyoming.
“Let’s look at the big picture, and when you think about carbon, it’s the building block of oil, the building block of (natural) gas, the building block of coal, which the state of Wyoming has in spades,” he said. “Not only does it open up the imagination beyond just burning it, but it opens up the possibilities of making some pretty exciting breakthroughs.”
That’s the driving idea behind some of the area’s new efforts to make PRB coal into other valuable products. That includes the new Advanced Carbon Products Innovation Center, a research facility under development in partnership with the University of Wyoming and Energy Capital Economic Development Corp.
“Thinking about our coal in a different way opens up far more possibilities,” Horner said. “When you think about carbon and the amount that’s produced in these different forms, it spurs thought about developing new businesses and new industry based on carbon.”
The Integrated Test Center
That’s part of the idea behind the Integrated Test Center, a 206,000-square-foot research facility build next to the Dry Fork Station coal-fired power plant north of Gillette.
With a $15 million investment from the state and another $6 million from private energy concerns, the ITC is one of two homes for the COSIA NRG Carbon XPrize, a $20 million competition for research teams to develop and demonstrate technology to capture waste carbon dioxide from a power plant and turn it into valuable products.
That power generation not only burns a carbon-based material for fuel, but also emits a harmful form of carbon as a waste product makes carbon capture an important component of diversifying the element, said Gauray Sant, associate professor and Henry Samuell Fellow at the University of California Los Angeles. He’s also the leader of the Carbon Upcycling UCLA team that one of five finalists challenged to prove their technology at the ITC.
He said that while there are significant environmental implications in the potential breakthroughs that could come from ITC research, the ultimate driving force is economics.
“I think corporations are starting to see the writing on the wall that lobbying isn’t going to (solve) this problem for them,” he said. “It’s not a technical challenge, it’s an economic challenge. That’s one of the reasons why there’s a big push right now (for carbon capture).”
Because coal makes up “a really, really large percentage” of the natural resource wealth in Wyoming and the world, diversifying carbon “can have significant implications on the economy,” Sant said.
Because the XPrize is such a recognizable organization and the size of the potential prize so large, it’s helped push carbon research into the mainstream of public interest.
“The XPrize is a wonderful business, because anytime you have a competition with a big prize like this, it captures the public’s imagination. Solutions are empowering.”
While exciting, Sant also cautions against believing beyond our potential to use and manufacture carbon-based products. That’s because, even with huge production drop-offs nearing 40 percent, nothing compares to the sheer volume of coal mined and burned to produce electricity.
“The scale of the challenge is massive,” he said. “As a state, what does Wyoming try and go after? Do you try and protect an industry that’s based on extraction, or be an incubator of technology? In time, it’s much more valuable to hold technology and offer technology rather than extraction.”
He uses Silicon Valley as an example. It wasn’t the carbon-based computer chips that grew that area into an economic powerhouse, it was the technology developed there.
A new approach
Billions of dollars has been spent on failed carbon and coal technology over the past 15 years, said Robin Eves, president and CEO of Clean Coal Technologies Inc. But after years of failure, he said his company is starting to realize some success.
Clean Coal spent more than 10 years perfecting its technology to upgrade the energy potential, or British thermal unit output, of coal. Its process reduces the moisture in coal in a way that leaves the mineral stable and safe to handle. Along with producing more energy than untreated coal, the refined product also produces fewer harmful emissions when burned, including carbon dioxide.
In essence, Clean Coal wants to produce a better version of thermal coal.
“We’re no longer fighting total skepticism,” Eves said about the process of developing and proving his product. “We’re being embraced because coal is here to stay.”
After testing its process in Tulsa, Oklahoma, Clean Coal moved its test plant to Campbell County at the former Fort Union mine site this summer.
The company partnered with the University of Wyoming’s School of Energy Resources, and it’s already paid off.
“It’s given us a tremendous boost in the sense that we’re not having to convince people that we’re different,” Eves said. “We have the technology, the results, but now we have the university.”
In the past year, the school has identified minor changes to Clean Coal’s process that have led to a “significantly higher end product that what we got in testing in Oklahoma,” said Aiden Neary, the company’s chief financial and operating officer.
The company is now reassembling the test plant to incorporate UW’s suggestions, and the university will continue to be a “crucial partner” as the company looks to build commercial plants.
Both Eves and Neary believe their end product can be a short- and mid-term solution to the coal crisis.
“If the U.S. wants to fight for coal and the use of coal, we need to export it to consuming nations,” Eves said.
While the United States and Europe might be moving away from coal in favor of other sources of energy, other countries are embracing coal, Neary said. The need for coal has increased globally, especially in Asian countries such as Japan, India, China and South Korea.
Those nations recognize the limitations of alternative energy sources and have gravitated toward coal because it’s cheap and abundant. These are opportunities that Wyoming and the U.S. are missing out on.
For example, in 2016, the U.S. exported 60 million tons of coal. Indian coal usage is expected to hit 1.7 billion tons by 2021.
“The U.S. needs to get involved in that,” Neary said, adding that Powder River Basin coal “is the best in the world, provided you can upgrade it.”
Clean Coal has been talking with representatives from India and Japan, and it’s working on securing agreements with companies in those countries to buy the finished product. And it’s invited people from all over the country and world to come to Gillette to watch the process in action when the test plant is reassembled.
“In one year, we would expect to have a commercial plant underway in Wyoming,” Neary said.
As for the location of that commercial plant, Eves and Neary would like it to be as close to the mouth of a mine as possible. The company is in the early stages of figuring out what it would take to build a production facility at the same location as the test plant.
Design of a commercial plant is 95 percent complete, Neary said. It will be modular, so instead of having to build one large facility, it can build the plant in modules and add more as demand increases.
“Once it’s proven out, you will find that other coal companies have no other choice but to replicate it,” Neary said.
A place for innovation
Like Sant, Eves said the future and sustainability of coal in the next 20 or 30 years “will be determined by its marriage to technology.”
Next door to Clean Coal’s test plant is the future location of the Advanced Carbon Products Innovation Center, a $2.8 million project that, when complete, will allow researchers to work on carbon technology.
Phil Christopherson, CEO of Energy Capital Economic Development, said the facility will hopefully serve as a much-needed bridge for taking ideas from the lab to a commercial plant.
“Proving out the commercial viability is a big hurdle,” he said. “That’s what’s stopped everything in the past. There’s a lot of stuff that works in the lab, but can you scale it up and make money?”
Pilot plants give researchers a chance to prove their technologies can work on a larger scale, but there isn’t a facility anywhere in the state to place pilot plants.
The University of Wyoming School of Energy Resources is very involved with the project, Christopherson said.
“We use them to help vet and understand the technologies so that we can better evaluate the projects that are coming,” he said.
Dave Spencer of the Advanced Carbon Collaborative is working with Christopherson and UW. He said UW feels that it has a number of carbon products that will be ready to make on a commercial level within the next couple of years. But it doesn’t have a place to test them in Laramie.
“UW feels they need a presence in the basin to roll out their tech,” Spencer said.
He said it’s been a long process, particularly with coming up with money for the project. It had received a $1.5 million grant from the Wyoming Business Council, and in August applied for a grant from the Economic Development Association.
But even after the money is secured, there’s still a lot of work to do.
“There’s no such thing as an overnight success in economic development,” Spencer said. “Sometimes it takes generations to make changes.”
At one point in history, burning wood was the main source of energy, then the world switched to using coal and oil.
“We’re at that stage now where we’re going to see another shift,” Spencer said. “When change comes, you have to adapt with it, look beyond the horizon to where we can be.”
Having a facility like the one being built near Gillette is crucial to developing new technologies that use carbon, Horner said.
“If you’re going to generate these new business opportunities and you’re going to feature technology in that, you need to have an appropriate ecosystem,” he said. “While the university can prove new technologies at a lab-type scale, we don’t have the facilities here to scale it up and see what the longterm potentials are.”
Wyoming is not the only state trying to make this change. Other coal-producing states, such as Utah and Ohio, are “in a race to the finish line,” Spencer said.
Many foreign governments are further along on this issue than the U.S., he added. He visited a company in Evanston that’s producing carbon fiber from a coal tar chemical it had to ship in from a Japan power plant.
“We could make that same chemical right here in Wyoming,” Spencer said. “That’s the opportunity that we have. Getting people to shift gears is the hard part. People want to continue doing what they’ve always done.”
When the coal mines laid off hundreds of employees in the spring of 2016, “a vacuum formed,” Spencer said, and small coal technology start-ups popped up. But then the coal market rebounded a little and those companies disappeared.
It’s a matter of timing and now might be the best time with the coal industry in long-term decline, he said.
If those researchers at the ACPIC are successful, they’ll need somewhere to build a commercial plant. Christopherson said the best-case scenario would be for them to build in Campbell County or in Wyoming, or at least someplace in the U.S. where they can use Powder River Basin coal.
“In the end it’ll be their choice,” he said. “But we can put our best foot forward to help them stay.”
He thinks Gillette will be an attractive option because it’s close to the source material and it has a “wonderful community” and an industrial workforce.
“A lot of our workforce, their skills will easily transition to these advanced carbon product business,” Christopherson said. “And the fact that we’re a welcoming community will help persuade them that this is a great place to do business.”
The ‘carbon circle’
That companies are researching ways to reimagine carbon into new products from its raw state and from CO2 emissions could eventually lead to an insular “carbon circle” economy, Horner said. If you have to burn coal or otherwise break it down, capturing the CO2 creating also becomes a source of useful carbon.
“The way I visualize it, if the regulatory framework is that we have to capture everything, we can catch it, but then where do we release it?” he asked. “There’s enhanced oil recovery. Oil companies are very interested in using that CO2 to produce more oil. So, you’re now offsetting the cost of that CO2 and it starts to make carbon capture for Wyoming very compelling. Wyoming really wins in spades.”
In the end, the real challenge is maximizing carbon’s potential, which can be imagined as just about any product, from carbon nanofiber to 3-D printing material to captured CO2 used in building materials, Horner said.
“You’re trying to use all the contributions that come out of it, not just one piece of it,” he said, using the cattle industry as an example.
“Let’s say we all love filet steak and not the rest of the beef. We’d have to treat all that’s left (when butchering a cow) as waste, which is much less cost effective,” he said.
Once technology catches up the potential for carbon, Gillette may have to change its slogan from Energy Capital of the Nation to Carbon Capital of the World.