February 28, 2005

Center approves studies probing how to use more Indiana coal

WEST LAFAYETTE, Ind. – A state-funded center based at Purdue University last week authorized the launching of three studies to investigate how to reduce Indiana’s dependence on imported coal by using new low-polluting plants and upgrading existing power-generating facilities.

The Center for Coal Technology Research advisory panel, working with Lt. Gov. Becky Skillman's Office of Energy Policy, approved the state-funded studies on Feb. 22. The studies – to be done by Purdue, Indiana University and Purdue University Calumet – will cost a combined $85,000 and are expected to be completed by the end of the year.

"The key issues are the expansion of the coal markets into clean and effective energy and the retention of energy capital within the state," said Marty Irwin, director of the Office of Energy Policy.

While Indiana contains huge coal deposits, the state imports about half of the 66 million tons of coal consumed annually. One reason for importing coal is that most Indiana coal contains larger amounts of sulfur than coals found in some other states. To help meet emissions standards, the state imports low-sulfur coals from Wyoming and other states.

The three studies will explore how to reduce coal imports by constructing new low-polluting plants, said Tom Sparrow, director of the coal research center and a Purdue professor of industrial engineering and agricultural economics.

The center has estimated that current coal production adds nearly $1.3 billion and 14,000 jobs to the state's economy, and that each additional million tons of coal mined would add $60 million and 800 jobs. If Indiana coals were to replace the 22.5 million tons of coal now imported to generate electricity, it would add $1.35 billion and 18,000 jobs to the state's economy.

The Indiana Geological Survey, based at Indiana University, will conduct one of the studies, which will analyze how well Indiana coals might perform in plants based on "integrated gasification combined cycle" technology, one of the promising so-called "clean-coal technologies," which have been shown to produce near-zero emissions.

The technology uses "coal gasification" and cleaning, a process in which the coal is turned into a gas to run turbines that generate electricity. The waste heat from these turbines is used to create steam, which is again used to generate electricity in steam turbines.

The analysis will use information about the characteristics of coals mined in Indiana to assess how well they would work with the clean-burning technology compared with imported coals.

Another study, to be performed by the Purdue Energy Modeling Research Groups, will analyze factors that might influence the large-scale design of clean-coal technologies in the state. Those factors include the cost of building the plants, how reliable they would be, possible locations for the new plants, geological characteristics of the state, economic conditions and Indiana’s regulatory climate, said Brian H. Bowen, a research associate for the coal research center.

A key long-term consideration will be whether the state possesses geological features favorable for "sequestering" carbon dioxide produced when coal is burned. The sequestering method involves injecting carbon dioxide into underground cavities so that it does not enter the atmosphere.

Another major factor is the state's regulatory climate, Bowen said.

"Because the energy industry is still regulated in Indiana, we have a rate base whereby investors know they are guaranteed a certain return on their investments," he said. "This could take some of the risk out of investing in new power plants."

The third study, to be performed by Purdue Calumet’s Energy Efficiency and Reliability Center, will focus on the possible construction of a facility that would "partially gasify" coal to produce "coke" fuel for Indiana steel plants, while also using the gas to generate electricity for Indiana utility customers.

Steel plants now produce the fuel in "coking ovens," in which coal is partially gasified so that the coal is turned into coke, a purer form of coal burned in blast furnaces. Both the gas and coke are then used to drive the furnaces.

Steel plants in the United States and Indiana are heavily dependent on imported coke and have been plagued by a volatile market that has seen the price of coke spike from about $60 to $400 per ton in the last year, Bowen said.

The facility proposed by researchers at Purdue Calumet might eliminate Indiana's dependence on imported coke, which would stabilize the coke market and also create gas to generate electricity.

The three studies are intended to lead to further research to provide the state with more precise information, Sparrow said.

"We expect the center to make major contributions to the state's economic growth through the expansion of our coal resource base," Sparrow said.

Writer: Emil Venere, (765) 494-4709, venere@purdue.edu

Sources: Tom Sparrow, (765) 494-7043, fts@ecn.purdue.edu

Brian H. Bowen, (765) 494-1873, bhbowen@purdue.edu

Marty Irwin, (317) 232-7578, mirwin@@commerce.in.gov

Purdue News Service: (765) 494-2096; purduenews@purdue.edu

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