Department of Justice opens investigation into failed carbon-capture plant

Cranes stand at the construction site for Southern Co.'s Kemper County power plant near Meridian, Miss., on Tuesday, Feb. 25, 2014.

Enlarge / Cranes stand at the construction site for Southern Co.’s Kemper County power plant near Meridian, Miss., on Tuesday, Feb. 25, 2014. (credit: Gary Tramontina/Bloomberg via Getty Images)

Southern’s most recent financial statement (PDF).

The Mississippi-based facility had received $387 million in federal grants to build a state-of-the-art coal gasification and carbon-capture power plant (otherwise known as an Integrated Gasification Combined Cycle, or IGCC, plant). But in 2017, Southern’s subsidiary, Mississippi Power, decided to scrap the cutting-edge tech and only use the power plant to burn cheaper natural gas, in a major blow to the proponents of carbon capture.

Bad timing

Kemper was a complicated project. It was located near a lignite coal mine, which was intended to serve Kemper exclusively. Lignite is a low-grade coal compared to the anthracite and bituminous coal that’s found in Wyoming and Montana, so Kemper planned to synthetically transform the plentiful local coal to gas. The plant would then burn the syngas in a turbine, strip the carbon dioxide (CO2) from the power plant’s flue, and send that CO2 through a pipeline to an oilfield where it would be used for enhanced oil recovery. (That is, CO2 is forced down into an oil well to increase the pressure of the well so more oil can be recovered.)

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International Energy Agency predicts wind will dominate Europe’s grid by 2027

A view of wind turbines from the coast

Enlarge / Scroby Sands offshore wind farm, Caister, Great Yarmouth, Norfolk, England. (credit: Photo by: Geography Photos/UIG via Getty Images)

IEA’s forecasts (PDF) put wind just beating all other electricity sources with a 23-percent share of the energy mix. “Other Renewables” like biomass plants contribute a little over 20 percent, gas adds 20 percent, nuclear contributes just a little below 20 percent, and coal declines to just over 10 percent. Solar energy contributes about six or seven percent in the IEA’s 2027 scenario.

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Potential buyers for largest coal plant in the Western US back out

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Enlarge / Navajo Generating Station and Navajo Mountain. (Photo by: Education Images/UIG via Getty Images) (credit: Getty Images)

Kayenta mine, which is owned by the world’s largest private coal firm, Peabody Energy. After the news of NGS’ proposed shutdown, Peabody began a search for a potential buyer for the coal plant so as not to lose its only customer.

The Salt River Project, the majority-owner of NGS, published a press release on Thursday saying Peabody Energy retained a consulting firm to identify potential buyers of the massive coal plant. That firm came up with 16 potential buyers who had expressed some interest. Salt River Project says that it hosted numerous tours for prospective buyers and set up meetings with various regulators as well as the Navajo Nation. Ultimately, a Chicago firm called Middle River Power and a New York City firm called Avenue Capital Group (which invests in “companies in financial distress”) had entered into negotiations to potentially take over the coal plant and keep it running.

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As coal stalls, Wyoming considers new environmental clean-up rules

Dumptruck full of coal drives through strip mining area.

Enlarge / GILLETTE, Wyo.: A truck loaded with coal is viewed from the Eagle Butte Coal Mine Overlook which is operated by Alpha Coal. The area is a large producer of coal. Gillette uses the moniker of “The Energy Capital of the Nation”. (Photo by (credit: Matt McClain/The Washington Post via Getty Images)

according to the Casper Star-Tribune.

The board’s passage of the proposed rules is somewhat surprising in a coal-heavy state, because it could potentially raise the cost of coal mining in Wyoming for some companies. However, there is political support for more stringent environmental rules after a number of coal companies filed for bankruptcy in recent years. Although no companies ended up abandoning mine cleanup to the state, the specter of hundreds of millions of dollars of cleanup in the event of another coal downturn has left regulators eager to limit how much damage the state could be on the hook for. The five-person advisory board voted 4-1 in favor of limiting self-bonding. The board member who voted against limits to self-bonding works for Peabody Energy, a major coal producer in the state.

The limits wouldn’t do away with self-bonding in Wyoming. Instead, to qualify for self-bonding, a coal company would have to have a strong credit-rating and would be expected to run the mine for at least five more years. The Star-Tribune notes that credit ratings for coal firms also factor in the health of the market, so the state of Wyoming wouldn’t have to independently evaluate the larger economic risks to a mine going under.

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