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Kalama Power Plant Put on Hold by Erik Robinson The Columbian, May 10, 2007

A new state law, intended to curb emissions of gases warming the globe, has prompted a consortium of public utilities to delay a $1.5 billion coal gasification plant proposed in Kalama.

Energy Northwest on Tuesday asked state regulators to set aside its application to build a 600-megawatt power plant, which would be the first on the West Coast to burn gasified coal.

The consortium cited uncertainty over a bill that Gov. Chris Gregoire signed into law Friday in Vancouver. The bill, sponsored by state Sen. Craig Pridemore, D-Vancouver, sets enforceable limits on heat-trapping carbon emissions from electric power plants.

Theoretically, carbon dioxide emissions shouldn't be a problem for the plant at the Port of Kalama.

Richland-based Energy Northwest intended to spend $35 million modifying the plant so that, in the future, it would be able to capture massive quantities of carbon dioxide and inject it into ancient lava flows nearly a mile underground rather than spewing it into the atmosphere.

There's just one problem: The technology to sequester carbon on an industrial scale doesn't exist, at least not yet.

The new law forces the company to commit to sequester carbon or offset it.

"I would love to see carbon sequestration work on an industrial scale, if it can," Pridemore said. "But if it can't, I don't want to see the emissions."

Jack Baker, vice president for Energy Northwest, notified state regulators on Tuesday that uncertainty over the new law will force the consortium to immediately begin searching for alternative power supplies to meet anticipated growth in demand for electricity. The consortium had hoped to bring the plant online by 2012, probably without the ability to sequester carbon.

"We're saying the technology is not here yet," said Brad Peck, spokesman for Energy Northwest. "Waiting until the sequestration technology is in place is going to leave us short of power with no good options."

If the new plant is unable to sequester the carbon deep underground, the new law requires the consortium to offset those emissions. That could mean buying and shutting down a conventional Western coal plant. It will be up to state regulators to draw up rules that specifically define eligible offsets.

"It's not enough to say you're buying a plant that's already intending to shut down," said Marc Krasnowsky, spokesman for the NW Energy Coalition, which has lobbied against the Kalama plant in favor of conservation and renewable forms of energy.

Energy Northwest, which will need the financial backing of bondholders to build the project, intends to wait until the mitigation requirements are clear before deciding to move forward.

Meanwhile, construction costs rise as the project languishes.

The law sets a deadline of June 30, 2008, for the state Department of Ecology and Energy Facility Site Evaluation Council to adopt rules for offsetting carbon emissions. Officials are hoping to adopt a set of regulations well before the deadline, however.

"We will work cooperatively with Ecology to move as expeditiously as the law allows," said Jim Luce, chairman of the Energy Facility Site Evaluation Council.

Whatever regulators decide, Peck said the 20-member consortium will try to develop other energy resources to meet growing demand. Although Energy Northwest is involved in developing wind farms, Peck said wind energy by itself won't be enough to meet future demand.

"We don't believe for a second that it will come close to covering the load," he said.

The Kalama plant would be the first on the West Coast capable of breaking down coal and other fossil fuels into component parts, stripping out harmful elements such as mercury and sulfur, and burning the remaining gas to generate electricity. Without carbon sequestration, the plant would emit 20 percent to 25 percent less carbon dioxide than conventional coal plants.