[Senate Hearing 109-476]
[From the U.S. Government Publishing Office]
S. Hrg. 109-476
WYOMING COAL INDUSTRY
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
on
ISSUES ASSOCIATED WITH THE GROWTH AND DEVELOPMENT OF THE WYOMING COAL
INDUSTRY
__________
CASPER, WY, APRIL 12, 2006
Printed for the use of the
Committee on Energy and Natural Resources
______
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28-623 WASHINGTON : 2006
_____________________________________________________________________________
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
RICHARD BURR, North Carolina TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri DIANNE FEINSTEIN, California
CONRAD BURNS, Montana MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia JON S. CORZINE, New Jersey
GORDON SMITH, Oregon KEN SALAZAR, Colorado
JIM BUNNING, Kentucky
Bruce M. Evans, Staff Director
Judith K. Pensabene, Chief Counsel
Robert M. Simon, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
John Peschke, Professional Staff Member
Patty Beneke, Democratic Senior Counsel
C O N T E N T S
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STATEMENTS
Page
Coyne, Joe, Executive Director, Converse Area New Development
Organization, Inc., Douglas, WY................................ 26
Gern, Dr. William A., Vice President for Research and Economic
Development, University of Wyoming, and Chairman of the Board
of Directors, Western Research Institute....................... 30
Loomis, Marion, Executive Director, Wyoming Mining Association,
Cheyenne, WY................................................... 22
Shilling, Dr. Norman, Product Line Leader, IGCC Power, GE Energy. 15
Shope, Thomas, Chief of Staff, Office of Fossil Eneergy,
Department of Energy........................................... 2
Thomas, Hon. Craig, U.S. Senator from Wyoming.................... 1
Waddington, Steve, Executive Director, Wyoming Infrastructure
Authority, Cheyenne, WY........................................ 16
APPENDIX
Additional material submitted for the record..................... 45
WYOMING COAL INDUSTRY
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WEDNESDAY, APRIL 12, 2006
U.S. Senate,
Committee on Energy and Natural Resources,
Casper, WY.
The committee met, pursuant to notice, at 1:33 p.m., at the
Wyoming Oil and Gas Conservation Commission Building, Hon.
Craig Thomas presiding.
OPENING STATEMENT OF HON. CRAIG THOMAS,
U.S. SENATOR FROM WYOMING
Senator Thomas. The purpose of this hearing is to be able
to get the information from you, and bring it back to
Washington, so that you don't have to go there. So, I want to
thank all the witnesses for appearing before the committee.
The purpose of the hearing is to gain better understanding
of the legislative, economic, and environmental issues
associated with the growth and development of the Wyoming coal
industry. Our conversation today has important implications,
not only for Wyoming, but also for our country and for the
international community.
Coal amounts to 90 percent of the United States total
energy reserves. Coal fuels over half of the electricity
generated within our boarders. By 2015, global use of coal will
double. Today coal accounts for 25 percent of worldwide energy
consumption. In less than 20 years, it will more likely account
for more than 50 percent.
The United States has been using coal for two centuries.
The challenge is to meet our Nation's environment, economic,
and energy security goals while developing the resource. The
use of clean coal technology is critical in meeting this
challenge. Clean coal technologies can dramatically increase
the efficiency of, and significantly reduce the emissions from
coal combustion.
Coal is often associated with the generation of
electricity, that is going to change in the future. There's a
growing concern about the dependence on foreign suppliers of
oil, and coal is one of the effective solutions. Carbon Dioxide
will be captured during the electrical generation and can
engage the production of domestic oil fields.
Paired with the conversion of coal to liquid fuel, these
technologies will help reduce our dependence on foreign oil. By
2005 fuels from coal could replace as much as 2 million barrels
of oil and 5 trillion cubic feet of natural gas a day, Wyoming
is our Nation's largest coal supplier.
Last year 36 percent of domestic coal production came from
Wyoming. We must build on this production's success by
attracting activities relating to advancing coal technologies
in our State. The energy policy in 2005 has already set the
stage for this new era. It established a long ranging program
which will cover 80 percent of clean imaging projects. It
establishes three tax credits that will stimulate investment in
clean coal facilities. It authorizes a billion dollars over 3
years for liquid coal and gaseous fuels from coal.
Unfortunately, the President's budget did not reflect the
Energy Policy Act's emphasis on coal and we're working with him
on that. We have some real opportunities to get going and we've
got people in the private sector ready to move forward. These
are activities that need to take place within the next 2 or 3
years in the strong private-public partnership and advance that
effort. Essential infrastructure will rise, will also be
required to accomplish our bill's full potential when it comes
to Wyoming's coal resources. The exportation of our vast coal
resources has been advantageous, but there are added benefits
to keeping the fuel in the State where the fuel can energize
other activities. Railroads will be essential to the part of
our service to increase capacity and provide reliable service.
Electrical transmission must be constructed. We must
construct and expand pipeline infrastructure. Our State's
ability to engage in these kinds of value added activities has
limited only by our capacity to get these products to the
market. There are significant challenges, but we're standing on
the edge of a promising new era in energy development and
production. Wyoming will continue to be a national leader in
these efforts. If we overcome these challenges, we can improve
the Nation and Wyoming's economy, security and environment
while creating jobs and strengthening education. I look forward
to hearing our witnesses, to their thoughts on these issues and
we now turn to our first panel.
I would like to welcome Tom Shope, Chief of Staff of the
Department of Energy's Office of Fossil Fuel and Dr. Lowell
Miller, Director of the Office of Sequestration, Hydrogen and
Clean Coal Fuels with the Department of Energy. I understand
the Assistant Secretary, Jeff Jarrett, had some difficulties,
health difficulties, and wasn't able to be here. I hope all
goes well with him and we welcome you gentlemen here. Would you
like to proceed?
STATEMENT OF THOMAS SHOPE, CHIEF OF STAFF, OFFICE OF FOSSIL
ENERGY, DEPARTMENT OF ENERGY
Mr. Shope. Thank you Senator, and I would like to apology
for the Assistant Secretary who was unable to make it, but I'm
happy to report he is doing much better and looks forward to
coming out to Wyoming soon.
Senator Thomas. Good, glad to hear it.
Mr. Shope. Mr. Chairman, it is a pleasure to join you here
in Wyoming today. First, I would like to say how much the
Department appreciates the support of the chairman and the
members of the committee over the past years and we look
forward to working with you on fossil energy's research and
development programs.
Now, the Senator cited many of the statistics which I am
going to repeat, but I think they bear repeating, about the
status of fossil fuels in our country today. It is truly an
exciting time to be at the Office of Fossil Energy. As the
Senator mentioned, coal, oil, and natural gas today supply
about 85 percent of the total energy consumed in the United
States and coal accounts for well over half of our total
electricity generation.
The Energy Information Administration forecast that in 20
years, coal, oil and natural gas will still account for about
85 percent of the U.S. total energy consumption and roughly the
same numbers apply for total world energy consumption. Now,
that's not to say that we won't be making incredible strides in
increasing and perfecting alternate and renewable energy
sources, because the President and the Department of Energy are
committed to doing just that.
Rather, EIA's estimates reflect our insatiable appetite for
energy. Total U.S. energy demand is forecast to increase by
about 27 percent over the next 20 years, and that's just in
this country. Total energy demand is forecast to increase by 64
percent, worldwide. To meet this energy challenge, demand for
oil in the United States is projected to increase by 25
percent. Demand for natural gas to increase by 21 percent.
Demand for coal by 37 percent.
We can and must meet this growing demand for energy through
the use of advanced technology. That's what we are focusing on
at the Department of Energy. At the Office of Fossil Energy,
these are not just talking points or lofty goals, we are taking
concepts from the drawing board through demonstration into
commercialization.
Real world applications, applications in the field and on
the ground. And we are doing it by leading cooperative national
and international research development efforts. And in all
cases, partnering with industry, scientific and technology
leaders. Obviously Wyoming and neighboring States play a
critical role in this process. We are continuing to demonstrate
new oil and gas production technologies at the Rocky Mountain
Oilfield Testing Center, located right here in Casper. We
continue to work with the Western Research Institute, and we
are working with many advanced technologies of particular
interest to Wyoming. Like those used for enhanced oil recovery,
using carbon dioxide injection, which could allow us to
quintuple our domestic recoverable oil reserves.
We're continuing to work on advanced technologies like the
extraction of oil from shale, which could add another 300
billion barrels of oil to our domestic reserves. These are oil
shale resources which are concentrated in Colorado, Utah, and
right here in Wyoming.
We are also working on advanced technologies that will
allow us to take regular advantage of unconventional domestic
natural gas resources, such as coal bed methane, which now
accounts for 9 percent of all gas produced in the United
States.
And of course we are working on advanced technologies that
will continue to allow us to take advantage of our most
plentiful fossil fuel, coal. Coal is the workhorse of the
Nation's electric power industry. Serving as the cornerstone of
America's central power system. Technology has made coal and
other fuels far cleaner today than they were a generation ago.
Electricity generated from coal has risen 177 percent since
1970, yet emissions of small particulate matter sulfur dioxide
and nitrogen-oxide emissions have decreased significantly. But
these successes are not enough, to preserve this economically
vital energy foundation, we must invest in innovative, low-cost
environmental compliance technologies for existing plants and
develop cleaner and more efficient technologies for use in new
plants.
Our clean coal programs are driven by President Bush's
policies and initiatives to achieve energy security and reduce
polluting emissions in the air as well as greenhouse gas
emissions. They are underscored by the President's advanced
energy initiative and his 10 year $2 billion coal research
initiative. In furtherance of these efforts, we are currently
undertaking various cutting edge research and development
projects. While each project and program is aimed at a specific
technological goal, all the projects are designed to be
mutually supported and contribute to our ultimate goal a
completely clean coal-based plant that maintains coal's
favorable cost advantage over competing fuels.
Our coal research extends from innovations for existing
plants to needed technologies of the future in the areas of
gasification, turbines, carbon sequestration, hydrogen from
coal, fuel cells and associated advanced technologies. In about
6 years, we expect our work to result in an up and running
working, large scale, coal-based powerplant and hydrogen
production facility that emits no polluting or greenhouse
gasses into the atmosphere. We call this project ``FutureGen.''
Think for just a minute about what that will mean.
FutureGen will prove out the new technologies we're working on
today and serve as a model for the coal based powerplants of
the future. FutureGen will not only assure coal's future as the
dominate source of electric power, it will also be an important
source of the hydrogen that will fuel a hydrogen based economy
of the future. That is transformational technology, and it's
within our reach.
Of course these advances will be very important to Wyoming,
with market shares of Western coals continuing to rise and
production growing at about 20 million tons per year, Wyoming
leads the Nation in coal production. Our ultimate goal of
energy security can only be reached by scientists and engineers
working to research and develop new, cost effective
technologies to take us beyond our current performance.
As a Nation we will provide the energy we need, we will
continue to make incremental and impressive gains in
environmental performance. It will take time, effort and
resources, but we're far enough down the research and
development road to say with confidence that the promise is now
much larger than the problem.
The President's energy policy and its related initiatives
holds nothing less than to consign to the history books the
energy and environmental challenges that preoccupy our country
and the world today. We are not indulging in idle fantasies.
The products of our clean coal and other energy and
environmental technology research and development will continue
to supply the energy, the everyday miracle of modern life that
makes every thing else possible. Mr. Chairman, that concludes
my oral remarks, I have some written comments for the record
and I would be happy to answer any questions along with my
colleague, Dr. Lowell Miller, the Director of Hydrogen
Sequestration and Clean Coal Fuels.
[The prepared statement of Mr. Shope follows:]
Prepared Statement of Thomas D. Shope, Chief of Staff, Office of
Fossil Energy, Department of Energy
Mr. Chairman, members of the Committee, it is a pleasure to join
you here in Wyoming today to discuss the promise of technology to allow
coal to remain the bedrock of the American and the world power
generation industry. The Department appreciates the support of the
Chairman and the Members of the Committee over the past years and we
look forward to working with you as we move forward with Fossil
Energy's research and development programs.
It is a fact that coal is our most abundant domestic energy
resource--we have a 250-year domestic supply at current consumption
rates, and the entire world has a nearly 200-year supply. Coal is a
critically important contributor to both America's and the world's
energy security: a potentially clean, affordable and key source of
energy for the indefinite future.
I'd like to begin by laying out a few facts about fossil fuels and
energy in general.
The first fact I want to highlight is that fossil fuels--coal, oil
and natural gas--today supply about 85 percent of the total energy
consumed in the United States. Oil accounts for 40 percent of that
total--most of it for transportation fuels--while coal and natural gas
account for about 23 percent each. Nuclear energy, large hydroelectric
facilities and other renewable energy account for the remaining 14
percent. Coal accounts for well over half of our total electricity
generation.
Interestingly, roughly the same numbers apply for total world
energy consumption.
If we do not change the way we produce and consume energy, the U.S.
will remain reliant on imported sources of oil. Current forecasts
suggest that in 20 years the U.S. and the rest of the world would need
even more energy than we now consume to serve more people in improved
economic circumstances. Total U.S. energy consumption is forecast to
increase by about 27 percent and world consumption by 64 percent. The
use of our domestic resources, especially coal, will continue to be
important in meeting our energy needs and ensuring our energy security.
Consumption of oil in the U.S. is projected to increase by 25
percent; of natural gas by 21 percent and of coal by 37 percent.
Wyoming and neighboring states will play a critical role in satisfying
that demand growth. Consumption of nuclear, and renewable energy is
also projected to increase.
We will need energy from every available source and, for that
reason, we cannot be for one source of energy and against another. We
need them all and we must be for them all.
How are we going to meet this growing demand for energy? The
answer, as it always has been, is through human ingenuity--advances in
technology.
Intelligence and imagination have allowed us to tap oil and natural
gas resources deeper in the ground, deeper underwater and in more
inhospitable places than ever before.
That will continue as new technologies allow us to develop oil and
gas resources in parts of the Rocky Mountain region, on the Outer
Continental Shelf, and in Alaska.
Enhanced oil recovery technology using carbon dioxide injection
could significantly increase our domestic recoverable oil reserves by
allowing more oil to be recovered from mature oil fields.
At the same time, technology is allowing us to take greater
advantage of ``unconventional'' domestic resources. Perhaps the most
prominent example is coal-bed methane, which now accounts for nine
percent of all gas produced in the U.S. Our coal-bed methane resources
are centered in Wyoming, Colorado and New Mexico.
Other unconventional resources, while not yet proven to be
economic, hold significant potential for the future if certain
technological hurdles can be overcome. As you know, our oil shale
resource is concentrated in Wyoming, Colorado and Utah. In addition, an
estimated 200,000 trillion cubic feet of gas resource exist in methane
hydrate formations in the U.S. Worldwide, methane hydrates are
estimated to contain 400 million trillion cubic feet of gas.
Technology has made solar and wind power sensible technology
choices in certain circumstances today, and further R&D breakthroughs
will continue to drive down costs and encourage more widespread
applications of these technologies.
Technology has made nuclear power plants safer, more secure and
more efficient. It has transformed the transportation sector, providing
far cleaner fuels and, increasingly, more efficient vehicles. And it
has made industry and society overall much more energy efficient,
producing more goods and services while using less energy and emitting
less pollution for an ever-expanding economy. Our economy grew by over
125 percent from 1972 to 2000, yet energy use increased by only 30
percent. The EIA projects a further 32 percent improvement in energy
intensity--energy consumption per dollar of Gross Domestic Product--by
2025.
Technology has made coal and other fuels far cleaner today than
they were a generation ago. While our economy and population have been
growing, pollution has been declining. Electricity generated from coal
has risen 177 percent since 1970, yet emissions of small particulate
matter have decreased by 87 percent, along with a 38 percent decrease
in SO2 emissions and a 24 percent reduction in nitrogen
oxide emissions,
Our ultimate goal is energy security, which can be defined
concisely as reliable, affordable, and environmentally sound energy for
the future. That goal can be reached with the help of scientists and
engineers working to research and develop new, cost-effective
technologies that take us beyond current performance.
Based on what we have accomplished to date, anyone with knowledge
of the energy and environmental field should be an optimist about our
future prospects.
President Bush is an optimist, and his energy plan has from day one
been founded on technology. The President's new Advanced Energy
Initiative which he unveiled in his State of the Union Address is
founded on accelerating research in technologies that hold great
promise. As the President has said, we are on the verge of spectacular
technological advances that will redraw the energy and environmental
landscape beginning in our lifetimes.
We can and will provide the energy we need and we need to have
short, medium and long term approaches to this challenge. We must also
continue to make incremental but impressive gains in environmental
performance. There is no one immediate solution to our energy
challenge. We must face this challenge with a long term view to change
fundamentally the way we produce and consume energy. There are things
we can accomplish in the short term that change the way we power our
homes and businesses and vehicles. Energy efficiency measures will play
an important role. But many of the big changes are still some way off.
It will be perhaps 10 to 20 years before we see the transformational
technologies we are researching and developing today begin to have
real-world, beneficial effects on our lives.
The wait will be worth it. The benefits will be enormous, changing
our lives and addressing the energy and environmental concerns that
preoccupy us today.
There are great things coming in the energy and environmental world
and many of them have to do with clean coal's promise and the role we
envision for it in helping to meet our overall energy challenge. The
Office of Fossil Energy has taken and is taking a lead role, in
partnership with industry, university researchers, state governments,
independent energy organizations, foreign governments and others in
researching and developing technological advances that are making coal
a cleaner, more efficient source of energy every day. Our clean coal
programs are driven by: President Bush's energy policy goal of energy
security; by the Clear Skies Initiative to reduce polluting emissions
to the air by 70 percent by 2018, and recent complementary
Environmental Protection Agency regulations; by the climate change goal
to reduce the greenhouse gas intensity of the economy by 18 percent by
2012; and by the President's 10-year, $2 billion Coal Research
Initiative to develop near-zero atmospheric emissions, coal-based power
generation and hydrogen production.
Perhaps the best way to survey the goals and activities of the coal
and power generation sector is to take a brief tour of the Department
of Energy's clean coal program. If a technology is important, we're
working on it, often leading cooperative international R&D efforts. And
in all cases we are partnering with industry and scientific and
technology leaders.
The various R&D projects currently underway are mutually
supportive; while each project and program is aimed at a specific
technological goal with a specific energy/environmental benefit to be
met according to a specific timetable, all the projects are designed to
contribute in one way or another to our ultimate vision: a completely
clean--that is, emissions free--coal-based plant that maintains coal's
favorable cost advantage over competing fuels.
Coal plants have a useful life of at least 40 years, which means
that there are coal plants currently operating that were built as far
back as the 1960s, just about the time we as a nation began to take the
phenomenon of pollution emissions seriously. The federal government and
state governments have passed pollution control legislation and the
coal power industry has met the challenge by retrofitting technological
improvements to older plants and incorporating new technology in each
new plant as it was built, with impressive results, as mentioned
earlier.
That's good, but in order for coal to continue to account for more
than half of America's electricity supply, and nearly a quarter of
our--and the world's--total energy output, the coal research program is
proceeding along three interwoven, complementary tracks: a Clean Coal
Power Initiative for the commercial demonstration of new technology;
design, construction and operation of the coal-based power plant of the
future called FutureGen, a 275-Megawatt, fully integrated, near-zero
emissions, coal-fired power plant and research facility that will
produce both electricity and hydrogen while sequestering carbon
emissions; and a coal research effort that is concentrated on clean
coal's key technology needs.
Our coal research extends from innovations for existing plants to
needed technologies of the future in the areas of gasification,
turbines, carbon sequestration, hydrogen from coal, fuel cells, and
associated advanced technologies.
In about six years, we expect our work to result in an up-and-
running FutureGen plant: a working, large-scale power plant and
hydrogen production facility that emits almost no polluting or
greenhouse gases to the atmosphere. Think about: virtually no nitrogen
oxides, no sulfur dioxides, no mercury, no particulate matter, no
carbon dioxide. Nothing but energy.
The goal is for FutureGen to prove out the new technologies we're
working on today and serve as a model for the coal-based power plants
of the future. FutureGen holds the potential to not only assure coal's
future as the dominant source of electric power, but to also be an
important early source of the hydrogen that will fuel a hydrogen-based
economy of the future.
That is transformational technology--and it's within our reach.
Clean coal is set to continue its enormous contribution to
America's energy security and as you will see, to world energy
security.
While FutureGen is our promise for the future, let me turn to some
of the more immediate advances being brought about by the Clean Coal
Power Initiative, or CCPI.
CCPI has progressed steadily since it was initiated by the
President in 2002, providing Government co-financing with utility
partners for new coal technologies that can help utilities meet the
President's Clear Skies Initiative and other energy goals. Some of the
early projects are also showing ways to reduce greenhouse gases from
coal plants by boosting coal combustion and power plant efficiency.
To take one example from the 10 CCPI projects that have been
selected after two rounds of competitive solicitations, the ``Mustang''
project in New Mexico will demonstrate a multi-pollutant control
process that can remove virtually all sulfur dioxide and nitrogen oxide
emissions and 90 percent of mercury emissions.
While CCPI demonstrates existing new technology, our core coal
research program is developing the technologies of the future that will
eventually be essential components of FutureGen.
We can break the program elements down in general terms, beginning
with our Innovations for Existing Plants program, which is aimed at
short- and medium-term goals.
We aim by next year to develop cost-effective technologies ready
for commercial demonstration that reduce mercury emissions by 50 to 70
percent, and eliminate microscopic particle emissions.
By 2010, we plan to test technologies for cutting mercury emissions
by an average of 70 percent.
For the long-term, our coal research goals are ambitious but
achievable.
We are far along in research, development and demonstration of
advanced Integrated Gasification Combined Cycle, or IGCC, technology.
IGCC, in essence, converts coal to its constituent gases and then burns
the gas. The IGCC process is inherently clean, highly efficient and
versatile. It is potentially capable of generating electricity, steam,
and a broad range of chemicals including synthetic natural gas, and
virtually eliminating atmospheric emissions of nitrogen oxides, sulfur
dioxides, mercury and other pollutants.
With IGCC, carbon dioxide emissions may eventually be reduced by
half compared to conventional coal technology, with the majority of the
remaining carbon dioxide emissions ready for capture and permanent
underground storage.
As we move along our R&D path for coal gasification, we have
specific technological hurdles to leap. We have to improve new gasifier
and turbine performance and reliability while steadily bringing down
costs. We will have to develop new gas-related technologies and
integrate them with fuel cells and fuel cell/turbine hybrids.
Fuel cells are usually thought of as a feature of automotive
vehicles of the future. Often overlooked is their potential to be a
very important part of our power generation future, both as an integral
part of future power plants and as a ``distributed generation''
supplement to the electricity grid--a local power source for commercial
and public buildings, hospitals and residences, for energy-intensive
telecommunications facilities, and other uses.
Because fuel cells rely on electrochemical reactions rather than
combustion, they are inherently efficient, quiet, and virtually
pollution-free.
Combined with the kind of IGCC system described earlier, fuel cells
will make possible near-zero emissions, coal-based power with nearly
double the efficiency of today's coal-fired plants. Fuel cells are a
key option for the FutureGen concept.
Our Solid State Energy Conversion Alliance program, known as SECA,
is working today to develop fuel cell modules that can operate at one-
tenth the capital cost of today's systems, and hybrid fuel cell-turbine
systems that operate at up to 60% efficiency on coal. Compare that to
the average 33 percent efficiency rate at today's coal power plants.
Another of our research projects is aimed at a new and potentially
transformational market, given the right price environment, for
hydrogen derived from coal. Transition to hydrogen from coal as a
transportation fuel could help reduce our dependence on imported oil.
Finally, our carbon sequestration program has immense potential for
reducing greenhouse gas intensity.
Carbon sequestration is the capture and permanent storage of carbon
dioxide. Our ability to eliminate CO2 emissions from coal-
based power plants by permanently capturing and storing them
underground will have a significant, beneficial effect on greenhouse
gas intensity. That's why carbon capture and storage, as well as
measurement, monitoring and verification are at the heart of our
efforts to meet the goals President Bush set out in his Global Climate
Change Initiative.
We plan to demonstrate a portfolio of safe, cost-effective
greenhouse gas capture, storage and mitigation technologies at the
commercial scale by 2012, with the potential for substantial deployment
and market penetration beyond 2012.
By 2018 we should have developed commercial systems for the direct
capture and sequestration of greenhouse gases and pollutant emissions
that results in near-zero emissions with less than 10% increase in the
cost of produced energy.
To accomplish this ambitious program, we have formed seven Regional
Carbon Sequestration Partnerships in the United States and Canada.
Wyoming, it should be noted, is an active participant in two of the
regional partnerships: Big Sky, led by Montana State University, and
the Southwest Partnership led by the University of New Mexico. We have
also formed the international Carbon Sequestration Leadership Forum
(CSLF) to share scientific and technological information and
participate in joint projects. The CSLF has drawn the enthusiastic
attention of many of the world's largest coal consumers and now
comprises 21 member nations and the European Commission.
Just last week we conducted a meeting of the CSLF in New Delhi, at
which we reached another, closely related milestone in international
energy/environmental cooperation when India become the first country to
join the government steering committee for FutureGen. As a partner, the
Indian government will contribute $10 million to the FutureGen
Initiative and Indian companies will be invited to participate in the
private sector segment. India is the first of what we hope will be many
international government partners to join with us in the FutureGen
project.
I don't need to point out that Carbon Sequestration technology is
integral to the design and operation of FutureGen.
But I do want to emphasize a couple of additional potential
benefits of carbon capture. First, carbon dioxide derived from power
plants will be increasingly in demand as a commercial product for
injection into mature oil fields, adding to our domestic oil reserves
and production and providing revenue to power generators. And second,
research projects currently underway are testing the strong possibility
that CO2 injected into active oil fields can be sequestered
there, providing a very attractive energy and environmental double
benefit: reduced greenhouse gas emissions and increased oil production.
The successful development and deployment of clean coal technology
will undoubtedly be important to America's energy future. It will also
be important to Wyoming. Here are a few numbers to illustrate just how
important:
Substantial new coal fired power plants are being prospected
nearly every week. More than 140 new coal-fired power plants
have been proposed representing 85 GW of electricity, over $119
billion investment, and enough power to electrify over 85
million homes. At least 6 new coal fired plants have been
proposed for Wyoming.
Market shares for western coals continue to rise, with
production growing at about 20 million tons per year. More
eastern power plants are expected to use western coals, with
western coal supply to eastern power plants expected to
increase by more than 50 percent through 2030.
Wyoming continues to lead the Nation in coal production.
Your mines account for more than one-third of the approximately
one billion tons of domestic coal produced each year, and
nearly 70 percent of western coal production.
Wyoming coal production is increasing, thanks in large part
to your world class coal seams and desirable low sulfur
composition.
The Powder River Basin is a tremendous coal producing region
with over 65 trains filled with coal leaving the basin each day
destined for various end uses throughout the country.
The coal industry continues to be an important source of
employment for Wyoming.
Coal industry jobs here are among the highest paying, with
the Department of Commerce reporting Wyoming's labor earnings
from coal mining at more than $300 million. That breaks down to
wages of more than $64,000 per year (excluding benefits), more
than twice the state average.
Each coal mining job supports an estimated three related
jobs, leading to a total payroll effect of more than $600
million to the state of Wyoming.
Coal is at the heart and soul of Wyoming, both now and for the
foreseeable future.
I will conclude by emphasizing how deeply committed we are to the
research underway today.
The President's energy policy, his new Advanced Energy Initiative,
his goals for climate change, his Coal Research Initiative and the
other activities I outlined propose nothing less than to rewrite the
future of the energy and environmental challenges that preoccupy our
country and the world today.
We must invest today to reach the day when combined energy from all
sources will be reliable and affordable; when energy-related emissions
from stationary sources will be minor to non-existent; when a large
segment of the transportation sector will be converted to fuel-cell
vehicles running on hydrogen; when our efforts to control emissions and
increase efficiency will be complemented by less-developed, faster-
growing countries with far larger populations having the benefit of the
technologies we have taken the lead in developing.
Imagine, for example, the beneficial effect on global emissions and
energy resource consumption if China, which is building new coal-based
power plants at the rate of one a week, were to adopt some of these new
power generation and energy efficiency technologies and processes.
We're working with them on it.
The combination of sensible energy policy, scientific and
engineering ingenuity, the genius of American business and the rich
energy resources of Wyoming and other states will allow us to continue
to grow our economy and enjoy our way of life for centuries to come.
Mr. Chairman, that concludes my testimony. I will be happy to
answer any questions the Committee may have.
Senator Thomas. Okay, thank you. Your remarks will be put
into the record. I wonder, from the technological standpoint,
what other issues associated with building an IGCC plant that
uses Western coal at altitudes above 4,000 feet.
Mr. Shope. I will defer to the technological expert in that
area.
Senator Thomas. Very well.
Dr. Miller. I think the biggest challenge will be to
address the moisture that's in the Western coal in order to
make it compete with some of the other coals. The integrated
gasification combined cycle starts with the gasifier and that
is somewhat sensitive to the moisture content of the coal.
Senator Thomas. I see. Do you have plans to deal with that
issue.
Dr. Miller. Yes, we have. There have been an number of
studies that have been performed using the Wyoming coal as a
feedstock, looking at different ways to address the moisture in
the coal. There are gasifiers that can be selected. Some that
do not require the moisture to be dried and others that do dry
the coal prior to going through the gasifier and both of them
are processes which look like they are going to produce
economically competitive products from the gasification
process.
Senator Thomas. Of course, the basic elements are
essential, but we sometimes get a little politically involved
in terms of where these projects take place and I hope we
continue to remember where the source of coal is and that seems
to me that's the kind of key to where the coal would go. And,
of course that's the reason we put that provision in the law
that at least half of this business needs to go in elevations
that exceeds 4,000 feet.
Dr. Miller. That's true and most of the studies we are now
doing, are what we call mine mouth studies, locating the
facility near the mine mouth or near the source of coal.
Senator Thomas. Good, thank you. The Department recently
commissioned a study on the use of carbon dioxide to enhance
the recovering oil fields, they found carbon dioxide injection
allows the recovery of 50 percent of the oil in place, compared
to 33 percent. What opportunities exist for an emissions from
coal fire generation to be used for enhanced recovery? Does the
Policy Act of 2005 encourage the construction of infrastructure
and technological development with these innovative solutions,
Mr. Shope?
Mr. Shope. Well, Senator, again, enhanced oil recovery
certainly is a very promising opportunity for us. Certainly we
are focusing on carbon sequestration in general. But looking
for those opportunities for synergies, not just with carbon
sequestration and geological voids which of course is extremely
important. But also taking advantage of the opportunities for
enhanced oil recoveries. I mentioned in my opening remarks some
of the studies are indicating we could possibly quintuple our
reserves of oil that we were able to produce. Our FutureGen
project that I mentioned certainly has carbon sequestration as
part of it, as part of the FutureGen Alliances consideration of
the various projects, certainly we are looking at opportunities
to see if enhanced oil recovery could be a part of that, to see
how that squares up with other offerings, other bids.
Of course, then FutureGen Alliance would be making the
final determination as to what exact sites would be selected.
But, it is a provision we are trying to work diligently on and
working, not only within our own office, but working with the
Office of Science within the Department of Energy, to seek the
crossover synergies there, but even within the Office of Fossil
Energy, we are making sure that our oil and gas program is
working closely with our own sequestration program to maximize
those opportunities.
Senator Thomas. Thank you. You mentioned FutureGen, that's
been talked about for some time, it's been one of the
priorities the President has talked about, probably more than
anything else. What's the status of that? What's the timing you
put on that program?
Mr. Shope. Senator, I'm very pleased to talk about the
status of FutureGen, again, as I mentioned, the FutureGen
project will revolutionize coal use. Eliminating environmental
concerns and also, more so than just the project itself, it'd
be validating emerging energy technologies and pioneering new
partnerships. The request for proposals for site locations has
gone out, we're now in February, those proposals will be due
back in May of this year. Once the proposals are reviewed, they
will be narrowed down and the site selection will be done by
the FutureGen Alliance themselves.
The short list would be expected to be produced by mid-this
year, some time in the latter part of this year, in the summer.
We will then be engaging in full NEPA compliance for those
candidate sites that have the potential to be selected for the
site. Final selection would be targeted to take place in late
2007. Now, the FutureGen Alliance itself is continuing to gain
industry acceptance. They've now had another member join up--
bringing the total to nine major producers, major significant
companies. So, the FutureGen project is moving along well, and
we're very excited about it.
Senator Thomas. So, your expectation is this project will
be decided upon by the end of 2007?
Mr. Shope. That's correct, Senator. I believe by 2007. We'd
then finalize design and begin construction, with plant
operations projected to begin in 2012. They would continue in
operations for 4 years in 2016 and there would be 2 to 3 year
maintenance, or follow-up, period to gather additional
monitoring data and analysis. The target for long term
commercial employment of this would be within 20 years,
approximately 2025.
Senator Thomas. This kind of falls into my earlier comment
that's a great idea and we're very much for it and certainly
hope we're giving good consideration on it. But, it's going to
be awhile. In the meantime, we have some other opportunities
that could be accomplished much more quickly. Is that true?
Mr. Shope. Well, again, Senator, I would address it this
way. As I mentioned, that plant that we talked about for
commercial deployment would be in 2025. Again, this is a living
working laboratory.
Senator Thomas. Right.
Mr. Shope. And so, all of the technologies that we're going
to be developing for that plant, are ones that we could be
using today. As far as gasification, membranes, hydrogen
technologies, carbon sequestration. All of the technology
leading up to that plant, so I would hesitate to focus solely
on the future plant. We also have the benefits leading up to
it.
Senator Thomas. We could do the transition from coal to
fuel right now, can't we?
Mr. Shope. That's correct.
Senator Thomas. Dr. Miller, will the water content problem
that you talked about for Western coal be factored into this
FutureGen project?
Dr. Miller. It could be, well, it will be, depending on the
source of coal that is chosen and the site of the plant.
However, as we mentioned in my earlier comments, it's not what
I would call, or what we engineers call a rate-limiting step.
It is certainly something that can be overcome and there are
technologies already available. Depending upon what the price
of the product should be in order to be competitive to solve
that particular problem, Senator. I don't think it's a, as I
said, it's not a rate-limiting problem from my point of view.
Senator Thomas. So this wouldn't be an obstacle to Western
coal, where the coal is?
Dr. Miller. One of our studies has shown that, already that
we can utilize the Western coal and come out with a more
competitive product when we consider what the other competitors
might be.
Senator Thomas. Thank you. Mr. Shope, you mentioned the
President had talked a lot about a 10-year, $2 billion clean
coal initiative, would you explain that just a little bit?
What's this talking about?
Mr. Shope. Certainly, Senator. Again, I'm pleased to report
that we're at $1.9 billion of that 10-year commitment and we've
done it within 6 years, we're talking about the entire coal
research program that we're working on. FutureGen, of course,
would be a part of that. Developing clean coal technologies
that are ready for the marketplace, that are environmentally
sound and operate in a cost efficient manner. Our budget in
2006 does put us up, again, to the $1.9 billion mark. By the
end of the 10 year cycle we could have approximately $4 billion
in coal research having been committed by the administration.
Senator Thomas. I see, thank you. Over 6 months ago, the
Energy Policy Act of 2005 was signed into law. There's been a
lot of talk about additional litigation and new bills. You have
a bill now as a result of a decade's amount of work. What do
you think is necessary to implement what we now have? And are
there other legislative initiatives that need to be put into
place to cause this to happen in your view?
Mr. Shope. Senator, I would defer to folks above my pay
grade to decide on the long-term policy direction, and any
legislation that might be needed. I'm open to say that under
the Energy Policy Act that there are many provisions that we
don't have the funding to implement. So, from my perspective,
of course, from a budgetary standpoint, we must focus on what
is the prize. Focus on what is it that will get the most bang
for our buck. Is that technology clean? Will we have positive
environmental impacts? We have to look at what is the impact on
the market? Is there a market failure that needs to be bridged?
Senator Thomas. But, do you need more legislative authority
to do that?
Mr. Shope. Again, I would have to defer on the question as
to making that decision.
Senator Thomas. I know the money is one thing, and I
understand that to implement these things we need money. But, I
guess that the thing that I am going to pursue a little and
pretty soon is whether our challenge is to implement the policy
that we now have in place or whether in fact, it doesn't seem
to me that we probably need a new policy. Maybe we need new,
some features and factors to implement that policy.
Mr. Shope. Yes Senator, and again there are some wonderful
provisions within the Energy Policy Act and things that will
make a big difference. We mentioned earlier the tax credit
provisions, loan guarantee provisions. These are things that
will help bridge that valley of death for advanced
technologies, from development into market, and into
commercialization. These are incentives that I think are, will
be beneficial and will pay in the long-term.
Senator Thomas. Good, I hope you'll keep in touch with us
as to what you think needs to be done to implement the policies
we have. Because we have failed, we want to look forward to
alternatives, we need to look forward to finding more efficient
ways to produce. We want to look forward to being able to use
things that we have available to us at this point.
There are a number of provisions in the energy bill that
would help coal development in ways that we are discussing here
today. One of the most important is title XVII, which
establishes a loan guarantee program to cover up to 80 percent
of those advanced projects. And there are people lined up with
private funding to make these projects a reality, but the
Department has not yet issued guidelines as to how to apply
these loans. What is your view as to when that will happen and
what are the provisions we can expect to make a difference in
the short term?
Mr. Shope. Senator, the guidelines are currently under
departmental review. I can report that. I know that the
Department is looking at creating a central office for the
management of the loan guarantees. So it would not be something
that would be done strictly within the Office of Fossil Energy
but more of a departmental approach. That's being considered
right now. And the final decision hasn't been made on all that,
but again, they want to make sure that the loan guarantees pay
off. Because, as I mentioned before, we want to make sure that
they are in fact good investments in companies. There's always
risk associated with any R&D investment, but we want to make
sure that we maximize, or limit our exposure to it as much as
possible.
I've been told that we could expect those guidelines to be
published in the very near future. We're targeting late spring
for the publication of them, and targeting some time in the
fall for implementation of the loan guarantee program.
Senator Thomas. There appear to be a substantial number of
private sector investors that are willing to move forward to do
some of these things. But one of the questions they have in
their minds, of course, is to what these incentives are going
to be. What's necessary to qualify for them? How do they get
implemented? And, certainly, some of these relatively new
programs, there needs to be some incentives for the private
sector to invest. And so, I think it's important to move
forward on it as quickly as we can.
Mr. Shope. I agree with you, Senator. And as far as the tax
incentives, if you're addressing those as well, the guidelines
published in February. We've been working closely with the IRS
on those and their guidelines were published in February. There
is information that's now available for entities interested in
applying for those incentives. The window for their
applications are, would be closing, I believe its June 30 when
they're closing. They are open now for the submittal, they will
be closing it June 30. Once those applications are received,
the Office of Fossil Energy will be reviewing those and making
a certification as to the viability, technological viability,
economic viability of the particular project that is seeking
the incentive. Once we certify it, it would go to the IRS, that
would also have to approve of that incentive. The program is
limited to that $1.3 billion in caps, so the IRS is targeting
having final selection by fall of this year.
Senator Thomas. All right. I appreciate that.
Dr. Miller, do you have any observations as you see it from
your role? If we're here to kind of address, how do we
implement these ideas that we have in terms of new techniques
and so on? Are there any observations that you have that might
help us move forward?
Dr. Miller. Senator, I think it's important to remember
that coal technology is very, very flexible and Wyoming coal is
particularly well suited for what we call coal conversion
technology. And, that's using integrated gasification combined
cycle concept for what we call a coal production facility.
Which permits us to produce power as well as other products,
depending upon what the local market might bear or desire at
that particular point. And, as I said, the coal here is
particularly well suited for a coal conversion concept whether
it be for synfuels or whether it be for power or a combination
of both.
I think that the energy bill, from my point of view, of
working with industry, probably addresses the one major factor
that concerns anybody, an entrepreneur going into building the
first plant of any kind. An integrated gasification combined
cycle facility is a lot more complex than a general powerplant.
A coal conversion facility is the same, the risk is fairly high
and the capital investment is higher than normal.
So, by providing that incentive, you reduce the element of
risk to a point where it might be acceptable to an entrepreneur
and we can see, even in the past few months, we are
experiencing a great deal increase in interest through studies
and through participation in industry looking at trying to be
the first now to implement one of those facilities.
Senator Thomas. Great. I appreciate that. Obviously one of
the questions that's always in mind of people and has to do
with location of these things and so on, is that we have the
fossil fuel resources that are generally in this area and the
market is in other areas, so we have to have, we have to
consider how we transport it. We have to do it one way or
another, whether we do it as we do it now with rail and
transfer the coal to be refined somewhere. Whether indeed along
with this goes pipelines or transition lines whatever the case
is, so that we can get this started to market.
Any closing comments, Mr. Shope?
Mr. Shope. No, Senator, I am just excited for the
opportunity to be here today, and again the promise of fossil
fuels are important, extremely important part of this energy
mix for energy security, as I mentioned in our opening
comments, we're going to be defendant on fossil fuels in one
form or fashion or another for a long time to come. And we do
need to do all that we can to try and make these fossil fuels
as clean and efficient as possible. We are diligently trying to
do that and we look forward to working with you and the
committee to continue that process.
Senator Thomas. Well, thank you very much. And we
appreciate what you do, I know it's difficult. Energy has
become one of the most pressing issues that we have. It also,
of course, is a unique commodity and is something that
everybody has and is used to having. We have to persuade them
that we have to make some changes to continue the kind of
service that they have is not always an easy thing to do. But,
I think that it is becoming more clear to people that we are
going to have to do things differently and certainly we want to
do that. So, we just want to urge you to work with us in
Wyoming and work with our producers here and see if we can move
forward in accomplishing the policy goals we have. I thank you
very much for being here.
Mr. Shope. Thank you.
Senator Thomas. Okay, we'll invite our second panel to come
up if you will please. We have Dr. Norman Shilling from General
Electric, Steve Waddington from Wyoming Infrastructure
Authority, Marion Loomis from the Wyoming Mining Association,
Joe Coyne from the Converse Area New Development Organization,
and Dr. William Gern who will testify on behalf of the Western
Research Institute at the University of Wyoming. Gentlemen, we
appreciate very much your being here and certainly you are the
folks who will fill us in on your observations as to what we
need to do to cause this to happen and to cause it to happen
locally for the advantage of the mining people and for the
Nation to be able to use mining resources.
So we'll get started and let you make your statements and
we'll have a few questions. We appreciate you being here.
Dr. Shilling.
STATEMENT OF DR. NORMAN SHILLING, PRODUCT LINE LEADER, IGCC
POWER, GE ENERGY
Dr. Shilling. Thank you. Good afternoon. I am Norm
Shilling, product leader for IGCC Power at GE Energy. GE
appreciates the opportunity to participate at this hearing and
in the Wyoming Energy Summit. GE is a worldwide supplier of
advanced power generation technologies from renewable resources
such as wind, water, biogas and solar, to natural gas, oil
nuclear, and coal, the focus of today's hearing. I will focus
on five points.
First, coal will continue to be a significant part of our
energy mix. We are seeing a nationwide resurgence of interest
in coal. The West is leading this trend. The power industry has
grown to recognize the advantages that low cost Western coal
provides. EIA's most recent Annual Energy Outlook predicts that
over the next 25 years, the West is one of the regions in which
the largest amount of coal-fired capacity addition is expected.
Second, environmental considerations will strongly
influence any decision to use coal. The environmental
challenges to coal are well known. We believe that the answer
lies in using the cleanest, most efficient technology to
generate electricity from coal.
This leads to my third point: integrated gasification
combined cycle, or IGCC, is a technology for using coal more
cleanly and efficiently. IGCC delivers significantly reduced
emissions of sulfur dioxide, nitrogen oxides and particulate
matter. IGCC is highly effective in removing mercury. IGCC
consumes 30 percent less water than combustion coal technology
and produces useful byproduct. All are matters of particular
importance in the West. IGCC also offers the capability to
remove carbon before combustion thus providing a significant
savings in cost and efficiency in comparison to post-combustion
capture.
Commercial development of large IGCC plants is underway.
GE, in alliance with Bechtel, is a single source supplier of a
630 MW IGCC reference plant, with strong contractual guarantees
& warranties. The alliance is working to reduce the cost of
IGCC. GE and Bechtel have entered into front-end engineering
design studies for the 630 MW IGCC reference plant for two
major utilities--AEP and Cinergy.
These ``first-of-a-kind'' plants are a critical step to the
widespread commercialization of IGCC. GE is working now to
advance IGCC to significantly improve the performance and
economics of IGCC for low rank coals. The low heating values
and high moisture in Western coals, as well as the altitudes at
which Western plants would be located, require further
engineering, design and development work for IGCC systems that
are optimized for Western coals.
My fourth point is to thank you and your colleagues in the
Congress for recognizing the vital role of cleaner coal in last
year's energy bill. The advanced coal project investment tax
credit is valuable as a means to mitigate the cost differential
facing the first commercial scale IGCC plants. The new DOE loan
guarantee program, once implemented, offers another financial
mechanism to support IGCC deployment.
We are particularly interested in the provisions included
in section 413 of the Act authorizing the Western Integrated
Coal Gasification Demonstration Program. If the full
environmental and energy benefits of IGCC are to be achieved,
the ability of IGCC to efficiently use Western coals must be
established. Significant engineering and technology integration
is required for the first-of-a-kind plants for Western coals.
The cost-shared Western IGCC demonstration program could
provide the framework for Federal Government and industry to
work together to expand the envelope of efficient, low
emissions IGCC plants to economically use these coals. We
support and appreciate your efforts to speed the implementation
of this program.
My last point is to highlight the opportunities that are
available through the gasification component of IGCC to deliver
broader benefit from coal. Gasification is a coal refining
process. It can generate a slate of products including hydrogen
and ultra-clean transportation fuels such as diesel. The
gasification aspect of IGCC thus provides a path away from
imported petroleum or natural gas for the production of many of
our national staples. We encourage the consideration of a
broader Federal policy initiative to take advantage of this
opportunity.
In summary, GE believes that the national, economic and
energy security interests of the United States will be served
by deploying cleaner coal technologies, such as IGCC, that
enable us to utilize the full range of our domestic coal
resources--including those found here in the West. We thank you
for your leadership, and look forward to working with you to
this end.
I look forward to your questions. Thank you.
Senator Thomas. Thank you.
Mr. Waddington.
STATEMENT OF STEVE WADDINGTON, EXECUTIVE DIRECTOR, WYOMING
INFRASTRUCTURE AUTHORITY, CHEYENNE, WY
Mr. Waddington. Mr. Chairman, thank you for inviting me to
appear here before you today. My name is Steve Waddington, I am
the executive director of the Wyoming Infrastructure Authority.
The Authority is a instrumentality of the State of Wyoming. Our
mission is to diversify and expand the State's economy through
improvements in the electro-transmission system. And, also to
support advanced coal technology for electricity production.
The future for Wyoming coal is great, but we must look to
address market and infrastructure challenges. My testimony will
touch on three areas related to the growth and development of
Wyoming coal.
Congress and the Federal Government have important roles to
play to help in all three of these areas which are: the need
for transmission investments; the need for advanced coal
technologies to emerge on a commercial scale in Wyoming; and
the captive shipper issue. One means for future growth and
development of Wyoming coal is to ship the coal by wire instead
of by rail. Generating electricity from coal in Wyoming will
create jobs and other economic boosts for the State. Coal fire
generation in Wyoming and our world-class wind generation
potential offer an attractive option for utilities throughout
the West. But, the key to unlocking this value-added expansion
of Wyoming's economy is transmission.
The Wyoming Authority was created to help address this
issue. We have embarked on a number of important transmission
developments and our pending projects are summarized in written
testimony, Mr. Chairman, that I submitted today. There are two
areas I want to emphasize which Federal actions is important
for encouraging transmission investment. The first is the
Department of Energy's role under the Energy Policy Act to
designate national interest electric transmission corridors. We
think the projects we're working on, are in the national
interest and DOE should be prepared to accept applications and
expedite designations.
The second area, Mr. Chairman, is to consider providing
incentives for transmission investment through Federal tax
policy. The Authority can issue regular bans to finance
transmission, and included in that is our ability to loan up to
$1 billion to the private sector. Several other States, in
fact, are following Wyoming's lead creating State bonding
authorities to finance transmission. However, because of an IRS
rule, these public sector bonding capabilities would not be
federally tax exempt except under very limited and unusual
circumstances. Congress should consider relaxing these private
use restrictions for transmission investments. Senator Kent
Conrad is working on a bill to promote energy production and
one of his provisions would relax the private use restriction
and if this became law, our bonds could be issued on a tax
exempt basis. And, I ask the committee to consider this as a
means of not just incentivizing transmission investment, but
lowering the cost of transmission financing for consumers.
The Energy Policy Act last year signaled the Federal
Government's intent to continue with stimulating the support of
advanced coal. And, we've already heard much about that.
Wyoming needs to be actively participating in these Federal
programs. These technologies must be developed to work and to
emerge on a commercial scale to meet the needs Wyoming coal at
elevation. Otherwise as these technologies become mainstream
elsewhere in the Nation, Wyoming's full market share may be at
risk. FutureGen as we've heard is a government industry project
to design, build and operate the world's first coal-based new
zeroed emission part of generation plant. The State of Wyoming
will submit a proposal responding to the FutureGen industrial
alliances RFP for wholesale sponsorship. The Governor's office
is leading our effort to put forth a competitive proposal and
we plan to vigorously compete for the FutureGen demonstration
plant to be sited in Wyoming.
Our FutureGen application effort, Mr. Chairman, will also
help position Wyoming strategically as we prepare to seek
Federal funds for the rush in integrated coal gasification
demonstration project that's provided for under section 413 in
the Energy Policy Act. We are very interested in working with
you, Mr. Chairman and this committee to ensure that this
program is adequately funded and that Wyoming is given strong
consideration as the location for this demonstration project.
My third topic is just to briefly note the captive shipper
issue. The captive shipper issue is a threat to the production
of coal and other key commodities from Wyoming. A captive
shipping customer is one, who by virtue of its location, has
access to only one rail provider. Captive shippers can pay rail
rates of up to 450 percent above railroad costs, by one
statistic I've seen. As opposed to the 6 percent above cost
paid by shippers where competition exists. There are bills that
attempt to address this issue pending before Congress, their
objectives are summarized in my written testimony.
In conclusion, the future for Wyoming coal is bright, but
we must work proactively to address market and infrastructure
challenges including the need for transmission investments, the
need for advanced coal technologies to emerge on a commercial
scale in Wyoming and addressing the captive shipper issue. This
concludes my testimony, thank you very much.
[The prepared statement of Mr. Waddington follows:]
Prepared Statement of Steve Waddington, Executive Director, Wyoming
Infrastructure Authority, Cheyenne, WY
Mr. Chairman and distinguished members of the Committee, thank you
for inviting me to make this appearance before you today. My name is
Steve Waddington. I am the executive director of the Wyoming
Infrastructure Authority. The Authority is an instrumentality of the
state of Wyoming. Our mission is to diversify and expand the state's
economy through improvements in the electric transmission system to
facilitate increased utilization of Wyoming's energy resources. Earlier
this year, the Wyoming state legislature expanding the Authority's role
to also take a leadership role in supporting emerging advanced coal
technologies as it relates to electricity production.
I believe the future for Wyoming coal is bright--but only if we
work proactively to address market and infrastructure challenges that
have the potential for eroding Wyoming's share of the national coal
market long term. My testimony will touch on three areas of concern
related to the future growth and development of Wyoming coal. In all
three issue areas, Congress and the Federal Government have important
roles to play, in collaboration with the State, to overcome these
market and infrastructure obstacles. My three topic areas are: 1) the
need for transmission investments; 2) the need for advanced coal
technologies to emerge on a commercial scale using Wyoming coal at
Wyoming altitudes; and, 3) the captive shipper issue.
THE NEED FOR TRANSMISSION INVESTMENT
One value-added means for future growth and development of Wyoming
coal is to ship coal by wire, instead of by rail. Generating
electricity from coal in Wyoming, and shipping the product by wire,
will create jobs and other economic base for the state. Coal-fired
generation in Wyoming, combined with Wyoming's world-class renewable
wind generation potential, offer an attractive option for utilities
throughout the western interconnect. Many utilities serving fast
growing urban areas in the west have relied heavily on natural gas-
fired generation in recent years to meet their growth. These utilities
are now seeking alternatives to diversify their power supply and
Wyoming has abundant natural resources--and a political will to deploy
these energy resources--to help meet growth in the west. The key for
unlocking this value-added expansion of Wyoming's economy is adding to
the transmission infrastructure.
It is critically important to recognize that the existing electric
transmission system was built by electric utilities in a vertically
integrated manner. As a result, the existing system was built and sized
to serve local customers, integrate utility-owned generation and to
support reliability. In addition, the existing regulatory and
institutional system relied upon to address congestion and facilitate
resource development on the grid has not functioned well. A wide
variety of regulatory, financial and policy uncertainties have
significantly slowed the pace of both private sector and public power
system investments in the utility transmission system. The impacts of
these uncertainties on the consumer and overall economic activity have
been, and continue to be, profound. Unless immediate improvements to
the transmission grid are made, increasing pressure on existing
facilities will intensify and system reliability will erode. At the
same time, the Nation could find itself continuing to over-rely on
natural gas fired generation located close to load centers. Such an
outcome would not further the national interest. Each of these concerns
has a particular significance for the West.
In the West there is intensifying interest in securing a more
diverse power supply through increasing reliance on low cost fuels,
such as coal and wind, that are abundant in areas of the West, but that
are distant from load centers. However, with few exceptions, in the
West the transmission system was not designed to support economic
transfers of power or the development of new sources of supply. To
enable this development to occur will require new transmission
facilities.
The Western interconnection is especially vulnerable as a result of
growth in the region. To meet these needs, load serving entities are
seeking to build new power generation to keep pace with both the
retirement of aging power stations and the need for more capacity to
meet growing electric power demand. This, along with increasing
requirements for fuel diversity to offset natural gas reliance and
improved environmental performance, is placing added pressure on
existing transmission facilities. There is an immediate need for
transmission upgrades to enable additional transmission-dependent
generation facilities to serve load growth in the very near-term.
The Wyoming Infrastructure Authority was created to help address
this issue in a positive way for Wyoming. The Authority has embarked a
several transmission development feasibility projects. Our pending
projects are summarized briefly below.
TOT3 Partnership with Trans-Elect and Western
The Authority has entered into a partnership with Trans-Elect Inc.
to pursue development of new electric transmission between Colorado and
Wyoming--known as TOT3. The Western Area Power Administration (Western)
has joined the WIA and Trans-Elect to work jointly together on the TOT3
project to determine the public service benefits and interest in this
transmission upgrade. Interest expressed in the proposed line ranges
from between 2,100 MW and 7,300 MW of additional capacity, including
prospective coal and wind project developers. Load serving entities in
Colorado have also expressed interest. We are now entering the
technical feasibility study phase on this project.
Wyoming-West Partnership with National Grid
The Authority has also entered a public-private partnership with
National Grid USA to jointly conduct a transmission study that will
help lay the groundwork for a significant increase in electric
transmission capacity between Wyoming and neighboring states in the
west. This project is dubbed Wyoming-West. The Authority is also in
active discussions with Western, which operates one existing corridor
between Southwest Wyoming into Utah, and Western is actively interested
in working with us on the Wyoming-West endeavor as it moves forward.
TransWest Express Partnership with Arizona Public Service
Arizona Public Service Company (APS), National Grid and the Wyoming
Infrastructure Authority (WIA) signed a Memorandum of Understanding
(MOU) in early March to collaborate in developing new electric
transmission lines between Arizona and Wyoming. This MOU expands upon
previous announcements by APS in October 2005 to begin development of
the TransWest Express Project and by the WIA and National Grid in
December 2005 that they would jointly undertake the Wyoming-West
Transmission Study.
Arizona and neighboring states are experiencing significant growth
in electricity demand. To help meet that growth, APS envisions
construction of two new 500,000-volt (500-kV) transmission lines from
northern Arizona, through Utah to Wyoming. APS and other utilities in
the west are attracted to Wyoming as an abundant source of low-cost
wind and clean coal generation. The TransWest Express Project will be
designed to help meet growth in demand with low-cost sources of supply
from Wyoming.
The Frontier Line
In April 2005 four western Governors joined and announced their
memorandum of understanding to stand ready to support a major
transmission corridor development between California, Nevada, Utah and
Wyoming. The Frontier Line will be designed and developed to ensure
citizens of all four sponsoring States benefit from it. The four
sponsoring Governors recognized our region needs a significantly more
robust interstate electricity system in order to enable access to more
sources of clean energy. The Frontier Line will deliver this goal for
millions of consumers across the West.
In the past year there has been significant groundwork laid. The
Authority has been actively involved, providing technical and financial
resources toward the successful development of this project. Next week,
on April 17-18, the four sponsoring Governors are hosting a major
energy conference to be held in San Diego. A significant announcement
is planned for this event, laying out the plan for actively beginning
the detailed feasibility study of the Frontier Line concept.
Moving to federal actions, Congress recognized the challenges
related to transmission development with a number of measures in the
2005 Energy Policy Act. In particular, the Department of Energy's role
to study and designate critically important transmission expansion
needs as corridors that are in the National Interest, and the Federal
Energy Regulatory Commission's backstop siting authority related to
corridors so designated, is a critically important initiative. For the
West especially, where transmission is needed across long distances
involving several states, and likely over vast tracts of Federally-
managed lands, FERC's potential back-stop siting role could be a
significant help.
The Department of Energy needs to be encouraged to move ahead as
quickly as possible with the designation of National Interest Electric
Transmission Corridors (NIETCs). DOE should also accept proposed
projects early for DOE review and possible early designation, where
projects are already underway. The Authority provided DOE with comments
recently raising a number of concerns with its proposed approach. These
comments are summarized below.
It is critically important that DOE's designation of
corridors not be limited to those where persistent congestion
obtains today. Doing so would put an inappropriate brake on the
legislative intent to encourage transmission infrastructure to
develop to reduce consumer prices and diversify the fuel mix.
DOE must expedite the study and designation of NIETCs, and
do so by designating corridors for potential projects broadly,
as generalized paths between two (or more) locations.
DOE must fully recognize the features and characteristics of
the Western transmission system, and take into account the
numerous studies that have already demonstrated the need for,
and benefit from, transmission infrastructure investment.
DOE should recognize several ongoing major transmission
expansion efforts in the West, including the Frontier Line, the
TransWest Express Project and WIA's two ongoing projects in
partnership with Trans-Elect, Inc. and National Grid USA, and
anticipate that one or more of these projects will likely apply
to DOE for early designation as a NIETC.
DOE should remain flexible and in a position to accelerate
an early review and the designation of corridors on a case-by-
case basis, and establish the application process for such
early designation.
The Authority can issue revenue bonds to finance transmission
investments, including extending up to $1 billion in borrowing
capability to the private sector. Several other States in the west have
following Wyoming's lead, creating state bonding authorities to finance
transmission infrastructure. Today, because of a IRS rule known as
private use restrictions, these public sector bonds would not be
Federally tax exempt except under very limited and unlikely
circumstances.
Congress should consider relaxing the private use exemption for
transmission investments. The exemption should be relaxed for certain
circumstances, such as for investment in a corridor that has received a
national interest designation or is being financed by a public entity
such as the Wyoming Infrastructure Authority. Another alternative would
be for Congress to allocate an amount of tax credit bonding authority
for state entities to use to finance important needed transmission
infrastructure. By either means, tax exemptions or tax credits, the
cost of financing the transmission investment would be significantly
reduced. Lowering the cost of transmission investments would help to
stimulate its development and deployment, and will reduce the costs to
consumers.
Senator Kent Conrad is working on a bill to promote energy
production and one of its provisions would relax the private use
exemption in certain circumstances. The language in the draft bill on
tax-exempt bonds would recognize the Wyoming Authority to be a
governmental entity and thus qualify relative to waiving the IRS
private activity rules--making WIA bonds a federally tax exempt
issuance. This provision is meritorious and I respectively ask the
committee to strongly consider it on its merits.
ADVANCED COAL TECHNOLOGY
Congress, with the leadership of this committee, has signaled in
the Energy Policy Act last year the Federal Government's intent to
continue to stimulate and support clean coal technology and synthetic
fuels production. Wyoming needs to be actively participating in these
Federal programs. These technologies must be developed to work and to
emerge on a commercial scale using Wyoming coal at elevation.
Otherwise, as these technologies become mainstream elsewhere in the
nation, Wyoming's coal market share will be threatened.
The Governor and the State legislature have taken a number of
significant steps to position Wyoming strategically to secure a value-
added utilization of coal through advance technologies. A Clean Coal
Work Group is actively engaged. The Infrastructure Authority and the
Pipeline Authority are both actively involved in this effort.
Emerging advanced coal technologies are a significant opportunity
for the future growth and development of Wyoming coal. Wyoming's coal
market potential can be viewed in terms of a value chain. Currently,
the commodity, coal, is produced and primarily directly sold and
shipped by rail for use in electricity generation around the country.
But in the future there are a number of products and co-products that
will be profitably produced from Wyoming coal. If petroleum prices
continue their recent upward trend, these value-added markets will
become increasingly commercially viable. The figure below shows the
value chain with coal as the base commodity. As the value of coal-
derived commodities increases, the likelihood of moving even further up
the primary products value chain increases. Additionally, the co-
products of water and hydrogen could have potential economic value as
the nation moves toward a hydrogen economy.
FutureGen
FutureGen is a government-industry cost-shared project to design,
build and operate the world's first coal-based, near-zero emission
power plant. The plant will also produce hydrogen and byproducts for
use by other industries, while capturing and permanently storing carbon
dioxide in deep geologic formations.
A FutureGen industrial alliance has been established and on
December 2, 2005, the U.S. Department of Energy entered into a
cooperative agreement with the alliance to begin the site selection
process and prepare a conceptual design for the facility. The Alliance
has issued its RFP inviting proposals for host sites upon which to
build and operate the FutureGen plant.
The State of Wyoming has submitted its notice of intent to submit a
proposal responding to the FutureGen Industrial Alliance's RFP for host
sites sponsors. The detailed proposals are due May 4, and the
Governor's office is leading a concerted effort to put forth a
competitive proposal. We intend to compete vigorously for FutureGen to
be developed in Wyoming.
A total of nine states have formally expressed interest in hosting
the FutureGen project, representing as many as 22 proposed sites. Given
the complexity and rigor of the proposal process, there will probably
be some attrition in the application process and less sites actually
submitted by May 4. The process will then move to a short-listing of
candidate sites to be announced this summer. Then DOE will take one
year to develop an environmental impact statement, and then issue a
record of decision with a likely even shorter list of sites that it
deems acceptable. The Alliance will then select the one preferred site
from this shorter list by around September, 2007.
We believe Wyoming has a competitive edge because of our strong
position for permanent storage of carbon dioxide--which is one of the
key deliverables in the FutureGen project scope. That said, the
application criteria are rigorous and the competition will be fierce.
We expect that Wyoming will at least reach the short list and continue
to be considered as DOE does its environmental study work.
Section 413--a Western Integrated Demonstration Project
The FutureGen application effort will also help position Wyoming
strategically to seek an appropriation and allocation of Federal
program funds to support a Western Integrated Coal Gasification
Demonstration Project using western coal at elevation. Section 413 of
the Energy Policy Act calls for this demonstration project as a means
for ensuring that coal gasification technology emerges on a commercial
scale using Western coal and operating at Western elevation. Wyoming is
very interested in working to ensure that this program is funded, and
we believe Wyoming will merit strong consideration as the location for
this demonstration project.
THE CAPTIVE SHIPPER ISSUE
The captive shipper issue is a threat to the production of coal and
other key commodities in Wyoming, as it is in rural America generally.
A captive shipping customer is one who, by virtue of its physical
location, has access to only one rail provider. Captive shippers pay
rail rates of up to 450 percent above railroad costs, by one statistic
I've seen, as opposed to the 6 percent above railroad costs paid by
shippers where railroad competition exists.
One Wyoming example is the Laramie River Station, a coal-fired
generation facility located near Wheatland, Wyoming. This power plant
is vital for serving the electricity needs of consumers served by
cooperative utilities across Wyoming. It is served by one railroad,
which transports 8.3 million tons of coal annually from the Powder
River Basin south 175 miles to the plant. The power plant's contract
with the railroad expired last year and the railroad renewed the
contract with dramatically higher rates. At four times the railroad's
average coal hauling rates, these new fees will cost electric customers
$1 billion over the next 20 years. Since the power plant is captive to
this sole practical option for shipping the fuel it needs to produce
power, there was little choice but to accept what would appear to be
the exercise of monopolistic advantage and, with that, a very rate
increase.
Congress needs to act and bills are pending. The Railroad
Competition Improvement and Reauthorization Act (S. 919 and H.R. 2047)
would clarify and ensure that the primary objectives of the nation's
rail transportation policy are:
To maintain consistent and efficient rail transportation
service for shippers, including the timely provision of rail
cars requested by shippers;
To promote effective competition among rail carriers at
origins and destinations; and,
To maintain reasonable rates in the absence of effective
competition.
The Railroad Antitrust and Competition Enhancement Act (H.R. 3318)
would also help promote competition among railroads and provide better
rates for shippers. This competition enhancement act would amend the
Clayton Act to eliminate the antitrust exemption applicable to
railroads.
IN CONCLUSION
In conclusion, the future for. Wyoming coal is bright--but only if
we work proactively to address market and infrastructure challenges
that have the potential for eroding Wyoming's share of the national
coal market long term. These significant challenges include: 1) the
need for transmission investments; 2) the need for advanced coal
technologies to emerge on a commercial scale using Wyoming coal at
Wyoming altitude; and, 3) the captive shipper issue. In all three issue
areas, Congress and the Federal Government have important roles to
play, in collaboration with the State, to overcome these market and
infrastructure obstacles.
Thank you for the opportunity to appear before the committee today.
This concludes my testimony. I would be pleased to answer any questions
you may have.
Senator Thomas. Thank you, sir.
Mr. Loomis.
STATEMENT OF MARION LOOMIS, EXECUTIVE DIRECTOR, WYOMING MINING
ASSOCIATION, CHEYENNE, WY
Mr. Loomis. Senator Thomas, ladies and gentlemen, I am
Marion Loomis, I am the executive director of the Wyoming
Mining Association. Thank you for the opportunity to talk to
you today about the coal industry in Wyoming.
WMA represents 24 mining companies in Wyoming producing
bentonite, coal, trona and uranium. And as you know, Wyoming
leads the Nation in the production on all four of those
minerals. On the coal front, Wyoming producers supply over 35
percent of this Nation's coal. Last year 17 mines produced over
405 million tons. Those 17 mines generated over $670 million
for Wyoming in the form of severance taxes, ad valorem
production taxes, Federal mineral royalties, bonus bids on new
coal reserves, Abandoned Mine Land Reclamation fees, local
property taxes on equipment and facilities, State royalties,
and sales taxes. They provided another $364 million to the
Federal Government in those same types of taxes.
The industry employed over 5,300 miners with an annual
payroll of over $475 million, that's almost $90,000 per miner.
That money flows through our economy, buying houses, cars,
food, clothes and provides for an excellent quality of life for
those miners. The Wyoming geological survey estimated that the
average selling price for coal in 2005 was $7.75 per ton, so
the total value of Wyoming's coal production is projected to
exceed $3 billion. I think it is interesting that 44 percent of
the selling price of the coal goes to the State and Federal
Government in the form of taxes, royalties and fees and that
doesn't include any income taxes.
I also mentioned that a good deal of that $3 billion comes
back to the State of Wyoming in the purchase of goods and
services--trucks, tires, fuel, explosives--and any other
equipment necessary to run those operations. Wyoming has the
third largest coal reserves in the Nation. Our proven reserves
exceed 45 billion tons of recoverable coal. But the total
resource, that is the proven reserves combined with the coal
uneconomic today exceed 1 trillion tons. Most of our coal is
shipped out of State as steam coal for electric plants across
the Nation. The latest figures which are from 2004 showed we
consumed 25 million tons of coal in the State of Wyoming. We
shipped 372 million tons to 35 other States from New York, to
Oregon, from Texas to Wisconsin and most States in between.
I've included a map of our distribution of our coal in the
written information.* That distribution demonstrates the
ability of Wyoming coal to be shipped economically across
considerable distances due too primarily due to the fact that
we have extremely low sulfur content in our coal. But as plants
across the country install wet scrubbers, Wyoming producers
will lose that competitive advantage. But we believe that
Wyoming's efficiency and effectiveness will prevail when it
comes to producing coal at a competitive price per million
Btus. Additionally, the quality and contemporaneous nature of
reclamation at Wyoming coal mines will provide this resource in
a low impact manner.
---------------------------------------------------------------------------
* The map has been retained in committee files.
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You asked what we thought the future of coal might look
like, and we were certainly very optimistic for, not only the
future here in Wyoming, but also in the United States. We feel
coal will play a continued major role in the electricity
generation mix. But it's also going to provide a source for
supplemental liquid fuels. As the world oil production nears a
peak, the value of our domestic coal reserves and production in
conjunction with energy conservation will be even more
important to our Nation's economy and security.
There's been a great deal of recognition about how
wonderful the United States is to disruption of oil supplies.
As you know, 60 percent of our oil supply comes from foreign
nations. So, to address this most important issue, we feel coal
is going to be a big part of the answer. Coal to liquids, coal
to gas has to be a big part of it. It takes .7 to .9 tons of
coal to make a barrel of liquid, so in order to generate 100
million barrels per year of coal derived fuel, we would have to
devote approximately 89 tons of coal a year to a conversion
plant. That's only 20 percent of our 2005 coal production rate.
With an average thickness of 70 feet for Wyoming's coal seams,
it would only take 726 acres per year to supply the coal to
generate 100 million barrels of fuel. Last year the United
States imported 145 million barrels of oil from Russia, so we
would come pretty close to replacing that.
As I stated above, in the future, coal is going to be
burned differently, it's in my written comments. The existing
technology--and it's already been talked about--but the
existing technology is going to allow new coal fire powerplants
to capture the particuates which we do today. The nitrogen
oxide, the sulfur dioxide and the mercury. And further into the
future we are going to develop approaches to address
CO2 emissions.
I think it's important, and you mentioned this time frame
between what we do today and when IGCC comes online down the
road and it's important to remember that the real means of
transition are we're going to have to construct a more
conventional coal fired powerplants. But, they're going to be
different than the plants we have today. The ultra super
critical pulverized plants and the other plants that are
available with technologies are going to have to bridge some of
that.
All of the projections indicate that the demand for
electricity is going to continue to grow. From 1993 to 2004,
total generation increased 24 percent. If that growth rate
continues over the next 10 years, we're going to need an
additional 15,000 to 23,000 megawatts of generated capacity
every year. That's 10 plants the size of the Wheaton coal fired
powerplant every year.
In summary, we feel coal must play a key role in addressing
our future energy needs. While renewables and enhanced oil
recovery can do a lot to address our needs, only coal has the
reserves to produce significant amounts of new fuels. The
technology exists to produce these new fuels. Now is the time
for the United States to take the position that reducing our
reliance on foreign imports of fuel is critical to our security
and our economy. Thank you.
[The prepared statement of Mr. Loomis follows:]
Prepared Statement of Marion Loomis, Executive Director, Wyoming
Mining Association, Cheyenne, WY
Senator Thomas, ladies and gentlemen. I am Marlon Loomis. I am the
Executive Director of the Wyoming Mining Association (WMA). Thank you
for opportunity to talk to you about the coal industry in Wyoming. WMA
represents 24 mining companies in Wyoming producing bentonite, coal,
trona and uranium. As you know, Wyoming leads the nation in production
of all four of those minerals. This hearing is only about coal, but I
think it is important to note that Wyoming provides 85-90% of the soda
ash used in the United States and contributes positively to the foreign
balance of payments with the soda ash exported from the United States.
Our bentonite goes all over the world for oil and gas drilling and
Wyoming leads the nation in production of uranium.
On the coal front, Wyoming producers supply over 35% of this
nation's coal. Last year 17 mines produced over 405 million tons. Those
17 mines generated over $670 million for Wyoming in the form of
severance taxes, ad valorem production taxes, federal mineral
royalties, bonus bids on new coal reserves, Abandoned Mine Land
Reclamation fees, local property taxes on equipment and facilities,
state royalties, and sales taxes. They provided another $364 million to
the federal government in the form of federal mineral royalties,
Abandoned Mine Reclamation fees, and Black Lung fees. I am sure they
also paid a significant amount in federal income taxes, but I don't
have those numbers. The industry employed over 5,300 miners with an
annual payroll of $475 million. That is money that flows through our
economy buying houses, cars, food, clothes and provides for an
excellent quality of life for those miners.
REVENUE TO WYOMING FROM COAL PRODUCED IN 2005
Severance Tax............................................. $160,000,000
Ad Valorem Tax on Production.............................. $133,000,000
Ad Valorem Tax on Real and Personal Property.............. $11,000,000
Federal Mineral Royalty--Wyoming share.................... $180,000,000
Abandoned Mine Reclamation Fee Returned to Wyoming........ $29,000,000
Bonus Bids Returned to Wyoming............................ $102,000,000
Sales Tax................................................. $44,000,000
State Royalties........................................... $8,000,000
-------------
Total Revenue returned to Wyoming......................... $667,000,000
-------------
Payroll................................................... $475,000,000
-------------
Production in tons........................................ 405,000,000
------------------------------------------------------------------------
The Wyoming Geological Survey estimated that the average selling
price for coal in 2005 was $7.75 per ton so the total value of
Wyoming's coal production is projected to exceed $3 billion. I think it
is interesting that 34% of the selling price of the coal goes to state
and federal government and, as I stated above, that does not include
any income taxes to the federal government.
Wyoming has the third largest coal reserves in the nation and, as
stated above, leads the nation in production. Our proven coal reserves
exceed 45 billion tons, but the total resource, i.e. proven reserves
combined with coal uneconomic today, exceed 1 trillion tons.
Most of our coal is shipped out of state as steam coal for electric
plants across the nation. The latest figures show that Wyoming
consumers used 25 million tons of coal in 2004. The other 372 million
tons were shipped to 35 states from New York to Oregon, from Texas to
Wisconsin and most states in between. That distribution demonstrates
the ability for Wyoming coal to be shipped economically across
considerable distances due primarily to the low sulfur content. As
plants across the country install wet scrubbers, Wyoming producers will
lose that competitive advantage. But, we believe that Wyoming's
efficiency and effectiveness will prevail when it comes to producing
coal at a competitive price per million BTU's. Additionally, the
quality and contemporaneous nature of reclamation at Wyoming coal mines
will provide this resource in a low impact manner.
You asked what we thought the future of Wyoming coal might look
like. While the future is going to be much different than the past, we
are very optimistic about the future of coal, not only in Wyoming, but
also for the United States. As we see it, coal will not only play a
continued major role in the electricity generation mix, it will also
provide a source of supplemental liquid fuels. It is our view that the
trends in oil production will play a potentially significant part in
the future of coal. We believe that as the world oil production nears a
peak, the value of domestic coal reserves and production, in
conjunction with energy conservation, will be even more important to
our nation's economy and security.
Many forecasters say that world oil production will peak in the
next 20 years. There are some that say world oil production actually
peaked in 2005. Although we won't know for some time how close we are
to a peak in world oil production, it is accepted that U.S. oil
production peaked in the 1970's and nothing, including development of
ANWR, is projected to turn that around. At best ANWR will improve the
decline curve, but U.S. production will continue to decline. Maybe with
Enhanced Oil Recovery and ANWR we will be able to hold our production
flat, but no one seems to suggest that we can increase production.
There has been a great deal of recognition about how vulnerable the
United States is to a disruption in oil supplies. Sixty percent of our
oil consumption comes from foreign sources. Some comes from friendly
allies such as Canada, Mexico and Ecuador, but a good portion comes
from countries much less friendly to the United States such as Nigeria,
Venezuela, and Iraq. OPEC countries supply over 2 billion barrels per
year of our annual consumption of 7 billion barrels. Just from a
national security position, it is critical that the United States
become more self reliant on our own reserves. To not address this most
important issue puts our nation at risk. Combine the security concerns
with our balance of payment deficits and it just makes so much sense to
develop the resources available in the U.S.
Coal is a major part of the answer. The U.S. has 250 billion tons
of proven coal reserves. Some of this could be converted to supply 100
million barrels per year in the near future. It would require 30 coal-
to-liquid plants producing 10,000 barrels per day. However, the coal
reserves could supply much more than that if the U.S. takes the
position that energy security is worthy of an effort similar to putting
a man on the moon. This will need to be approached as strategic and
sustainable development, including measures that address emissions or
other environmental considerations related to additional coal
production and utilization.
Coal-to-liquids and coal-to-gas has to be a big part of the answer
to our future supplies. It takes 0.7-0.9 tons of coal to make a barrel
of liquid. In order to generate 100 million barrels per year of coal
derived fuel, we would have to devote approximately 80 million tons of
coal per year to conversion plants. That is only 20% of the 2005
Wyoming coal production rate. At an average thickness of 70 feet for
Wyoming's coal seams it would take 726 acres per year to supply the
coal to generate 100 million barrels of fuel. Last year the United
States imported 145 million barrels of oil from Russia, 418 million
barrels from Nigeria, 549 million barrels from Venezuela and 556
million barrels from Saudi Arabia. We need to find new sources of fuel.
The cost of coal conversion plants averages about $750 million for
a 10,000 barrel per day plant. The proportional costs decrease with
increasing plant size, but it will conservatively take over $20 billion
of investment to reach 100 million barrels per year. It is important to
recognize, however, that this will represent only 5% or less of the 2
or 3 billion barrels per year of new sources that the U.S. will need to
find.
One coal to liquids plant has been announced in Wyoming. It would
produce 11,000 barrels per day with the plans to take it to 40,000
barrels per day if the money and technology is available. It would be
located in Carbon County near where the first coal mine in the state
opened in 1869. There are several other announced plants in the U.S.,
but there is nothing built yet.
As I stated above, in the future coal will be burned differently
than it is today. Existing technology will allow new coal fired power
plants to capture the particulates, NOX (nitrogen oxide),
SOX (sulfur dioxide), and maybe mercury. Further in the
future coal fired power plants will need to develop approaches to
address CO2 emissions. Coal still has so much energy that it
cannot be ignored; it will be a major part of our electricity resources
for generations to come.
The U.S. electricity demand is increasing at a rate of 2% per year.
All projections indicate that demands for electricity will continue to
increase. From 1993 to 2004, total generation increased 24%. If that
growth rate continues over the next ten years, we will need an
additional 15,000 to 23,000 MWe of generation capacity each year. That
is 10 plants the size of the Wheatland coal fired power plant every
year.
In summary coal must play a key role in addressing our future
energy needs. While renewables and enhanced oil recovery can do a lot
to address our needs, only coal has the reserves to produce significant
amounts of new fuels. The technology exists to produce these new fuels.
Now is the time for the United States to take the position that
reducing our reliance on foreign imports of fuel is critical to our
security and our economy.
Thank you.
Senator Thomas. Thank you very much.
Mr. Coyne.
STATEMENT OF JOE COYNE, EXECUTIVE DIRECTOR, CONVERSE AREA NEW
DEVELOPMENT ORGANIZATION, INC., DOUGLAS, WY
Mr. Coyne. Senator Thomas, thank you for the time this
afternoon. I work for the Converse Area New Development
Organization, a local economic development agency known by the
acronym ``CANDO''. We work hard with our congressional staff,
State legislature, Governor, local elected officials and other
organizations to help grow our local economy.
I understand that today you are receiving testimony
regarding the legislative, economic, and environmental issues
associated with the growth and development of the Wyoming coal
industry. I would like to address those issues from my
perspective as a local economic developer in Douglas and
Converse County, Wyoming.
In the 10 years that I have been in Wyoming, I have
witnessed a shift in the traditional thinking here. Folks want
more than survival. We want to move away from the historical
third-world economy of mineral extraction. And moreover, we
want to keep our youth in Wyoming. And to do that we must
diversify our economy. The opportunity that is before us today
is to add value to our coal by gasifying it and then exporting
electricity and ultra-clean diesel fuel instead of train load
after train load of raw coal. The coal gasification industry
could significantly enhance Wyoming's and the Nation's economy
while greatly strengthening our security by minimizing the
amount of petroleum we import to meet our country's
transportation needs.
There are significant risks to development of a coal
gasification facility or a coal to liquids plant. The cost
alone is staggering, easily in excess of $1 billion. While
there is a great opportunity for making serious money, while
petroleum is selling at $65 to $75 a barrel, who can guarantee
that the price will stay that high for 20 years? And who is
willing to prove up the Fischer-Tropsch process with Wyoming
coal, at Wyoming altitude? Moreover, who is willing to build
the electrical transmission lines that would be necessary for
carrying any additional power generated in Wyoming?
We in Wyoming are very thankful for your efforts, Senator,
and your colleagues who have addressed some of those concerns
in the energy bill of 2005. Much more work remains to be done.
It may be that Wyoming's coal gasification industry gets
started, not by generating electricity, nor by producing ultra-
clean diesel fuel, but instead simply by producing synthetic
gas. Existing pipelines can easily move that synthetic gas to
the market right now. Thereby minimizing the fiscal risk
associated with coal gasification. However, that limited use of
coal does not come close to its full potential. It would not
significantly diversify our economy and it would not go very
far to reduce foreign oil imports. Eventually, we must do those
things.
Currently, Wyoming's procuring a bid to the U.S. Department
of Energy regarding FutureGen. If the Federal Government's goal
is to place this facility in one location that it can truly
change our future, it needs to be built in Wyoming. Other
States may be able to gasify coal, but I urge you to think
larger. The gasification of coal allows you to capture
virtually all of the carbon dioxide from coal. Preventing its
release into the atmosphere. What you could then do is make
beneficial use of that gas and not simply sequester it forever
under ground.
In Wyoming, carbon dioxide is already being injected into
the ground, revitalizing our vast oil and gas fields.
Additionally, the Fischer-Tropsch classes can be combined with
coal gasification, creating a fantastically ultra-clean diesel
fuel. While there is a national market for that fuel, Wyoming
can offer the Federal Government a much more compelling test
for coal gasification.
Here's where I would like to challenge your committee
further, Senator. Our efforts at CANDO and elsewhere in State
have led us to conclude that coal gasification can best succeed
if it is matched up with wind or bio-fuel production. For
instance, Fischer-Tropsch process creates a high-energy by-
product called naphtha, refineries commonly naphtha to increase
the octane of gasoline and other products. But it could also
make an excellent companion to wind-power generation. As you
know, even in Wyoming, sometimes the wind does not blow. In
fact the intermittent supply of wind is often seen as a major
drawback in this development. However, if wind energy were
partnered with coal gasification, the excess naphtha could be
burned and it burns quite cleanly in generators to provide a
relatively constant source of electrical power, solving the
problem of transmission.
There are equally synergistic opportunities for bio-fuels,
fertilizers, and other industries associated with coal
gasification. If our Nation is truly to become more energy
independent, we will need to look at every resource available.
Wyoming's vast fossil fuel resources can be perfectly balanced
with alternative energy production, particularly wind. Too
often, we have looked only to export raw materials such as
coal, oil, gas and uranium, which Wyoming has an abundance. But
we must not ignore the opportunities that are before us just
because they may seem complicated, complex or initially
expensive. We can do this today if we are patient, wise and
visionary.
Wyoming has unique attributes that you've already heard
about this afternoon that would allow a project like FutureGen
to succeed beyond your imagination. Please do what you can to
appropriately encourage the decision makers to put FutureGen in
Wyoming. In Wyoming, you will find the support at the
grassroots level and also at the leadership levels. You'll also
find all of the building blocks, not just the geology to
effectively, economically prove that coal gasification is a
viable energy alternative to importing more foreign oil.
Senator, thank you for studying this issue. Working
together, I know that Wyoming can help meet America's growing
energy appetite and at the same time strengthen our country's
independence. It's been a privilege to speak with you today,
and if time permits I'll try to answer any questions.
[The prepared statement of Mr. Coyne follows:]
Prepared Statement of Joe Coyne, Executive Director, Converse Area New
Development Organization, Inc., Douglas, WY
Mr. Chairman, welcome to Wyoming! I thank you and the committee
members for your time this afternoon.
I work for the Converse Area New Development Organization, a local
economic development agency known by the acronym ``CANDO''. We work
hard with our Congressional staff, state legislature, Governor, local
elected officials and other organizations to help grow our local
economy.
I understand that today you are receiving testimony regarding the
legislative, economic, and environmental issues associated with the
growth and development of the Wyoming coal industry. I would like to
address those issues from my perspective as a local economic developer
in Douglas and Converse County, Wyoming.
First, we should take a moment to make some general observations
about the rural nature of Wyoming. Some have called Wyoming a small
city with very long streets. Our total population is less than 500,000
residents. Douglas has grown to 5,200 citizens, and Converse County is
only about 12,000 people. By contrast, the population of Albuquerque,
your hometown, Mr. Chairman, is about 800,000. However, even
Albuquerque is small compared to the size of the metropolitan areas
back East or out on the Pacific Coast. Wyoming's rural--even frontier--
nature has cultivated a strong independence in her residents.
Traditionally, the State has taken pride in its ability to survive.
The wind here can be astonishing. When similarly strong winds blow
back East, folks get all excited, give the wind a formal Name and call
it a Tropical Storm! Yet here, we just brace ourselves and get on with
our day.
Our ``long streets'' and open spaces intimidate many. I drove 50
miles to be here this afternoon--a distance that might take you across
three state lines as you drive around Washington, DC--but I only spent
a fraction of the time (about 45 minutes) you would spend driving the
same distance. In Wyoming, we relish our ``windshield time,'' taking in
the open space, wildlife and scenery every day.
Wyoming is, by far, the nation's largest coal producer, shipping
400 million tons of low sulphur coal annually to 35 states to generate
electricity. Wyoming's coal industry has established an incredible
record of safety with its mining operations, and has repeatedly proven
itself to be a good steward of our environment.
My point is this: As you examine the issues surrounding Wyoming's
energy growth, you simply cannot do so with the same perspective as you
might in other areas of the United States.
Yet, I have also witnessed a shift in the traditional thinking of
Wyoming. Folks want more than survival. We want to move away from the
historic third world economy of mineral extraction. Moreover, we want
to keep more of our youth in Wyoming. To do that, we must diversify our
economy. One opportunity that is before us today is to add value to our
coal by gasifying it, and then export electricity and ultra clean
diesel fuel instead of trainload after trainload of raw coal. The coal
gasification industry could significantly enhance Wyoming's and the
nation's economy, while greatly strengthening our national security by
minimizing the amount of petroleum we import to meet our country's
transportation needs.
There are significant risks to development of a coal gasification
facility or a coal-to-liquids plant. The cost alone is staggering,
easily in excess of $1 billion dollars. While there is a great
opportunity for making serious money while oil is selling for $65-70
per barrel, who can guarantee that the price will stay that high for 20
years? And who is willing to prove up the Fischer-Tropsch process with
Wyoming coal, at Wyoming altitude? Moreover, who is willing to build
the electrical transmission lines that would be necessary for carrying
any additional power generated in Wyoming?
We in Wyoming are very thankful for the efforts of Senator Craig
Thomas and his colleagues, who have addressed some of these concerns in
the Energy Bill of 2005. Likewise, the Wyoming Infrastructure Authority
is working hard to stimulate development of much needed transmission
lines, while the Wyoming Pipeline Authority pushes for the development
of more oil and gas pipeline capacity.
It may be that the Wyoming coal gasification industry gets started
not by generating electricity, nor by producing ultra clean diesel
fuel, but instead can simply produce synthetic gas. Existing gas
pipelines can easily move synthetic gas to market right now, thereby
minimizing the fiscal risk of coal gasification. However, that limited
use of coal does not come close to the full potential of Wyoming coal.
It does not significantly diversify Wyoming's economy. And it would not
go very far to reduce foreign oil imports. Eventually, we must do those
things.
Political and business decisions to be made in the immediate future
will address the inherent financial risks of coal gasification. I thank
you for taking the lead on addressing some of those issues in the
Energy Bill of 2005. Much more work remains to be done.
Currently, Wyoming is preparing a bid for the U.S. Department of
Energy regarding FutureGen. If the government's goal is to place this
federal facility in the one place that it can truly change our future,
it needs to be built in Wyoming. Other states may be able to gasify
coal, but I urge you to think larger. The gasification of coal allows
you to capture virtually all of the carbon dioxide from coal--
preventing its release to the atmosphere--and then to make beneficial
use of that gas. In Wyoming, carbon dioxide is already being re-
injected into the ground, revitalizing our vast oil and gas fields.
Further, the Fischer-Tropsch process that can be combined with coal
gasification creates a fantastically ultra clean diesel fuel. While
there is a national market for that fuel, Wyoming can offer the federal
government a much more compelling ``test'' for coal gasification.
Our efforts at CANDO have led us to conclude that coal gasification
can best succeed if it is also matched up with wind and bio-fuel
production. For instance, the Fischer-Tropsch process creates a high-
energy byproduct called naphtha. Refineries commonly use naphtha to
increase the octane of gasoline and other products. But is also makes
an excellent companion to wind energy. As you know, even in Wyoming,
sometimes the wind does not blow. In fact, the intermittent power
supply of wind is often seen as a significant drawback to its
development. However, if wind energy were partnered with coal
gasification, the excess naphtha could be burned (and it burns quite
cleanly) in generators to provide a relatively constant source of
electrical power. Likewise, there are synergistic opportunities for
bio-fuels, fertilizers, and other industries wherever this process is
followed.
If our nation is to truly become more energy independent, we will
need to look at every resource available. Wyoming's vast fossil fuel
resources can be perfectly balanced with alternative energy production,
particularly wind. Too often, we have looked only to export raw
materials, such as coal, oil, gas and uranium. We must not ignore the
opportunities that are before us just because they may seem
complicated, complex or expensive. We can do this thing if we are
patient, wise, and visionary.
Wyoming has unique attributes that would allow a project like
FutureGen to succeed beyond your imagination. Please do what you can to
appropriately encourage the decision-makers to put FutureGen in
Wyoming. In Wyoming, you will find support at the grassroots and
leadership level. You will also find all the building blocks to
effectively and economically prove that coal gasification is a viable
energy alternative to imports.
Overall, there is one major deterrent to development of any kind of
coal plants in Wyoming: The inadequacy of electrical transmission
lines. Without transmission, Wyoming cannot build another significant
power plant of any sort. The experts in this area are the folks at the
Wyoming Infrastructure Authority, and I urge you to listen carefully to
their comments.
Finally, I ask you to consider another time in history, when the
Congress created, essentially, a ``bounty'' to be paid to any company
that could create an energy efficient appliances. You created an
industrial race to develop energy efficiency, environmentally friendly
refrigerators. As a result, consumers quickly got the appliances they
needed. An adequate incentive was offered to industry, who immediately
responded, and the entire appliance market was positively impacted. I
would suggest that a similar bounty might whet the appropriate
appetites to motive industry to build the first commercially viable,
full scale, coal gasification plant.
Thank you for studying this issue. Working together, I know that
Wyoming can help meet America's growing energy appetite, and at the
same time strengthen our country's independence.
It has been a privilege to speak today and, if time permits, I will
try to answer any questions.
Senator Thomas. Thank you very much.
Dr. Gern.
STATEMENT OF DR. WILLIAM A. GERN, VICE PRESIDENT FOR RESEARCH
AND ECONOMIC DEVELOPMENT, UNIVERSITY OF WYOMING, AND CHAIRMAN
OF THE BOARD OF DIRECTORS, WESTERN RESEARCH INSTITUTE
Dr. Gern. Mr. Chairman, thank you. I am William Gern, vice
president for research and economic development at the
University of Wyoming. I also speak on behalf of the University
of Wyoming Research Corporation, which is better known as the
Western Research Institute, where I serve as the chairman of
the board of directors.
I start my remarks with more context. In a report compiled
by the Wyoming Geological Survey using DOE Energy Information
Agency data, Wyoming is number one in the States in coal
production, as you've heard already, and it's held this
position for more than two decades. It is also number four in
natural gas and seven in petroleum and number one in uranium.
When all of this energy is placed into the common accounting
system using quadrillion, that's 1.0 x 10\15\, British thermal
units of energy produced, the amount of energy--and the amount
of energy consumed by a State is subtracted from that total,
Wyoming leads the Nation in net energy production twice as much
as the next State, which is Alaska.
Recognizing Wyoming's status in energy production, the
University of Wyoming has just completed a successful
initiative to develop a school for energy resources. This
initiative recognizes Wyoming's existing strength in energy
related research and will add important new compliments. The
school has three elements, all of which are also meet the
Energy Act of 2005 goals. We will enhance our existing
institute for energy research. We will add new centers,
including one examining uses of subbituminous Western coals.
Here we will study gasification, catalysis, carbon
sequestration, and trapping. We will develop undergraduate and
graduate curriculum in energy sciences and the third element is
the technology outreach center which will provide important
information concerning the energy related technologies to
industry and to our government partners.
The Wyoming legislature passed this legislation providing
funding to create the energy school in March 2006 and Governor
Freudenthal recently signed legislation into existence and
authorizing immediately our ability to commence work in
establishing this new chapter in the University's role for the
State of Wyoming. The school is slated to receive $12 million
for the first two years of a three year ramp-up period and
thereafter it will be sustained with approximately $10 million
annually. Significant funding.
As the energy school proposal was being developed, we were
mindful of elements in the Energy Act of 2005 and opportunities
presented by research partnerships with Federal agencies, the
most important of which is the U.S. Department of Energy. The
University of Wyoming has great interest in the new PACE-E
legislation. We recognize the importance of this legislation,
especially in the elements of dealing with the education of a
new competent workforce for energy in the United States.
In order for coal to be used as cleanly as possible, the
Nation needs greater understanding about the process of
trapping of carbon dioxide from combustion and gasification
processes and about the geologic sequestration of carbon
dioxide. The University of Wyoming (UW) has considerable
expertise in CO2 tracking and offloading
technologies and in the geologic sequestration of carbon
dioxide and its use in enhanced oil recovery. UW is a member of
the DOE funded Big Sky Carbon Sequestration Partnership where
our role is to examine CO2 sequestration in
carbonate rock reservoirs such as the Madison Formation, which
underlies most of the basin and in the economic analysis of
carbon sequestration. We are also interested in understanding
petroleum reservoir stimulation using the offloaded carbon
dioxide which will further use the Nation's known existing
supply of oil.
According to the Wyoming Geological Survey, there's 1.4
trillion tons of coal in Wyoming, of which 64 billion tons can
be mined using current technologies. But in order for the
Nation to use the energy residing in the remaining 1.3 trillion
tons, new technologies are required. Specifically, in situ
gasification processes need greater understanding through
research. Also, we need much more fundamental understanding of
the biological and physical events associated with coal bed
methane or coal bed natural gas formation.
The University of Wyoming Research Corporation is a
501(c)(3) not for profit research entity known as the Western
Research Institute funded primarily by U.S. Department of
Energy and U.S. Federal Highway Administration. In the energy
sector, WRI continues its strong efforts in coal conversion and
upgrading power generation, waste management, and utilization
and alternative fuels, environmental remediation, renewable
energy technologies, and bioprocessing. WRI supports utilities
in a number of emissions issues. WRI has built a test scale
combustion test facility mimicking a coal fired utility boiler.
This facility now is supporting technology developing
verification for a number of utilities for coal technology
companies and in the combustion and emission control equipment
manufacturers.
For example, current technologies are testing
NOX reduction with Breen Energy Solutions, testing
mercury capture technologies with Mobile Tech USA, testing
strategies for multi-point pollution control with Headwaters,
Incorporated. WRI has developed a patented pre-combustion
mercury removal process that first dries the coal, then uses
hot recycle gas to remove the mercury. Unlike post-combustion
processes that remove mercury from the flue gas, WRI's patented
process removes mercury from coal prior to combustion. This
process has been shown to remove up to 80 percent of the
mercury from Powder River Basin coal. In February 2006, WRI was
notified by the U.S. Department of Energy that their project
was selected for an award supporting commercial scale up. DOE
funding, which is approximately $1 million, will be matched
with $460,000 from industry affiliated co-sponsors such as the
Electric Power and Research Institute, Southern Company Basin,
an Electric Power Cooperative, and the North Dakota Industrial
Commission, Montana, Dakota Utilities in Detroit, Edison, as
well as Sask Power. WRI is working to develop enabling
technologies for zero emission coal based powerplants in the
future. With oxycombustion, fuel is combusted in pure oxygen,
the flue gas is recycled back into the furnace to maintain
optimum burning conditions. Because oxycombustion excludes
nitrogen, the byproduct is nearly pure carbon dioxide, a waste
gas that can be effectively managed.
The cost of oxygen, however, is a major issue in the
development of sequestration ready power systems of the future.
Working with a specialty gas manufacturer, BOC Process Gas
Solutions of Murray Hill, New Jersey, WRI is developing a novel
technology for the lower cost production of oxygen that takes
advantage of the oxygen storage properties of the mineral,
perovskite. The cost of producing oxygen using the BOC
catalytic auto-thermal reformer technology is estimated to be
20 to 30 percent lower than the cost of cryogenic air
separation.
A hydrogen project now underway at Western Research
Institute at the University of Wyoming is expected to yield
cheaper and easier ways to produce pure hydrogen from gasified
coal and other mixed gasses. The new process advances the water
gas shift process whereby coal is reacted with steam and oxygen
to produce the synthesis gas. Under a Department of Energy
grant, WRI and the University of Wyoming are developing a
device that combines water gas shift technology with improved
hydrogen separation to maximize the total hydrogen produced.
Both WRI and the University of Wyoming recognize the
importance of ARPA-E legislation that is currently being
discussed and we are pleased, Senator Thomas, that you are a
co-sponsoring senator. And with that, thank you, Senator, for
this opportunity.
[The prepared statement of Dr. Gern follows:]
Prepared Statement of William A. Gern, Vice President for Research and
Economic Development, University of Wyoming, and Chairman of the Board
of Directors, Western Research Institute
Mr. Chairman, I am William A. Gern, Vice President for Research and
Economic Development for the University of Wyoming; I will also speak
on behalf of the University of Wyoming Research Corporation which is
better known as the Western Research Institute where I serve as the
Chairman of the Board of Directors.
Wyoming leads the Nation in net energy production. The Wyoming
Geological Survey developed a report placing all forms of energy
production, by each state, into the common accounting system of
quadrillion (1.0 x 1015) British Thermal Units (Btu's). The
survey used DoE EIA data (2003) for this report (the report may be
viewed at http://wvvw.wsgs.uwyo.edu/Coal/DNR_RE_Study.pdf). The
Geological Survey also used the DoE EIA data to estimate energy
consumption by state. The result of subtracting consumption from
production is estimated net energy production. In terms of gross energy
production Texas led the Nation, with 9.08 quads Btu, Wyoming was
second with 8.80 quad Btu. It is estimated that Texas consumed 12 quad
Btu however, meaning that as a state they were a net energy importer.
At the same time, Wyoming was estimated to have consumed 0.4 quad Btu,
thereby exporting approximately 8.4 quad Btu to the nation. This is why
Wyoming is the Nation's leader in net energy production. Alaska was
estimated to rank second in net energy production with approximately
4.77 quad Btu.
Wyoming's energy portfolio is multifaceted, it produced 6.65 quad
Btu of coal (ranks #1), 1.52 quad Btu of natural gas (ranks #4) and
0.29 quad Btu of crude oil (ranks #7). Wyoming has led the nation in
coal production for the past two decades, with Wyoming coals
responsible for an estimated 35 percent of the nation's electrical
power. While nuclear power generation was examined in this report, it
did not attempt to attribute the source of the nuclear fuel; Wyoming
ranks #1 in uranium production.
Recognizing Wyoming's status in energy production, the University
of Wyoming has just completed a successful initiative to develop a
School for Energy Resources. This initiative recognizes UW's existing
strength in energy-related education and research, most of which is
fundamental, and will add important new components. The school has
three elements, all of which also meet Energy Act of 2005 goals. UW
will enhance existing research capabilities. We will hire permanent
research staff and provide state-funded operating budget to elements of
our existing Institute for Energy Research. Incentives will be provided
to UW departments in the form of support funding for three-year faculty
appointments into various energy related centers on the campus as well
as support for graduate students. A large annual pool of funding is
available for grant matching (this will be very helpful in winning
competitive awards from the DoE). Finally an interdisciplinary
technical advisory board will help steer the scientific work conducted
under the aegis of the Institute for Energy Research.
The second element is academic. Funding for 12 distinguished
professorships is available. This will help attract faculty who have
achieved international recognition for their research and teaching in
fields related to energy. Our curriculum will be broadened in
interdisciplinary directions to support the state's economic health and
strengthen UW's graduates' preparation for careers in energy-related
fields.
The third element is statewide outreach and service. Here a
permanently funded Energy Outreach Center will provide technical
consulting, hold statewide workshops, and produce technical reports
supporting energy project design, scientifically-based analysis of
energy resources and effective long-term energy planning. The Outreach
Center will serve as an important link between the School for Energy
Resources, industry and government agencies.
The Wyoming Legislature passed legislation, providing funding to
create the School for Energy Resources in March, 2006. Governor
Freudenthal recently signed this legislation into existence with the
authorization to immediately commence the work of establishing this
important new chapter in the University's role for the state of
Wyoming. The school is slated to receive $12 million for the first two
years of a three year ramp-up period, after which it will be sustained
with approximately $10 million annually.
As the energy school proposal was being developed, we were mindful
of elements within the Energy Act of 2005 and opportunities presented
by research and education partnerships with Federal agencies, the most
important of which is the Department of Energy. We are pleased with
Senator Thomas' co-sponsorship of the PACE-E and ARPA-E Senate bills.
We recognize the importance of this legislation especially the elements
dealing with education of a competent workforce and of increased
funding for energy-related research.
In order for coal to be used as cleanly as possible, the nation
needs greater understanding about the processes of trapping carbon
dioxide (CO2) from combustion and gasification processes and
about geologic carbon sequestration. ``Carbon sequestration'' is
initiated with CO2 capture from the flue gas, followed by
usage or storage or both. Flue gas, produced by conventional air
combustion, contains approximately 10-15% CO2; the balance
is nitrogen and minor combustion byproducts. Flue gas produced by
plants using oxygen instead of air for combustion, as in future
Integrated Gasification Combined Cycle'' (IGCC) plants, also contains
CO2 but more concentrated (say 50%) and at higher pressures.
Aqueous-amine absorption currently is widely used for separating
CO2 from flue gas. This type of separation substantially
increases the cost of electricity generated. DoE's goal is to reduce
this cost and therefore they support programs developing new separation
technology that will reduce the CO2 capture cost, hopefully
by a factor of 4 (http://www.netl.doe.gov/technologies/carbon_seq/
index.html). DoE's target for IGCC plants is a new separation
technology that will reduce the CO2 capture cost by a factor
of 2-3. To our knowledge existing separation technologies, however
optimized and configured, cannot approach these stretching targets. A
route to achieve these capture targets is through novel sorbent and
membrane materials. Sorbent is made of granular material that can trap
CO2, but not the other flue gas components, and hence is
similar to the materials used in in-line filters for purification of
water and air. These materials need both high CO2 capacity
and high CO2/nitrogen selectivity, and they must be easy to
regenerate. The University of Wyoming is actively pursuing research to
identify and develop this needed material.
UW has considerable expertise in geological CO2
sequestration. As a member of the DoE-funded Big Sky Carbon
Sequestration Partnership (Montana State University is the lead
institution), we are examining CO2 sequestration in
carbonate rock reservoirs and the economic analysis of CO2
sequestration. This work is being done UW's Enhanced Oil Recovery
Institute where we will couple this knowledge with research deepening
our understanding of petroleum reservoir stimulation using the off-
loaded CO2; an end result will further use of the nation's
existing known oil supplies.
According to the Wyoming Geological survey, there is 1.4 trillion
tons of coal in Wyoming, of which about 64 billion tons can be mined
with current technologies. In order for the nation to use the energy
residing in the remaining 1.3 trillion tons, new technologies are
required. Specifically in situ gasification process needs greater
understanding through research. In situ gasification is not new; as a
matter of fact, Wyoming was home for such research over twenty years
ago. The Nation also needs a much more fundamental understanding of the
biological and physical events associated coal bed natural gas (CBNG)
formation. Many important scientific questions remain open--what is the
rate of gas formation? what are the physical and biological components
of gas formation? can the gas production be altered through
manipulation?--to name a few. Finally the University of Wyoming is
doing considerable research into issues associated with CBNG process
water production using DoE funding.
As Wyoming's surface coal mining industry was strongly developing
in the early 1970's many felt that reclamation of the mined surface
would be quite slow in the arid, cold regions of the state. The Wyoming
Abandoned Coal Mine Land Research Program, part of the Wyoming
Department of Environmental Quality Abandoned Mine Division, produced
much valuable information for mine managers to use in reclaiming mined
lands. This program is managed by the University of Wyoming for DEQ and
many UW-based research projects have resulted in a wide array of
reclamation techniques useful not only in coal mine reclamation, but to
the reclamation of other disturbed lands throughout the West. While
surface coal mining is by its nature a disruptive process, active
reclamation is effective in returning once mined land into effective
places for grazing and wildlife.
The University of Wyoming Research Corporation is a 501(c)3 not-
for-profit research entity known as the Western Research Institute,
funded primarily by the U.S. Department of Energy and the Federal
Highway Administration to supports these organizations' mandates for
the benefit of the Nation.
In the energy sector, WRI continues its efforts in coal conversion
and upgrading, power generation, waste management and utilization,
alternative fuels, environmental remediation, renewable energy
technologies, and bioprocessing.
WRI is supporting the utilities on a number of emission issues. For
example, WRI has built a test-scale Combustion Test Facility that
mimics a coal-fired utility boiler. This facility is now supporting
technology development and verification projects for utilities, for
coal technology companies and combustion and emissions control
equipment manufacturers. The following are examples of the projects
being conducted: testing of NO reduction technologies (with
Breen Energy Solutions); testing of Hg capture technologies (with
MoboTec U.S.A.); testing of strategies for multi-pollutant control
(with Headwaters, Inc.).
WRI has developed a patented pre-combustion mercury removal process
that first dries the coal, then uses the hot recycle gas to remove the
mercury. Unlike post-combustion processes that remove mercury from the
flue gas, WRI's patented process removes the mercury from the coal
prior to combustion. The process has been shown to remove up to 80
percent of the mercury in PRB coal (additional mercury is removed
during combustion). Not only is this technology competitive with post-
combustion processes on a cost basis, it also is easily integrated into
a power plant, and the treated coal product increases plant efficiency
by 3-4 percent for Powder River Basin (PRB) coal. What's more, the
water removed from the coal can be condensed and used at the power
plant for cooling and other uses, a considerable benefit in the arid
West. A recent economic study sponsored by the Electric Power Research
Institute showed the WRI process to be one of the lowest-cost
technologies for removing mercury from PRB coal-fired power plants. In
February 2006, WRI was notified by the Department of Energy that this
project was selected for an award to support commercial scale-up. The
DoE funding of approximately $1 million will be matched by
approximately $460,000 from industry-affiliated co-sponsors Electric
Power Research Institute, Southern Company, Basin Electric Power
Cooperative, North Dakota Industrial Commission, Montana-Dakota
Utilities, Detroit Edison and SaskPower.
WRI supports the coal industry in mine reclamation through the
development of a novel bio-based source treatment of acid mine drainage
(AMD). Although the high-sulfur coals of the East make this problem
more widespread in the eastern half of the country, acid mine drainage
is associated with hard rock mining and coal mining throughout the
United States. Other processes treat the drainage through
neutralization. WRI has partnered with Kennecott Energy to demonstrate
the effectiveness of the biobased source treatment process at a mine in
Tennessee. The results to date have confirmed that the process
effectively controls acid mine drainage by controlling the source of
the acid within the mine. Additional demonstrations are being planned
with other coal companies at other mines.
Since the first commercial coal bed natural gas (CBNG) well was
established in the Powder River Basin in 1986, CBNG production has
grown explosively and now constitutes a major resource within the
energy mix for Wyoming, the region and the Nation. More than 40,000
wells are expected to be drilled in the next decade alone. The
management of the produced water, however, remains a significant
consideration. When an operator drills a CBNG well, large amounts of
water are withdrawn in order to free the methane to be extracted. In
some areas of Wyoming and Montana, the water quality is such that it
cannot be used for agriculture, livestock or discharge into surface
streams without causing degradation of the water. WRI is working with
developers and others to demonstrate treatment methods that will allow
the beneficial use of the produced waters. For example, WRI is working
with CBM Associates to demonstrate an application that allows the water
to be used for irrigation purposes. WRI also is exploring the use of
CBNG produced water in power plants to reduce the draw of fresh water
for cooling and other plant purposes.
WRI is working to develop enabling technologies for zero-emissions
coal-based power plants of the future. With ``oxycombustion,'' fuel is
combusted in pure oxygen (rather than air which contain considerable
nitrogen gas) and flue gas is recycled back into the furnace to
maintain optimum burning conditions. Because oxycombustion excludes
nitrogen, the byproduct is nearly pure carbon dioxide, a waste that can
be more effectively managed. The cost of oxygen, however, is a major
issue in the development of sequestration-ready power systems of the
future. Working with a specialty gas manufacturer, BOC Process Gas
Solutions (Murray Hill, New Jersey), WRI is developing a novel
technology for the lower-cost production of oxygen that takes advantage
of the oxygen ``storage'' properties of the mineral perovskite. The
cost of producing oxygen using the BOC Catalytic Autothermal Reformer
(CAR) technology is estimated to be 20 to 30 percent lower than the
cost of cryogenic air separation.
A hydrogen project now underway at Western Research Institute and
the University of Wyoming is expected to yield a cheaper and easier way
to produce pure hydrogen from gasified coal and other mixed gases. The
new process advances the water-gas shift process whereby coal is
reacted with steam (water) and oxygen to produce a synthesis gas. Under
a U.S. Department of Energy grant, WRI and the University of Wyoming
are developing a device that combines water-gas shift technology with
improved hydrogen separation to maximize the total hydrogen produced.
The University of Wyoming is leading the development of a ceramic
catalyst, while WRI will test a variety of vanadium alloy foil
membranes for durability and optimum effectiveness at lower
temperatures. Finally, the ceramic catalyst and the vanadium membrane
will be integrated into a single stackable device that can operate at
lower temperatures.
Through this testimony, I want to make apparent that Wyoming is a
major player in the Nation's energy production. We desire to have a
much greater role in processes associated with the conversion of coal
into other forms of energy. The University of Wyoming has established
the School of Energy Resources for this and other reasons. It will have
a very important role in research, outreach and education regarding
energy production. The Western Research Institute continues to apply
knowledge leading to new and efficient production technologies that are
less polluting but will result in meaningful new uses for the Nation's
energy supply.
Mr. Chairman, thank you for the opportunity to provide testimony to
this committee.
Senator Thomas. Thank you all very much. I appreciate your
comments and I appreciate your ideas. I have a few questions
and we'll see what we can do there.
Dr. Shilling, how would you evaluate GE's position with
regard to technology development as opposed to actually being
close to constructing a plant for IGCC?
Dr. Shilling. There is a fairly significant amount of work
that goes between the development of technologies such as we're
doing now for low rank coals and then implementation within the
design. And of course we're developing a reference plant design
right now for coal for high sulphur coal. We'd have to do
something similar to bring that to market in terms of a
reference plant design, a standard plant design. And of course
the benefits of that, when you look at the typical utility
that's going to be putting in one of these plants, what they do
not have within their model of acquiring technology or building
coal plants is the type of additional engineering that would
have to go into a--what we call a first of a kind plant. And
similar to what we're doing now, we would need also to develop
a first of a kind plant for Western coals. It would allow us to
take advantage of the lower sulphur that's in Western coals,
plus it would integrate technology that we're developing now
for being able to deal with the moisture that's in Western
coals. And of course that plant will look significantly
different. We'll have a different balance of the topping cycle
to the bottoming cycle piece of--you know, the plant
distribution, where the power's coming from. We'll have a
significantly different waste handling system as a gas removal
system, and IGCC is very complex.
Technology today is very complex. We can see it in the
development of, for example, advanced aircraft engines,
locomotives. It's a part of our technology today. It's part of
our technology society.
So, going from the design from the development into the
deployment, there is another step, which the engineering of the
plant. And I would say that's a--probably right now a major
feature that still has to be accomplished before we define and
before we deploy a plant optimized for western coal.
Senator Thomas. So would you say that the policies and
incentives that are currently in place are enough for General
Electric and others to pursue and construct plants, or are you
simply in the process of research?
Dr. Shilling. There is--no. We're not just in research. We
need to deploy these technologies that we're developing very
rapidly. Within the Energy Act, there is, of course, title IV
for the incentive tax credit. There is title XVII for the loan
guarantee. There's section 413 for Western coal demonstration.
There is still a gap that deals with that first of a kind
engineering. And again, when utilities look at implementing an
IGCC project, that winds up being called still the kind of a
final gap that needs to be closed and we need to find a way to
fund that and support that development.
Senator Thomas. Okay. Well, I hope that all of you are
looking at actually getting something built as opposed to just
research. And I understand research has to be certainly
performed. General Electric recently signed the agreement with
DKRW to use GE's gasification technologies, the proposed coal
to liquids facility right here in Wyoming. The first phase was
supposed to produce approximately 11,000 barrels per day of
ultra clean diesel fuel from carbon base and coal. It is my
understanding this will be the first application of that
technology. What are the environmental benefits of producing
transportation fuel as opposed to running crude oil through the
refineries?
Dr. Shilling. The good news is that the coal to liquids is
very clean compared to what I'll call standard refinery, taking
in crude and refining that into distillate or into diesel
fuels. The reason is that we take out--the metals we take out,
the mercury we take out, the sulphur, as part of the process,
and it's going to be very, very clean compared to a standard
refinery where they're dealing with high sulphur----
Senator Thomas. This process is pretty much available,
ready to move forward?
Dr. Shilling. That's right. The technologies are available.
They need to be integrated into a total plant and whether or
not the decision is made, for example, to do it with a complete
processing, after you convert the coal, you will have a--what
we call synthetic crude, in a way. It has waxes and it has a
higher and lower order of hydrocarbons. You can do that final
processing to produce either diesel or methanol or other
products onsite, or you can ship that to a refinery. And the
good news about shipping it to an existing refinery is even
that synthetic crude will also have very low de minimus levels
of sulphur. So the sulphur part and the mineral part of the
processing of that fuel or that feed stock within a normal
refinery even will show significant environmental benefit.
Senator Thomas. You're not planning to make meth, are you?
Dr. Shilling. Pardon me?
Senator Thomas. I'm sorry. That's just a joke. That's what,
it's in the Medicine Bow area, and that's something that's
fairly likely to happen, is that right?
Dr. Shilling. Well right now, GE would be licensing our
gasification technology into--and providing, of course, the
engineering support for that into the total project. I believe
right now that project is moving towards and into the financing
phase.
Senator Thomas. Good. Thank you. Mr. Waddington, what do
you think Congress might do to help improve and move forward
with this transmission project the Authority's working on?
Mr. Waddington. Well, Mr. Chairman, we have two public-
private partnerships on relatively near term transmission
opportunities. And in both instances, one of our partners is
the Western Area Power Administration along with a private
sector party. We're just about ready to embark on detailed
technical study work that's expensive and I would suggest, Mr.
Chairman, you consider a Federal funding piece to that that
would help bolster Western's ability to work with us as we get
into the detailed study. Whether that's a redirect of DOE's
existing appropriate funds or by some other appropriated means.
Senator Thomas. WAPA?
Mr. Waddington. WAPA. Mr. Chairman, they like to be called
Western, is what I've been told.
Senator Thomas. Oh, is that right?
Mr. Waddington. Yes. So I've been trying to get--I've
called them WAPA for years, and I'm trying to get into the
habit of calling them----
Senator Thomas. WAPA sounds more familiar to me. Okay. So a
frontier corridor is one of the things you're working on. Is
that right?
Mr. Waddington. Mr. Chairman, yes, we are involved in the
frontier line. We also have a partnership and a relationship
with Arizona Public Service on the Trans-West Express Project.
Both of those are multi-State, long distance, long term
initiatives. The two projects I was referring to are actually
shorter distance projects connecting Wyoming with Colorado and
Utah.
Senator Thomas. Good. Just a short answer, because I know
it's a complicated problem, but obviously, there's more to the
so-called capacity shipper thing and the railroad thing than
just the price. Capacity, investment. What do you think is the
solution to railroad capacity?
Mr. Waddington. Mr. Chairman, I didn't come today with the
solution readily at hand. This is a complicated matter. I think
it's important to Wyoming. It's important to rural States
throughout the country and it needs a concerted look. But
frankly it's a complicated matter and I don't have the solution
for you today.
Senator Thomas. But there is a capacity problem, isn't
there, in terms of the Powder River Basin?
Mr. Waddington. Mr. Chairman, absolutely. There are coal
plants that are receiving very limited supplies of coal and
working down their inventories because of the lack of cars, as
one example. So it----
Senator Thomas. And market and capacity are higher than
we're able to provide because of the limitations on the
capacity of the railroad?
Mr. Waddington. That's my understanding, Mr. Chairman.
Senator Thomas. I see. Okay. You mentioned bonding
authority and the possibility of creating tax exempt status.
I'm aware of this issue, but I want you to know that other
things Congress can do--are there other things Congress can do
to help in the construction or the transmission? There's some
confusion about sometimes on tax exemption in terms of
construction and ownership and those kinds of things.
Mr. Waddington. Well, Mr. Chairman, I'd say in general that
the Energy Policy Act that passed last year gives us the tools
if--provided two things. That Congress keeps the implementing
agency's feet to the fire and those provisions get implemented.
And second, if there's sufficient funding appropriated as we go
through times. In general, I think we have an energy policy to
implement. The one area that I suggested in my testimony that
might be a new provision is recognition--and several States
have emerged now with these State bonding authorities, where
we're trying to make a difference, as one more financing tool
to move these projects ahead. And federally tax exempt bonding
would give us a significant lift in terms of lowering the cost
of those transmission investments.
Senator Thomas. Yes. Sometimes there's a little discussion
over who benefits from that, whether it's the builder, whether
it's the owner, whether it's the user. That gets to be a little
bit of a complicated question. But I understand what you're
saying. So, Mr. Loomis, just very briefly, in general terms,
how do you state the differences between mining coal and other
types in terms of mining practices, energy content,
environmental factors, and reserves? We need to explain that to
people sometimes.
Mr. Loomis. Senator Thomas, certainly we are blessed here
in Wyoming, as you're aware, with coals that are surface
mineable coals that are close to the surface which, in many
cases in the other parts of the country, they're deeper. Our
coal seams are thicker, 70 to 100 foot coal seams which, in the
east Midwest and other States, they might be 3 feet to 10 feet.
So those two, being relatively close to the surface, are
extremely thick coal seams, making them much different and the
reason why we produce so many more tons per man year than an
Eastern or Midwestern coal. On the environmental side, as I
mentioned, our coals--and has already been mentioned by
others--are extremely low in sulphur. Our coals will meet the
demands of the Clean Air Act of 1.2 pounds of SO2
per million Btus without scrubbers. So that has been a big
reason that has allowed us to go coast to coast in competing
for new markets. That, in addition to our extremely efficient
mining operations. And as I said, as more and more utilities
split on what scrubbers, we're going to lose that particular
advantage, but we still believe we will be the most efficient
mines when it comes to tons per million Btus.
Senator Thomas. Okay. Very good. Thank you. Obviously, the
energy industry's been good at providing employment for Wyoming
people. You mentioned the salaries and so on. Give us a
snapshot of the average age and the types of expertise and
perhaps salaries that exist in the industry.
Mr. Loomis. I'll kind of take them in the opposite order. I
mentioned the salaries. We were looking at $80,000 to $100,000
a year for a miner in Wyoming. The skills are not the labor
skills of 100 years ago. They're highly technical skilled jobs
today. The people that work in the mines have to be able to
look at computers, be able to run them. They're on their
trucks. They're on the drag lines. Even the dozers that do the
reclamation work will have GPS systems where they will be able
to contour that land back to within inches of what is required
for final topographic relief. So these are highly skilled jobs
that are available in the industry.
As far as the aging, I don't have an average age, but I
know a great deal of the people that are working in the
operations started at about the same time I did, and I'm
getting pretty old, Senator. So you know that work force is
aging as well. So that is a major consideration. It's not a
crisis. We're addressing it, but certainly the industry is
going across the country to job fairs in the East and South
telling people about the jobs that are available here in
Wyoming. We're going out to the schools in the State of Wyoming
and trying to make presentations to the high schools and the
vocational education classes that these jobs are available in
Wyoming and they should take a look at them. And that they need
to have math skills, they need to have reading skills, they
need to have writing skills in order to compete for these jobs,
but they are good jobs and we're doing that out of the
association. I'm trying to raise the education level of--or
knowledge level of these jobs and the ability for Wyoming
students.
Senator Thomas. Do you have available employment--have
people in the industry? Are you short?
Mr. Loomis. We're short.
Senator Thomas. You're short?
Mr. Loomis. Especially welders, electricians, mechanics,
those skill sets are in extremely short supply.
Senator Thomas. I see. Okay. Marion, did you hear that
salary range? What would you guess would be the time frame to
get to IGCC production? Do your folks have any particular
feelings?
Mr. Loomis. Mr. Chairman, Dr. Shilling would be a much
better person to ask that question of, but I----
Senator Thomas. Yes. But do you see it though in your
industry as something happening quite soon, or----
Mr. Loomis. Mr. Chairman, I think we're going to see some
of that happening, but I mentioned the need for 10,000 to
20,000 megawatts a year of new power. That's not going to
happen with IGCC. It's going to happen, if it happens with
coal, with more conventional plants. But saying it's a
conventional plant, it's not going to be the plants that we
built even 10 years ago. They're going to be cleaner, more
efficient plants addressing mercury and SOX and
NOX and particulates. But nevertheless, I don't
believe we're at the IGCC plant for these immediate needs of
this Nation. They're going to be the more conventional plants
with the new technologies for emission control.
Senator Thomas. So you agree with the concept that there's
a short term future and a long term future?
Mr. Loomis. Absolutely, Mr. Chairman.
Senator Thomas. Mr. Coyne, what do you think Congress might
do that it hasn't already done to reduce the regulatory,
economic, and logistical hurdles that exist for attracting coal
projects to Wyoming?
Mr. Coyne. Senator, I think there's a handful of things
that could still be addressed. You're already doing, I think,
maybe all of this, but first, we need the Department of Energy
to finish up the regulations. They need to be written and then
objective wise decisions need to be made by that Department
regarding that energy bill. Second, there's been a lot of talk
about a national grid to address the transmission line issues
through FERC or through other areas. I'm no expert in that
area, but if there's a path where we could increase the
capacity to export electricity and to make the grid maybe more
stable and safer throughout the country, then I would encourage
you to bless those efforts.
There's also been a lot of talk recently about the
development of a single battlefield fuel I think the Department
of Defense could use. It may be that the Fischer-Tropsch
process and the ultra clean diesel fuel that it could create
from coal may be that fuel. I would urge you to encourage the
Department of Defense to find the money in their many billion
dollar budget to actually study and determine whether that is
the fuel and, if so, to move forward with those projects.
Senator Thomas. What did you call it?
Mr. Coyne. Single battlefield fuel.
Senator Thomas. I see.
Mr. Coyne. And then finally, if there's anything within
your power to encourage or to drive the completion of due
diligence for coal gasification efforts, I would encourage you
to do that.
Senator Thomas. Think we can get California to buy our coal
generated fuel?
Mr. Coyne. When I studied law, there was a little thing
called the interstate commerce clause that had a lot to do with
what could cross State lines and perhaps that clause doesn't
apply to California, but it sure seems that Wyoming's coal is
clean enough for 34 other States.
Senator Thomas. What an idea. Okay. I'm not sure I quite
understood. You are in favor of moving forward with the coal
gasification, coal conversion, but you think it ought to be
balanced with non-fossil activities. Is that your point?
Mr. Coyne. It is, and I think that Wyoming's resources,
particularly wind, have largely been left untapped because of
the intermittent nature of wind power through the year,
throughout the time of the year. It may be that both of these
industries can best be moved forward if they are joined
together, particularly when we look at transmission issues.
Senator Thomas. That's interesting. I had some contacts
this week saying that if you're going to generate wind power
you need to participate in the cost of transmission and the tax
exemptions that go for wind power ought to have a little
something to do with the transmission costs as well, which
would be a little different change with the--and then something
in the future. Of course, I agree with you and unfortunately,
currently, wind and solar produce about 1 percent of our total.
Do you see a potential for wind energy to be more efficient to
where we produce more with the relatively fewer number of
facilities, or are we going to have to have--are we going to
have the same kind of efficiency in the production? Or what's
your view of that?
Mr. Coyne. The potential for wind power is huge. You would
need to talk to the doctor on my left about what power of
hugeness it would need to become in order to become significant
in the overall picture. But the opportunity's there. It's clean
fuel.
Senator Thomas. Yes.
Mr. Coyne. And certainly there's room for it to grow. In my
opinion, it's not going to become the significant answer to our
future energy needs. It's just too small.
Senator Thomas. All right. No question, but with
integration is an idea. Do you recall that in the initial idea
of the wind generation in Medicine Bow was to integrate it with
the Colorado River. Unfortunately, the Medicine Bow one blew
away, but that still was the concept, and a good concept. Dr.
Gern, as you move forward, what is the relationship between
Western Research Institute and the University Energy College in
terms of research? How do you work those two functions
together?
Dr. Gern. Thank you, Senator. As you know, the Western
Research Institute is the University of Wyoming Research
Corporation and our trustees appoint the board of directors of
the Western Research Institute. And the president of the
University of Wyoming or that person's designee is to serve on
the board, and that's why I serve on the board. I am the
president's designee.
As we develop this energy school, it is very logical to
think about the strengths that WRI has and the strength that
the University has. All universities are strong. Restrictions
are strong in fundamental research, and that is the research
that looks down the road a fair distance. But that research, in
order to be important, must be brought into economic reality.
It must be placed into businesses. It must be done in such a
way that it can actually be deployed and therefore employ
people using it.
WRI is very good at moving concepts, fundamental concepts,
into the applied arena and then all the way up to pilot or
demonstration scale projects. And so I see the relationship,
one, being as a provider of fundamental research and WRI's
serving as a site where this fundamental research can be moved
into the applied realm. That doesn't mean that WRI doesn't do
fundamental research on its own, but the University is such--a
much larger research entity than WRI. More research will come
out of the University just because of size. But WRI has
significant applied technology based tools and infrastructure
like this utility boiler that can be used and other things in
examining a whole bunch of issues.
One of the things that, for example, we're very interested
in is in catalytic membranes. Several people have spoken about
these kinds of new technologies. We are also very interested in
catalytic membranes. We have developed our own proprietary
patented catalytic material and placing it into a membrane
whereby the flow through process can occur, that is you react
it as the combustion gas moves through and then separate it at
the same time, is extremely important and really improves the
efficiency of these things. That's fundamental research and
then it becomes how you place it into a functioning technology.
Senator Thomas. That's great. And you have had research of
course, and we've worked with you in the past and you've gotten
a considerable amount of dollars there for WRI and for the
University, for the Rocky Mountain Research Institute and all
those things, but of course we haven't really been recognized
as having facilities to do a great deal of--now do you see the
Energy College as being an energy research center?
Dr. Gern. I do. The School for Energy Resources, like I
said, will have three major components, all aimed at supporting
energy related technologies out of the University. We are
hoping to hire 12 distinguished professors as soon as we can.
Now think about this. These are the nation's, or maybe the
world's experts in areas of energy and we will have the
capability, the financial capability of hiring these people and
bring their expertise to the Laramie campus. I think that that
bodes well for our ability to continue to develop new
technologies and continue the applied route for these
technologies, and we're very happy about that.
Another piece of this is something that is not often
considered, but the Wyoming legislature did consider it. And
that is they provided us $1 million a year of matching funds to
go after Federal projects, DOE projects. And as you know, there
is always a significant match requirement when you work with
the Department of Energy and this million dollars is going to
make us very competitive.
Senator Thomas. Very good. Very good. We appreciate that.
That's great. Well thank you all very much for your input and
we appreciate it. I hope you'll all stay seated for a moment
because I want to visit with you a little later. But for those
of you who may be interested, all the statements that are given
today will be posted on this Energy Committee's website, so if
you want more of this information, you can find it there.
From this testimony there may be some questions sent to
some of you and I hope you'll respond to them and they will be
put in the record. So, without any further ado, I'll adjourn
the official meeting of the committee.
[Whereupon, at 3:06 p.m., the hearing was adjourned.]
APPENDIX
Additional Material Submitted for the Record
----------
Statement of Fred Lawrence, President, Carbon Recovery Technology,
Inc., and Dr. Ronald W. Spahr, Professor and Department Chair,
University of Memphis
TRANSAMERICA GRID (TAG) PROJECT
The TransAmerica Grid (TAG) Project is a comprehensive, strategic
plan to construct a high voltage AC and/or DC transmission system that
would link the wind and coal rich western and great plains states with
the large electrical load centers to the east (Chicago, St. Louis,
Memphis), the west (Los Angeles and through the Pacific Intertie, San
Francisco and the Northwest), and the south (Phoenix, Tucson, Houston,
Dallas/Fort Worth). The TAG concept has evolved from discussions within
the utility, transmission, wind and coal industries and among state
officials in the West and Midwest over the past 15 years. It addresses
many of the concerns that currently face the U.S. power industry:
(1) It provides access and facilitates utilization of up to 10,000
MW of wind-power resources of the Dakotas, Colorado, Kansas, Montana,
Nebraska, New Mexico, Oklahoma, Texas, Wyoming, and other wind-rich
states;
(2) It provides access and facilitates utilization of up to 14,000
MW of plentiful clean low-sulfur coal/lignite resources of Colorado,
Montana, North Dakota and Wyoming;
(3) It relieves transmission constraints and bottlenecks that exist
in the West, Southwest, Midwest and Texas;
(4) It would create synergies by linking the East, West, and Texas
grids and would also link energy abundant regions with load centers;
(5) It enhances the deregulation of the U.S. power industry by (a)
providing new and existing generation with better access to new
markets, and (b) tying in the Eastern, Western and Texas electrical
grids, thereby creating a more efficient, essentially national market
for electrical power;
(6) The proposed system would provided nationally generated power
to accommodate regional demand peaks, diversify weather-related and
hourly peak loads across the country, providing higher utilization of
efficient power generation and reducing the need for standby peaking
generation capacity;
(7) It diversifies seasonal and daily peak loads among load centers
in the country, thereby reducing further the need for standby peaking
generation capacity,
(8) It provides for the diversification of renewable (wind, hydro,
and solar) electrical generation to increase the reliability of
renewable power; and
(9) It stabilizes and improves the reliability of the entire
electrical grid system in the U.S.
The TransAmerica Grid project is a huge undertaking--in many ways
comparable to the construction of the U.S. interstate highway system in
the 1950's and 1960's. However, unlike the highway system, the TAG
project will generate revenues from tariffs on the power that it
transports. These revenues are estimated to be in the range of $2
billion per year. Although the system itself is estimated to cost $11.7
billion, once in operation, revenues will allow the system to generate
a positive net present value in as little as 5-6 years. To develop the
concept more fully into an actual blueprint with more precise cost and
revenue projections will require a comprehensive feasibility study.
Funds from the U.S. Congress are currently being requested by the
University of Memphis for partially funding this study.
LAWRENCE GENERATION STUDY
The Lawrence Generation Project proposal is a component of the
Trans-America Grid (TAG) Project, a long-term energy master plan to
provide greater generation capacity and a stronger electrical grid in
the central and western United States. It is proposed that the Lawrence
Generation Project provide electrical power for consumers in Colorado
and California. Power would be transmitted by transmission lines
proposed by Trans-Elect, Inc and Wyoming Infrastructure Authority, the
TOT 3 line to Colorado, and to California by a modified version of the
currently proposed Frontier Line or the proposed Northern Lights Line.
These new interstate high-voltage electric transmission line proposals
grew out of work done as part of the Rocky Mountain Area Transmission
Study (RMATS).
The Lawrence Generation Project is located in the Powder River
Basin, Johnson County, Wyoming. Property, owned by Lawrence Land
Company, contains approximately 7,500 acres with in excess of 500
million tons of coal and a second property contains approximately 11.8
billion tons of coal. The project is expected to generate 2,800 to
3,000 MW of new clean almost zero emission, electrical power by using
either a conventional Pulverized Coal Rankin Cycle or by utilizing the
newer Integrated Gasification Combined-Cycle (IGCC) technology. Either
alternative is expected to capture carbon dioxide (CO2) and
other harmful emissions. The CO2 will be used for enhanced
oil recovery, thus sequestered. CO2 flooding has been
described as the most cost-effective method for extracting the final
amounts of recoverable oil from depleted fields. Enhanced oil recovery
will significantly increase production of crude oil in older producing
fields and significantly prolong productive lives of the fields in
which it is applied.
______
Statement of E.G. Meyer, Laramie, WY
It is important to properly define the categories of ``clean coal
technologies''. For example, gasification and subsequent use of the CO
and H2 either for an IGCC power generation or for an FT reaction to
produce liquids is a form of a CCT. Likewise, boiler and burner
configurations to lessen emissions are another form of CCT as is
treatment of flue gases. Chemical refining of coal to produce char for
fuel, chemicals for feed stocks, and CO and H2 is a separate CCT
category. Thus I request that the Committee recognize these and other
distinct types of technologies and provide adequate support for them.
It is unwise to focus on a single type of CCT before knowing which ones
are the best.
______
Statement of Scott B. Smith, CEO, Western Research Institute, Laramie,
WY
Mister Chairman and Members of the Committee, thank you for
allowing me the opportunity to submit a statement for the record.
Chairman Domenici, I'd like to thank the Senate Energy and Natural
Resources Committee for conducting this field hearing in the great
state of Wyoming. In particular, I wish to offer our appreciation to
Senator Craig Thomas for his leadership on the issue of Wyoming's and
the Nation's energy future.
As the CEO of Western Research Institute (WRI), it's an honor to
highlight some of the key energy-related work Western Research
Institute is performing, largely under the auspices of and in
coordination with the Department of Energy.
INTRODUCTION TO WRI
WRI is a Laramie, Wyoming-based $8 million-per-year entity and a
multi-disciplinary team of 70+ highly skilled scientists, engineers and
other professionals. We conduct research, develop and bring to market
significant new technologies, and deliver value to private clients
through contract services.
In all we do, whether originating new technologies that attract
industrial partners or working with industrial partners to realize the
full potential of their concepts, WRI functions in partnership with
others. In fact, that is our goal: To be a preferred source that
government and industry clients go to when they seek innovative
partners and technologies in the energy, environmental and
transportation materials sectors.
Our main facilities, located on the University of Wyoming campus,
house administrative functions and 38 laboratories. Our 22-acre
Advanced Technology Center (ATC), north of Laramie, contains 15
buildings with shops and offices, laboratories, and pilot facilities.
The ATC is where most of our energy technologies get legs under them.
Western Research Institute is a 501(c)3 not-for-profit research
entity funded primarily by the U.S. Department of Energy and the
Federal Highway Administration to support these organizations' mandates
for the benefit of the Nation. Western Research Institute enjoys a
relationship with the University of Wyoming but receives no UW dollars
and no funding from the state of Wyoming. Our aspiration has always
been to be an asset to the University and, more than that, to serve the
best interests of the state of Wyoming in the energy, environment and
highway materials realms.
In the energy sector, WRI continues its efforts in coal conversion
and upgrading, power generation, waste management and utilization,
alternative fuels, environmental remediation, renewable energy
technologies, and bioprocessing.
My purpose today is to highlight Western Research Institute's
considerable work in the field of coal research and technology. WRI is
the leading energy research entity located in the number-one coal-
producing state in the Nation. I assure you this is not by accident.
Nor is it a recent phenomenon: For 23 years, WRI's proximity to the
energy resources in the western United States, especially the Powder
River Basin, has given us a heightened sense of responsibility and
purpose in how we conduct our business and set our direction. We have
made the knowledge of virtually every aspect of coal technology and use
our domain.
SUPPORT FOR TODAY'S COAL INDUSTRY
From the mine mouth to the rails
WRI has a long history of assisting the coal industry in the area
of coal upgrading. The high moisture content and resultant low heating
value of western U.S. coals affects both boiler efficiency and
transportation costs. WRI is working with Fuels Management Inc. (Miami,
Florida) to develop its mine-mouth coal drying and upgrading process.
We constructed a pilot-scale facility in our Coal Research Building at
the Advanced Technology Center and conducted tests to determine optimum
processing conditions. The technology is now ready for scale-up, and a
100-ton-per-day plant is being designed and constructed.
From the utility boiler to the stack
WRI is supporting the utilities on a number of emissions issues.
For example, WRI has built a test-scale Combustion Test Facility that
mimics a coal-fired utility boiler. This facility is now supporting
technology development and verification projects for utilities, for
coal technology companies and for combustion and emissions control
equipment manufacturers. Here are some examples of projects being
conducted:
Testing of NOX reduction technologies (with Breen
Energy Solutions)
Testing of Hg capture technologies (with Mobotec USA, Inc.)
Testing of strategies for multi-pollutant control (with
Headwaters, Inc.)
WRI has taken a lead role in policy support for air quality
regulations by creating and facilitating the Subbituminous Energy
Coalition (SEC), an organization of approximately 50 members
representing the major coal companies in the Powder River Basin,
utilities burning PRB coal, railroads serving the PRB, and other
interested parties. The SEC provides a forum for industry discussions
on environmental control issues and provides a collective voice for PRB
coal producers and users. The SEC has orchestrated a detailed review of
proposed EPA mercury rules to ensure that subbituminous coal remains an
environmentally acceptable and competitive fuel source. Members include
Arch Coal, Kennecott Energy, Peabody Energy, Basin Electric Power
Cooperative, Pacific Power and Xcel Energy.
WRI has developed a patented pre-combustion mercury removal process
that first dries the coal, then uses the hot recycle gas to remove the
mercury. Unlike post-combustion processes that remove mercury from the
flue gas, WRI's patented process removes the mercury from the coal
prior to combustion. The process has been shown to remove up to 80
percent of the mercury in Powder River Basin coal (additional mercury
is removed during combustion). Not only is this technology competitive
with post-combustion processes on a cost basis, it's also easily
integrated into a power plant, and the treated coal product increases
plant efficiency by 3-4 percent for PRB coal. What's more, the water
removed from the coal can be condensed and used at the power plant for
cooling and other uses, a considerable benefit in the arid West. A
recent economic study sponsored by the Electric Power Research
Institute showed the WRI process to be one of the lowest-cost
technologies for removing mercury from PRB coal-fired power plants. In
February 2006, WRI was notified by the Department of Energy that the
project was selected for an award to support commercial scale-up. The
DoE funding of approximately $1 million will be matched by
approximately $460,000 from industry-affiliated co-sponsors Electric
Power Research Institute, Southern Company, Basin Electric Power
Cooperative, North Dakota Industrial Commission, Montana-Dakota
Utilities, Detroit Edison and SaskPower.
As the Nation develops a Cap-and-Trade market for mercury
emissions, the importance of accurate measurement from different
sources becomes not only an environmental issue but a profit-and-loss
issue. At WRI, we are working with the National Institute of Standards
(NIST), the Department of Energy and the Electric Power Research
Institute (EPRI) to develop calibration standards and a methodology for
continuous mercury emissions monitoring. In 2005, WRI commissioned a
report from NIST that revealed that different vapor pressure formulas
used for calibrating mercury testing equipment disagree by as much as
seven percent. In March 2006, WRI spearheaded a meeting in Orlando that
attracted stakeholders from around the world to discuss the issue and
how to approach it. Last month's meeting launched the effort co-
sponsored by WRI, EPRI, the DoE and NIST to establish a NIST protocol
and new ASTM standard for calibrating monitors. In attendance were
representatives from NIST, the U.S. Environmental Protection Agency,
the EPRI, ASTM International (formerly the American Society for Testing
and Materials), and mercury analysis equipment manufacturers.
Ash management and mined lands reclamation
The power industry in the United States produces more than 100
million tons of coal combustion products, or ashes. More than 70
million tons of ash is disposed of annually, increasing the costs of
electricity and posing a potential liability to the industry. WRI is
developing new, large-volume niche uses for ash and provides technical
services to the ash management and utility industries. These include
ash-based grouts for the control of underground mine subsidence and
flowable fill materials for use in construction applications as
backfills, structural fills and trench bedding. The market for
construction-grade aggregate in the United States offers a significant
opportunity for the use of coal ashes. WRI has developed the SYNAGTM
process, which uses coal combustion ashes to produce lightweight and
standard-weight synthetic aggregate for use in construction. Partners
in the development of ash technologies have included Xcel Energy,
Montana-Dakota Utilities and the North Dakota Industrial Commission.
WRI is supporting the coal industry in mine reclamation through the
development of a novel biobased source treatment of acid mine drainage
(AMD). Although the high-sulfur coals of the East make this problem
more widespread in the eastern half of the country, acid mine drainage
is associated with hard rock mining and coal mining throughout the
United States. Other processes treat the drainage by neutralizing it.
WRI has partnered with Kennecott Energy to demonstrate the
effectiveness of the bio-based source treatment process at a mine in
Tennessee. The results to date have confirmed that the process
effectively controls acid mine drainage by controlling the source of
the acid within the mine. Additional demonstrations are being planned
with other coal companies at other mines.
Coal bed methane
Since the first commercial coal bed gas well was established in the
Powder River Basin in 1986, coal bed methane (CBM) production has grown
explosively and now constitutes a major resource within the energy mix
for Wyoming, the region and the Nation. More than 40,000 wells are
expected to be drilled in the next decade alone. The management of the
produced water, however, remains a significant consideration. When an
operator drills a CBM well, large volumes of water are withdrawn in
order to free the methane to be extracted. In some areas of Wyoming and
Montana, the water quality is such that it cannot be used for
agriculture, livestock or discharge into surface streams without
causing degradation of the water. WRI is working with developers and
others to demonstrate treatment methods that will allow the beneficial
use of the produced waters. For example, WRI is working with CBM
Associates to demonstrate an application that allows the water to be
used for irrigation purposes. WRI is also the exploring the use of CBM
produced water in power plants to reduce the draw of fresh water for
cooling and other plant purposes.
ENERGY FOR THE 21ST CENTURY
Coal
WRI is working to develop enabling technologies for zero-emissions
coal-based power plants of the future. With ``oxycombustion,'' fuel is
combusted in pure oxygen and flue gas is recycled back into the furnace
to maintain optimum burning conditions. Because oxycombustion excludes
nitrogen, the byproduct is nearly pure carbon dioxide, a waste that can
be effectively managed. The cost of oxygen, however, is a major issue
in the development of sequestration-ready power systems of the future.
Working with a specialty gas manufacturer, BOC Process Gas Solutions
(Murray Hill, New Jersey), WRI is developing a novel technology for the
lower-cost production of oxygen that takes advantage of the oxygen
``storage'' properties of the mineral perovskite. The cost of producing
oxygen using the BOC Catalytic Autothermal Reformer (CAR) technology is
estimated to be 20 to 30 percent lower than the cost of cryogenic air
separation.
WRI is developing new catalysts and related synthesis technologies
to produce transportation fuels. One such technology converts any
carbonaceous feedstock into a mixture of alcohols. Imagine a power
plant using Wyoming coal as the feed. With the WRI process, the plant
would not only produce electricity but also an alcohol mixture ready
for blending with gasoline. This mixture of alcohols could replace
MTBE, could supplement the Nation's ethanol supply, and could serve as
a chemical feedstock. Used in conjunction with coal gasification, this
synthesis technology is a coal-to-liquids technology. As a biogas-based
system, the technology provides a means of capturing and converting
greenhouse gasses into a useful product.
A hydrogen project now underway at Western Research Institute and
the University of Wyoming is expected to yield a cheaper and easier way
to produce pure hydrogen from gasified coal and other mixed gases. The
new process advances the water--gas shift process whereby coal is
reacted with steam (water) and oxygen to produce a synthesis gas. Under
a U.S. Department of Energy grant, WRI and the University of Wyoming
are developing a device that combines water--gas shift technology with
improved hydrogen separation to maximize the total hydrogen produced.
The University of Wyoming is leading the development of a ceramic
catalyst, while WRI will test a variety of vanadium alloy foil
membranes for durability and optimum effectiveness at lower
temperatures. Finally, the ceramic catalyst and the vanadium membrane
will be integrated into a single stackable device that can operate at
lower temperatures.
Other significant WRI energy technologies
WRITE, WRI's Thermal Enhancement technology, is being developed and
tested for upgrading heavy oils, specifically to upgrade the thick,
carbon-rich bitumen produced from oil sands such as those found in
Canada and Venezuela. An estimated 1.7 to 2.5 trillion barrels of oil
lies within the oil sands of Alberta, making it the world's largest
known oil reserve. The bitumen produced from oil sands, however, must
be either diluted or upgraded to meet the specifications for transport
by pipeline to refineries. The WRITE Process is a field upgrading
technology, which is fueled by internally generated coke and which uses
a distillation step to produce a pipeline-ready material. WRI's partner
in the technology development is MEG Energy of Alberta.
The U.S. Department of Energy has traditionally promoted large-
scale gasifier technology development while U.S. Department of
Agriculture research has concentrated on fermentation methods such as
those used to produce ethanol. Most agricultural feedstocks, however,
are not suited to the production of biofuels by fermentation, and most
biofuel development efforts don't address the needs of farmers. With
both the DoE and the USDA as partners, WRI is pioneering a farm-scale
gasification system that can address agricultural waste disposal and at
the same time make every farmer an energy producer. For example, the
grass seed producers of the Pacific Northwest currently have a 6.2
million ton waste grass disposal problem. Assuming they produce one or
two tons of waste straw per acre and the new process produces 60
gallons of liquid fuel per ton at $1 per gallon, they could be adding
372 million gallons of liquid fuel worth $372 million into the Nation's
net fuel production. Similarly, the farmers could use the same process
to produce $87 million worth of electricity.
GUIDING PRINCIPLES AND CONCLUSION
WRI believes with the U.S. Department of Energy that domestic coal,
oil and alternative resources can contribute substantially to our
Nation's economic strength, energy security and quality of life through
the 21st century.
The Cooperative Research Program under which WRI performs most of
its energy-related work was established to stimulate research in
support of the mission of the Department of Energy Office of Fossil
Energy. Western Research Institute supports this mission by developing
technologies that promote the development of secure and reliable
domestic energy supplies, clean power generation, and the production of
hydrogen from domestic coal and natural gas. As a public/private
research initiative, the program leverages DoE funding, ensuring that
the demand for energy innovations is validated by private funding.
Western Research Institute is grateful for the vision of this
Committee and we are deeply appreciative of the support you give to the
annual appropriation that funds the Department of Energy's Cooperative
Research and Development Program. This is the Program that enables WRI
to perform our work for the benefit of Wyoming and the Nation. The
Program has been very successful in recent years because it helps
establish a solid partnership with end users, thereby ensuring that our
limited R&D dollars are at work in areas that foster energy
independence and that industry and the American public find relevant
and commercially worthwhile.
This testimony is respectfully submitted on behalf of the Western
Research Institute team shown below.