Peabody Energy, one of the largest privately held coal companies in the world, is making a move into the natural gas market after agreeing to become a minority investor in GreatPoint Energy Inc. GreatPoint is commercializing its "bluegas" technology to convert coal, petroleum coke and biomass into pipeline-quality gas.
As part of the agreement, St. Louis-based Peabody and GreatPoint plan to "evaluate the potential" of joint coal gasification projects using Peabody reserves and land, with a focus on the Powder River Basin of Wyoming. Peabody's coal products fuel about 10% of all U.S. electricity generation and more than 2% of worldwide electricity, and its three Powder River Basin mines operated at peak levels in 2006, shipping a record 138.4 million tons of coal and loading 9,200 trains.
"Using GreatPoint Energy's technology to turn coal into natural gas while capturing carbon will provide a clean coal-based alternative to expensive natural gas imports, while using Peabody's industry-best reserve position," said Rick A. Bowen, Peabody senior vice president of Btu conversion and strategic planning. Peabody did not disclose financial details of the agreement.
GreatPoint claims its proprietary process captures mercury, sulfur, carbon dioxide and other pollutants from the coal feedstock to produce "a pure stream of methane." Bluegas, it said, is as clean as natural gas and may be used directly in place of conventional natural gas for all applications, including power generation, residential and commercial heating and chemical production. GreatPoint completed a pilot of the technology at a facility in Des Plaines, IL.
Peabody said its coal-to-gas projects would help to build energy security and "ease reliance on expensive natural gas imports," i.e., liquefied natural gas. The company also said it is "leading technology initiatives around the world to achieve near-zero emissions from coal with carbon capture and storage through voluntary partnerships" that include FutureGen in the United States, GreenGen in China, Coal21 in Australia and the Asia-Pacific Partnership.
GreatPoint, headquartered in Chicago, said including Peabody, it has raised more than $137 million from investors that include Suncor Energy Inc., Dow Chemical Co. and AES Corp.
In October Dominion said its Brayton Point Power Station in New England would be the site of a large-scale demonstration project by GreatPoint (see NGI, Oct. 29, 2007). Brayton Point is New England's largest fossil-fueled power station with a total net summer capability of 1,568 MW. The plant is about 30 miles south of Boston and 13 miles east of Providence, RI, and is capable of burning coal, natural gas and oil.
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