Resource World Magazine

62 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 4 e p i l o g u e D a v i d D u v a l T hese are tough days to be in the min- ing business, especially the coal sector where global demand for thermal coal in particular continues to drop in the face of an oversupplied market and reduced demand from emerging markets. Things could hardly get worse in China where Reuters reports that slowing consumption growth is unable to absorb sustained capacity increases and rising imports. In the United States, the coal industry has faced increased competition from natu- ral gas, much of it from shale-based sources where supplies are seemingly unlimited. Ironically, the lack of pipeline infrastructure in places such as North Dakota has resulted in much of this gas being flared, a practice that is easily visible from outer space. The emergence of renewable energy technologies and new environmental regulations saw US coal production fall in 2013 to the lowest levels since 1993, according to the Energy Information Administration (EIA). Domestic coal consumption in the US is slated to decline by a further 2.7% in 2015 as federal standards requiring power plants to reduce air pollution are imple- mented. US coal consumption peaked in 2007 and has declined nearly 37% since then, EIA data shows. Thermal coal, the primary fuel used to generate electricity throughout the world, has fallen by almost 70% from an all-time high in 2008; and analysts believe that further weakness is in the cards. Bank of America Merrill Lynch predicts that the existing global supply overhang will per- sist, putting further pressure on prices. For the moment at least, thermal coal demand and pricing in Europe reflects a particularly unique set of political circum- stances. Bucking a global trend, European physical prices have actually risen of late because gas supplies to Europe via Ukraine from Russia were disrupted this year, pushing up demand for coal. European coal for delivery in October to Amsterdam, Rotterdam and Antwerp was recently priced at $76.50 a tonne, a premium over Australian coal of around $10.25 a tonne, making it economically attractive to ship coal to Europe from Australia. China has been trying to reduce the share of coal in its overall energy mix and has been closing coal-fired power plants in smog-hit regions like Beijing. Emissions of carbon dioxide (CO 2 ) and environmentally damaging particulates into the environment from coal generating electricity plants have become a politically charged issue throughout the world, providing the impetus for increased research into clean coal technologies. A solution might well be at hand to solve the problem and it involves a unique carbon capture system at SaskPower near Estevan, Saskatchewan. Carbon capture and storage (CCS) can cut up to 90% of CO 2 emissions from power plants. However, with more than a dozen false starts to date, the technology has yet to be demonstrated on a commercial scale. In North America, there are actually two such commercial-scale power plants enter- ing the final stages of construction, one in Mississippi and the other at Estevan. So far, these plants have made it farther than any other carbon capture demonstration proj- ect to date. If they come online as expected and meet expectations concerning oper- ating performance, they could accelerate development of other CCS-equipped plants around the world. SaskPower's $1.35 bil- lion Boundary Dam Project is by far the cheaper of the two. It will see the integra- tion of a rebuilt coal-fired generation unit with carbon capture technology, resulting in low-emission power generation. Next year, it is expected to become the world's first post combustion coal-fired CCS project. SaskPower expects the project will trans- form the aging Unit #3 at the Boundary Dam Power Station near Estevan into a reliable, long-term producer of 110 mega- watts (MW) of base-load electricity, while reducing greenhouse gas emissions by one million tonnes of CO 2 each year. That's equivalent to taking more than 250,000 cars off Saskatchewan roads annually. The captured CO 2 will be transported by pipeline to nearby oil fields in south- ern Saskatchewan where it will be used for enhanced oil recovery. The CO 2 that is not used for enhanced oil recovery will be stored in the Aquistore Project, a research and monitoring project that is intended to demonstrate that storing CO 2 deep under- ground is safe. The CO 2 will be injected 3.4 km underground into the Deadwood Sandstone Formation which is below the Williston Basin, a sedimentary basin that is made up of many layers of porous and non-porous rocks. Whether this storage system is replicable at other power gener- ating sites is still an open question. In addition to CO 2 , there will be oppor- tunities for the sale of other byproducts from the CCS project. Sulphur dioxide (SO 2 ) will be captured, converted to sul- phuric acid and sold for industrial use. Fly ash, a by-product of coal combustion, will also be sold for use in ready-mix concrete, pre-cast structures and concrete products. Coal-fired power plants offer signifi- cant cost advantages over other energy sources including natural gas and nuclear. However, coal will have to clean up its act to remain an economically viable option to other forms of power generation. n Clean coal technology best option to ensure economic viability of coal-fired power plants

• Cover