A flagship “clean coal” plant is a flailing mess. Does that mean the technology is doomed?

On Monday, Ian Urbina of the New York Times published an epic investigation into the breathtaking fiasco that is the Kemper "clean coal" plant in Mississippi. Everyone should read it.

The Kemper project was supposed to be a lifeline for coal in a world that's inching toward low-carbon energy. Owned by Southern Company, the plant aimed to convert coal into synthetic gas, burn it to create electricity, and then capture the waste carbon dioxide and bury it underground rather than let it waft into the atmosphere. Fewer CO2 emissions, less global warming. Or at least that was the hope...

But Kemper, a first-of-its-kind demonstration project, has been a flailing mess. It’s now more than two years behind schedule and costs $4 billion more than its original $2.4 billion budget. As Urbina reveals through interviews and leaked documents, the project has been plagued by horrific mismanagement by Southern Company: shoddy construction, lack of planning, lack of oversight. And Mississippi’s ratepayers now have to pay for these missteps.

You can find all the grisly details in Urbina’s piece, but I do want to offer a few big-picture thoughts on what Kemper’s woes might mean for energy and climate change more broadly:

1) The Kemper project is just one example of carbon capture and storage (CCS), a catchall term for techniques in which CO2 is captured at an emission source and then sequestered underground. But CCS can come in many flavors, which makes generalizing from a single project tricky.

Worldwide, there are 15 CCS projects currently in operation and 7 more on the drawing board. Four are coal plants, but there’s also a natural gas processing plant, an iron/steel facility, a fertilizer plant, an ethanol plant, and so on. And they often use very different technologies to capture and/or store the CO2:

2) Southern is focused on only one piece of this: making CCS work for coal-fired power plants. The dying US coal industry is obviously eager for this technology to pan out. And numerous analyses have found that it would be nice to develop coal CCS, since it'd give us more options for decarbonizing the electric sector. (It may prove cheaper to retrofit China's existing coal plants than to retire them early, for example.)

But coal CCS isn’t absolutely essential for halting climate change. There are, after all, other low-carbon sources of electricity available, such as wind, solar, hydro, and nuclear. If coal CCS fails, it’s not game over.

3) By contrast, getting CCS to work for industrial facilities does seem rather essential. Steel, iron, cement, and chemical facilities produce around 20 percent of the world’s CO2 emissions. And, right now there are no great low-carbon alternatives for those processes. If we truly want to zero out the world’s greenhouse-house emissions, we’ll likely have to get some sort of industrial CCS to work.

4) So when thinking about Kemper’s struggles, we want to separate out a few big questions. Is the Kemper debacle an outlier? Or is it indicative of broader problems with coal CCS? And if coal CCS is doomed, does that mean industrial CCS is doomed, too? Let’s take these in turn.

5) Urbina’s investigation suggests that a great many problems with Kemper were project-specific, stemming from Southern’s mismanagement. Construction started before the plant was even 15 percent designed. Officials put forward misleading timetables in order to qualify for hundreds of millions of dollars in federal subsidies. Mississippi Governor Haley Barbour shifted the financial risk of the plant onto ratepayers. Oversight was lax. So much went horribly wrong.

6) It’s also worth noting that Kemper was unique in pursuing not one but two different first-of-a-kind technologies together at the same time. First, it used integrated combined gasification cycle (IGCC) technology to convert poor-quality lignite coal into synthetic gas in order to make the waste CO2 easier to capture. IGCC is an extremely complicated process, and, according to Urbina, various engineers blamed this component for driving up the plant’s costs. (Note that a different IGCC plant built in Indiana also suffered cost overruns.) That was all in addition to the carbon capture portion, which is tricky in its own right.

7) So maybe Kemper was an outlier. This particular combination of IGCC + CCS may prove doomed — the construction and operating costs may just be too high to be worth the effort. But there are other coal CCS technologies out there. For instance, the Petra Nova coal CCS plant that’s currently under construction in Texas doesn’t use IGCC at all.

8) That said, I don’t want to be too rosy about coal CCS. The technology faces some serious challenges overall. For starters, any plant that captures and buries its CO2 will always be more complex and costly than a counterpart that simply dumps its carbon into the air. Among other things, capturing CO2 usually requires a lot of extra energy — an issue known as "parasitic load."

That means coal CCS can’t ever possibly compete against conventional coal without the aid of carbon pricing or regulations or subsidies. Southern plans to offset some of Kemper’s extra cost by injecting the CO2 into old oil fields in order to recover some previously inaccessible crude oil (a technique known as enhanced oil recovery). But this clearly isn’t a long-term climate solution. At a certain point, someone will have to pay extra to store the CO2 underground permanently.

9) Coal plants with CCS also tend to be big, complex projects — and hence more vulnerable to delays and cost overruns. The Two Elk Energy Park, a long-delayed coal CCS plant in Wyoming, suffered from these exact issues. And similar problems are bogging down many large nuclear plants. Better project management can help, but it may not solve all of coal CCS’s cost problems.

10) Again, though, coal CCS isn’t the only CCS out there, and there are other methods that may prove more fruitful — particularly for industrial facilities. In Iceland, researchers recently demonstrated a technique to mix CO2 exhaust with water and inject it directly into deep basaltic formations, where it turns to stone within two years. That technique doesn’t require as much extra energy for the capture process (though, on the downside, basaltic formations aren’t ubiquitous and you’d have to transport the CO2).

Alternatively, check out Net Power’s attempt to build natural gas power plant in Texas that uses an Allam Cycle to capture the waste CO2 without a huge loss of efficiency or major increase in parasitic load. There’s no guarantee any of this will work; this is just to say there’s more to CCS than Kemper.

11) By the way, if we built biomass plants that used CCS to sequester their carbon, those could in theory suck CO2 out of the atmosphere — a technique known as BECCS that may be necessary to avoid some of the more extreme global warming scenarios. That's another reason to keep exploring the technology, even if Kemper's a total bust.

12) Separately, Urbina’s piece highlights the pitfalls of regulated utilities with poor oversight. Like many states in the US South, Mississippi has an electricity sector that’s still tightly regulated. Southern Company is a monopoly that owns both generation and distribution in the state, and it can pass on costs to ratepayers with approval from regulators.

Those regulators tend to be pretty deferential to Southern. When Kemper’s price tag started shooting up in 2012, Southern could simply pass that on to ratepayers, via a 13 percent hike in electricity bills.

In deregulated states, by contrast, power generators have to compete with each other to provide electricity to the grid. A project like this one, with jaw-dropping risks and endless overruns, would simply sink the company in charge. There are arguably pros and cons of both systems, but we’re seeing the downsides of regulated systems here.

13) Another question is how Kemper’s woes might affect the EPA’s recent carbon rules for new power plants in the United States. Under those regulations, any company proposing to build a new coal plant will have to install CCS technology to capture some of its emissions. EPA justified this requirement by saying that CCS had been "adequately demonstrated," pointing to (among other things) the Kemper project. Some legal experts have wondered if Kemper’s failure might make this rule more vulnerable in courts.