Atty. Gen. Salzburg: We are discussing the whole panoply of issues that the project presents. Specifically, we are working on a Joint Development Agreement which will address the rights and obligations of each of the parties as we go forward regarding such things as: how the project will be funded; the structure of ownership and leasing of the facility for research to be conducted by GE, UW and other parties; creation of a joint entity to address issues which arise during the engineering, design and construction of the facility; definitions of intellectual property owned by the parties and how the IP will be protected; licensing of technology; siting; permitting; and others.

WyoFile: What are the key issues on the table? What level of control will Wyoming have over the research and the resulting intellectual property? In other words, What does Wyoming have at stake?

Salzburg: All of the above are important.

A significant portion of Wyoming's economy is tied to our coal wealth. Currently, almost 40% of the nation's electric power generation is fueled by Wyoming coals. We export some 450 million tons of coal per year. While Wyoming's coal is attractive for its low sulfur content, coal-burning power plants also contribute to the increase in atmospheric greenhouse gases, and the regulation of carbon emissions in this country is clearly needed. It is important to Wyoming that its coal be able to compete in a carbon-constrained marketplace.

   One technology that is promising to address greenhouse gas emissions is IGCC (Integrated Gasification Combined Cycle), a technology which requires gasification of the coal prior to combustion for production of steam. Bituminous coals are currently used in this technology using a slurry feed, however, because Wyoming Powder River Basin coals are relatively high in moisture and relatively low in BTU content, gasification of our coals for use in IGCC power plants presents technical problems which have not been fully addressed to date. The proposed facility is intended to provide the means to address and resolve those problems.

   GE is a world leader in IGCC technology– it has proprietary technology related to gasification of coal, as well as proprietary technology for the dry feed of coals into a pressurized vessel.

   UW has conducted research into removal of hazardous constituents of coals prior to feed; the use of certain catalysts to produce other useful products from synthesis gas, and the removal of carbon dioxide from synthesis gas prior to combustion. This latter research promises to facilitate the capture of carbon dioxide far more efficiently and economically than technologies currently available, or in development, to remove carbon dioxide from emissions after combustion.
If, through this project and the research that is planned, the facility is able to develop an economical and efficient way to gasify Wyoming coals for use in IGCC power plants, and to capture carbon dioxide prior to combustion so that it can be geologically sequestered or used (for example, for enhanced oil recovery), and to develop additional catalysts to create other useful products from synthesis gas, Wyoming's coal will continue to be a viable (and valuable) commodity for many years to come. For Wyoming, success in doing so will help to preserve our economy and a significant portion of the State’s tax base, and allow us to simultaneously address issues related to the climate and environment.

   From the standpoint of the University, the project will provide the necessary facilities for education and further research well into the future.

WyoFile: We understand that you have taken the lead in negotiations on behalf of the state but that you have also retained outside counsel from Denver.

Salzburg: I have been asked to serve as a facilitator in the discussions to try to make sure that issues which arise are addressed in a timely fashion.

   The University has retained Hogan & Hartson to provide specialized expertise which is not available through the Office of the Attorney General, or the University's General Counsel. Specialty areas of the law include intellectual property rights, and structuring of public/private partnerships.

WyoFile: What are some of the precedents you look to in representing the state and the University of Wyoming in this regard. For example, are the recent negotiations between the University of California and British Petroleum over the half billion dollar alternative energy research program there relevant?

Salzburg: I am generally aware that BP gave UC Berkeley $500 million for development of a facility to study biofuels, and that there was much adverse criticism of the University for associating with a company which had a spotty environmental record, and for ignoring the scientific evidence that production of biofuels actually adds to atmospheric carbon, however, I am not privy to the details of the relationship between BP and the University, nor whether these or other criticisms were justified.

One reason that the University has hired specialty counsel to assist with the project is their experience in this sort of project and the issues which commonly arise. We rely on their expertise in the applicable law and their prior experience.