Coal Connections: Wyoming-Chinese delegation tout solidarity on cleaner coal

There is no easy shortcut getting from Wyoming in the United States to Shaanxi Province in the People’s Republic of China – they are opposite each other on the globe, and even on the fastest, pole-straddling aircraft you must strap in for a full day of travel. The geographic distance underlines the way China is viewed by many Americans, as the most foreign of foreign countries – indecipherable language, undemocratic government, drone-like workforce, indifference to environment, and a government-driven economic plan to dominate the world.

But the lingering impression from a week-long June conference on coal that brought Australian, American and Chinese scientists and politicians together in China’s Shaanxi Province, is that these countries, with their substantial coal reserves, surprisingly have a lot in common, and a lot to learn from each other in their efforts to keep the world’s dirtiest fossil fuel viable as an energy source in a carbon-constrained world.

One thing the Chinese have in common with Americans is a belief that the rest of the world pays close attention to what goes on in their country – a reasonable assumption in a nation of 1.3 billion that has undergone in a decade an industrial revolution that took the developed world a century. China is now one of the three leading economies – and fastest growing – in the world. So, naturally, a hospitable Cantonese businesswoman – her company makes knives and flashlights and runs private kindergartens – assumed I follow attentively the vigorous Chinese debates in recent years about free speech, raising the retirement age, and air pollution – when in fact, like most Americans, my fix on China is rooted in the repression of the Tiananmen Square protests 20 years ago. Maybe it’s time we got up to date.

The “Third International Advanced Coal Technologies Conference” was the work of the University of Wyoming’s School of Energy Resources (SER) and the Shaanxi Provincial Institute of Energy Resources and Chemical Engineering, with support from the U.S./China Clean Energy Research Center and the Commonwealth Scientific and Industrial Research Organization of Australia, which hosted the first such conference in Queensland, Australia, four years ago.

While Wyoming and Shaanxi are a match of sorts – both with big coal reserves, located in their country’s “West,” and very pro-development (not so similar in population: Shaanxi 38 million; Wyoming 570,000) – there is a marked contrast in the way their respective national governments view coal. China’s supreme State Council and its economy-managing National Development and Reform Commission are fully committed to a future with coal – they have to be, with growth of industrial- and consumer-demand for electricity moving at breakneck speed, and an emphasis on “security” that inclines them to rely on their only abundant domestic energy resource — coal — rather than import other fuels.

But Wyoming’s coal-boosting delegation in Shaanxi – including Gov. Matt Mead, SER chief Mark Northam, and likely 2013 Wyoming House Speaker Tom Lubnau – feel no such love from their federal government. That was underlined by the meager smattering at the conference of federal energy officials, led by James Wood, Deputy Assistant Secretary at the Department of Energy’s clean coal section in the Office of Fossil Energy. Wood seemed a bit lonely among the Wyoming scientists, businessmen and politicians, who unanimously decried the Obama administration’s lack of enthusiasm for coal, or even the pursuit of “clean” coal. Wood, who did not stay for the full conference, touted several DOE funded projects meant to advance carbon capture in coal-fired energy over the next decade, but he told me he too was troubled by the U.S. Environmental Protection Agency’s tough new air and mercury standards for power plants, which many think are designed to block any new coal power plants in the U.S.

The coal technology race

Let’s set aside the politicians and the policy for the moment, and look at the science and the industry – because, really, you can’t avoid seeing it everywhere you look in Shaanxi province. Much has been made of the air pollution coal (and gasoline combustion) has deposited in the thick air of Beijing and other cities, but not many see the industrial edifice that is engulfing China’s West.

There are factories churning out trucks, televisions, aircraft and pharmaceuticals. There are cooling towers everywhere, and huge campuses where coal is being transformed into chemical feedstocks. There are massive buildings going up for no discernible purpose, except to keep busy the swarms of workers that wander to and fro on the building sites. Conference attendees flew north to Yulin, on the edge of Inner Mongolia, to look at sprawling new complexes devoted to using coal in every which way – for energy, for agriculture, for textiles, for Styrofoam packing peanuts.

The reason? China has coal in abundance, but not (so far) much else. In an interview, Prof. He Yungde claimed that 96 percent of China’s energy supply comes from coal – he meant 96 percent of power plants burn coal, but translations often missed fine distinctions – and the country now has to import oil for vehicles. Hence the emphasis on electric cars and processing chemicals from coal, something the U.S. has neglected. “And just about anything you can derive from oil, you can derive from coal,” points out Mark Northam, director of SER.

That sort of “value-added” use of coal – the jobs and dollars it could bring – is the envy of Wyoming, where, as Northam puts it, we merely “dig and ship” coal (and natural gas, and helium, and …), making the state vulnerable to booms and busts it can’t control. But you’re not likely to see Shaanxi’s vast science fiction-like tangle of pipes and stacks and boilers in Wyoming, with its small workforce and the high cost of delivering products and energy to population centers – not to mention (and it wasn’t mentioned much, here) the high value placed on Wyoming’s clean skies and open landscapes.

Still, the “value added” projects are at least one area where Wyoming officials and scientists may have something to learn from China – they are way ahead of us in squeezing every bit of value out of a lump of coal. Also useful: modern power plant technology and design (China has shut down many of its smaller, antiquated plants) that can be built in America, where most of the coal-fired production is aging and antiquated. The new plants are not “clean,” though, and the cost of making them so is prohibitive in China as well as the U.S. These coal scientists and coal-state politicians are generally gloomy about the Obama Administration and the EPA, but they hold out hope that, as Gov. Matt Mead said, “We cannot leave out the tried and true. With growing energy demands this is not the time to be subtracting from the kind of energy we use.”

No one is subtracting coal from the energy mix in the developing world, which is why this was also a trade mission for Mead – if he can get Wyoming coal through the green gate of America’s Northwest shipping ports, the Chinese are eager to buy: it’s actually cheaper (and presumably cleaner) than moving coal from Shaanxi to the nation’s coastal population centers. That’s also why research into “clean”  coal (banish that impossible term – now the phrase is “advanced coal technology”) continues apace. None of the technologies described at this conference provides a miraculous affordable “clean” coal, but many researchers are convinced that coal could be used with as little pollution as natural gas — if we could afford the cost of cleanup.

And the action on “advanced coal technology” has clearly shifted to China. General Electric, which recently backed out of a $50 million match with the University of Wyoming to build a coal gasification pilot plant, recently agreed to put twice that into gasification projects with the Shenhua Group Corporation of China.

So even if coal’s future in the U.S. is uncertain, there is plenty of interest, and funding, for coal-related research, and some of it was highlighted at the Xi’an conference. Translators who sometimes mangled in amusing ways toasts and greetings among participants, probably found the chemistry and engineering details much harder than Mandarin. It’s fascinating and complex stuff, and here are a few examples:

• Larry Baxter of Brigham Young University is developing a cryogenic (freezing) process that can be retrofitted to existing power plants, which purports to capture CO2, sulfur, metals and other pollutants from flue gases at a relatively low cost
• Hua Wei of the Shaanxi Coal and Chemical Industry Group described a new gasification demonstration plant using technology that transforms coal into a traditional petroleum chemical product, olefin, with a double carbon-to-carbon bond, involving overlapping atomic orbitals (was that lost in translation?)
• Mohammad Piri, of SER, is making a name in carbon sequestration circles with his laboratory studies of the flow of injected gasses in various types of rock, using the new super computer outside Cheyenne to create predictive models.

Piri’s work illustrates that not all the action is in China – in fact, the Chinese envy the work on carbon sequestration in the U.S., as well as the use of CO2 in the U.S. for enhanced oil recovery. They are eager to tap experts like Wyoming geologist Ron Surdam to help them model their own potential sites, particularly in the Ordos Basin in Shaanxi. China, despite its reputation for rapidly expanding its coal-fired power plants and polluting its and the world’s air, has suddenly embraced the issue of global warming and set new standards for carbon reduction – including a 40 percent reduction in energy intensity (a ratio of energy use to Gross Domestic Product) by 2020.

These goals – and an unqualified acknowledgment of man-caused climate warming – are in the Chinese government’s 12^th Five Year Plan. The plans are not just central government window-dressing, according to Deborah Seligsohn of the non-profit World Resources Institute in Beijing, who says the commitment to reducing pollution from China is real. It was a theme I heard repeatedly among the researchers at the conference. “The U.S. is way ahead on environmental issues, and China must improve,” said Lifa Zhou, the director of the Shaanxi Provincial Institute of Energy Resources and Chemical Engineering, as we talked after dinner in Yulin, through a translator.

Zhou, like many other Chinese scientists I met, was surprisingly open about the problems his country faces. He talked about growing income disparity in China as its most serious problem. I asked him if China’s rapid economic expansion could collapse like the U.S. housing bubble, and he answered, “Stability is badly needed, and you must have a middle class.”

Experts say that, in fact, there’s little chance of collapse, in part because China’s expansion is paid for in cash – trade imbalances have fattened the government’s coffers. And China – Communist China! – also makes the hearts of capitalist investment bankers beat fast. The $8.1 billion chemical and power plant campus we toured was owned by the Shenhua Shaanxi Guohua Jinjie Energy Sources Co., Ltd., with investors from Japan, Germany, South Korea, and Switzerland contributing $1.6 billion. When I asked where the other $6.5 billion came from there was a quick huddle among Chinese officials, and then the translator said, “From the banks.” Which banks? I asked. Another huddle. “Domestic banks,” she said brightly. For the rest of the tour, Chinese strangers at each stop would come up to me whenever I had my notebook out and lean in to read along, unabashed.

The new coal-fired industrial sites we visited were towering, stark, steaming, dusty, metallic, all greys and browns, stretching for miles (one of the energy “parks” we visited spreads over 42 square kilometers). Though you see throughout China extensive tree-planting efforts – at least along the highways – there was little of the natural beauty espoused in the province’s promotional brochures; historic sites – Xi’an was the first capital of China – are surrounded by clutter and traffic. On one of our bus trips, in northern Shaanxi, when a spate of rain passed through during a bus ride, one of the University of Wyoming students shouted: “The sky! Haven’t seen that since I got here!”

But it’s not a joyless, nose-to-the-grindstone world. In the bustling city of Yulin,. provincial officials toast their American guests and sing distinctive (dare we say “screeching”?) regional folk songs, and  Gov. Matt Mead is forced to respond, assisted by UW students, with a college drinking song. People in the province have jobs. They enjoy free education and cradle-to-grave universal health care – and that’s not true in other provinces, which lack Shaanxi’s coal-generated wealth.

Tackling the problem, not debating it

Projects the size of the Shaanxi chemical complex need the approval of China’s National Development and Reform Commission (NDRC), which sits pretty high up in the government tree, but despite the Five Year Plans and NDRC controls, the Chinese economy is surprisingly diverse and freewheeling.  “China is the best example of investor-led capitalism in the world,” said Bob Grady, of the Cheyenne Capital Fund, L.P., who accompanied Gov. Mead and announced a new agreement expanding China services for Wyoming-based Eleutian Technologies.

Entrepreneurial companies abound – a young Chinese translator talks about “getting rich” importing handbags. You pay for your medical care, right into old age (unless you’re in Shaanxi Province, which provides universal health care, thanks to its energy wealth). There was a lively debate in the newspapers while I was there about raising the mandatory retirement age, as the state system verges on bankruptcy.

“The way things operate here is not that different from the U.S. You have the same government bureaucrats, and bureaucrats are cautious,” said Deborah Seligsohn, of the non-profit World Resources Institute’s Beijing office. But she added an interesting twist. “But whereas in the U.S. we have bureaucrats and then politicians above them who are willing to take risks, in China bureaucrats go all the way to the top. And bureaucrats are risk averse.”

Certainly, China can move more quickly on big projects than the U.S., as long as they fit within the Five Year Plan. “The permitting process is easy,” said James Wood of DOE. “When they built Three Gorges Dam they went to villages in the way and said, ‘Do you have gills? No? Then you better get out.’”

But if the Chinese bureaucrats want to avoid the kinds of controversies that cause disruption, the environmental goals in the Five Year Plan may prove important: a 2011 Gallup poll indicated a strong majority of Chinese consider the environment a priority, even if it means curbing the industrial explosion. By a 57 percent to 21 percent margin, they favored environment over economic growth, if the two are in conflict. There are other concerns among the energy producers and planners in China. A big one is infrastructure: brown outs are predicted in the rapidly growing urban areas of China this summer, in part because it’s hard to move enough energy, by wire or by train or by boat, from the coal fields in the West to the coastal cities in the East. Whatever Gallup says, the Chinese bureaucrats are worried about satisfying the populace’s growing hunger for electricity. Which is why they want to buy Wyoming coal (“very receptive,” said Gov. Matt Mead of his talks with Chinese energy companies).

The Chinese are also eager to acquire Americans’ expertise on coal-bed methane, and oil shale – areas of potential energy production that haven’t yet been mapped, much less tapped, in China. “And that,” said World Resources Institute’s Seligsohn, “could change the whole equation.”

The Chinese can out-build the rest of the world – and their risk averse nature has them cornering resources all over the globe – but they still look to the U.S. for research, whether it’s on carbon sequestration, enhanced oil recovery, or new ways of removing carbon. Chemical engineer Larry Baxter said that for all the griping about the U.S. falling behind, or abandoning coal, he wouldn’t trade his BYU roost for the opportunities in China. “The U.S. is the best place to do this research. No question.”

And most of that research, these days, is devoted to removing and controlling carbon – there are no climate change deniers among these pro-coal researchers. Baxter was typical, waving off the global warming doubters with a tired shrug: “More and more evidence shows that global warming is man-caused. So this is a world problem and it’s going to be China and the U.S. together.”

It was not the best moment for Wyoming, then, when state Rep. Tom Lubnau (R-Gillette) suggested in an address that there is still “a huge debate where I live about global warming and whether it’s sun spots, or …” Eyes rolled. A couple of scientists shook their heads. Lubnau was not taking a position, and in fact he went on to say, “It doesn’t matter. We need (regulatory) certainty.” But it’s interesting that even the Chinese participants at the conference, who might have every reason to sow doubt about coal’s contribution to climate change, talk militantly about tackling the problem, not debating it.

And what about Australia, the quiet third member of this trio of coal-rich entities? Just as the Chinese impressed the group with their work on coal-to-chemical uses, and the Americans lead the way on carbon sequestration, the Australians offer some lessons in how to accelerate the kind of changes necessary if coal is to have a role in a carbon-constrained world.

This summer, coal-rich Australia will implement a carbon tax – $23 per ton of carbon, covering not just smokestack releases, but also fugitive emissions at mines (like the methane that is vented from underground mines to keep miners safe).

John Carras, the director of Advanced Coal Technology for the Commonwealth Scientific and Industrial Research Organization (CSIRO), to develop an ambitious research agenda of power plant efficiency and carbon capture and sequestration. It will force the Australian power companies to deal with pollution as a price of doing business – necessitating cleaner operations.

And it illustrates – listen up, United States – how a country can buy into the urgency of slowing man-caused global warming, and the need for sharing the responsibility among nations, while still doing everything it can to utilize its most abundant energy source, dirty old coal.

— Geoff O’Gara is one of Wyoming’s most accomplished journalists and writers. Geoff is a Wyoming Public Television producer and host of the influential Capitol Outlook and Wyoming Chronicle programs. He is the author of What You See in Clear Water: Indians, Whites, and a Battle Over Water in the American West (2002) and A Long Road Home, Journeys Through America’s Present in Search of America’s Past (1989) and several other books. An avid cyclist, basketballer and fly fisherman, he lives in Lander.

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