Photograph by William Campbell/Corbis
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A coal train rumbling across Montana is a mile and a half (2.4 kilometers) long yet carries barely a day's fuel for a large power plant. The U.S. burns more than a billion tons of coal a year.

Photograph by William Campbell/Corbis

High Cost of Cheap Coal: The Coal Paradox

Here's what you need to know about the warming planet, how it's affecting us, and what's at stake.

On a scorching August day in southwestern Indiana, the giant Gibson generating station is running flat out. Its five 180-foot-high (54.9-meter-high) boilers are gulping 25 tons (22.7 metric tons) of coal each minute, sending thousand-degree steam blasting through turbines that churn out more than 3,000 megawatts of electric power, 50 percent more than Hoover Dam. The plant's cooling system is struggling to keep up, and in the control room warnings chirp as the exhaust temperature rises.

But there's no backing off on a day like this, with air conditioners humming across the Midwest and electricity demand close to record levels. Gibson, one of the biggest power plants in the country, is a mainstay of the region's electricity supply, pumping enough power into the grid for three million people. Stepping from the sweltering plant into the air-conditioned offices, Angeline Protogere of Cinergy, the Cincinnati-based utility that owns Gibson, says gratefully, "This is why we're making all that power."

Next time you turn up the AC or pop in a DVD, spare a thought for places like Gibson and for the grimy fuel it devours at the rate of three 100-car trainloads a day. Coal-burning power plants like this one supply the United States with half its electricity. They also emit a stew of damaging substances, including sulfur dioxide—a major cause of acid rain—and mercury. And they gush as much climate-warming carbon dioxide as America's cars, trucks, buses, and planes combined.

Here and there, in small demonstration projects, engineers are exploring technologies that could turn coal into power without these environmental costs. Yet unless utilities start building such plants soon—and lots of them—the future is likely to hold many more traditional stations like Gibson.

Coal Mining's Environmental Impact

Last summer's voracious electricity use was just a preview. Americans' taste for bigger houses, along with population growth in the West and air-conditioning-dependent Southeast, will help push up the U.S. appetite for power by a third over the next 20 years, according to the Department of Energy. And in the developing world, especially China, electricity needs will rise even faster as factories burgeon and hundreds of millions of people buy their first refrigerators and TVs. Much of that demand is likely to be met with coal.

For the past 15 years U.S. utilities needing to add power have mainly built plants that burn natural gas, a relatively clean fuel. But a near tripling of natural gas prices in the past seven years has idled many gas-fired plants and put a damper on new construction. Neither nuclear energy nor alternative sources such as wind and solar seem likely to meet the demand for electricity.

Meanwhile, more than a quarter trillion tons of coal lie underfoot, from the Appalachians through the Illinois Basin to the Rocky Mountains—enough to last 250 years at today's consumption rate. You hear it again and again: The U.S. is the Saudi Arabia of coal. About 40 coal-burning power plants are now being designed or built in the U.S. China, also rich in coal, could build several hundred by 2025.

Mining enough coal to satisfy this growing appetite will take a toll on lands and communities. Of all fossil fuels, coal puts out the most carbon dioxide per unit of energy, so burning it poses a further threat to global climate, already warming alarmingly. With much government prodding, coal-burning utilities have cut pollutants such as sulfur dioxide and nitrogen oxides by installing equipment like the building-size scrubbers and catalytic units crowded behind the Gibson plant. But the carbon dioxide that drives global warming simply goes up the stacks—nearly two billion tons of it each year from U.S. coal plants. Within the next two decades that amount could rise by a third.

There's no easy way to capture all the carbon dioxide from a traditional coal-burning station. "Right now, if you took a plant and slapped a carbon-capture device on it, you'd lose 25 percent of the energy," says Julio Friedmann, who studies carbon dioxide management at Lawrence Livermore National Laboratory. But a new kind of power station could change that.

A hundred miles (161 kilometers) up the Wabash River from the Gibson plant is a small power station that looks nothing like Gibson's mammoth boilers and steam turbines. This one resembles an oil refinery, all tanks and silvery tubes. Instead of burning coal, the Wabash River plant chemically transforms it in a process called coal gasification.

The Wabash plant mixes coal or petroleum coke, a coal-like residue from oil refineries, with water and pure oxygen and pumps it into a tall tank, where a fiery reaction turns the mixture into a flammable gas. Other equipment removes sulfur and other contaminants from the syngas, as it's called, before it's burned in a gas turbine to produce electricity.

Cleaning the unburned syngas is cheaper and more effective than trying to sieve pollutants from power plant exhaust, as the scrubbers at a plant like Gibson do. "This has been called the cleanest coal-fired power plant in the world," says Steven Vick, general manager of the Wabash facility. "We're pretty proud of that distinction."

The syngas can even be processed to strip out the carbon dioxide. The Wabash plant doesn't take this step, but future plants could. Coal gasification, Vick says, "is a technology that's set up for total CO2 removal." The carbon dioxide could be pumped deep underground into depleted oil fields, old coal seams, or fluid-filled rock, sealed away from the atmosphere. And as a bonus, taking carbon dioxide out of the syngas can leave pure hydrogen, which could fuel a new generation of nonpolluting cars as well as generate electric power.

The Wabash plant and a similar one near Tampa, Florida, were built or refurbished with government money in the mid-1990s to demonstrate that gasification is a viable electricity source. Projects in North Dakota, Canada, the North Sea, and elsewhere have tested the other parts of the equation: capturing carbon dioxide and sequestering it underground. Researchers say they need to know more about how buried carbon dioxide behaves to be sure it won't leak back out—a potential threat to climate or even people. But Friedmann says, "For a first cut, we have enough information to say, 'It's a no-brainer. We know how to do this.'"

Yet that's no guarantee utilities will embrace the gasification technology. "The fact that it's proved in Indiana and Florida doesn't mean executives are going to make a billion-dollar bet on it," says William Rosenberg of Harvard's Kennedy School of Government. The two gasification power plants in the U.S. are half the size of most commercial generating stations and have proved less reliable than traditional plants. The technology also costs as much as 20 percent more. Most important, there's little incentive for a company to take on the extra risk and expense of cleaner technology: For now U.S. utilities are free to emit as much carbon dioxide as they like.

Cinergy CEO James Rogers, the man in charge of Gibson and eight other carbon-spewing plants, says he expects that to change. "I do believe we'll have regulation of carbon in this country," he says, and he wants his company to be ready. "The sooner we get to work, the better. I believe it's very important that we develop the ability to do carbon sequestration." Rogers says he intends to build a commercial-scale gasification power plant, able to capture its carbon dioxide, and several other companies have announced similar plans.

The energy bill passed last July by the U.S. Congress offers help in the form of loan guarantees and tax credits for gasification projects. "This should jump-start things," says Rosenberg, who advocated these measures in testimony to Congress. The experience of building and running the first few plants should lower costs and improve reliability. And sooner or later, says Rogers, new environmental laws that put a price on carbon dioxide emissions will make clean technology look far more attractive. "If the cost of carbon is 30 bucks a ton, it's amazing the kinds of technologies that will evolve to allow you to produce more electricity with less emissions."

If he's right, we may one day be able to cool our houses without turning up the thermostat on the entire planet.