Thank you for your inquiry.

We will attempt to answer your questions to the best of our ability given some political/regulatory/technology uncertainties at this time.

First off, I would like to provide you with some more information about the Big Sky Carbon Sequestration Partnership (BSCSP). We are one of seven regional partnerships funded by the US Department of Energy to: research, demonstrate and deploy carbon sequestration technologies in the United States. To clarify, this program studies terrestrial and geologic storage of CO2, but not some of the other components needed to deploy Carbon Capture and Storage (CCS) on a coal plant (i.e. capture and compression technologies). To learn more about CCS, I recommend reading a Special Report on CCS by the Intergovernmental Panel on Climate Change. The report Summary for Policymakers is available to download here http://www.ipcc.ch/pdf/special-reports/srccs/srccs_summaryforpolicymakers.pdf .

The regional partnership program has the following three phases, the BSCSP is currently in the 4th year of the validation phase and waiting for approval of funds for the deployment phase.

1) Characterization Phase (2003 - 2005) – the focus of this phase was on identifying carbon sources and sinks, researching CCS technologies and studying the nation’s current infrastructure and regulations with respect to carbon sequestration.

2) Validation Phase (2005-2009) – the second phase has focused on determining the best approaches for storing CO2 in both geologic and terrestrial systems. Small scale terrestrial and geologic field tests are currently under way to: test CO2 storage formations; validate injectivity, capacity, and containment; establish monitoring, mitigation, and verification (MM&V) technologies and work on regulatory frameworks, economics and public outreach and education.

3) Deployment Phase (2008 – 2016) - The focus of this phase is to demonstrate at large (commercial) scale that CO2 injection, and storage can be achieved safely, permanently, and economically. During this phase, each partnership will have one large-scale project, where large volumes of CO2 will be injected into a geologic formation. The injection will continue over several years. The Deployment Phase tests will be implemented in three stages which will test key technologies during the demonstration and deployment. The first 3 years will be devoted to: site selection and characterization, permitting and NEPA compliance, well completion and testing and infrastructure development. The next three years will include CO2 procurement and transportation, injection operations and monitoring activities. The last three years of this phase will be devoted to site closure, post-injection monitoring and project assessment.

And now, here are some answers to your questions.

1. Given this lengthy time frame, can you give me an estimate of how soon could we expect a coal plant such as HGS to be able to sequester its carbon?

This question is difficult to answer precisely, however there are several coal plants being planned that include CCS in their plant design. Successful CCS will require deployment of several technologies, many of which are commercially ready, yet unproven in conjunction with the other necessary components. For a coal plant to sequester carbon, it will need to have a capture and compression facility, infrastructure in place to transport the CO2 to the storage location (i.e. a pipeline) and a safe injection site with the necessary monitoring technologies in place. Developing a power plant usually takes at least 5 to 10 years, this timeframe includes the engineering design, financing, permitting and siting, and construction. Most coal plants that are currently planned in the US and include CCS are scheduled to go online in the timeframe of 2012-2015.

From a policy perspective, the U.S. does not currently regulate CO2 emissions, this is expected to change within the next couple of years but there is still uncertainty on what the regulation look like and how it will be implemented. This uncertainty, coupled with the state of the CCS technology, is why we see some plants being proposed without carbon capture, or slated as ‘capture ready’. Several states have passed bills that regulate CO2 emissions for new power generating plants or for power they will purchase from other states. These bills are driving some private companies to invest in CCS and develop plants that will capture and sequester carbon.

2. Are there any plans to conduct this type of testing in the Great Falls area, or anyplace else in the vicinity that might be suitable for the sequestration of HGS carbon dioxide?

The BSCSP is currently in the planning phase of performing some studies on Kevin Dome, a geologic structure near Shelby, MT that potentially could store CO2. It is known that this structure contains naturally occurring CO2 and has trapped it for millions of years. Natural analogs such as Kevin Dome for geologic storage provide excellent research opportunities. The BSCSP plans to do a characterization study over the next 2 years to learn more about this structure, its capacity to hold CO2, its trapping mechanism and the behavior of CO2 within the structure. Potentially this dome and other similar geologic domes could be utilized to store additional CO2, such as the emissions from the HGS proposed plant. SME is therefore, interested in learning the results of this study for that reason.

The other possible scenario for plants that capture CO2 is to sell it to an oil producer for Enhanced Oil Recovery (EOR). EOR has been done for over 25 years and involves pumping CO2 into mature oil fields to increase production. This is often viewed as a mutually beneficial option because selling the CO2 as a commodity can help offset the high costs of installing and operating the capture facility.

Numerous other potential geologic storage sites occur within our region including regionally extensive flood basalts in Washington, Oregon, and Idaho. Wyoming and Montana host regionally extensive deep saline formations that are the focus of the proposed Phase III demonstration project in Wyoming. Finally, deep unmineable coal seams are also viewed as potential geologic sinks that again, are regionally extensive in Montana and Wyoming.

While carbon sequestration is still clearly early stage, I personally would not classify it as wholly untested. The combination of natural analogs, experience with other underground injection programs, years of experience injecting CO2 in EOR activities, and the existence of several test projects around the world (pilot to industrial scale) mean there is valuable experience and knowledge that already exist.

Thank you for your questions and your interest in the Partnership’s efforts. Please feel free to contact us to learn more about our program and also notify us if you would like to be put on our mailing list to receive newsletters and/or notification of our annual meeting that is tentatively planned for mid-August of this year.

Sincerely,

Dr. Lee Spangler

Director

Big Sky Carbon Sequestration Partnership.