Thursday, May 17, 2007

BP & Rio Tinto Bet on Clean Coal Power.

BP and Rio Tinto, the world's third largest mining company, have formed a joint venture called Hydrogen Energy that will develop clean coal power technology.

The basic idea is to ultimately build coal-fired plants that produce de-carbonized energy by making hydrogen (good) while trapping and storing CO2 (bad), resulting in drastically reduced greenhouse gas emissions.

BP already has a gas-fired plant up and running in Scotland that is using the technology and it has plans to have a second plant up and running at its facility in Carson, CA by the end of 2012. The Carson plant would produce 500 MW and would use coke as a feedstock.

The end-game for both plants is to optimize the technology to the point where we coal becomes a feasible long-term energy alternative again.

Reporting on the joint venture, Bloomberg notes that the U.S. and China, which are the two largest energy consumers and CO2 emitters on the planet, both have enormous coal reserves and are unlikely to abandon the mineral as an energy source, thus making the BP/Rio Tinto technology timely and necessary.

The Bloomberg article notes that the BP plant in Scotland pumps CO2 to an oil field 2.5 miles beneath the North Sea. According to the company's press release, at the Carson facility, BP plans "capture some four million tonnes of CO2 a year and transport it for reinjection into geological formations in southern California for permanent storage."

BP, Rio Tinto Venture to Develop Clean Coal Energy [Bloomberg]