The Need
One way to optimize the carbon footprint of coal is to engage in polygeneration — that is, use coal and biomass to generate electricity, fuels and the building blocks for chemicals and plastics. The construction and operation of multiple world-scale polygeneration facilities in the United States could offer a critical bridge to alternatives and renewables through the next two or three decades and lead us to important answers on carbon efficiency and sequestration along the way. Each polygeneration facility constructed — producing approximately 60,000 to 100,000 bbl/day of fuels (largely for aviation use), 1 million tons/ year of naphtha (for the chemical industry) and 250 MW of electricity — would use a variable range of feedstock from coal, to biomass to waste blended to increase efficiencies and minimize the carbon footprint. The ability to produce plastics from the naphtha would convert carbon to commonly used products. Remaining CO2 would be used in enhanced oil recovery and otherwise sequestered, as part of a national (and worldwide) effort to minimize the carbon output and impact of fuel production and power generation.
Polygeneration itself is more efficient and will have less net carbon impact than existing independent power and fuel generation regimes. By blending the input of the facility and maximizing the use of the output, the carbon efficiency can be superior to that of a conventional oil refinery.
Solution
The good news is that the technology already exists to build these world-scale facilities, and Dow has pledged to lead a consortium of interests to make investments in polygeneration in the United States. The most difficult barrier to the successful construction and operation of a world-scale project is financing. Initial estimates of the cost of a single project is approximately $10 billion. The shear scale of the project and cost would require a unique federal financing mechanism that would be able to take an equity position in each project of as much as 50% ($5 billion/each). Dow proposes that a minimum of three of these projects be built in the United States, and as each is completed and operational, new understandings and technologies developed from the research and operations can be applied to drive down the cost and reduce further any impact from CO2.
Congress should establish a direct loan program, along with other incentives, to build three polygeneration plants. The government share of capital costs should not exceed 50% and should cover the added costs of carbon reductions and management.
