Healy plant redux?

Alaska Gov. Frank Murkowski said conserving natural gas could help save Agrium's Kenai Peninsula fertilizer plant and suggested reopening the Healy clean coal plant, a $300 million experimental power generation facility that was shuttered in 2000 after failing to meet the expectations of its proposed operator, Golden Valley Electric Association of Fairbanks. (See related stories in Petroleum News this week.)

The plant can deliver 50 megawatts of power, and would relieve the consumption of 10 million cubic feet of gas per day, Murkowski said at a Feb. 17 press conference. The savings, along with gas storage in the Kenai National Wildlife Refuge, might deliver enough gas to keep the fertilizer plant open until more gas can be found in Cook Inlet, Murkowski said.

Before the Healy plant can be reopened, it will need to be converted into a conventional coal-fired power plant, Golden Valley Electric said. Congress last year failed to pass its comprehensive energy bill, which included a $125 million low-cost loan to retrofit and reopen the plant.

Christine Gillespie, Agrium investor relations manager, told Petroleum News the company's Kenai plant will need a great deal more gas than the Healy clean coal plant would conserve.

"There's talk of re-firing coal plants to save gas now used to generate electricity, but it only saves 3 bcf per year," Gillespie said. "At full operation the Kenai plant uses 46 bcf per year - at the bare minimum the plant uses 23 bcf when it's running at its minimum 50 percent capacity."

Even if the Healy plant could make a difference, it presents its own set of challenges.

According to Golden Valley Electric, the plant is fatally flawed by a faulty design and its unproven experimental technology. The plant was constructed by its current owner, the Alaska Industrial Development and Export Authority. The Department of Energy provided a $120 million grant to the project. Under the original agreement, Golden Valley Electric had agreed to operate the plant and purchase its power once the plant was commercially viable. The plant was shut down because safe, reliable and economic operation was not possible with the experimental technology, Golden Valley Electric said.

The objective of the clean coal plant was to test a combustion system that burns coal in stages to minimize the formation of nitrogen and sulfur oxides. Pulverized limestone added to the combustor converts to lime, which reacts with sulfur dioxide in the gas and removes it as a sulfate. Un-reacted lime and sulfates are recycled to scrub the flue gas, to further reduce sulfur dioxide effluents.

Although Golden Valley Electric rejected the technology after tests were completed in 1999, AIDEA found that the new technology met the technical and environmental objectives that were established for the project, the authority said in a Jan. 2005 report.

"AIDEA continues to pursue all options for getting HCCP into operation and selling power as soon as possible," the report said.