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Is
Clean Coal Ready To 'Clean Up'? |
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 Though
you may have already heard the term 'clean coal', odds are good you may
be hearing it more and more in the future. Clean coal is the simple way
of describing coal that is chemically washed of minerals and impurities,
so it burns cleaner. Perhaps more importantly, the proliferation of the
idea may also meana micro cap opportunity.
What's the underlying
fuel (no pun intended) for the paradigm shift? As usual, the numbers tell
the tale succinctly.
Coal provides
25% of global primary energy needs and generates 40% of the world's electricity.
Better still, coal is plentiful and cheap. At current production levels,
proven coal reserves are estimated to last another 155 years. In contrast,
proven oil and gas reserves are expected to last around 41 and 65 years
at current production levels, respectively. About half the United States'
electricity is already generated by coal-fired plants, so there's an infrastructure
for coal in place.
And looking
forward into the future, the demand for electricity will increase 53.4
percent over the next 25 years. Meeting this rising growth rate will require
the construction of the equivalent of more than 1,200 new coal power plants
of 300 megawatts each - the equivalent of about 65 plants each year. And,
coal will remain the largest single source of electricity, accounting for
51 percent of power generation in 2025. Great news for coal companies,
right? So far, yes, but there's more to the story.
 Coal
power is also dirty and destructive. Entire mountaintops are removed to
get it, and emissions from coal-fired power plants contribute to at least
24,000 premature deaths a year in this country alone. It accounts for 36
percent of our overall releases of carbon dioxide - the main culprit in
global warming.
So in a sense,
the writing on the wall is becoming obvious. Though the laws regulating
carbon dioxide emissions in the U.S. are still liberal, many scientists,
utility analysts, environmentalists and business executives admit that
CO2 emissions are the chief cause of global warming. Knowing carbon dioxide
will be firmly regulated in the future, the industry would rather make
it part of the cost to build a new plant now rather than wait and have
to add technology later.
The problem
is, clean coal plants aren't cheap to build - the initial cost to build
a clean coal plant is 25 percent more than a medium-sized conventional
coal-fired power plant. And, costs to dispose of their waste are steep
as well.
The aim of 'clean
coal' technology is to enhance both the efficiency and the environmental
acceptability of coal extraction, preparation and use, while simultaneously
limiting the amount of dangerous gases freely produced and emitted. On
top of that, doing both needs to be cost effective.....a three-way dynamic
that some assume may be an impossible balance. And, though conceptually
sound, 'green-friendly' observers have accurately pointed out that there
are no actual coal-fired power stations in commercial production which
capture all carbon dioxide emissions. So, the process is only of theoretical
benefit.....or is it?
True, clean
coal plants have not been built on a large-scale commercial basis due to
the high economic costs. But, like most things, time and ingenuity solve
problems. We may well be on the verge of turning the clean coal dream into
a reality. For the companies that have a proven and cost-effective method
of doing so, clean coal may end up being a profitable business to be in.
One of the companies
leading the charge is N-Viro International Corporation (OTCBB:
NVIC). The company has devised a way to generate revenues coming and
going, literally. The business plan is to haul away sewage/sludge for a
fee, then combine that same waste into coal fuel used in clean coal power
plants...and obviously collects a fee for providing the material. The sludge
waste/coal mix creates more energy (heat) than coal would alone.
Though still
in testing stages, we suspect the 2004-2007 oil rally is likely to push
the of a sludge/coal mix as an alternative fuel to the forefront. Michigan
State University recently ran an independent test of the N-Viro fuel in
their own coal-burning electricity plant, and found that the NVIC blends
work comparably to pure coal. General Electric also has their hand in the
idea. Acting as a third party, they monitored the successful operation
of the power plant. Their interest may be a clue to the viability of the
breakthrough. If GE ends up liking the idea and running with it, who knows
where it could go?
 Another
company working towards a viable clean coal solution is GreenShift Corporation
(OTCBB: GSHF).
GreenShift isn't
solely involved in clean coal solutions, nor are they even directly involved
in the creation of energy. Rather, they are a business development company
specializing in helping other companies develop green-friendly technologies
as well as operate more efficiently. For coal-burning plants though, such
a need is tremendous - more than 70% of the energy value of coal is lost
at the power plant. The upside to Greenshift's efforts is being able to
use much of today's entrenched industrial infrastructure
GreenShift is
also a major stakeholder in two other publicly-traded companies within
the ecologically-friendly space. The first one is GS CleanTech Corporation
(OTCBB: GSCT), formerly
known as Veridium Corporation. The other is GS Energy Corp. (OTCBB:
GSEG), previously named INSEQ Corporation. Like GreenShift itself,
neither of these companies is directly involved in clean coal power production,
but both facilitate clean power production. GS CleanTech offers cost-effective
ways to recycle and reuse waste as a resource, such as converting carbon
dioxide into ethanol. GS Energy - through its close ties with GS Agrifuels
(OTCBB: GSGF) - services
biofuel manufacturers by providing metal and machined equipment.
So just how
serious is the current coal-burning problem? Recent studies prompted by
pollution legislation (including the Clean Air Interstate Rule that caps
emissions of smog components sulfur dioxide and nitrogen oxides) suggest
that up to 500 coal plants in the U.S. could be forced to cease operating,
as they may exceed their allowed degree of toxic material emission. Such
a move could not only spur billions of dollars worth of new pant construction,
but also pay off big for the organizations that have actually found a way
to burn coal according to the higher 'clean' standards.
The potential
investment opportunity lies in how big this market is, yet how few players
there are so far....only a few dozen at best, and even fewer within realistic
reach of the goal. The most innovative and promising company stocks seem
to be found on the OTC's bulletin board.
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Updated: 8:15 pm PDT (03:15 GMT), November 2, 2010
