To clean up coal, Obama pushes more oil production

America's newest and cleanest coal-fired power plant comes with a catch: The heat-trapping carbon dioxide removed from its smokestack pollution will help force more oil out of the ground.

Some environmentalists complain that it ends up releasing more carbon dioxide into the atmosphere than is stored underground as waste.

It's another example of the Obama administration promoting new, cleaner technologies and allowing companies to do things it otherwise would oppose as harmful to the environment.

At first, the idea behind "carbon-capture" technology was to make coal plants cleaner by burying the carbon dioxide deep underground that they typically pump out of smokestacks.

But that green vision proved too expensive and complicated, so the administration accepted a trade-off.

To help the environment, the government allows power companies to sell the carbon dioxide to oil companies, which pump it into old oil fields to force more crude to the surface. A side benefit is that the carbon gets permanently stuck underground.

The program shows the ingenuity of the oil industry, which is using government green-energy money to subsidize oil production. But it also showcases the environmental trade-offs Obama is willing to make, but rarely talks about, in his fight against global warming.

Companies have been injecting carbon dioxide into old oil fields for decades. But the tactic hasn't been seen as a pollution-control strategy until recently.

Obama has spent more than $1 billion on carbon-capture projects tied to oil fields and has pledged billions more for clean coal. Recently, the administration said it wanted to require all new coal-fired power plants to capture carbon dioxide. Four power plants in the U.S. and Canada planning to do so intend to sell their carbon waste for oil recovery.

Just last week former Energy Secretary Steven Chu announced he was joining the board of a company developing carbon capture technology.

The unlikely marriage of coal burners and oil producers hits a political sweet spot.

It silences critics who say the administration is killing coal and discouraging oil production. It appeases environmentalists who want Obama to get tougher on coal, the largest source of carbon dioxide.

It also allows Obama to make headway on a second-term push to tackle climate change, even though energy analysts predict that few new coal plants will be built in the face of low natural gas prices and Environmental Protection Agency rules that require no controls on carbon for new natural gas plants.

"By using captured man-made carbon dioxide, we can increase domestic oil production, promote economic development, create jobs, reduce carbon emissions and drive innovation," Judi Greenwald told Congress in July, months before she was hired as deputy director of the Energy Department's climate, environment and energy efficiency office.

Before joining the Energy Department, Greenwald headed the National Enhanced Oil Recovery Initiative, a consortium of coal producers, power companies and state and environmental officials promoting the process.

But the environmental benefits of this so-called enhanced oil recovery aren't as certain as the administration advertises.

"Enhanced oil recovery just undermines the entire logic of it," said Kyle Ash of Greenpeace, one of the few environmental groups critical of the process. "They can't have it both ways, but they want to really, really bad."

That has become a theme in some of the Obama's green-energy policies.

For wind power, the government has shielded companies from prosecution for killing protected birds with giant turbines.

For corn-based ethanol, the administration underestimated the environmental effects of millions of new acres of corn farming. The government even failed to conduct required air and water quality studies to document its toll on the environment.

The administration wants to make similar concessions to make carbon-capture technology a success.

The EPA last week exempted carbon dioxide injection from strict hazardous waste laws. It has classified the wells used to inject the gas underground for oil production in a category that offers less protection for drinking water. Oil companies using carbon to get oil also aren't subject now to the tougher reporting and monitoring requirements that experts say are necessary to ensure the carbon stays underground. In addition, they're fighting an EPA proposal that would require them to be if the carbon comes from power plants covered by the new federal rules.

"It amounts to looking the other way," said George Peridas, a scientist with the Natural Resources Defense Council, which supports using carbon for oil extraction. The group believes it replaces dirtier oil or oil produced in more environmentally sensitive places and reduces carbon in the atmosphere.

The administration also did not evaluate the global warming emissions associated with the oil production when it proposed requiring power plants to capture carbon.

A 2009 peer-reviewed paper found that for every ton of carbon dioxide injected underground into an oil field, four times more carbon dioxide is released when the oil produced is burned.

Administration officials counter by saying the oil was going to be extracted anyway, so the policy should only be seen as reducing carbon dioxide from coal plants.

The administration also touts the benefits for energy security. Every barrel of oil produced here will mean one less produced abroad.

"We are taking carbon dioxide that would have gone to the atmosphere in coal plants, storing it and displacing imported oil with domestic oil," said Energy Secretary Ernest Moniz, asking a question posed by The Associated Press on C-SPAN's "Newsmakers" in September.

In Mississippi, where Southern Company's Kemper County power plant will eventually supply two oil producers with carbon dioxide, Denbury Resources Inc. says it would not be able to produce oil there otherwise.

The federal support for Kemper lowers the cost of installing the carbon capture equipment, and ultimately, the cost of carbon dioxide for the oil producer.

The nearly $5-billion project received $270 million from the Energy Department, prior to the Obama administration, and another $279 million in federal tax credits.

While Kemper is the first, it's not the only one. The Energy Department under Obama has provided $1.1 billion to six projects that capture carbon and sell it to oil companies. Four of those projects are power plants. And the EPA recently highlighted two of those projects, with a combined $858 million in federal money, as a way to reduce power plant emissions. Both plan on selling the carbon dioxide to oil companies.

The marriage was rocky from the start. Oil companies want to use the least amount of carbon dioxide possible to extract oil, not exactly what is desired in a strategy to reduce pollution. And the oil producers, no stranger to federal regulations, don't want to deal with any more rules - such as strict and costly monitoring and reporting requirements aimed at verifying that the carbon doesn't escape.

On the coal side, it takes more energy - and thus, more coal and more carbon dioxide pollution - to run the equipment needed to capture carbon and compress it to be sent down a pipeline to an oil field.

"If you add up all the environmental costs," said Stan Flint, a Jackson, Miss.,-based consultant who works with environmental groups and opposes the project, "this is not going to be green."