A bill authorizing the state-owned Alaska Railroad Corp. to sell $2.6 billion in tax-exempt revenue bonds to finance a major coal-gasification project proposed by Agrium Corp. at its fertilizer plant near Kenai passed the state House April 24.
The legislation prompted a brief debate on the House floor over greenhouse gases and global warming, however.
Agrium hopes the project will allow it to switch from using natural gas to coal as a feedstock in the manufacture of ammonia and urea fertilizer. Gas is in increasingly short supply in Southcentral Alaska as producing gas fields are depleted. Agrium is now able to operate its plant in Nikiski only on a seasonal basis.
An amendment to House Bill 229 that would have obligated Agrium to limit carbon dioxide emissions from the plant was defeated 26-11 on the House floor. Rep. Les Gara, D-Anchorage, offered the amendment, arguing that state assistance to large industrial projects like Agrium's should be linked to efforts to reduce greenhouse gas emissions, which have been tied to global warming.
The amendment Gara proposed would have required that a coal gasification and electrical generating facility financed with railroad bonds limit carbon dioxide emissions to the amount of CO2 released per megawatt of power produced by the Beluga power plant during 2006. Beluga is an electrical generation plant on the west side of Cook Inlet that is operated by Chugach Electric Association and fired by natural gas.
“Most scientists agree that carbon dioxide emissions are the major cause of global warming, and the most prevalent greenhouse gas,” Gara said. Coal production, on average, produces twice the CO2 emissions as natural gas, according to the U.S. Environmental Protection Agency.
“Sponsors of this project have said they would like to minimize carbon emissions from the proposed plant but have made no commitments,” Gara said.
Reps. Mike Kelly, R-Fairbanks, and Peggy Wilson, R-Wrangell, spoke against the amendment, saying that scientific research connecting carbon dioxide to global warming is questionable.
Agrium's existing fertilizer plant is a major source of greenhouse gas emissions, and the coal gasification plant and an adjacent 200-megawatt coal-fired power plant would add to those emissions. The company has said that it will seek ways to dispose of CO2 and reduce releases to the atmosphere. The most promising candidate for disposal is injection of the gas in depleted gas reservoirs in the area, or using the CO2 in enhanced oil recovery in mature Cook Inlet oil fields.
Agrium is currently engaged in advanced engineering on the project and hopes to make a corporate decision to proceed with construction in mid-2008. Construction would require three years, allowing the plant to go into operation in 2011 if the project moves forward.
Rep Mike Chenault, R-Kenai, is the sponsor of House Bill 229.
Tim Bradner can be reached at
tim.bradner@alaskajournal.com.
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