May 4, 2006

Wyoming seeks $1 bln clean coal power plant project

SAN FRANCISCO (Reuters) - Wyoming has proposed a site in
the coal-producing Power River Basin for a $1 billion project
to build the world's cleanest coal-burning power plant.

Gov. Dave Freudenthal submitted the state's application on
Wednesday to build the FutureGen project as part of a
consortium of the U.S. Department of Energy and big utilities
and mining companies, including American Electric Power,
Southern Co., and Peabody Energy.

The 275-megawatt plant would burn coal to produce
electricity as well as hydrogen. The project would separate
heat-trapping greenhouse gases from the plant's exhaust and
inject them into underground reservoirs to prevent them from
entering the atmosphere.

The Bush administration is looking to hydrogen as an energy
source to fuel a new breed of clean-running cars to help reduce
dependence on oil.

"We have been at the forefront of energy production for
many years, and the state has several of the physical
characteristics needed to make this work," Freudenthal said.

Wyoming proposed a 640-acre site in the Powder River Basin
with two of the largest coal mines within 10 miles.

Carbon dioxide produced by the plant could also be used in
nearby enhanced oil recovery operations, Freudenthal he said.

Other states including Pennsylvania, Kentucky, Ohio, Texas,
Colorado, Illinois and West Virginia also are contenders for
the project.

A short list of plant locations is expected late this
summer for environmental reviews with a final selection
expected about a year after.

Construction could begin in 2009, with operations beginning
in 2012, the governor's office said.