Turning Dirty Coal into Clean Energy Today's expensive gasoline is making people look for alternatives. That has opened doors of opportunity for entrepreneurs like Andrew Perlman, who is betting that the newest fuel will be made from one of humanity's oldest: coal.
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Turning Dirty Coal into Clean Energy

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Turning Dirty Coal into Clean Energy

Turning Dirty Coal into Clean Energy

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RENEE MONTAGNE, host:

It's easy to complain about record gas prices, but for some entrepreneurs, those prices spell opportunity. Over the next few weeks we'll bring you the stories of people who are creating the future of fuel alternatives to oil. This morning, it's Andrew Perlman who thinks that the newest fuel will be made from one of humanity's oldest: coal.

NPR's Elizabeth Shogren traveled to Des Plaines, Illinois, where Andrew Perlman hopes to turn his vision into reality.

ELIZABETH SHOGREN reporting:

Andrew Perlman talks fast, works fast. He even eats fast. He and his business partners barely take time to eat lunch.

Unidentified Man: I got an extra sandwich.

Mr. ANDREW PERLMAN (Co-Founder, GreatPoint Energy): They do? What do you have there?

Unidentified Man: Turkey.

Mr. PERLMAN: I'm not going to take it just in case you need it for dinner.

Unidentified Man: No, I...

Mr. PERLMAN: No. No. No.

Unidentified Man: I'm going over there.

Mr. PERLMAN: But just in case.

SHOGREN: He's always been an entrepreneur. When he was nine, he turned his parent's kitchen into an ethanol lab to sell the fuel to neighbors. He studied business and technology at Washington University in St. Louis, but not for long.

Mr. PERLMAN: I couldn't sit in class and listen to all these great stories, and not do it myself.

SHOGREN: Perlman found a professor who had an invention that he thought had promise.

Mr. PERLMAN: Put a business team together--even had its own investors--wrote a business plan. Thought we were all set. And at the last minute, the provost stepped in and said, I'm sorry, we don't license technologies to students. We want students to be in class. So I said, okay. I'm not a student anymore.

(Soundbite of laughter)

Mr. PERLMAN: And I thought that was going to solve the problem.

SHOGREN: After he dropped out, the school decided it wouldn't license to former students either. But that didn't stop him. He found a different technology, one that could make international telephone calls cheap by sending voices over the Internet. And he launched his first real business. He was 19. Now he's 30 and has started four successful high-tech businesses. But he says the new frontier is satisfying the country's thirst for clean energy.

Mr. PERLMAN: It's become like the dot com times all over again. Everybody we know is starting energy companies. All the hot companies that people are talking about are energy companies. When we started, there were three venture capital companies in the country with a focus on energy. And now there're 76.

SHOGREN: At first he looked for futuristic solutions, like fuel cells. Now he's convinced that the dirty fuel of yesterday is the clean energy of tomorrow.

Mr. PERLMAN: Coal is the future for our country. People talk about biomass. People talk about wind. They talk about solar. But even if you put all of those things together, you still don't have enough fuel to make a significant difference. On the other hand, we have this huge resource, coal, that generates 55 percent of our electricity in this country, and it's not going away. And if you want to make a difference, you have to find a cleaner, better way to do something with that fuel.

SHOGREN: Now, there's already a way to turn coal into something called syngas. A few power plants and factories use it. But that gas is dirtier than natural gas. You can't use it in your furnace or kitchen range. Perlman wanted something better. Little did he know, an aging engineering professor at Southern Illinois University, Ed Hippo already had something better.

Thirty years ago during the energy crisis, Hippo worked for Exxon on a federally funded research project to turn coal into natural gas or methane. The technology worked, though not cheaply enough. When the energy crisis ended, Exxon and the government abandoned it. But Hippo didn't.

Dr. ED HIPPO (Professor, Southern Illinois University): I'm kind of stubborn.

(Soundbite of laughter)

Dr. HIPPO: That gut level feeling kept on telling me, this is important. We have to get this solved.

SHOGREN: Hippo and his grad students kept on working in a modest lab on this almost-forgotten technology. Over the years, they worked out most of the kinks. But Hippo needed money to prove it could work on a larger scale. He made a pitch to federal agencies, but they turned him down.

Dr. HIPPO: The government funding agencies were telling me, We're not interested in producing methane. We have plenty of methane.

SHOGREN: He feared he'd never have a chance to show that his ideas worked. But a year ago, out of the blue, this gray haired engineer got a call from the frenetic world of venture capital. Andrew Perlman's company was on the line.

Dr. HIPPO: I was totally shocked that anybody was interested.

SHOGREN: Within days, Perlman and his partner showed up in Hippo's lab in Carbondale, Illinois.

Dr. HIPPO: They were like kids in a candy store. They were crawling all over the equipment.

(Soundbite of laughter)

Mr. PERLMAN: This is it. I mean, this is the gasifier. If this works then we can go to a commercial scale.

SHOGREN: Andrew Perlman's newest company, GreatPoint Energy, is taking Hippo's technology, from the laboratory to a small plant. They're using a gasifier built to test new technologies at the Gas Technology Institute near Chicago's O'Hare Airport. The building is tall and skinny because it's built around a steel cylinder, a reaction chamber three and a half feet in diameter and five stories high.

Perlman and his crew climb up the stairs to the middle of the structure. This is where the coal enters the reaction chamber. It's mixed with a catalyst that's the key to the whole process, and subjected to 500 pounds of pressure at 1300 degrees Fahrenheit. The gas emerges at the top and travels through a variety of filters to remove sulfur dioxide and other pollutants.

Mr. PERLMAN: So at the end of the day, we believe we can make gas for less than three dollars per million BTUs. And the price of gas right now is over seven dollars per million BTUs, so we're talking about a significant saving.

SHOGREN: What makes GreatPoint technology so much cheaper than existing technologies is the catalyst. It let's them do in one step what now takes four. So what is this magic ingredient? Perlman won't say.

Mr. PERLMAN: Well, our catalyst is a combination of low cost, abundant materials, metals that are proprietary to our company.

SHOGREN: Perlman says the catalyst also allows them to capture about half of the carbon dioxide. That gas is considered the biggest cause of global warming. Perlman hopes to have a full-scale plant producing methane out of coal within four years. That's warp speed for an energy project, but kind of slow for a guy who built four companies in less than 10 years. Perlman says this technology is worth the extra time.

Mr. PERLMAN: You can make a new computer chip, and it's very exciting, but it doesn't really make a big difference in the world. But, if you can take the most highly used fuel source in the U.S., that's extremely dirty, and convert it into fuel that burns very cleanly, then you actually do have an impact on people's lives and people's health. And I think that there's something that's a lot more exciting about doing that.

SHOGREN: Perlman persuaded two capital venture firms to fund the business. And dozens of the country's best experts have signed on as employees and advisors. Their pedigrees give the company credibility. GreatPoint keeps the details of its technology hush-hush, so experts without connections to the company can't evaluate its prospects.

Gary Stiegel, a gasification expert for the Department of Energy, says he's skeptical about GreatPoint's cost estimates. But he says if GreatPoint's team is successful and keeps its costs low, the impact could be huge.

Mr. GARY STIEGEL (Gasification Expert, Department of Energy): I think you would see a large deployment of plants producing substitute natural gas from our indigenous coal resources, and supplementing our, you know, existing natural gas supplies. And hopefully, reducing projected imports of liquefied natural gas, from regions of the world that are potentially unstable.

SHOGREN: There's no guarantee that the technology will work outside the laboratory. But GreatPoint's investors say the risk is worthwhile, because the technology holds the promise of making a precious out of coal, which as Perlman likes to say is about as cheap dirt.

Elizabeth Schogren, NPR News.

MONTAGNE: GreatPoint Energy is just one of several companies hoping to cash in on coal. You can read about other efforts to turn dirty coal into clean energy at our website, npr.org.

This is NPR News.

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