Funds to modify a coal-fired powerplant to capture and sequester carbon dioxide are coming from an unusual source. The Dept. of Agriculture has approved a $300-million loan through its Rural Utilities Program to Basin Electric Power Cooperative, a North Dakota wholesale power power cooperative, for what is billed as the first project of its type in the country to operate on a commercial scale.

A 120-MW slipstream of Antelope Valley Station Unit 1, fueled by lignite, will be processed to capture 3,000 tons of carbon dioxide per day at the plant near Beulah, N.D. The carbon dioxide will be piped to the nearby Great Plains Synfuels Plant, where it will be added to that plant’s carbon dioxide and shipped north to a Canadian oilfield. There it will be injected into the ground to create pressure that will force oil out, a process known as enhanced oil recovery. Great Plains Synfuels has gasified coal since the early 1980s and has delivered carbon dioxide for enhanced oil recovery since 2000.

Basin Electric selected the ECO2 process by Powerspan Corp., Portsmouth, N.H., in 2007 in the first competitive solicitation for a carbon dioxide capture demonstration at a coal-fueled powerplant in the U.S. Carbon capture and sequestration technology is being extensively researched because legislation or regulation to restrict carbon emissions is widely expected within the next couple of years.

Capturing carbon dioxide is costly and power-intensive. The Antelope Valley project’s “parasitic load” probably will be in the range of 20-25 MW, says Basin Electric project manager Jim Sheldon. Front-end engineering design will begin late this year, aiming for project completion by 2012.