Something in the Air

Texas investors say they can build a power plant driven by air. But there's a dirty secret ingredient.

Moviola Grog Shop August 24
A team of engineers left their Houston offices three years ago with a blank check and a yearning for the perfect hole. They appraised 6,000 of them coast-to-coast, but none was as impeccable as the one they found in Norton, Ohio.

The town, about 35 miles south of Cleveland, has a 540-acre cavern nearly a half-mile beneath its surface, a limestone underworld left dark since the mining drills stopped 25 years ago. Ribbon-thin stalactites testified to the rock's seismic stability. There were no cracks or creases where air could seep out.

A sturdy seal was essential, given the enormous strain the mine would be under. A 35-foot-tall compressor, driven by two million horsepower, would be pushing air into the shaft, creating enough pressure to liquefy an elephant.

Haddington Ventures, a Texas company that invests in energy-storing power plants, founded Norton Energy Storage in 1999. The latter bought the mine with money from an array of investors -- J.P. Morgan, Travelers Insurance, and Prudential Insurance among them. Construction on the plant is set for this fall, at a cost of over $1 billion. Beginning in 2003, Norton will host the world's first large-scale power plant driven by compressed air. By 2008, it will have grown into a 2,700-megawatt monster, the state's largest power plant of any kind.

Its creation is a direct response to Ohio's electricity deregulation. Previously, the government strictly regulated prices. But as of last January, prices began to rise and fall at the whim of consumer demand. As a general rule, prices are high during the day, when the world is bustling, and low at night, when it sleeps. "A market like that provides the right incentives," says Norton engineer Michael McGill.

Indeed, no energy provider is as well-equipped to navigate market fluctuations as a compressed air plant. It can buy electricity from conventional plants cheaply and in huge bulk after nightfall, then use that electricity to drive its compressors, which squeeze the air into the cavern.

When the compressed air is released during the day, it drives the turbines and spins the generator, which produces electricity. By storing the energy until demand arrives, the plant might see its megawatts quadruple in value.

The buy-low, sell-high concept has huge profit appeal to Norton's investors. But the company prefers to stress the savings its presence means to Northeast Ohio consumers. The stored energy will increase the amount available during the day, it contends, thus creating a surplus and flattening electricity rates.

"That's kind of our place in the market, to fill the gaps between high loads and low loads," says McGill. In a market with wild swings in supply and demand, "We can contribute to stabilizing the pricing."

Norton has an argument to make for efficiency, too. The region's coal-burning power plants can't slow down to meet fickle consumers, so they operate at full bore 24 hours a day. During times of low demand, electricity is created but never used. In concept, Norton's electricity consumption ensures that the energy surplus created at night has somewhere to go.

"It could be a useful tool for load-shifting, so that instead of wasting the power at night -- when you have electrons fizzling out on the wire -- you can store them a few hours [as compressed air]," says Kevin Snape, executive director of Cleveland's Clean Air Conservancy. "It should make our power grid more efficient."

But Snape and others can't resist a little skepticism, especially when they hear plant officials making claims that sound suspiciously counterintuitive. Plant spokeswoman Joyce Miller asserts that "for every two units of electricity that we'd use to compress the air into the mine, we generate three units of electricity."

Alas, there's a pesky principle of thermodynamics that says you can't create more energy than you start with, and in converting one form to another, some energy is invariably lost.

Norton's plant is no exception. The only way two units turn into three is with the generous addition of coal and natural gas.

"The Norton plant will consume more electricity to compress the air than they gain when it's released," says Albert Juhasz, a thermodynamics expert at NASA Glenn.

"You hear about how great this is going to be for the environment," adds one industry insider, who requested anonymity. "But they get the energy to compress the air from power plants that are burning coal. And when they release the air, they have to light it with natural gas. In the process, they lose at least 35 percent of the original energy."

Norton doesn't claim to offer renewable energy or a green power source. But in press releases, it broadly boasts of being "environmentally friendly."

"I won't say that's a load of crap, exactly," says Snape. "It won't cause more problems, but I don't see it cleaning up any."

"The environmental consequences may actually be worse," says George Sterzinger, executive director of the American Council for an Energy-Efficient Economy in Washington, D.C. He worries about the amount of natural gas the plant will need to fire its turbines.

Norton spokeswoman Miller tries to sidestep the issue. "Yes, I know that . . . but no comment."

That sort of tight-lipped response has Snape seeing red flags.

"I've got reservations anytime somebody is out there saying, 'We'll give you any information we have,' then says, 'No comment.' I get edgy."

But Norton Energy officials can't stonewall the Ohio Power Siting Board, which controls their certification. Board Executive Director Kim Wissman says the plant has applied to use 45 billion metric cubic feet of natural gas per year after it reaches full capacity. That's roughly the amount South Africa consumes in a year.

Hence, in exchange for the promise of stable electricity rates, the Norton plant will place massive strain on the decidedly unstable natural gas supply. This at a time when, just last winter, home natural-gas prices quadrupled in some cases, due to an industry-claimed shortage.

The Ohio Consumers Counsel, the state's citizens' advocate, seems to be taking a short-term view on the matter. "There is a chance that [Norton] will impact natural gas prices," says counsel spokesman Ryan Lippe. "Given the need for natural gas and its ability to flow through the pipeline to plants, certainly it would be an additional competitor for that natural gas. That's a consideration, but right now, there isn't a pipeline capacity shortage."

The Power Siting Board, meanwhile, appears to be taking Norton's word that rates won't rise. "That's one of the questions we asked them," says Leon Winget, power coordinator at the board, "but the company seems to think it has ample supply."

If environmental and consumer activists remain skeptical, however, the city of Norton is not. The Texas company has already ingratiated itself with civic powers. Mayor Amy Addis gushes over the 25 new jobs and the corporation's volunteering spirit. Norton Energy is reimbursing the city for expenses incurred during contract negotiations. It's paying to widen Cleveland-Massillon Road, in addition to funding new water and sewer lines and firefighting equipment. The company has also promised to sponsor baseball teams, hold a fireworks show, host a family picnic, and serve a pancake breakfast for Boy Scout Troop 132.

First Energy, whose fiefdom officially ended with deregulation, will be one of the plant's primary energy providers at night, and it supports Norton Energy, too.

"We're maximizing our resources," says First Energy spokeswoman Ellen Raines. "We're selling electricity when demand is low, when we wouldn't have sold it otherwise."

Most important, the Ohio Power Siting Board, the body that coordinates a range of state regulators, has certified Norton Energy, which only awaits a permission-to-install permit from the federal EPA to begin construction.

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