JACKSON - Black Hills Corp., Babcock & Wilcox and Air Liquide Engineering plan to build the nation's first commercial-scale carbon capture and sequestration coal-fired power plant in Campbell County.

The partnership has filed an application to the U.S. Department of Energy seeking clean-coal technology funding available under the agency's restructured FutureGen project. The plant is anticipated to be in service by 2015, according to Babcock & Wilcox.

"While we can confirm that Black Hills has submitted an application to the DOE, unfortunately, DOE application rules restrict us from discussing details," Black Hills Corp. senior communications coordinator Laura Snyder said in an e-mail response to the Star-Tribune.

The 100-megawatt power plant will use B&W's Oxy-Coal Combustion process in which coal is burned within a regulated oxygen environment rather than air, resulting in near-zero sulfur dioxide emissions and a more pure stream of carbon dioxide.

"It will be capable of capturing and storing approximately 1 million metric tons of carbon dioxide a year, which is greater than 90 percent of the proposed plant's total carbon dioxide emissions," B&W states on its Web site.

Rob Hurless, telecommunications and energy adviser to Gov. Dave Freudenthal, briefly described the project to members of the Joint Minerals, Business and Economic Development Committee this week.

Hurless said the same oxy-combustion technology may be used to retrofit existing coal-fired power plants. One of the biggest challenges in capturing CO2 at existing coal-fired power plants is separating the CO2 into a pure enough form for other industrial uses or geologic sequestration.

"While this is not simple by any stretch, there may be a way forward in adding life and improving environmental performance," Hurless said.

B&W said the plan is to permanently store large volumes of CO2 in deep saline formations or for enhanced oil recovery. The plant will serve to "build knowledge to make informed CO2 policy decisions for coal-based power plants," according to B&W's Web site.

Hurless said using CO2 captured at the oxy-combustion plant for enhanced oil recovery would meet the DOE's funding requirement for carbon sequestration. The plant will likely be a mine-mouth facility, he said, and there are many oil fields in the region that are candidates for CO2-flood enhanced oil recovery.

The project is among dozens of proposals in Wyoming seeking financial support from DOE programs such as the Clean Coal Power Initiative, which received an appropriation of $800 million from the American Recovery and Reinvestment Act of 2009.

"Secretary (Steven) Chu has been serious about moving money," Hurless said. "The Department of Energy had a reputation of sitting on money. Recently, these things have been moving fairly quickly."

Hurless noted that several years ago the state Legislature created tax incentives specifically for coal liquefaction and coal gasification facilities. Technically, an oxy-combustion facility would not qualify. Committee co-chairman Rep. Tom Lockhart, R-Casper, said the committee will take the matter under advisement.

Contact energy reporter Dustin Bleizeffer at 307-577-6069 or dustin.bleizeffer@trib.com.