Arch Coal Inc. (ACI) that it purchased 35% equity interest in a Texas power plant as part of its ongoing pursuit of technology meant to reduce damaging greenhouse gas emissions. The Trailblazer Energy Center near Sweetwater, Texas is being developed by Tenaska Inc.  Arch’s investment will be staged over time as the development of the project reaches key milestones.

The fossil-fuel based Trailblazer plant is expected to be among the world’s cleanest power plants. The plant will act as a strategic source of carbon dioxide for enhanced oil recovery (EOR) applications in West Texas. Moreover, Trailblazer will supply the Texas economy with an additional 600 megawatts of clean, secure, reliable electric generating capacity.

In capturing 85% to 90% of the carbon dioxide emissions from the plant, Trailblazer will emit 70% less carbon dioxide than the cleanest natural gas-based power plants.  Moreover, Trailblazer will ship the captured carbon dioxide to the nearby Permian Basin, where it will be used to boost oil production and extend the life of that critically important domestic energy resource.

Arch will supply the center’s fuel needs for its first 20 years, utilizing its Wyoming-based Power River Basin operations.

A recent Electric Reliability Council of Texas (ERCOT) report projects that Texas will need to add more than 55 gigawatts of new and replacement power-generating capacity over the next two decades to meet projected demand growth.

Today’s announcement is consistent with Arch’s ongoing strategy of making small but strategic investments in technology companies focused on making coal use cleaner.  In addition to Trailblazer, Arch’s technology portfolio includes an equity interest in DKRW Advanced Fuels, which is planning to convert coal into clean-burning transportation fuel on Arch reserves in southern Wyoming, and ADA-ES, a leading-edge emissions control company.

St. Louis, Missouri-based Arch Coal is one of the largest coal producers in the U.S. Arch Coal primarily conducts its business through three operating segments: Powder River Basin (PRB), having operations in northeastern Wyoming and southeastern Montana; Western Bituminous, having operations in western Colorado, eastern Utah and southern Wyoming; and Central Appalachian, having operations in eastern Kentucky, Tennessee, Virginia and southern West Virginia. Coals mined from the PRB region have very low sulfur content and low heat value.

Arch Coal has a significant amount of reserves and is a top-three producer in the PRB. In our opinion, PRB coal will be in great demand over the coming years. Going forward, the significant coal-fired power plant build-out will increase annual thermal coal demand by more than 43 million tons; most of which will be fueled by PRB coal.

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