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Elements of surprise



If the city scraps its downtown Martin Drake Power Plant, physicist Dave Neumann could see years of research and development for his emissions system circle the drain.

So like any good entrepreneur, Neumann is hedging his bets. He still wants to see his trademarked NeuStream system remove sulfur dioxide from fuel plant emissions. He also wants to recover metals such as neodymium and yttrium — critical to high-tech industries — from fly ash. But in addition, he says, his technology can also capture carbon dioxide, a substance playing a pivotal role in making oil wells more productive.

"If you put CO2 down into them, then it rejuvenates oil wells," Neumann writes in an e-mail interview. "We could take CO2 coming off coal and gas plants and we could eliminate our importation of oil and sequester CO2 at the same time. Power plants could get paid for capturing their CO2."

And that could mean growth — and jobs — for Neumann Systems Group, Inc., even if Colorado Springs Utilities submarines its current deal with the manufacturer.

For years, Springs-based Neumann Systems has been developing NeuStream to remove sulfur dioxide from fossil fuel-burning plants, using equipment that's smaller and cheaper than competitors'. Utilities has invested $63 million in the technology, much of it before it inked a $73.5 million deal last year with Neumann. The city-owned utility stands to gain 3 percent of future sales of all NeuStream equipment to other energy companies, but could terminate the deal "for convenience" by simply giving notice, according to the contract.

And that's possible now that City Council, which acts as the Utilities Board, has commissioned a study about retiring Drake. Mayor Steve Bach is interested in removing the hulking power station as a step toward revitalizing downtown.

The Drake study is due later this year. So far, Utilities has requested only a "slow down" on the sulfur dioxide project, Neumann writes, adding, "We are working out the details of what that means with CSU management."

The project, currently below cost and on schedule, is scheduled to be operational at Drake by April 2014 to meet federal emissions limits that must be met no later than 2017. If Drake is decommissioned, the technology possibly could be transferred to the city's Ray D. Nixon Power Plant south of Colorado Springs.

"While a comparative design study has not been completed, initial analysis suggests that the vast majority of the design and engineering work and investment could be applied to Nixon," Utilities spokesman Dave Grossman says in an e-mail.

But if the city bails entirely, other utilities might get cold feet before investing. "Our chance of pulling this off somewhere else goes to zero," Neumann says.

Neumann Systems already employs 65 people, and its leader can envision hundreds of local manufacturing jobs if NeuStream takes off.

He recently announced another goal to capture metals from Utilities' fly ash, which is now either landfilled or used in building materials. This technology, he predicts, could generate up to $49 million annually at Drake.

As for CO2, no federal regulations require its removal from power plants' emissions, though some energy producers expect Congress to eventually adopt such laws. NeuStream, Neumann says, has shown "extraordinary results" in removing CO2 in tests by the Energy and Environmental Research Center in North Dakota.

Neumann's company reports that 25 percent of Texas oil production comes as a result of using CO2 in oil fields previously believed to be depleted. Using CO2 reduces the use of water in drilling, with the greenhouse gas permanently sequestered underground. And, a Neumann release says, "The only readily available new source of large quantities of CO2 is power plants."

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