(Recasts, adds background about Kyoto, global warming, more details from study, comment from head of Senate Energy panel) By Timothy Gardner NEW YORK, March 14 (Reuters) - As pressure grows to slow global warming, the United States, the world's top greenhouse gas emitter, should become a pioneer in burying carbon dioxide output from coal-burning power plants, a study recommended. U.S. coal-fired power plants soon may have pay dearly for the right to pollute, or shut down unless they entomb the gases underground, said the Massachusetts Institute of Technology study, titled, "The Future of Coal." "If we don't have carbon capture and sequestration coal has a very bleak future," MIT professor John Deutch, a former director of the Central Intelligence Agency under Bill Clinton and co-author of the study, said in an interview. The U.S. government should help fund up to five demonstration projects that entomb emissions of carbon dioxide, the main gas scientists link to global warming, the study said. The projects would help the power industry understand which underground geologic formations would best hold the gas. The sequestration projects would cost less than $1 billion, according to the study, financed by MIT, the Better World Fund, the Pew Charitable Trusts, Shell Oil Co. <RDSa.L> and others. The study confirmed a 2005 report by scientists who advise the United Nations that carbon capture and sequestration could boost power bills by 20 to 25 percent. "We're not happy about that, but the alternatives are more expensive," said Deutch. Nuclear power plants cost billions of dollars. Wind and solar will play a bigger role in coming years, but are not cheap enough yet to meet growing demand for power, he said. SAUDI ARABIA OF COAL The United States has the world's largest reserves of coal, which is cheap, but emits more greenhouse gas than any other fossil fuel. U.S. utilities plan to build about 150 coal plants in the United States, but not one has plans in place for technology to capture and bury CO2. President George W. Bush pulled out of the international Kyoto Protocol on global warming and favors voluntary emissions cuts. But pressure is growing for the United States to limit emissions. Contenders from both political parties for the 2008 presidential elections favor a U.S. emissions regime, and coastal states are implementing their own regulations. U.S. Sen. Jeff Bingaman, a New Mexico Democrat and head of the Senate energy committee, lauded the study. "A robust and comprehensive approach toward carbon sequestration is an essential part of future coal technology development and implementation," he said in a statement. Energy companies already inject CO2 from natural formations into Texas oil and gas fields to boost energy production. But those reservoirs are not big enough to store volumes of the gas that would lower overall U.S. emissions and begin to tackle climate change, the study said. Saline formations about 1 kilometer underground, which are widespread throughout the country, have the best potential to store the gas, it added. ONE PIECE OF THE PUZZLE If coal-burning plants ignore the problem, it could be more troubling than the nuclear industry's lack of foresight on radioactive waste disposal, one snag that has slowed further U.S. development of that industry, Deutch said. Burying emissions is only one piece of the puzzle. Capturing CO2 at plants is even pricier than burying it. The government should therefore only give assistance to power plants that will capture the gas, the study said. U.S. leadership on greenhouse gases could put pressure on other big emitters. The study recommended that China, the world's top coal burner, build at least two demonstration sequestration projects. India, another large consumer, lacks saline formations, but should also learn to bury the gas. As developing countries, neither is required to regulate emissions under the Kyoto pact.
