In the second half of the 20th century, oil- and natural gas-burning furnaces drove coal out of the home-heating business across North America. But if Great Point Energy--a Boston-area startup with a low-cost process for converting coal into pipeline-grade natural gas--has its way, coal may start keeping us toasty again before long.

Great Point Energy of Cambridge, MA, says its process is cheaper and more reliable than drilling for new natural gas or importing liquefied natural gas from the same unstable regions. "We can take coal out of the ground and put it in a natural-gas pipeline for less than the cost of new natural-gas drilling and exploration activities," says CEO Andrew Perlman.

Traditional coal-to-methane plants like the 1970s-era Dakota Gasification plant in Beulah, ND, and new plants envisioned by General Electric (GE) and ConocoPhillips are costly because they require a series of chemical plants operating at a wide range of conditions. In these plants, cryogenic equipment operating just a few degrees above absolute zero feeds pure oxygen to the gasifier, where coal baked to up to 2,500 ºF breaks down into a mixture of carbon monoxide and hydrogen called syngas. From there, the syngas is subsequently catalytically transformed into high-grade methane in a separate reactor.

In contrast, Great Point compresses the process into one single, efficient reactor by moving the catalysts into the gasifier itself. The key is a proprietary, recyclable catalyst developed in house with help from gasification and catalysis experts at Southern Illinois University, the University of Toronto, and the University of Tennessee, among others. The catalyst (which Perlman cagily describes as "a formulation of abundant low-cost metals") lowers the amount of heat required to gasify coal and simultaneously transforms the gasified coal into methane. In fact, the heat released in the syngas-to-methane step is sufficient to sustain the gasification, eliminating the need to fire up the reactions with purified oxygen. "It's perfectly heat balanced," says Perlman.

On the strength of lab-scale demonstrations with its catalyst, Perlman and his partners have picked up $37 million from venture-capital firms Draper Fisher Jurvetson, Kleiner Perkins Caufield & Byers, and Advanced Technology Ventures to test their catalyst in a pilot plant. Rather than building a pilot plant from scratch, Great Point accelerated the process by leasing one from the utility-supported Gas Technology Institute at Des Plaines, IL. Perlman says Great Point ran the plant's 14-inch-in-diameter, 60-foot-high gasifier for a week in November with the firm's proprietary catalyst, converting Illinois Powder River Basin low-sulfur coal into between 13,000 and 14,000 cubic feet of natural gas per day. He anticipates that a second run this spring will give him and his partners the data they need to take the next step: designing a larger but still precommercial plant that he expects to have operating by 2009. Subsequent testing at Des Plaines will evaluate the catalysts with dirtier yet more energetic petroleum coke, a byproduct that the average refinery generates at the rate of 5,000 to 10,000 tons per day--more than enough to fuel a commercial-scale synthetic-gas plant.