WASHINGTON - For years, power companies have struggled to find a way to capture, in an economical way, the carbon dioxide that flows into the atmosphere when fossil fuels are burned.

Now, the industry hopes the solution lies near the mouth of the Houston Ship Channel, where a new type of power plant aims to make carbon capture easier and far less costly. The technology achieves that, somewhat ironically, by using carbon dioxide instead of steam to drive the turbines that make electricity.

The technology is called supercritical carbon dioxide, and the power giant Exelon and the industrial company CB&I are investing in the $140 million Houston-area facility in the hope it can keep coal and natural gas viable as a wave of regulations designed to limit emission of greenhouse gases loom on the horizon. Greenhouse gases, such as carbon dioxide, contribute to climate change.

Electricity has been generated pretty much the same way since the days of Thomas Edison. Coal, natural gas or fuel oil is burned to heat water until it turns to steam, which drives the turbine. The new technology essentially replaces water with carbon dioxide, which is heated until it achieves a supercritical state that is both liquid and gas to drive the turbine.

Using carbon dioxide as the medium allows the fuel, say, natural gas, to be mixed with pure oxygen and burned inside the turbine. The only by-products of the combustion are water and carbon dioxide, which then can be easily captured. That avoids the costly process of separating carbon from the cocktail of waste gases in a traditional power plant's exhaust.

The experimental plant, with a generating capacity of 50 megawatts, or enough to power roughly 40,000 homes, is under construction in La Porte. The project, the first of its kind, is not expected to be completed until next year. But the technology is already generating some optimistic, if cautious, buzz around executive suites right now.

Speaking to a room full of consultants and government officials in Washington recently, Neil Kern, a manager at the North Carolina power company Duke Energy, described supercritical carbon dioxide as the most promising of carbon capture systems under development right now.

"The industry has had a lot of failures," said Kern, who is charged with looking into new technologies, "but as we like to say, it only takes one."

Two approaches so far

So far the power industry's attempts to capture carbon have revolved around two technologies. One uses a solvent like ammonia to strip the carbon from a power plant's exhaust. The other changes the chemical properties of the fossil fuel - for example, turning coal into a gas - to remove the carbon before it is burned.

While both are technically feasible, the price tag has so far proved prohibitive. A clean coal plant costs up to 80 percent more to build, with a 20 to 30 percent loss in efficiency, according to the Department of Energy. Six years ago, Atlanta-based Southern Co. began construction in Mississippi on the 582-megawatt Kemper County clean coal plant, a marquee project with funding from the U.S. Department of Energy, that removed carbon by converting the coal to synthetic gas.

The project is years behind schedule and is projected to cost three times its original budget at $6.6 billion.

With the La Porte plant, the idea was to rethink the concept of a power plant all together. Instead of adding a carbon capture feature onto a steam turbine, engineers at Net Power, the North Carolina technology company building the La Porte plant, asked what if turbines inherently separated out carbon? The solution they came upon was to take a supercritical carbon dioxide turbine designed by Toshiba and burn natural gas along with pure oxygen to create a stream of pure, industrial grade carbon, said Walker Dimmig, Net Power's communications director.

As with any emerging technology, the question is whether the promise shown in the lab is borne out in the day-to-day rigors of generating electricity. Even the most ardent proponents of supercritical carbon dioxide say if the technology is proven, commercial application is at least a decade off.

"What's not totally clear is if the economics will work out," said Doug Hofer, who is leading research on the carbon dioxide turbines for GE's research arm. "That's one of the things we're still trying to understand."

The technical hurdles begin with finding a cheap way to produce pure oxygen. Then, there is the matter of what to do with carbon dioxide once captured.

The U.S. power industry pumps 1.9 billion metric tons of carbon dioxide into the atmosphere each year - far more than can be consumed or disposed of with existing technology, pipelines and other infrastructure.

Now, it is primarily pumped into aging oil and gas fields to increase production. There's also discussion of pumping it into underground caverns, but neither application is viewed as a solution.What to do with it

Advocates imagine if a cheap and plentiful source of carbon is created, industry will find use for it. Perhaps as a component in producing materials like cement and plastics. Or as a feedstock in growing algae, which can be used to do everything from make medicine to clean water.

"We see carbon utilization as a game-changer," Kern said. "Algae likes carbon dioxide. And you can do a lot of things with algae."

At the Department of Energy, officials are taking a wait-and-see approach. Earlier this year it announced it was putting up $80 million to fund the construction of another test plant using a supercritical carbon dioxide turbine. That facility won't capture carbon, but one official said using the turbines for that purpose could have enormous potential, if the technology proves out.

The attention has not gone unnoticed at Net Power, which was founded in 2009 by the technology investment firm 8 Rivers.

"We worked on this for a long time and didn't get a lot of traction," Dimmig said. "Once people saw $140 million checks being written, they realized this was real, and we better get on board with this."