Barely a wisp of water vapor streams from the smokestack into the clear morning sky at the Dry Fork Station power plant outside Gillette, Wyoming.

Built in 2011, Dry Fork is "a great example of what a new, modern coal plant can do," said Jason Begger, executive director of the Wyoming Infrastructure Authority.

Pollution controls scrub out the acidic sulfur dioxide, absorb the neurotoxic mercury and reduce the smog-forming nitrogen oxides.

But nothing restrains the 3 million tons of planet-warming carbon dioxide the plant releases each year.

Coal-fired power plants are a leading contributor to climate change around the world. Though the United States has retired more than half its coal-fired power plants in favor of cheaper, cleaner alternatives, the carbon-heavy fuel is on the rise globally. China alone has tripled its coal-fired capacity since 2006, for example, according to Global Energy Monitor.

To ward off worsening impacts of climate change, scientists say, it's no longer enough to simply reduce greenhouse gas emissions. Carbon dioxide must be removed from the atmosphere.

Coal state

Wyoming has a particular stake in the issue. The state is the nation's leading coal producer. Fossil fuel industries provide thousands of jobs and about $1 billion in tax revenue to fund schools and government operations, Begger said.

The coal industry's future in particular is in doubt. Two companies with major operations in Wyoming went bankrupt this year. Coal production is down by one-third from its 2007 peak, and experts say the trend will continue as natural gas and renewable energy sources rise.

The entire fossil fuel industry faces an existential threat as climate change concerns grow.

"Our customers now care about carbon emissions," said Scott Quillinan, director of research at the University of Wyoming School of Energy Resources. "If Wyoming is going to continue in this business of fossil fuels, we have to also be a leader in carbon management."

That's why the state put up $15 million of the $21 million needed to build the Integrated Test Center at Dry Fork Station. It's the only facility in the country where researchers can tap directly into a full-size power plant's emissions. Engineers will plug in and run experiments to remove carbon dioxide from the exhaust stream.

There's not much to see at the moment. A thick silver pipe runs about the length of two football fields behind the plant's chain-link fence. Poking through the fence are six widely spaced 20-cm (8-inch) pipes wrapped in gray jackets and topped with blue valve wheels.

Next month, Colorado-based TDA Research will be the first to test its carbon capture technology here. The company received $3 million from the Department of Energy in February, one of eight businesses and universities awarded nearly $24 million total to study carbon capture.

The big event will come next year, when the Integrated Test Center co-hosts the Carbon XPRIZE, a $20 million contest to produce profitable products out of the plant's carbon dioxide.

Finalists come from the United States, China, India, the United Kingdom and Canada. Their products range from building materials to fish feed.

Underground storage

Another option is to bury the CO2.

University of Wyoming geologists drilled down through 3 kilometers of rock searching for geologic formations where they could safely and permanently store CO2.

The idea is not unprecedented. Quillinan notes that natural gas comes from reservoirs that have remained sealed for millions of years. Rock formations elsewhere in the state hold helium, a very buoyant gas that leaks through most barriers, as anyone who has kept a helium balloon for more than a day knows.

"If [they] can hold helium," Quillinan said, "we know [they] can hold CO2."

Quillinan's group has identified a formation nearby they estimate could hold nearly 500 years' worth of Wyoming's emissions.

More testing needs to be done. That includes tests to ensure carbon sequestration doesn't interfere with water supplies or cause earthquakes, problems seen with hydraulic fracturing for natural gas and oil.

The technology to capture and bury carbon exists, but at a cost of roughly $60 to $80 per ton, Begger says, "it is just not economical today."

The possible exception is the Petra Nova plant in Texas, where carbon dioxide is isolated and pumped into an oil field, increasing production by 1,300%, according to the plant's owner, NRG.

The only other large-scale carbon capture project currently operating in North America is the Boundary Dam Power Station in Saskatchewan, Canada. Boundary Dam is the other site that will be hosting Carbon XPRIZE contestants next year.

Electric utility Southern Company canceled its Kemper carbon capture project in Mississippi after massive cost overruns and plunging costs of natural gas.

Tax breaks to incentivize carbon capture have passed Congress with rare bipartisan support.

Begger hopes that more investment will bring the cost down. He says technology has helped mitigate coal's acid rain, mercury and smog problems.

"We're choosing to look at carbon capture really as an engineering challenge and not this giant political hurdle," Begger said.