BUFFALO - Gov. David Paterson on Tuesday promised up to $6 million of state funding toward the development of a new kind of coal-fired power plant in Chautauqua County.

The Jamestown plant would serve as a demonstration facility for an emerging technology that captures carbon dioxide emissions and sequesters the heat-trapping gas underground and out of the atmosphere.

“There is no silver bullet to solving the twin threats of climate change and growing energy demand, and New York should have a comprehensive strategy to address both,” said Paterson, who visited the Jamestown site Tuesday.

Paterson committed up to $6 million to a coalition researching the project. The Oxy-Coal Alliance, made up of Praxair, Dresser-Rand, Ecology & Environment, Foster Wheeler, Battelle Labs, the University at Buffalo and AES Corp., is seeking additional funding through federal grants.

“This is an excellent opportunity to demonstrate new, world-class technology right in our own community,” Charles McConnell, a Praxair vice president said. “Demonstration projects are fundamental to building a road map to commercial implementation of carbon dioxide capture technology in the future.”

The Jamestown Board of Public Utilities has been planning a new municipal plant since 2003.

The idea of making it a demonstration project for carbon sequestration emerged last July in response to environmental concerns. The project has the potential to remove more than 90 percent of carbon dioxide emissions, BPU officials said.

“The BPU has been committed to developing a plan to replace our aging plant facilities in a way that would meet or exceed environmental restrictions, striving for carbon neutral or negative emissions,” BPU Chairman John Zabrodsky said.

Several environmental groups, however, say Jamestown does not need another plant to replace one being shut down which supplies about 20 percent of customers' electricity. They say the city's needs could be met more cleanly and less expensively by a combination of energy efficiency and renewable energy development.

In a statement, opponents including the Citizens Campaign for the Environment, New York Public Interest Research Group and the Atlantic chapter of the Sierra Club, also criticized Paterson for investing state money in “unproven technology during a time of fiscal crisis” and for doing so before the completion of environmental studies.

“This power plant is ill-advised from both environmental and economic points of view and does not deserve to go forward,” said Walter Simpson, co-founder of the Western New York Climate Action Coalition.

Opponents said the cost of the carbon capture and storage technology would increase the cost of electricity produced by the plant by as much as 40 percent.

One thing the state hopes to determine with the project is whether sequestration works in New York's geology, particularly upstate where it is considered favorable. The carbon dioxide can be sequestered 3,000 to 5,000 feet below the ground, beneath a layer of solid cap rock. Researchers on the Jamestown project also will explore ways to reuse carbon dioxide.

Sen. Charles Schumer, D-N.Y., praised the state investment, saying the project “propels Jamestown and upstate to the forefront of energy innovation when the sky-high price of oil shows we must diversify our energy supply.”

Several conditions must be met before the project can go forward, including the establishment of a sequestration site. Also, the state must enact legislation authorizing the siting of a carbon capture and sequestration facility in New York. A working group of scientists and other experts will help guide the legislation.

The project, which could be operational in 2013, would create about 28 new jobs, retain 33 others and create 525 temporary construction jobs.