“CLEAN” COAL COSTS

What makes this project so important is the heavyweights participating. It’s more than the money they’re investing, it’s the money they stand to save in the coming carbon-constrained economy if they can prove carbon-capture-and-storage (CCS) is viable.

But, of course, nobody yet has proven CCS viable at anything remotely approaching commercial scale or competitive prices. Which might be why DOE is getting cold feet. On the other hand, this could just be a Republican DOE messing with a Democratic state, trying to send a message to big money interests about who to vote for in November.

The most infuriating aspect of DOE’s delay is how self-defeating it is: The longer it takes to commit itself to the project because of high costs, the more expensive inflation makes the project. Michael Mudd, FutureGen Alliance CEO: ''Every month of delay can add $10 million to the project's cost, solely due to inflation…''

Artist's concept of the FutureGen plant. (click to enlarge)

The cost of coal progress; Feds seek to ease their share of FutureGen load
Jim Suhr, January 14, 2008 (AP via Chicago Sun-Times)

WHO
The FutureGen Alliance (American Electric Power, Anglo American Services, BHP Billiton, China Huaneng, CONSOL Energy, E. ON U.S., Foundation Coal, Luminant, Peabody Energy) (Michael Mudd, Chief Executive); U.S. Department of Energy (DOE) (James Slutz, deputy assistant secretary) ; Illinois political leaders and Mattoon, Illinois, city officials (David Wortman, public works director)

WHAT
After winning a competitive bidding process to host FutureGen’s $1.8 billion CCS pilot project plant, DOE is obstructing development by asking for a renegotiation of its share of the costs.

click to enlarge

WHEN
The announced schedule calls for the Alliance to take bids this month on core technology, to break ground in the summer of 2009 and to begin operation in 2012. DOE’s hesitation is threatening to delay.

WHERE
Mattoon beat out Tuscola, Illinois, as well as Odessa and Brazos, Texas, locations to win the opportunity to host the FutureGen plant. One of DOE’s cost-cutting suggestions is to spread the project to other (as yet unspecified) locations.

WHY
- DOE obligated itself for 75% of the Futureen plant’s $1.8 billion cost. It now is reportedly considering cutting its share from $1.3 billion to $800 million. It has suggested the possibility of reducing costs by downsizing the project.
- Illinois state and congressional leaders are reportedly furious with DOE.
- DOE claims the Alliance is moving too fast.

Projected timeline for FutureGen. DOE is throwing the project off schedule. (click to enlarge)

QUOTES
- David Wortman, public works director, Mattoon: ''The Department of Energy needs to be working with the alliance and taking their counterproposal seriously…''
- Illinois Governor Blagojevich: ''…any delays will only drive up costs and postpone the benefits FutureGen promises to deliver.''
- U.S. Rep. John Shimkus (R-Ill.): ''The Department of Energy has made it pretty clear they're going to walk if they don't get a rescoped project, and I'm not sure how we stop them…The DOE is telling me it's the best plan. I like the original plan.''
- James Slutz, acting principal deputy assistant secretary, DOE: ''…projected cost overruns require a reassessment of FutureGen's design…[DOE] 'believes that the public interest mandates that FutureGen deliver the greatest possible technological benefits in the most cost-efficient manner.''