“CLEAN” COAL – THE NEW PLAN

In an effort to allay the excessive and growing cost burden of carbon-capture-and-sequestration (aka CCS or “clean” coal), the U.S. Department of Energy (DOE) earlier this year dropped out of the FutureGen Alliance plan to build an experimental plant in Mattoon, Illinois. (See DOE DROPPING FUTUREGEN?)

The costs for DOE’s part in the Illinois plant had grown from the original $1.3 billion commitment to $1.8 billion and were still growing. DOE will instead invest the original amount in a series of smaller plants.

This is an instance of DOE making a smart decision. It was being dragged into a project by its FutureGen partners (12 of the biggest power companies and utilities in the world) which would have likely benefited the commercial partners more than the pursuit of CCS knowledge.

Bud Albright, undersecretary, DOE: "The direction we're going -- let me make absolutely clear if there's any question -- we're fully committed to. We think it's a better direction…It's a faster way to go…"

Congressional representatives for the state of Illinois are outraged at the loss to the state of the plan and the associated revenues.

There are unconfirmed whispers DOE pulled out of the project because the Mattoon location was picked over Texas sites that were among the 4 finalists for the big, costly plant.

That may have been the implication of Illinois Senator Durbin’s statement: "They wouldn't even receive applications from the new sites until four weeks before the current administration ends…It isn't a serious plan…Our goal is to keep the location in Mattoon until this administration packs and leaves town…"

Driven by Durbin and the other Illinois politicians, the debate has become a strategic and political one, without any interest in the merits of CCS or how best to actually find out if it works. The debate is likely to keep progress on any “clean” coal project paralyzed.

Considering that (1) “clean” coal is actually a meaningless oxymoron, and that (2) other lawmakers may push through legislation prohibiting the building of new coal-fired facilities without CCS capability, and that (3) climate change may soon make new coal-fired facilities without CCS capability too expensive to operate, this might turn out to be a sort of good thing.

Keeping the development of “clean” coal tied up in bureaucratic tangles probably means the U.S. will not be able to build new coal plants. Unfortunately, China and India will keep building coal plants, whether they have CCS capability or not.

Looks like the FutureGen Alliance needs to head for Asia. Why not? That’s where the Bush administration is driving all the smart money.

The basic idea. (click to enlarge)

Energy Dept. unveils retooled plans for clean coal plants
Jim Suhr (w/F.N. D'Alessio), May 7, 2008 (AP via Yahoo Finance)

WHO
U.S. Department of Energy (DOE) (Bud Albright, undersecretary); FutureGen Alliance (including American Electric Power, Anglo American Services, BHP Billiton, China Huaneng, CONSOL Energy, E. ON U.S., Foundation Coal, Luminant, Peabody Energy, Rio Tinto Energy) (Lawrence Pacheco, spokesman); Senator Dick Durbin (D-Ill); Congressman Tim Johnson (R-Ill);

DOE has always had a complex, comprehensive development plan. (click to enlarge)

WHAT
DOE announced its new plan to develop “clean” coal in replacement of the FutureGen project.

WHEN
- The original FutureGen plan was a 2003 Bush administration intiative.
- The Mattoon site was chosen after 5 years of study.
- Illinois legislators now hope to fend off the change in DOE’s plans until a new administration takes office in January 2009.

click to enlarge

WHERE
It looks like the Mattoon, Illinois, location is out. DOE has yet to choose new locations.

WHY
- The 275 megawatt Mattoon FutureGen plant with CCS capability was originally projected to cost $1.3 billion but that projected costs had grown to $1.* billion when DOE backed out in January 2008.
- Illinois expected 3000 construction jobs and 150 permanent jobs from the Mattoon plant.
- DOE cannot legally cancel its contract with the FutureGen partners until June.
- Under DOE’s new plan, power plant builders will apply for slices of the $1.3 billion. There has been no number of projects specified.
- Each plant chosen must have a 300-megawatt capacity, permanently store underground at least 1 million metric tons of CO2/ year and capture a minimum of 81% of the generated CO2.

One of the biggest potential costs of CCS is the risk that geologic sequestration could be dangerously impermanent. (click to enlarge)

QUOTES
- Lawrence Pacheco, spokesman, FutureGen Alliance: "[TheFutureGen Alliance is] cautiously optimistic…We've gotten a lot of good feedback from members on the Hill…And there have been a number of hearings over the last month in which members of Congress have expressed pretty deep skepticism about DOE's plans to restructure FutureGen."
- Bud Albright, undersecretary, DOE: "I want it to be good, hard competition, and we want pencils to be as sharp as possible as they put their bids in…We're trying to get a good deal for taxpayers and wanting to do the right thing for the environment."