E&E News PM, January 30, 2008

DOE DUMPS FUTUREGEN, WILL PURSUE SMALLER PROJECTS

By Jenny Mandel, E&ENews PM reporter

The Energy Department announced today the abandonment of FutureGen, a Bush administration effort to build an advanced coal plant to demonstrate carbon capture and sequestration technologies, and will instead solicit industry input on a new approach for adding sequestration to commercially proposed power plants.

DOE abandoned the $1.8 billion FutureGen after informing Illinois lawmakers yesterday that the department would no longer support building the project in their state as had been planned.

Energy Secretary Samuel Bodman told reporters in a conference call today that DOE would solicit industry input by March 3 on how to proceed with plans to fund carbon capture and sequestration in commercial-scale power plants. Up to full federal funding could be available to add that technology to proposed coal plants that would use advanced technologies like integrated gasification combined cycle, or IGCC, to generate electricity.

Deputy Secretary Clay Sell said more than 33 IGCC projects have been proposed or have begun to be built, and DOE could fund several projects. To date, no IGCC plants have been built, and several of the proposed plants have been stalled due to financial and regulatory uncertainties.

Sell said the FutureGen Alliance, the industry group which is committed to paying 26 percent of the old FutureGen project to DOE's 76 percent, would be eligible and encouraged to submit proposals along with other bidders. He said the four FutureGen finalist sites in Illinois and Texas could be proposed under the new arrangement.

No retreat on 'clean coal'

In a call with reporters, Sell vehemently denied that DOE was turning its back on "clean coal" technology, the coal industry or Illinois interests that backed the Mattoon, Ill., FutureGen site.

Sell labeled "outrageous" a suggestion that DOE pulled support under political pressure after Texas lost its bid for the project. And he said the new plan would result in twice as much carbon being sequestered.

Said Bodman: "This restructured FutureGen approach is an all-around better investment for Americans."

Citing "technological advancements have been realized in the last five years," Bodman said the U.S. plants built with carbon capture and sequestration technology would be the world's cleanest.

"Each of these plants will sequester at least 1 million metric tons of carbon dioxide annually and help meet our nation's rapidly growing energy demand," Bodman said.

Along with the restructuring, Bodman announced that DOE's fiscal 2009 budget proposal next week would include $648 million for advanced coal technology programs overall, which exceeds last year's request by $129 million.

Of this amount, $407 million would be for research that includes development of more efficient gasification and turbine technologies, "innovations" at existing coal plants and large scale tests for injecting carbon dioxide underground.

The remainder would be used to demonstrate technologies for carbon capture and storage at coal-fired power plants, including $156 million for the "restructured" FutureGen plan announced today, DOE said.

Illinois protest

In a flurry of public statements, representatives from Illinois have loudly protested any reduction in DOE support for the project since a briefing yesterday with the state delegation at which lawmakers were informed the administration was backing away from plans for the project.

Earlier today, Republican Reps. John Shimkus and Timothy Johnson had a phone conversation with President Bush on "the importance of FutureGen to Illinois and to the nation," the lawmakers said in a statement. "He did listen to us, and we're hoping to meet again next week," Johnson said.

The matter may also be raised tomorrow in a Senate hearing. Jim Slutz, acting principal deputy assistant secretary of DOE's Office of Fossil Energy, is scheduled to testify before the Senate Energy and Natural Resources Committee at 10 a.m. EST on regulatory aspects of carbon capture and sequestration.

Senior report Ben Geman contributed to this report.

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