Energy & Environment Daily, January 31, 2008

ILL. LAWMAKERS MOBILIZE OVER PLAN TO SCRAP FUTUREGEN

By Jenny Mandel, E&E Daily reporter

Illinois lawmakers from both chambers and parties roundly criticized the Bush administration's plan to abandon an advanced coal demonstration facility slated for construction in Mattoon and urged the Energy Department to reconsider.

"We have lost confidence in Secretary Bodman," wrote Sen. Dick Durbin (D-Ill.) in a letter to President Bush. It was also signed by Democratic Sen. Barack Obama and seven House lawmakers: Democrats Jerry Costello, Rahm Emanuel, Janice Schakowsky and Danny Davis, and Republicans Timothy Johnson, Ray LaHood and Peter Roskam, all of Illinois.

They cited assurances extended by Energy Secretary Samuel Bodman on November 30, shortly before the site selection, that approval for the $1.8 billion FutureGen project was on track for completion before the new year.

The project's industry partners were prepared to provide additional funding and resolve "any other outstanding issues," they wrote. "It is hard to believe that cost concerns constitute [Bodman's] real objection to this project."

Yesterday afternoon, Bodman announced the department was pulling the plug on the Mattoon site and shifting its attention to commercial projects where industry would play a larger role. (E&E News PM January 30, 2008)

In a separate statement, Costello said politics was behind the sudden change. "Make no mistake, this is a political decision," he said. "I cannot help but believe that this would not have occurred if a site in Texas had been selected for FutureGen."

In a conference call with reporters yesterday, Deputy Secretary Clay Sell denied that DOE was turning its back on Illinois interests or the administration's commitment to advanced coal technology.

Sell called outrageous the suggestion that DOE pulled its support under political pressure and said the new plan would result in twice as much carbon being sequestered.

Funding pulled

The DOE intention is to end its agreement with the FutureGen Alliance, the industry group that was committed to funding 26 percent of the project cost to DOE's 74 percent, and possibly support several smaller projects in which the federal government would fund carbon capture and sequestration equipment added to industry-backed, commercial-scale advanced coal power plants.

DOE's plan won praise from Rep. Peter Visclosky (D-Ind.), who chairs the House panel that writes DOE's annual spending bill.

"The DOE has a fiduciary responsibility to ensure their programs are conducted in a cost-effective manner, and it appears that is exactly what they are doing with the FutureGen program," said Visclosky, who chairs the Subcommittee on Energy and Water Development. He said that carbon sequestration will be thoroughly examined in the coming year and he plans to address the issue in hearings on DOE's fiscal year 2009 budget.

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 yesterday, DOE said.

Broader base

Bodman said yesterday that DOE would solicit industry input by March 3 on how to proceed with its plans. 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.

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

Sell said the FutureGen Alliance 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. Earlier in the FutureGen bidding process, Kentucky, North Dakota, Ohio, West Virginia and Wyoming lost out on bids to host the project when DOE announced its short list in 2006 (E&ENews, July 26, 2006).

Citing technological advancements 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.

"This restructured FutureGen approach is an all-around better investment for Americans," he said. "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."

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

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