FutureGen's Future Cloudy

Feds Abandon Clean Coal Project

By Richard Martin, 2-01-08

Since I detailed the gaps in Montana Gov. Brian Schweitzer’s ambitious plans for “clean” coal plants in his state last month, the whole clean-coal movement has suffered a major blow. This week the Department of Energy said it would cancel funding for the FutureGen project, which is planning a commercial-scale coal plant with a carbon sequestration system in Matoon, Illinois.

Citing the high cost and potential difficulty in building a futuristic coal plant of this size, the DOE says it will cut its clean-coal funding and shift the dollars to smaller projects.

“This restructured FutureGen approach is an all-around better investment for Americans,” said energy secretary Samuel W. Bodman in a statement. The Energy Department is now budgeting $241 million for several power-plant projects that will capture a smaller percentage of their emissions. The FutureGen Alliance, which comprises 13 partners including the governments of China, Australia, Britain, and Germany, issued a press release refuting many of the points made by Bodman in withdrawing DOE’s backing for the scheme.

To say this is a disaster for developing less-destructive forms of coal generation – which still supplies about half of the nation’s electricity – is an understatement. Private investors were counting on federal funds to help create a working plant that would prove the feasibility of burning coal, and burying the resulting CO2, at a large scale. Now that won’t happen, and the prospects for new coal-fired plants in the U.S. look a lot grimier.

In other energy news:

-- While forging ahead with an ambitious renewable energy plan, Xcel Energy Inc. is also benefiting from rising prices in its core business. The Minneapolis-based utility, “Colorado’s largest electricity provider, said Wednesday its fourth-quarter profit jumped 37 percent as revenue climbed for natural gas and electric businesses,” according to the Rocky Mountain News. That still wasn’t enough to beat the predictions of Wall Street analysts, who forecast a profit of 38 cents a share rather than 31.

-- The Bush administration has come up with a controversial plan to reduce the money that flows back to states from federal mineral leasing. This week Colorado Senator Ken Salazar joined the legislators from both sides of the aisle who are objecting to that move, signing on to a letter sent to Interior Secretary Dirk Kempthorne and Office of Management and Budget director Jim Nussle. Revenue from mining on federal land have been split equally between the states and the U.S. government, but a provision in last month’s $555 billion appropriations bill would shift that to a 48-52 percent split.

-- The war of words between the energy industry, and its backers in the Colorado legislature, and the state agencies involved in redrafting the rules for permits for oil and gas production continued this week. “Conservative legislators … sent a shot across the bow” of the Colorado Oil and Gas Conversation Commission, reports the Grand Junction Sentinel, while David Neslin, acting director of the Colorado Oil and Gas Conservation Commission, fired back during a joint hearing of the House and Senate natural resource committees. Oil and gas companies have claimed that overhauling drilling regulations will erect new roadblocks to energy production in the state.

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