Political fights over clean coal get dirty and expensive

By Shelley DuBois, reporter

FORTUNE -- The politics of clean coal keep preventing the United States government from actually finishing a clean coal project. Last week, the Department of Energy added a new twist to the on-again-off-again clean coal project FutureGen, and it probably didn't have much to do with technology.

"Being the flagship DOE project tends to slow things down considerably because politics tend to get in the way," says John Thompson, the director of the Coal Transition Project at the Clean Air Task Force, a non-profit working on clean coal programs.


"The one thing that I think most observers would conclude about FutureGen is that it's been a highly political process from the beginning."

FutureGen started in 2003 under President George W. Bush. The original FutureGen was supposed to result in a 275 megawatt zero-emission coal plant in Mattoon, Illinois that converted emissions into hydrogen and electricity. Bush's DOE scrapped funding for this iteration of the project in 2008 because it got too expensive, coming in at $1.8 billion.

FutureGen picked up steam again in 2009 under President Obama. The plans remained largely the same: a plant in Mattoon, Illinois would use a technique called gasification to convert carbon emissions into a gas that can be stored or used for power.

But on August 5, the DOE announced another change. FutureGen is shifting locations to refit an existing 200 megawatt plant in Meredosia, Illinois, and will transport carbon to be stored in Mattoon via a 175-mile long pipeline. This version of the plan, called FutureGen 2.0, scraps the idea of a building a new plant in Mattoon, and will still cost at least $1.1 billion.

The DOE actually hasn't released a final estimate about how much the total project will cost, but it's going to receive about a billion of those dollars via Recovery Act, i.e., stimulus funding. The pipeline will be funded separately, and those usually cost about a million dollars per mile.

The new FutureGen: cheaper, less-proven technology?

The revised project also calls for a different kind of technology, called oxy-combustion instead of gasification. During oxy-combustion, coal is burned with pure oxygen instead of air, which contains other elements and compounds. Burning coal with oxygen generates a form of carbon dioxide that's easier to capture.

The government should be investing in oxy-combustion, says Thomspon, just not this way for this project. "What is sort of surprising to me about the change is that they're putting so much money into a technology that has only been done at such a small scale," says Thompson.

According to government studies, oxy-combustion is cheaper. But Thompson says it's also the least-developed technology for capturing carbon emissions from coal, and there's no way of knowing the true cost for a large-scale project. Instead of scrapping the gasification plan already in process-which received a little over a billion dollars in DOE funding last year-the government should fund demonstrations of oxy-combustion technology at lower-output plants before scaling up to a project of this size.

"I feel sorry for the project at Meredosia because it's kind of got the FutureGen curse," says Thompson. That means it will probably wind up costing more than the government predicts, and stall. That's part of a larger image problem for the US government.

And, in the global clean energy community, these kinds of about-faces can quickly wear out other countries and investors seeking to emulate or partner with the United States on investments, technology and long term planning. "When the DOE makes these sudden switches, it undercuts it our credibility overseas," says Thompson.

The shift is especially embarrassing in relation to China. The Chinese government invested in the original plans for FutureGen, but pulled out when the project faltered. Now China is investing heavily in its own clean coal technology, and running laps around the US in terms of technological advances.

The Chinese are building more gasifiers than anyone, and they're building them cheaply. The United States still has a window of opportunity to work with China to develop these technologies together. But if political forces can't make good on the money needed to fund the current iteration of FutureGen, warts and all, the US may soon find itself sucking exhaust in the race for clean energy. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Company Price Change % Change
Apple Inc 103.30 0.80 0.78%
Staples Inc 12.63 0.95 8.13%
Facebook Inc 76.68 1.86 2.49%
Intel Corp 34.57 -0.35 -1.00%
Micron Technology In... 31.51 -1.09 -3.34%
Data as of Sep 2
Index Last Change % Change
Dow 17,067.56 -30.89 -0.18%
Nasdaq 4,598.19 17.92 0.39%
S&P 500 2,002.28 -1.09 -0.05%
Treasuries 2.42 0.08 3.24%
Data as of 4:49am ET


Georgia dealers say Tesla shouldn't sell its cars directly to consumers. It's also one of the most popular markets for electric vehicles. More

If approved by Los Angeles city council, the plan could raise wages for 567,000 workers by 2017. More

The latest celebrity photo hack shows your digital life doesn't end at your phone. If your stuff lives on "the cloud," you don't control the data. More

If approved by Los Angeles city council, the plan could raise wages for 567,000 workers by 2017. More

A scam where fraudsters impersonate IRS agents has now stolen $5 million from taxpayers, and this woman - who lost her entire life savings -- is just one of its victims. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.