The White House Walks Away from Clean Coal

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by Jim Snyder,

from Bloomberg Businessweek,

A $1 billion Illinois project, meant to be the poster child for coal’s climate-friendly future, gets scuttled.

On the banks of the Illinois River, about 60 miles west of the state capital in Springfield, an old coal-fired power plant sits waiting for its future to arrive. First opened in 1948, it’s been dormant since 2011, when its owner, St. Louis-based Ameren, shut down the plant rather than retrofit it to meet federal standards. Last year workers came to give it a makeover. Using almost $1 billion in stimulus money, the project was supposed to become the poster child for clean-coal technology. Rather than spewing into the sky, the carbon dioxide produced as the plant burned coal would be captured into a pipeline buried below corn and soybean fields. It would run 30 miles east to Jacksonville, where the gas would be injected 4,000 feet underground. “It was like we were the phoenix rising,” says the plant’s director, Mike Long.

The resurrection was short-lived. On Feb. 3, the Department of Energy announced it was withdrawing support. Environmentalists who want investment in renewable power technologies rather than fossil energy cheered the decision. “We don’t need it, and we can’t afford it,” Bruce Nilles, head of the Sierra Club’s Beyond Coal campaign, says of carbon-capture projects.

President Obama has made addressing climate change a key part of his legacy.

The Illinois project, called FutureGen, was supposed to be a model for coal’s climate-friendly future. It was backed by some of the world’s biggest coal mining companies, who created a nonprofit, the FutureGen Industrial Alliance, to oversee the plant’s conversion. The White House saw FutureGen as a way to show leaders in China and India, where coal fuels more than half of electricity generation, that they can address their own carbon emissions without compromising economic growth. About 40 percent of man-made carbon emissions come from power plants.

The White House says the decision to walk away from FutureGen doesn’t mean it’s abandoning carbon capture. Since 2009 the Department of Energy has invested $6 billion in clean coal, and Obama included about $2 billion in tax credits for carbon capture in his proposed 2016 budget. White House spokesman Eric Schultz said in a Feb. 6 briefing the decision is “absolutely not” a signal Obama is retreating. “The administration has shown unprecedented support for clean-coal technologies,” he said.

Yet Obama decided not to fight for FutureGen after Republicans in Congress refused in December to extend a September deadline for using the stimulus money allocated to the project in 2009. “It makes no sense to pull the plug on $1 billion committed to America’s signature near-zero emissions power project at such a critical time for these investments in technology,” said Gregory Boyce, chairman and chief executive officer of Peabody Energy, the world’s largest private-sector coal company and one of FutureGen’s backers.

SaskPower opened the world’s first full-scale clean-coal plant last October, in Canada’s Saskatchewan province. Known as Boundary Dam, the plant cost $1.2 billion, $190 million of which came from the Canadian government. Its emissions travel down a pipeline rather than up a smokestack. But Boundary Dam enjoys one key advantage over FutureGen: Rather than simply burying its emissions, it sells the CO2 to an oil company, which injects the compressed gas into old wells to coax more oil to the surface—a process known as “enhanced oil recovery.” That turns the CO2 into a marketable byproduct, creating a steady revenue stream that offsets some of the costs of putting a lid on emissions.

A similar project is under way in Texas, where NRG Energy, a utility in Houston, is leading a $1 billion effort to build a clean-coal plant called Petra Nova. The project got $167 million in federal funds. As part of the deal, NRG bought a stake in a nearby oil field.

The lack of viable clean-coal plants means the Obama administration will have to rely even more on boosting renewables and natural gas as a source of electricity to achieve its goals of cutting power plant CO2 emissions by 30 percent by 2030.

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