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FutureGen has funding cut

World Coal,

The Department of Energy (DoE) has dealt a blow to the US coal industry, as it has withdrawn funding for the FutureGen clean coal project in Illinois.

Coal companies working on the US$1.65 billion project now plan to shut it down after the DoE suspended US$1 billion in stimulus funding it had committed to the project. The FutureGen Alliance – made up of coal companies working on the project – said they had no way to make up the money.

FutureGen was working to refit a coal-fired power plant where it would have stored carbon dioxide from the coal underground.

A DoE spokesman, Bill Gibbons, said the project’s funding had been suspended to “best protect taxpayer interests”.

FutureGen CEO, Kenneth Humphrey, has sent a letter to Energy Secretary Ernest Moniz asking the department to reconsider and pointing out that the state of Illinois has invested US$9 million in the project and private companies have spent another US$ 25 million.

"The project is poised for success and the Department stands to be instrumental in completing it," Humphrey wrote.

 "The federal funding was the key component," FutureGen Alliance spokesman Lawrence Pacheco said, adding that the Department of Energy told the alliance that the project couldn't realistically use the federal stimulus funds by the September deadline to do so.

Gibbons said that the project had provided useful research on carbon sequestration.

US Senator, Dick Durbin, said the Energy Department's decision was a disappointment for both central Illinois and supporters of clean-coal technology.

"A decade-long bipartisan effort made certain that federal funding was available for the FutureGen Alliance to engage in a large-scale carbon-capture demonstration project," Durbin said. "But the project has always depended on a private commitment and can't go forward without it."

As recently as last September, the project reached what the FutureGen Alliance called a major milestone when the US Environmental Protection Agency issued permits for FutureGen to start storing carbon underground.

According to the DoE, it has spent US$116.5 million on the power plant and US$86 million on the underground storage site.

"This project has gone through a decade of false starts and with today's announcement, US$1 billion in federal funding and hundreds of thousands of dollars in Illinois ratepayer financing can be freed up for investment in clean energy," said Holly Bender, deputy director of the Sierra Club's anti-coal campaign.

Questions have been raised over just how “clean” clean coal technology ever can be. In 2014, the UK advertising agency stopped Peabody Energy from running an advert promoting coal as a clean fuel.

The Advertising Standards Authority (ASA) concluded it was “misleading” to suggest coal was “clean”, because it ignored the fact that even with such technology, fuel remains one of the dirtiest and most polluting fossil fuels. The ASA said the term “clean coal” “implied that the advertiser's impact on the environment was less damaging than was actually the case.”

Peabody Energy’s ad was part of its Advanced Energy for Life campaign – a PR strategy developed by Burson Marteller.

Burson Marsteller has worked with the tobacco industry, aided governments with questionable human rights records and helped Union Carbide spin the aftermath of its infamous Bhopal poisonous gas explosion that killed thousands and injured many more.

Peabody Energy, for its part, has responded with disappointment to the news that the FutureGen project is to have its funding withdrawn. In a statement, the company said it called on the Obama Administration to reverse its decision to suspend development funding for FutureGen 2.0.

"It makes no sense to pull the plug on US$1 billion committed to America's signature near-zero emissions power project at such a critical time for these investments in technology," said Peabody Energy Chairman and Chief Executive Officerm Gregory H. Boyce. "The Administration has pledged US$1 billion for advanced coal projects in China, and I urge them to support investments in the United States. We have the knowledge to advance low-carbon technologies to commercial scale and must demonstrate our leadership and our will." 

Peabody Energy said FutureGen would be the only fully integrated carbon capture and storage project in the world. There are 22 carbon capture and storage projects in operation or construction globally, and the International Energy Agency initially called for at least 100 projects by 2020. The FutureGen concept was initiated as part of the Clinton Administration's Vision 21 program and has enjoyed strong bipartisan Congressional support. Yet as America has contemplated how to develop FutureGen for nearly two decades, others have moved decisively forward. 

Norway's Sleipner carbon storage project in the North Sea has been operating since 1996. Canada's Boundary Dam power plant began operating last October, capturing carbon dioxide for enhanced oil recovery. China's GreenGen power plant and carbon research centre was brought online in 2012, and ultimately will capture carbon dioxide for enhanced oil recovery.  At full build, GreenGen could become the world's largest near-zero emissions coal plant.  Peabody is a founding member of the FutureGen Alliance and the only non-Chinese equity partner in GreenGen.

Further criticism against the DoE came from the National Mining Association (NMA), whose President and CEO, Hal Quin, said “The Department of Energy's decision to back out of its commitment to its US industry partners to build the world's first near zero-emissions, carbon capture and sequestration (CCS) coal-fired power plant calls into question the commitment of the Administration to the development of clean coal technologies. This decision cannot be reconciled with the Administration's proposal to require CCS as the only acceptable technology for any new coal-fired power plant in the US.”

Such comments mark the bitter disappointment that FutureGen could not make a go of it as a new breed of coal-fired power plant. Had it become operational, the coal industry would have a beacon to point to as a mark of how coal can still be used in a low-carbon future that looks to curtail global warming and the potentially catastrophic effects of climate change such warming would bring. However, without the support of government, the project cannot continue. The withdrawal of funding is yet another sign that the US, along with numerous other countries – including recently, perhaps surprisingly, China – is moving away from coal.

Edited from various sources by Sam Dodson

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