FutureGen: Another Triumph of Government-Directed Energy Transformation

by Marlo Lewis on February 4, 2015

in Blog

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FutureGen to be shut down after feds withdraw $1B in funding,” reads the title of an AP story published yesterday afternoon. This news is significant for the future of U.S. energy policy:

  1. FutureGen’s financial unsustainability further debunks EPA’s mythos that carbon capture and storage (CCS) is an “adequately demonstrated” technology.
  2. If CCS is not adequately demonstrated, then EPA’s Carbon Pollution Standard rule is unlawful.
  3. If the Carbon Pollution Standard rule is unlawful, then so is the far more consequential regulation predicated upon it — the Clean Power Plan.

Here are some key excerpts from the AP story:

Coal companies working with the government on the long-planned $1.65 billion FutureGen clean-coal project said Tuesday they have no choice but to shut it down after the Department of Energy suspended the majority of its funding.

The department confirmed that it will not provide the $1 billion in stimulus funding it had committed to the project, which aimed to refit a coal-fired power plant near Meredosia in western Illinois and store carbon dioxide from the coal underground.

The FutureGen Alliance, the companies working on the project in western Illinois, said they were disappointed by the news but had no way to make up the money.

“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.

* * *

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

According to the Department of Energy, it has spent $116.5 million on the power plant and $86 million on the underground storage site.

* * *

The project has a long history of stops and starts.

First proposed in 2003 by President George W. Bush’s administration, the FutureGen project initially called for building an experimental power plant in eastern Illinois. But the Bush administration pulled the plug on that version of the project, citing rising costs. [Illinois Senator Dick] Durbin and others, though, suspected politics drove the decision.

The current version of FutureGen, dubbed FutureGen 2.0, was first planned after President Barack Obama took office. The scaled-down project was promised $1 billion in federal stimulus funding.

Along the way, the FutureGen Alliance has lost a number of its members, including several power companies.

EPA cited FutureGen in its proposed Carbon Pollution Standards rule as evidence that CCS is ready for prime time or soon will be:

The following is a brief summary of some examples of currently operating or planned CO2 capture or storage systems, including, in some cases, components necessary for coal-fired power plant CCS applications. . . .Oxy-combustion of coal is being demonstrated in a 10 MWe facility in Germany. The Vattenfall plant in eastern Germany (Schwarze Pumpe) has been operating since September 2008. It is designed to capture 70,000 metric tons of CO2 per year. A larger scale project—the FutureGen 2.0 Project—is in advanced stages of planning in the U.S. [79 FR 1474-1475]

Clarification added 2/5/2015 

I may have given the misimpression that EPA’s proposed CO2 performance standard (1,100 lbs. CO2/MWh) is based in part on FutureGen. EPA lists FutureGen among several examples of current or planned CCS projects. However, the agency’s determination that “partial” CCS is the best system of emission reduction (BSER) for new coal power plants is chiefly based on four other heavily-subsidized projects: Southern Company’s Kemper Project in Mississippi, SaskPower’s Boundary Dam Project in Canada, Texas Clean Energy Project (TCEP) near Odessa, and Hydrogen Energy California in Kern County [79 FR 1435].

Greenwire ($) quotes NRDC’s Dave Hawkins as saying that FutureGen’s demise is “absolutely not evidence of [CCS’s] readiness. This is purely a budgetary issue.” I think Hawkins is technically right but wrong on the big picture.

DOE stated that it withdrew funding because budgetary authority would expire before completion of the project. However, the fact that the U.S. Government was the major investor — pledging to fund $1 billion out of FutureGen’s estimated $1.65 billion total cost – and that private investors were unwilling to put any ‘skin in the game’ without a billion dollar commitment by the feds is evidence CCS is not adequately demonstrated.

Or maybe the administration pulled the plug on FutureGen because EPA (1) knows CCS can’t pass the laugh test as adequately demonstrated, (2) does not want to jeopardize the Clean Power Plan by tying it to an untenable new source rule, (3) plans in the final Carbon Pollution Standard rule to define BSER as some form of advanced coal generation absent CCS, and, therefore (4) cares not one whit whether CCS projects succeed or fail. I’ve heard rumors to that effect. Only time will tell whether there’s anything to them.

Lani February 5, 2015 at 1:39 pm

You can’t put Genie in a bottle. The epa (doesn’t deserve caps) is like a boat with a huge hole in the bottom. Sadly Americans have to pay the toll for the idiots in charge. When will this giverment start paying attention to the SCIENTIFIC FACTS. CO2 is GOOD for the world.

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