By Lee Buchsbaum
With the recent publication of two Congressionally ordered investigations into its seemingly temporary demise, another side of the FutureGen saga, the proposed federally-funded 275 megawatt (mw) experimental integrated gas, combined cycle (IGCC) power plant equipped with carbon capture and sequestration (CC&S) technology, has emerged. Populated with politicians trumping science and clutching projections corrupted by bad math, the investigations reveal a politically appointed Department of Energy (DoE) leadership fueled with an Orwellian desire to successfully accomplish nothing.
Formally announced by the Bush administration on February 27, 2003, and—citing runaway costs—killed five years later, the FutureGen concept was borne out of a need to accelerate implementation of clean coal technologies which have been available but untested on a commercial scale because of the financial and potential legal risks involved. It was and—for some continues to be—hoped that the empirical knowledge gained from deploying FutureGen would allow the U.S. to significantly reduce the aggregate CO2 emissions created by its power plant fleet.
In the months since the initial plan was officially nixed, the project has been chopped up, put on hold, kept on life support, and now, through the unyielding efforts of Senator Dick Durbin (D-IL), several other members of Congress, and perhaps another influential Illinois politician, it seems as though FutureGen’s time may actually have come.
The Child of Two Masters: the DoE and the FutureGen Alliance
As the plan for the $1.8 billion power plant evolved, a consortium of many of the largest power generators and coal producers, including American Electric Power, CONSOL Energy, Peabody Energy, Foundation Coal Corp. and Southern Company, along with several international partners, banded together to form the FutureGen Alliance. The group, in exchange for a role in planning the project that each saw the necessity of, pledged to cover over a quarter of the plant’s construction costs, with the DoE paying for the rest.
In the early stages of the project, from 2003 to 2007, several states, each eager to land FutureGen, competed by passing legislation, funding internal research necessary for site selection, and indemnifying the project against any future CO2 liabilities. By the end of 2007, the Alliance and the DoE had narrowed down the potential sites for FutureGen to four: two in Texas and two in Illinois. Conventional wisdom at the time suggested that the science underpinning the project dictated that the first plant should be constructed in Illinois, but the politics at the DoE was steering FutureGen to Texas or back to the drawing board.
As the Alliance signaled their support for Illinois, rumblings from within the DoE emerged that projected costs were skyrocketing. The Alliance countered by offering to restructure the costs by kicking in more private funding and by ensuring that the revenue created once FutureGen began producing electricity would be used to pay back its costs. They were met with silence. In December 2007, with the DoE dragging its feet and the Alliance eager to break ground, they gambled that it was time to push the envelope. When they did, the DoE responded first with silence, then with stonewalling and finally with letters of cancellation. By early 2008, after more than $300 million in Federal funds had been spent and five years of valuable time had been squandered, FutureGen at Mattoon was doomed.
What’s at Stake with FutureGen?
Designed as a living laboratory, FutureGen would test which CC&S technologies work, in what combinations with which types of coals and procedures. “When you want to build the first several IGCC plants with CC&S, you need to know what to do,” said Michael Mudd, CEO, FutureGen Alliance. “Moreover, it is the only similar project designed on a commercial scale facility to test all these technologies in a single facility. Over time, we can share the way we specify the equipment with industry throughout the world, write better specs, and incorporate that in those designs going forward.”
The envisioned plant would capture and store 90% of the CO2 emissions 7,000 feet below ground in the Mt. Simon Sandstone reservoir, a deep saline formation. But on a local level, it was the plant’s economic impact that continues to be the biggest prize. According to a Southern Illinois University-Carbondale study, construction of FutureGen would create more than $1 billion economic impact statewide and create 1,225 indirect and induced spin-off jobs.
While Mudd is emphatic that FutureGen at Mattoon should be the first of a new fleet of power plants, he realizes it should only be one of many designs. “It’s not appropriate to consider FutureGen as the sole model for CC&S,” Mudd said. “We need a whole portfolio of power plants. What would be best for bituminous coals, may not work for sub-bituminous. Lignite calls for a different construction plan. While Duke and AEP are building IGCC plants, some companies are trying Oxycumbustion techniques. It’s vital that our country can choose the rational path of advancing technology that reduces CO2 emissions.”
Though some debate even if such technologies are plausible, at a recent Platts conference, Milton Catelin, CEO, World Coal Institute, said that CC&S technology has already developed to the point where it can now deliver up to 55% of the emission reductions needed to fight global warming worldwide. Combined with operational efficiency improvements, he believes the technology is ready for wide scale deployment in the EU, the U.S., and elsewhere. “The belief in WCI is that the technology is ready now,” Catelin said. “We have all the technology we need to build CC&S power projects. There are, of course, first-of-a-type challenges to overcome, but we expect the efficiency of the units to improve dramatically after the first tranche of power plants are built and operational.”
Catelin added that since the U.S. has not moved forward on CC&S technology, China will likely build the first viable FutureGen-like plant and that international companies and the Chinese government will take the lead in sharing high end CC&S technology with the rest of the world. “For years we’ve been talking about exporting technology to China, now we may be in a position in Europe of being supplicants and asking for technology from China,” Catelin said.
Punting on the Finish Line: The Bush Administration’s FutureGen
Incensed by the Alliance’s unauthorized decision to site FutureGen at Mattoon, the DoE refused to grant a Record of Decision and publicly broke with the industry group, stating in fact, their intention to move away from the as-conceived FutureGen, be it in Mattoon or anywhere else. By mid-January 2008, citing skyrocketing costs, the DoE officially labeled the project D.O.A., and began drafting up plans for a mixed approach, with the goal of funding several experiments simultaneously, attaching Federally funded CC&S equipment onto a variety of existing and under-construction power plants nationwide. Gone was the idea of creating an international power plant laboratory with the goal of proving out various approaches to clean coal technology under one roof. And more importantly, gone was the progress made toward erecting a fully integrated clean coal power plant that might come on line by 2015. As the Presidential campaign season geared up, the DoE essentially punted the whole CC&S concept toward whomever the people might select as their next leader.
After the siting fiasco, things got ugly. Citing “cost over-runs” and “mis-management,” the DoE maneuvered to kill FutureGen. According to The Washington Post, Durbin, furious over what he viewed as duplicity on the part of the Bush administration, made several trips to then Sec. of Energy Samuel Bodman’s office, and quickly organized a campaign to keep the plant alive. At years end, he and 19 other members of Congress, signed a protest letter to Bodman, and then confronted the energy secretary face to face.
According to witnesses, the meeting in Durbin’s office quickly became heated after Bodman dropped the bomb that, as far as he was concerned, the plant in Mattoon was dead. “That was a meeting unlike any I’ve ever been a part of. Members of Congress were literally screaming and waving their fists at the secretary,” said someone in attendance, who spoke on the condition of anonymity. “We won this competition fair and square, Durbin said, and ‘are going to keep this alive for the next president,’ he vowed.”
The next day, after reportedly telling Durbin that the “DoE wasn’t about to build some Disneyland in a swamp in Illinois,” Bodman went public with his decision. “The likelihood that it would fail, leaving the American people with hundreds of millions of dollars in sunk costs and none of the benefits, is not acceptable,” Bodman wrote in a February 6, 2008, letter to the editor in the St. Louis Post-Dispatch.
Incensed, now President Obama and the rest of the Illinois delegation wrote to then President Bush, charging that the secretary had “misled us and the people of Illinois, creating false hope in a FutureGen project which he had no intention of funding or supporting.” Led again by Durbin, Congress ordered a pair of investigations, one to be conducted by the Government Accountability Office (GAO) and another by the House Committee on Science and Technology, to determine whether it was politics, money, or science which was at fault.
Throughout the remainder of the Congressional session, Durbin personally held up dozens of DoE projects while calling for a review of Bodman’s decision. In July 2008, the Senate Appropriations Committee voted to protect $134 million in funding for FutureGen in Mattoon, prohibiting the DoE from spending it on anything else.
Strange Bed Fellows, Indeed: Democrats Embrace Clean Coal
By leading a sustained rear-guard action to sustain it, Illinois Senator Durbin has clearly emerged as one of the principle backers of FutureGen. If the Bush administration had punted on the project, Durbin was determined to receive the airborne football. “This has been my longest, most difficult battle in Congress,” said Durbin in a recent interview.
Following his Presidential victory in November 2008, Obama’s transition team met with the FutureGen Alliance. When Obama announced plans for an economic stimulus bill, Durbin and other members of the Illinois Congressional delegation drafted a $2 billion line item to fund a “near zero-emissions power plant(s),” which Sen. Byron L. Dorgan (D-ND) later placed in the Senate version of the Stimulus Bill.
Republicans, perhaps playing politics, cried pork. “We all know what this is about. It’s an earmark for a single plant,” said Sen. Tom Coburn (R-OK), who placed FutureGen at the top of his government-waste list, emblazoned with the image of a pig. Ironically, during Texas’ campaign to land FutureGen, the Oklahoma Congressional Delegation supported its neighboring state’s bid.
In a compromise, the $2 billion in the Senate bill was zeroed out by the joint House-Senate conference committee that met to resolve differences in the chambers’ two bills. At the end of the day, at Durbin’s insistence, the final version of the legislation cut the funding to $1 billion to pay for “fossil energy research and development,” which could, potentially, fund any number of alternative projects. Hopeful that the project would eventually be greenlighted, in December 2008, the FutureGen Alliance and the City of Mattoon together spent $6.5 million to purchase the 440 acres for the plant’s eventual site.
The GAO and Other Reports: Proof in the Punting
Released at the end of March, the majority staff report to the House Committee on Science and Technology stated that the DoE’s cost comparisons were not accurate and were designed to undercut the FutureGen project and eventually kill it. It also accused the Bush administration of never fully committing to the project, stating that FutureGen was “nothing more than a public relations ploy for Bush administration officials to make it appear to the public and the world that the United States was doing something to address global warming.”
Both this and the GAO report reprimanded the DoE for the $1.8 billion cost estimate it cited as rationale for killing the project stating that the figure had not been properly calculated. When first proposed in 2003, DoE estimated that FutureGen’s federal cost would be approximately $900 million. By 2008, the project’s increased costs were almost entirely due to inflation and rising commodity costs, and still the actual price tag was still about $1.3 billion—or nearly $500 million less than what had been previously stated. “It is difficult to believe that anyone working at the top levels of DoE or the White House, both of which deal with many multi-year clean-up, research and defense projects … did not know the difference between ‘constant’ and ‘as spent’ dollars or even ask how the $1.8 billion figure was obtained,” the congressional staff report, said. Rep. Donna Edwards (D-MD), called the administration’s calculation errors a “second grade math” mistake.
The GAO report stated that Bush’s inaction may have set back clean coal technology in the U.S. by as much as a decade. “DoE officials knew they were manipulating the numbers and that a ‘restructured’ FutureGen would not accomplish what had been planned, but they went ahead anyway,” said Investigations and Oversight Subcommittee Chairman Brad Miller, (D-NC). “In the process, they lost the participation of China and India. The damage to U.S. leadership on clean coal technology, and climate change generally cannot be overstated.”
“They just didn’t like the project,” and could find no scientific or engineering rationale to kill it, so they created a reason, said David Gilies, press secretary with Illinois Congressman Jerry Costello. “Going forward, it is essential that we set the record straight: The idea that FutureGen was being poorly run or was experiencing some crazy cost escalation is political theater.”
“The report shows that political appointees in the DoE were hell bent on killing FutureGen and were looking for any reason to do so,” said Lawrence Pacheco, spokesperson, FutureGen Alliance.
“In a way, it was fascinating to re-live some of those difficult times and now to know what was really going on behind the scenes,” said Mudd. “When I started to deal with politics, I was told it was going to be a rough ride, now I know why we could never make any progress.”
In later testimony before the Senate Budget Committee, new Energy Secretary Steven Chu conceded to lawmakers that indeed DoE’s cost conclusions for FutureGen were, in fact, quite wrong. “The proper costing of any project has to include what you see as trends in costs of materials,” Chu said. “However, while there are a lot of merits to FutureGen, the current price is still very high. In fact, the actual cost of a revised FutureGen could still increase, possibly to as much as $2.3 billion.”
Previously, at a late February Platts energy round table held in Washington—and perhaps aware of the soon-to-be-released GAO report findings, Sec. Chu said that the DoE was still studying what to do. “We have not done a full review of FutureGen in Mattoon. There are several options, and we need to do a technical review of all these things. FutureGen sounds like it will cost a lot of money but doesn’t go that far. I would like to do a number of projects that focus on both pilot pre and post combustion and separation techniques, and not put all that money in one basket,” Chu said.
Where We Stand Today
In early March, Sec. Chu met with Sen. Durbin and the rest of Illinois’ Congressional Delegation. Though private, evidently Chu was apparently open to further discussions about FutureGen and promised to meet with the Alliance later in the month. However, John Grasser, Communications Director for Fossil Energy at DoE stated that things are still in a holding pattern. Of the $3.4 billion that has been allocated to Grasser’s Department by the Stimulus Bill, only $1 billion has not yet been designated. Making a
decision on FutureGen is “on Sec. Chu’s plate of things to do,” Grasser said.
Additionally, Congress has allocated another $75 million to be released in April to move the project forward. Those funds will be spent on further design of the plant and completing contracts for construction. If that money comes through, Mudd cautiously expects to have all federal funding restored by September, meaning construction would start next year. “We are very optimistic about it,” Mudd said. “We think the time is right, that the opportunity is right in Washington, so I think we have a very strong opportunity to get FutureGen back on the fast track and moving ahead.”
On March 30, the Alliance itself had its first direct meeting with Sec. Chu at which he reiterated his belief that FutureGen “has real merit” and that it will move forward. In an important, but subtle policy change, Chu committed to work with the Alliance going forward—signaling support not just for FutureGen, but for it to be sited at Mattoon.
“While the details for a new timeframe need to be worked out before an agreement can really be reached, we are urgently moving forward,” to make up for lost time, said a now vindicated and re-invigorated CEO Mike Mudd.
Buchsbaum is a Denver-based freelance writer and photographer specializing in industrial subjects. He can be reached through his Web site at www.lmbphotography.com or by phone at 303-746-8172.
