The Department of Energy is in the early stages of building a $1 billion coal-fired power plant, with a recent commitment by electric utilities and coal companies to pick up one-quarter of the project's cost. Billed as a near-zero emissions power plant that will also produce hydrogen fuel, the FutureGen plant will capture and store carbon dioxide emissions underground and is a major component of the White House's approach to climate change. Victor Der, director of the Office of Power Systems at the Energy Department, joins OnPoint to talk about the road ahead for FutureGen, battles with Congress over clean coal funding, and DOE's efforts to involve other countries involved on carbon sequestration research.
Darren Samuelsohn: Welcome to OnPoint. I'm Darren Samuelsohn. Joining us today in the E&ETV studios in Washington is Victor Der, the program director for the FutureGen project at the Energy Department. Mr. Der thanks so much for being here.
Victor Der: Well thank you for having me Darren.
Darren Samuelsohn: The FutureGen project, do you see this as President Bush's most significant long term commitment to global warming and climate change?
Victor Der: I think it's one of the major projects that he has in the works in committing himself to addressing the issue of climate change and global warming and greenhouse gas emissions from the use of fossil fuels.
Darren Samuelsohn: It was announced about two or three years ago, we're still in a very early stage in the process.
Victor Der: Absolutely, very early stage of the process and it takes a lot to get the project started.
Darren Samuelsohn: Give me a sense of how much government manpower, right now, is dedicated to FutureGen?
Victor Der: Well, we've got probably a couple of dozen people working on the planning stages of it. As you know this is a project that is a joint partnership between the government and a broad consortium of the industry in the coal area, both from the coal producers and from the coal based utility-electricity generators.
Darren Samuelsohn: We don't know yet where FutureGen is, and I'll get to that in a second, but where, right now, is most of the work being done? Is it coming out of Washington or is it coming out of the Energy Department labs?
Victor Der: Well actually right now the project is in the formative stages, basically a lot of the paperwork, but it's built on a lot of the technology and research work that's going on as part of our coal research program. And that's going on at the national laboratories and in partnerships with industry.
Darren Samuelsohn: Right now you're kind of in the, I guess, unsexy phase of this, before we even get to the construction. It's the environmental impact statements, the NEPA process, is that right?
Victor Der: Well we started the planning for the NEPA process, but we've got to get everything lined up in terms of our agreement with the industry and then hopefully we'll have a big push in that direction. And then the NEPA process is a very important part of any large project that the government funds.
Darren Samuelsohn: Reviewing some of the documents, it looks like in this period of time, at least in the initial planning stages, we might be, are we even at demonstrations yet of even some of the smaller, the technologies in smaller bench scale?
Victor Der: I think some of the technologies that you will see being considered in the FutureGen will have been tested at the smaller scale because the primary thrust of this particular project is to try to scale these things up to a large size. And the key here is to integrate all of these technologies together, both from the standpoint of producing the power and the hydrogen and coupling that with sequestering or capturing the CO2 and putting it into the geologic formations for storage.
Darren Samuelsohn: Do we have some of these projects actually ongoing, have started going on right now?
Victor Der: Some of the projects, in a piecemeal fashion, have occurred. For instance in the sequestration area, which is the carbon capture and storage, we've got a project that is taking CO2 from a gasification plant, sending it several hundred miles into enhanced oilfield recovery operations in Alberta, Canada. It's called a Weyburn project, but that's sort of just a piece of it. What we're looking at on FutureGen is taking a lot of the cutting edge technologies from the advance coal systems and coupling it with advanced technologies that we'll be using for the sequestration of the carbon dioxide, just, essentially, creating zero emission.
Darren Samuelsohn: Right, a lot of grants have gone out for carbon sequestration projects that the Energy Department has said are geared toward ultimately FutureGen. Are those also in the works? I think we're talking about a dozen or so, is that right?
Victor Der: We've got, as part of a major thrust in the carbon sequestration program, some regional partnerships. And I think there are about seven or so of those and their thrust is to look at developing databases for those particular regions, looking at infrastructures and the wherewithal to how you would handle the storage of carbon dioxide in those particular regions.
Darren Samuelsohn: Is that geared toward, ultimately, the site selection process that you have to go ahead?
Victor Der: Actually, it's sort of a parallel path. The site selection process that we will go through is going to be an open and fair, competitive process that we will be working with industry to have. And they will have the primary responsibility for doing that. Some of these regions will probably be candidate regions that people will look at, but it's an open bid for the sites for anybody who thinks that their site will meet these criteria.
Darren Samuelsohn: For the other sites that don't get picked, is that, I guess with an eye toward building power plants in the future that would be sequestering the carbon dioxide?
Victor Der: That's an absolutely important point to make there Darren because even if a site is not picked, and it may be for other reasons than the fact that, it's geology. There may be other things that focus under the types of proposed sites that are being considered in the near term. It's very important to continue the work in these other regions to make sure that we have the full capacity if we're going to replicate this concept of zero emissions across the country and the rest of the world.
Darren Samuelsohn: I find, I guess, the site selection process to be maybe one of the more interesting things, because you do have local politicians and state politicians and national politicians talking about how they want the project. And a lot of local governments are making statements right now and they're making news in terms of trying to gear the process towards them. It's kind of, in some respects, it's like the Olympics I guess you could say. They're bidding for this huge project. Would you agree?
Victor Der: Well I think there's a lot of state interest and a lot of state interest has been expressed. We've gotten a lot of letters and phone calls in, but the bottom line point here is that we want to make sure that the process that we put out there is a fair, open, competitive process. That everyone has an equal chance to put their best foot forward.
Darren Samuelsohn: Do we know, I mean right now, I guess the list of states is a long one. It's Illinois, Indiana, Kentucky, Ohio, Pennsylvania, Texas, West Virginia and Wyoming. Did I leave anybody out there?
Victor Der: I think you covered most of the things that we've been seeing. I think my home state of Maryland had sent in the letter also.
Darren Samuelsohn: OK, I've heard Kansas is ...
Victor Der: Kansas was another one that expressed interest and they've had things in the news about that in the past year or so.
Darren Samuelsohn: OK, are there any states that absolutely are probably not going to be interested in this?
Victor Der: I haven't heard anybody say they're absolutely not interested in the thing, maybe their silence may be some kind of an indication, but we've had really, really strong interest from the states that you've mentioned and others as well.
Darren Samuelsohn: The focus of FutureGen, big picture, is hydrogen production and carbon sequestration. Two things that we really don't have a firm grasp on right now. Why think about these two big things as opposed to why not just focusing on one in the construction of this power plant?
Victor Der: Well, the construction of a power plant uses a technology called coal gasification and then basically, in a very simple way, we take the coal and we convert it into a fuel gas. With that fuel gas we convert that into hydrogen, now the use of hydrogen can be many folds. We can produce power and electricity from the hydrogen, either through one of these advance turbines or fuel cells, but the hydrogen can also be used as a carrier for transportation and producing other types of products that could help us in terms of offsetting imported oil and the like. The idea of integrating this with carbon sequestration, the important part there, is to see whether or not we can address the carbon emissions, which is a greenhouse gas associated with the use of fossil fuels, in particular coal.
Darren Samuelsohn: Was this an evolution of Energy Department's work going back over the last 25 years or is this something where somebody in 2002 just this idea popped into their head?
Victor Der: I think for the longest time the idea of trying to make efficient power from coal and also to minimize or reduce to minuscule amounts of emissions, has always been a part of our program. I think in recent years, within the last decade or so, there has been concern about the emissions of carbon as a greenhouse gas and how that might lead to other climate change areas. And the questions were debated for the last decade or so, but let's say why not go after the whole system and see whether or not we can't have an absolutely clean system, but by using fossil fuels that sort of ensure our energy security for the future?
Darren Samuelsohn: Who thought up the word FutureGen or the name FutureGen?
Victor Der: Oh, that was a couple of years back. It's hard to say who in the Department of Energy coined that phrase, but we may as we'll give that credit to the president.
Darren Samuelsohn: OK.
Victor Der: Since it's his program.
Darren Samuelsohn: Sure. Industry has come forward very recently, the FutureGen industrial alliance just sort of announced their role in this. This was in the planning documents, that this group had to form and they've promised to pay 25 percent of the project's cost. Is that a binding commitment that they're in for the long haul on this?
Victor Der: We expect them to be in for the long haul. Their press releases and announcements reassured us that. They've written to the president in the past year or so reiterating that commitment. We believe that they are fully committed to this as we are to this particular project.
Darren Samuelsohn: OK and the international side to this is what? Eighty million dollars you've asked for, for international aid. What countries have shown an interest at this point?
Victor Der: I think many countries are showing an interest in FutureGen as part of the issue relating to carbon emissions. We've been able to garner interest in projects from various countries. We're actually actively trying to encourage them to participate in the FutureGen project. These countries would include China, Germany, United Kingdom, France, Italy, Brazil, a whole host of countries that are interested in looking at the issue of zero emissions from fossil fuels and clean coal.
Darren Samuelsohn: Obviously some of the countries that you just named, not all of them, but some of the countries are involved in the Kyoto Protocol. What role, why would they want to be involved in FutureGen when they have to do, make emission cuts right now?
Victor Der: Well, I think if they're involved in Kyoto it's something that they have to look out for the nearer term, but I don't think Kyoto is the end all for everything. It's maybe-some people look at it as the first commitment to the thing. I tend to think that FutureGen is a serious commitment to the reduction of greenhouse gases because we're actually putting a project in place. And I think for a very little investment on their part they can actually be a party to this, look at the technology, make an evaluation and adopt that for their own country.
Darren Samuelsohn: Do you sense, President Bush announced an international technology sharing agreement toward building, it sounds like global warming power plants or power plants like FutureGen. Are those countries that the United States signed up with, I think it's Australia, Japan, China, are those the same ones as well that kind of are, that technology sharing agreement is the same thing as going on here with FutureGen?
Victor Der: I think that those technology sharing agreements could be an umbrella over the types of projects, such as FutureGen, it could fall under that.
Darren Samuelsohn: OK.
Victor Der: Absolutely.
Darren Samuelsohn: This is something that we're looking out toward 2012, 2013, maybe beyond that. That's another presidential administration. How is the transition supposed to work, from 2008 when President Bush leaves office to whomever comes in?
Victor Der: Well we're hopeful that the merits of the project and the recognition of what it can do and implications of what it can do for the long term will sustain itself. I mean this is, I think, a key step in trying to show the industry, the other stakeholders, environmental groups and the rest of the world that we do have a path forward. And it's very important to do that because our major reliance on fossil fuels is not going to end after a few administrations. I think it's going to continue for probably many, many decades into the future. So this is an important project.
Darren Samuelsohn: Your budget documents though, I mean you're talking about I think it's 300 million from DOE budgets and 120 million on sequestration. So about $420 million is expected to be appropriated from Congress after President Bush leaves office, on this one billion dollar project. So that's ...
Victor Der: I think the numbers are roughly about a half a billion dollars directly on the project and about 120 million from the sequestration program. And we believe that that is what our commitment is in addition to raising money from the international partners and the commitment of about $250 million from the industry side. And we hope that that interest is sustained and that Congress will see the value of the program and fund it even beyond this administration.
Darren Samuelsohn: If this is President Bush's project though, we know from administration to administration, priorities change. And the next president, who knows who it will be or what party they're going to come from and what their priorities are. I mean what if it's a president whose priorities are totally different than this president?
Victor Der: Well I can't speak to what future presidents will do in terms of priorities, but we know that energy is a high priority today and probably will remain a high priority for everyone in the future. And that we would hope that this would have a main place in the future president's plates in terms of how they balance priorities or other things that they have to take care of for the country.
Darren Samuelsohn: Is there a plan to sock away money in the event, say, a couple of hurricanes hit in 2009 or 2010 that require like we're seeing right now, you know hundreds of billions of dollars taken out of the federal budget or wherever it's going to come from, so that your money could dry up. Is there a plan in terms of…?
Victor Der: Well in our request to Congress for our next fiscal year, which is 2006, we had requested the Congress to give us a substantial amount of money, on the order of 250 some odd million dollars, for the future so that there is at least a large commitment to the project to get some of the key features underway.
Darren Samuelsohn: Almost like a mandatory spending idea I guess? Like sort of like what we see with Social Security and Medicare?
Victor Der: No, I'm not sure it's a mandatory, it's identified funding that we would like for the Congress to maybe, for lack of a better term, to at least put a fence around the things that are committed to the project. That's the request that the administration made this year for the next fiscal year and we'll see what comes out from the Congress.
Darren Samuelsohn: What do you envision happening, I mean, well first off, when will this-when with FutureGen open for business? Do we have any sense yet?
Victor Der: Well, hopefully we'll get the industrial team together very soon and then opening for business means there's a lot of the grinding groundwork that you're talking about that gets things started. But I think there's a design phase associated with it and making sure that the technology that we use is the best technology that we have and has the potential for being affordable for the future. The groundwork has to be laid in terms of what site that we have to select, we have to select that carefully and make sure that it's the best site that we have. And then when all those things are done, we go into a construction mode and buying up hardware and putting that thing in. And eventually, within this 10 year project, we'll have the thing up and running somewhere around 2011, 2012.
Darren Samuelsohn: And then duplicate it around the country 10 years after that? Is that ...
Victor Der: Hopefully and we feel that a lot of the coal power plants in the country are aging. And let's say in the 2020 to 2030 time frame, which would be about 10 years or so after the project is completed, that we would like to have this particular technology offered up as an option for the industry to embrace in terms of providing energy and electricity for our country's future.
Darren Samuelsohn: Well, thank you very much. It sounds like we could probably have you on here for the next decade or so. You could be a rotating guest here on the show.
Victor Der: Well I appreciate you having me on.
Darren Samuelsohn: Thank you so much.
Victor Der: Thank you Darren.
Darren Samuelsohn: Until next time, this is Darren Samuelsohn for another edition of OnPoint.
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