Lawmakers likely to scrutinize DOE closeout of FutureGen project

By Manuel Quiñones | 02/04/2015 07:10 AM EST

The Department of Energy is pulling the plug on its involvement in the FutureGen 2.0 carbon capture and sequestration project — a significant blow to the Obama administration’s efforts aimed at boosting the technology.

FutureGen is aimed to retrofit a coal-fired power-generating unit in Meredosia, Ill., to capture 90 percent of its greenhouse gas emissions. DOE last year approved providing $1.1 billion of the project’s estimated $1.6 billion price tag.

But yesterday, DOE, after spending more than $200 million, said it could no longer back the effort. For one thing, delays would make it difficult to spend the remaining amount by a September deadline.


"In order to best protect taxpayer interests, the Department of Energy has initiated a structured closeout of federal support for the project that will help maximize the value of investments to date while minimizing ongoing risks and further costs," DOE spokesman Bill Gibbons said in a statement yesterday evening.

FutureGen 2.0 is a second iteration of an effort that dates back to the George W. Bush administration. It’s part of an ongoing effort to reduce emissions from industrial sources, plus make coal viable in a world concerned about carbon emissions.

Lawmakers are likely to scrutinize what DOE got for the money it has already spent and whether there are any possibilities of reviving the project.

Illinois Democratic Sen. Dick Durbin, a member of his party’s Senate leadership, has been one of FutureGen’s strongest supporters. He said Energy Secretary Ernest Moniz told him the effort, which includes industry allies, was unable to secure enough private financing.

"This is a huge disappointment for both Central Illinois and supporters of clean coal technology," Durbin said in a statement yesterday.

"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."

The fall of FutureGen is arguably the biggest blow to the CCS effort since American Electric Power Co. Inc. shelved its Mountaineer CCS project in 2011 after regulators did not permit it to pass the cost on to consumers.

Similarly, last year, the Illinois Supreme Court agreed to hear litigation against a state mandate for utilities to buy FutureGen’s power (EnergyWire, Dec. 1, 2014). The Sierra Club has also challenged FutureGen over permitting (ClimateWire, Dec. 15, 2014). Challenges have contributed to delays and concern among potential funders.

Despite having to pull back, DOE says the work has not been in vain. "While this is an unfortunate outcome, the Department acquired valuable information and tangible benefits from the work accomplished to date," Gibbons said.

"That progress will continue to benefit our broad clean coal portfolio," he said, "helping to further the deployment of carbon capture and storage projects and the development of next-generation technologies."

Durbin said, "I am encouraged by the news that the Department of Energy values the injection site in Morgan County as a world class sequestration opportunity. I am hopeful that Illinois will continue to play an integral role in developing this technology."

Lawmakers, particularly pro-coal ones, will also likely point to FutureGen’s demise as evidence that CCS is not yet commercially available enough for a proposed U.S. EPA mandate. The agency is mulling requiring the technology for all new coal power plants. It gave FutureGen its carbon injection permit last year.

Lawmakers will also likely reiterate calls for the Obama administration and Congress to boost fossil fuel research spending. The president’s fiscal 2016 budget included new tax credits for CCS. Sen. Heidi Heitkamp (D-N.D.) is one of several legislators pushing for legislation on the issue.

Another major U.S. CCS project, Southern Co.’s Kemper plant in Mississippi, has been plagued by numerous delays and cost overruns. A similar project in Canada is already under operation.