Wednesday, January 30, 2008

Sequestration On Hold?

Today's Washington Post reports that the Department of Energy may be withdrawing its support for the landmark Futuregen carbon capture and sequestration (CCS) project, which recently announced its selection of a site in Illinois. CCS is widely viewed as an essential technology for managing the growth of greenhouse gas emissions from energy production, and particularly from coal, which has the highest emissions of any fossil fuel. The Futuregen project would be one of the first to integrate all of the elements of coal-power-based CCS under one roof. If the DOE truly intends to cancel its involvement in this public/private project, it should provide a detailed, public explanation of its concerns, rather than vague suggestions that technology has passed the project by, and cost over-runs rendered it unattractive.

Demonstration projects are rarely intended to be profitable, and Futuregen is no exception. Even at its original estimated cost of $1 billion, the effective capacity cost of its planned 275 MW output was already a multiple of that for a comparable conventional coal or gas-fired plant. While cost over-runs can cripple the profitability of commercial projects, that simply isn't a consideration, here. In fact, the international industrial partnership supporting the project is organized as a 501(c)(3) non-profit corporation.

Nor do I find Secretary Bodman's suggestion that he would prefer to support other sequestration projects particularly reassuring. The DOE recently announced support for three such projects, but all of them are focused on the CO2 handling side of the problem. While no one would call CCS proven technology, most of its components have been demonstrated at various scales in industrial projects elsewhere. CO2 from North Sea gas fields is collected and reinjected underground, and the Great Plains Synfuels Plant sends its CO2 to the Canadian oil fields for use in enhanced recovery. The main attraction of Futuregen was that it would be the first large-scale effort to integrate CCS into the up-front design process of a coal-gasification combined-cycle power plant (IGCC).

Each of the DOE's stated concerns deserves to be addressed. With regard to the costs of the project, it ought to be relatively easy to assess whether the cost escalation since the project was announced in 2003 is in line with the general inflation in engineering and construction costs that has affected commercial power plants, oil platforms and refinery projects around the world, with some allowance for the first-of-a-kind nature of this facility. Determining whether newer CCS technology has superseded the design basis of Futuregen is trickier, but not impossible, particularly with reference to the project's original technology goals, which appear to focus more on practical integration, operation and performance measurement, rather than finding the "bleeding edge." And if better technology is available, it may still not be too late to incorporate it.

Finally, this being Washington, the specter of politics always looms over such decisions. In Monday's State of the Union address, President Bush said, "Let us fund new technologies that can generate coal power while capturing carbon emissions." He did not specify where. Two of the sites not chosen for the Futuregen project were in Texas. One was in the Congressional district of the former Chairman of the House Energy and Commerce Committee, Joe Barton (R-TX.) The other was in Odessa, TX, sister city to the President's home town, which is represented by K. Michael Conaway (R-TX,) a former close associate of President Bush. Weighing against that, of course, is that Secretary Bodman himself is a native of Illinois. Without suggesting anything improper, these connections make it imperative that the DOE's decision concerning Futuregen be made in as transparent a manner as possible, on its merits, alone. I share the President's assessment of the importance of demonstrating this technology; if for good reasons Futuregen isn't the right vehicle, then we need to find a better one ASAP.

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