Clean coal setback fuels industry attacks

The Energy Department’s decision this week to pull the plug on a major “clean coal” demonstration project stands as the latest setback for a technology that only recently held promise as a key piece of the United States’ fight against climate change.

Meanwhile, industry groups are seizing on the decision to scrap the years-old initiative as more evidence of the Obama administrations ”war on coal.”

FutureGen 2.0, a project with roots in the George W. Bush administration, had the lofty aim to be the first utility-scale coal-fired power plant to use carbon capture and sequestration (CCS).  The idea is simple enough: to pump carbon dioxide into the ground instead of putting it into the atmosphere.

Funding, however, was a different matter. President Obama’s 2009 economic stimulus law provided initial funding for the Illinois-based project, though it was to be financed via a public-private partnership and a September 2015 deadline to spend the federal portion was fast approaching.

The private sector, meanwhile, has shown little interest in expensive CCS technologies, making it a hard sell for government projects.

“The biggest problem CCS faces right now is that there are no markets for the projects,” said Howard Herzog, a research engineer at the Massachusetts Institute of Technology.

“These demonstrations are created by government incentives and government programs to get the first of the kind going.”

Herzog said there would be no market for coal plants with expensive carbon-capture systems until federal limits on power plants’ greenhouse gas emissions require them.

“Longer term, you need markets, and the markets are only created via climate policy,” he said. “And the climate policy is just too weak right now to create the markets.”

There’s no indication that the Energy Department had any fundamental problems with the carbon capture technology, Herzog said.

Nonetheless, the Energy Department says carbon capture is still important to the Obama administration. It’s providing funding to a variety of projects to develop different pieces of the CCS puzzle, like a power plant in Texas.

The administration also says that FutureGen was not a complete loss, and it had some important results.

“While this is an unfortunate outcome, the department acquired valuable information and tangible benefits from the work accomplished to date,” a department spokesman said.

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

Although the private sector is not ready to adopt carbon capture, coal interests were quick to suggest that losing FutureGen meant that Obama is turning his back on an opportunity to make coal cleaner and more viable in the future.

Hal Quinn, president of the National Mining Association, said in a statement that ending FutureGen “calls into question the commitment of the administration to the development of clean coal technologies.”

Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity, said the decision shows that “President Obama and his federal agencies are clearly opposed to advancing carbon capture and storage technology, despite repeated assurances.”

The industry said that the end of FutureGen also makes it hard for the Environmental Protection Agency (EPA) to regulate carbon from power plants.

A January 2013 proposal from the EPA would limit new coal-fired power plants to 1,000 pounds of carbon dioxide emissions per megawatt-hour produced, a level based on what can be achieved with carbon capture.

Without FutureGen, the industry has a stronger argument that the proposed limit is unreasonable, the industry argues.

“This decision cannot be reconciled with the administration’s proposal to require CCS as the only acceptable technology for any new coal-fueled power plant in the U.S.,” Quinn said in the statement.

More than anything else, the decision could be a reflection of the reduced urgency of deploying carbon capture, said Stephen Ansolabehere, a professor of government at Harvard University.

“One of the things that’s changed in a big way since the middle of the previous decade is the rise in horizontal drilling and fracking and that effect that has had on the cost of natural gas,” he said. “That took a lot of the pressure off of finding a clean coal alternative.”

Gas drilling advances have also made it a much cheaper fuel than the government had anticipated, making it a much more accessible low-carbon option than a coal plant with carbon capture.

“The market context in which policy decisions and recommendations were being made back then was extremely different,” he said.

But in the long term, it’s still important to study and develop carbon capture, Ansolabehere said.

“Compared to the rest of the world, we’re rich in supplies of energy, and coal is one of the central fuels,” he said. “And how we use that in an environmentally friendly way is a very important question.”