Friday, February 1, 2008

CCS is more important than FutureGen

As Ororo Munroe noted in his previous blogs, the Department of Energy announced earlier this week that it has canceled its support of the FutureGen project. Personally, I think this is unfortunate because it creates uncertainty in the investment of our government in coal-fueled energy technology. However, practically speaking, I don’t see this as a catastrophic event, as long as the DOE follows through on its commitment to some key technologies that will enable coal to be a desirable energy source in the future. Specifically, carbon capture and sequestration (CCS) should be demonstrated at commercial scale promptly and convincingly.

First, some notes about the New York Times article containing this news. The DOE gives the impression that the main reason for the cancellation is the ballooning cost. It notes that the estimated cost has nearly doubled from $1 billion to $1.8 billion, and it was expected to increase more. Conversely, in its web site the FutureGen Alliance corrected this figure by noting that the estimated cost to the DOE only increased from $0.8 billion to $1.1 billion due to inflation, with the additional necessary funds provided from industry partners and from operating plant’s revenue. I doubt that cost was the real reason FutureGen was canceled, but it is a convenient explanation. The real reason for this project’s cancellation is likely more complex, including also its poorly defined objectives, complicating partnerships with foreign governments, and misalignment with the desires of industry, as alluded to in a report from MIT. On the up side, the DOE deputy secretary notes that the White House is increasing “clean coal” research to $648 million this year, up 25% from last year. He also said that the FutureGen project would be revamped to simply piggyback some other new coal power plant that private industry is planning to build anyway. This approach may have less impact on the generation of hydrogen gas from coal, but it would still help develop and demonstrate CCS technologies. The end of the NY Times article notes “Ernest J. Moniz, under secretary of energy in the Clinton administration and an author of a report by the Massachusetts Institute of Technology on the future of coal, said the new approach could work well, but ‘I’d like to see us get going quickly.’” That’s interesting – here is an independent expert on the topic who doesn’t really care about the details of the FutureGen plant, but just wants it to move forward quickly.

In order to interpret Dr. Muniz’s expeditious ambivalence, I checked out the report from MIT, “The Future of Coal: Options for a Carbon-Constrained World,” published in 2007 by a multi-disciplinary group at MIT. A recurring theme in the report is the urgent need for “the successful large-scale demonstration of the technical, economic, and environmental performance of the technologies that make up all of the major components of a large-scale integrated CCS system — capture, transportation and storage.” Furthermore, it is important to “demonstrate CO2 capture for several alternative coal combustion and conversion technologies.…It is critical that the government RD&D program not fall into the trap of picking a technology ‘winner,’ especially at a time when there is great coal combustion and conversion development activity underway in the private sector in both the United States and abroad.” As an important side note, the report also directs Congress to disallow the grandfathering of new conventional coal plants from carbon emission penalties, in order to prevent the “perverse incentive” to build coal plants without CCS today.

So, from all of this it appears that carbon capture and sequestration is by far the main obstacle to the widespread use of coal in the future, both for our country and the world. It’s not that big of a deal that FutureGen is being scrapped/revamped, but it is extremely important that CCS technologies be developed as quickly as possible, and in a way in which it will be fully embraced by the energy industry.

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