Problems that killed FutureGen now threaten other projects
Chris Smith, DOE’s fossil energy chief, today said he decided to pull the plug on FutureGen, which involved retrofitting a coal plant with capture technology, because of a fall legal deadline to spend the money.
“This is unfortunate for us. It’s a project that we worked very hard to ensure it would succeed,” Smith said during a Global CCS Institute conference. He said FutureGen was “simply undone by timelines that were established by law.”
But FutureGen is just one of several carbon capture projects receiving economic stimulus dollars. And all of them must spend the money by that law’s same tight deadline.
Smith said Summit Power’s Texas Clean Energy Project — which aims to trap carbon from a coal plant and use the CO2 for enhanced oil recovery and making fertilizer — is so far meeting its development benchmarks, including signing a deal with an affiliate of China National Petroleum Corp. DOE’s share of that project is about $350 million.
Smith, however, appeared concerned about Hydrogen Energy California LLC, which aims to produce electricity from hydrogen and capture CO2 emissions for enhanced oil recovery and fertilizer. DOE’s share is just over $300 million.
Hydrogen project CEO James Croyle responded during the conference quoting Mark Twain: “The rumors of my demise are greatly exaggerated.” He said the company may indeed lose out on some federal funds but added, “It doesn’t matter to us,” because the loss wouldn’t be enough to kill the project.
Smith sought to reassure his audience, many of them CCS boosters, that DOE was working with the projects to ensure their survival and remained committed to the technology.
He touted President Obama’s fiscal 2016 budget proposal, which includes new tax credits for CCS and almost $370 million for clean coal research. Boosters would like to see that number be closer to $400 million.
Smith, like other CCS supporters, pointed to recent successes. NRG Energy Inc. and JX Nippon Oil & Gas Exploration Corp. broke ground on another Texas project last year. And Canada’s Boundary Dam is already operational. Plus, Southern Co.’s Kemper plant, while delayed and over budget, is nearing completion.
Saving FutureGen?
Lawmakers have been divided in their response to FutureGen’s failure. Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska), like the coal industry, said the development put the administration’s commitment to CCS in question.
Sen. Heidi Heitkamp (D-N.D.), who has introduced legislation in the past to boost CCS development, thought DOE didn’t really have a choice in scrapping FutureGen. But she wants to make sure the roughly $200 million the administration had already spent doesn’t go to waste.
Heitkamp asked, “Then really, what have you gained from the investment that you’ve made?”
DOE said this week it has learned valuable lessons from its investment.
Sen. Joe Manchin (D-W.Va.) said during the CCS conference this morning that he was looking to meet with DOE Secretary Ernest Moniz to urge him to redeploy the money yanked from FutureGen and use other dollars for the technology.
Manchin noted that as West Virginia governor, he helped pull the plug on American Electric Power Company Inc.’s Mountaineer CCS project because it was too expensive.
In response to questions about some of Manchin’s comments, Smith said the stimulus dollars couldn’t be redeployed; they will go back to the federal treasury. He said another $8 billion was for loan guarantees, not grants.
Heitkamp is likely to reintroduce legislation to boost CCS overall. “We’re going to look for a path forward for this technology,” she said this week.
Murkowski suggested CCS could end up in a broader energy package. “But if we don’t have the support for the technologies, whether it’s CCS or whatever the technology is going to be for utilizing our coal in a clean and kind of an advanced way, it does prove to be problematic,” she said.
Manchin this morning pushed for his own legislation to prevent U.S. EPA from mandating CCS for all new coal-fired power plants. The agency has pointed to the Texas and California projects as examples of the technology’s availability.
He was less certain about the ability to revive FutureGen. Perhaps industry can shoulder more of the load, he suggested. “I think all those options will be discussed,” Manchin said.
Sen. Dick Durbin (D-Ill.), perhaps FutureGen’s top booster on Capitol Hill, appeared less optimistic this week. “It’s a disappointment. I worked on this for more than 10 years,” he said. “It’s becoming increasingly difficult with this … deadline.”
Ideas that lawmakers and advocates have floated include extending the deadline for spending the stimulus dollars, speeding up loan guarantees and allowing companies to “double dip” on government aid, by perhaps getting grants and guarantees.
The group Taxpayers for Common Sense, pointing to a letter from the industry-backed FutureGen Alliance urging policymakers to keep the project alive, warned lawmakers against spending more money to revive it.
The political landscape appears difficult on Capitol Hill, advocates say. Many lawmakers are reluctant to extend the stimulus deadline. And while CCS is popular with fossil fuel boosters, many climate skeptics are not on board with measures to address emissions. Then there are climate hawks who see it as a technology to perpetuate fossil fuels.