FutureGen – A two decade long failure finally bites the dust. Another coal plant down the tubes.

February 4, 2015 – by John Blair, valleywatch.net editor. Editor’s note:Valley Watch did not directly oppose FutureGen in either of its forms. We did however, closely monitor its progress and design in keeping with our stated purpose which is “to protect the public health and environment of the lower Ohio River Valley.”

This was a rendering of the original concept of a zero emissions plant called FutureGen. This project was  first proposed in the second Clinton administration. This month, the Department of Energy scotched plans for the ill fated plant.

This was a rendering of the original concept of a zero emissions plant called FutureGen. This project was first proposed in the second Clinton administration. This month, the Department of Energy scotched plans for the ill fated plant.

I first heard about FutureGen at an Indiana coal conference in the Fall of 2000. Clinton was still in the Whitehouse and was proposing a project designed for “zero emissions.” The man from the US Department of Energy spoke glowingly of how coal could be used to generate electricity and emit nothing, zero, nada.

Of course, it required federal government funding to the tune of at least $1 billion and a “private” match of about 25%.

Zero emission coal plants were a dream of the coal industry, which, even at that early date were faced with looming prospects of several new health based rules designed to control the multitude of voluminous emissions that result form coal being burned in a boiler, the conventional method of electrical generation. Sulfur dioxide, oxides of nitrogen, a variety of toxic emissions including mercury and the main climate change culprit, carbon dioxide were all soon to be subject to emissions cuts in order to make burning coal a safer alternative.CCS

As the new century wore on, some of these rules were implemented, causing significant increases in the cost to burn coal. And. climate change science was maturing to the point that a consensus had formed that climate change was man made and beginning to cause geophysical and climate problems across the globe.

In, 2004, I had a conversation with Sierra Club’s Bruce Nilles regarding how we should approach FutureGen. I helped convince him that the economics of the proposal were so bad that we (Sierra and Valley Watch) should not oppose its development. My theory was that it would become so expensive both to build and to reach its objective of zero emissions that it would die of its own weight and we could show that we did not oppose government experimentation with new tech.

FutureGen promoters stopped calling it zero emissions around 2004 and began referring to it simply as near zero emissions since they know there was no way they could operate a coal plant without emissions.

Numerous states sought to host the project. Illinois joined with Indiana to pony up a proposal where Illinois would build the plant and Indiana would take its supposedly small waste stream, particularly its CO2, burying it deep in sandstone formations. Kentucky and Texas also fought hard for the plant, which in the end was awarded to Illinois mainly through the efforts of Illinois Senator Richard Durbin. It was scheduled to be built just outside of Mattoon, IL and its CO2 would be buried nearby instead of in Indiana.

In the second term of George W. Bush, costs for FutureGen’s federal subsidy needs rose to more than $1.8 billion and even pro-coal Bush stepped in to say no to such an outlay. It was just too expensive and the private match was deemed too little to make the economics work.

But due to the power and effort of Durbin, especially in the aftermath of Barack Obama’s election in 2008, the project was revived but in a very different form. Instead of a completely new plant built on a greenfield, the project would move forward at lesser cost by retrofitting a retired coal plant in Meredosia, IL using a process called oxy-combustion which in theory would allow the capture of CO2 for burial nearby.

A consortium of mostly coal companies, a few utilities and others, led by Peabody Energy in nearby St. Louis had formed to provide the “private sector” match for the project. Under the Durbin proposal, DOE would commit $1 billion to go toward  the new proposal which was to cost upwards of $1.7 billion.

Unknown-1Yesterday, the FutureGen Alliance released a letter to Department of Energy Secretary, Ernest Moniz expressing disappointment with the “Departments’s recent decision to suspend development funding for FutureGen 2.0…” In that letter, Alliance Chief Executive, Kenneth Humphreys claimed the Alliance had already spent more than $25 million (1.47% of estimated project costs) on the project) and that that relatively small amount, after fifteen years showed “substantial non-federal ‘skin in the game.”

Valley Watch has never really opposed the project because we could easily predict this outcome due to the massive expense of carbon capture as well as the economic and geophysical obstacles to its success.

We believe that it was only prudent for the DOE to pull the plug on the project especially since every single time such projects have come forth, their economics have proven to cost too much. Duke Energy’s experimental plant at Edwardsport, IN (see story below) was supposed to cost only $1.4 billion when it was first proposed in 2004 and be carbon capture ready. But that ill fated plant grew to more than $3.5 billion and is not carbon capture ready as originally claimed since that would add another $1.5 billion to the price tag.

Duke Energy's Edwardsport plant has been a financial disaster for Hoosier ratepayers

Duke Energy’s Edwardsport plant has been a financial disaster for Hoosier ratepayers costing them more than $3.5 billion. It has been brought with operational problems and has completely failed to live up to its optimistic billing. © 2011 BlairPhotoEVV.

A similar plant in Mississippi called Kemper is carbon capture ready and has cost nearly $5.5 billion to construct but perhaps more importantly, the parasitic energy required just to run the capture technology consumes from 25-40% of the energy the plant will produce, thereby significantly reducing overall plant efficiency.

Proponents of coal love the adjective “clean” as in “clean coal.” And they claim they can make coal clean by adding lots of pollution controls to plants. Electrostatic precipitators for fly ash, scrubbers for sulfur dioxide, bag houses for fine particles, selective catalytic reduction (SCR) for nitro oxides all are proven technology that do capture much of the large volume of pollution coal plants emit.

In the past, these were add-ons to existing plants paid for by unsuspecting electric ratepayers as they were “incrementally” added one at a time on old, dirty coal power plants . Had these add-ons been put into place at one time instead of over time, ratepayers would have balked because of the huge cumulative increase in rates their construction entails.

But the coal industry is not on its last leg because of old plants as much as because the new plants. built in the last decade have proven extremely costly, raising electric rates to levels that are forcing some ratepayers, both residential and commercial, into bankruptcy.

Of course, the coal industry and the utilities that buy their product have been elated to spend untold millions to clean up their dirty old plants since, as monopolies, they are guaranteed a substantial profit on every investment they make, including incremental clean up of their dirty plants.

Of course we need to be careful in our celebration of this plant’s failure to be built since it is clear that any time billions of government dollars are close at hand, projects, regardless of their economic or physical veracity have a way of coming back from the dead. Like zombies in a Hollywood movie, these things can sometimes resurrect in the same or slightly different form to capture any amount of federal government largess.

Another project, the Indiana Gasification facility proposed for Rockport, IN. In that project, said to cost more than $2.8 billion in 2008 dollars, the federal government was to ante up a $2 billion loan guarantee and a law passed by the Indiana legislature forced Indiana commercial and residential natural gas consumers to buy its output even when natural gas is selling for less than a third of what the IG project would charge Hoosier consumers.

IG is now stuck in the mud but like others projects proposed by those that dream of getting rich from the federal government, its sponsors refuse to simply walk away and still cling to the hope that somehow a government run by supposed conservatives will bail them out, socializing the fish being taken but privatizing the profits they hope to take home.

Presently, coal is nearing its financial death even when the price per ton has remained steady. Mines in Appalachia are shutting down and those in the Illinois Basin are either closing or reducing their workers. Coal stock prices have fallen precipitously over the last few years. What use to look like winners int he stock market, those like Peabody Energy have fallen from the middle $80’s per share to a mere $7.28 today.

Valley Watch has proud history of participating in that demise. In fact, we were the first group in the nation to oppose both coal mining and burning, dating back to 1997. We have successfully stopped numerous coal proposals in the last twenty years including a giant plant 1,500 megawatt behemoth proposed by Peabody Energy in Muhlenberg County, KY shortly after the second Bush administration took office.

 

 

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