Peter Folger Specialist in Energy and Natural Resources
decade after the George W. Bush Administration announced FutureGen—its
signature clean coal power initiative—the program is still in early
development. Since its inception in 2003, FutureGen has undergone changes
in scope and design. As initially conceived, FutureGen would have been the
world’s first coal-fired power plant to integrate carbon capture and
sequestration (CCS) with integrated gasification combined cycle (IGCC)
technologies. FutureGen would have captured and stored carbon dioxide (CO2) in deep underground saline formations and produced hydrogen
for electricity generation and fuel cell research. Increasing costs of
development, among other considerations, caused the Bush Administration to
discontinue the project in 2008. In 2010, under the Obama Administration,
the project was restructured as FutureGen 2.0: a coalfired power plant
that would integrate oxy-combustion technology to capture CO2. FutureGen 2.0 is the U.S. Department of Energy’s (DOE) most
comprehensive CCS demonstration project, combining all three aspects of
CCS technology: capturing and separating CO2 from
other gases, compressing and transporting CO2 to
the sequestration site, and injecting CO2 in
geologic formations for permanent storage.
Congressional interest in CCS technology centers on balancing the competing
national interests of fostering low-cost, domestic sources of energy like
coal against mitigating the effects of CO2 emissions
in the atmosphere. FutureGen would address these interests by demonstrating CCS technology.
Among the challenges to the development of FutureGen 2.0 are rising costs of production,
ongoing issues with project development, lack of incentives for investment from
the private sector, time constraints, and competition with foreign
nations. Remaining challenges to FutureGen’s development include securing
private sector funding to meet increasing costs, purchasing the power
plant for the project, obtaining permission from DOE to retrofit the plant, performing
the retrofit, and then meeting the goal of 90% capture of CO2.
The FutureGen project was conceived as a public-private partnership between
industry and DOE with agreements for cost-share and cooperation on
development, demonstration, and deployment of CCS technology. The
public-private partnership has been criticized for leading to setbacks in FutureGen’s
development, since the private sector lacks incentives to invest in costly CCS technology.
Regulations, tax credits, or policies such as carbon taxation or cap-and-trade
that increase the price of electricity from conventional power plants may
be necessary to make CCS technology competitive enough for private sector
investment. Even then, industry may choose to forgo coal-fired plants for
other sources of energy that emit less CO2,
such as natural gas.
A proposed rule by the Environmental Protection Agency (EPA) to limit CO2 emissions from new fossil-fuel power plants may provide some
incentive for industry to invest in CCS technology. Alternatively, critics
of the proposed rule have expressed concern over the loss of American competitiveness
in a global market not subject to similar regulations. These critics point to China’s
increasing CO2 emissions and argue that Chinese
industries will surpass American industries in productive competitiveness
and that this will lead to American companies outsourcing jobs and
production. Delays in FutureGen’s project development may have made full-scale
demonstration of CCS technology by 2015—the year that federal stimulus funding
for FutureGen expires—difficult to accomplish.
Date of Report: April 3, 2013
Number of Pages: 15 Order Number: R43028 Price: $29.95
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