US panel submits carbon-capture development plan

* Up to 10 storage demonstration projects online by 2016

* Passing climate bill helps to make carbon storage work

* U.S. may have thousands of years of carbon storage

By Tom Doggett

WASHINGTON, Aug 12 (Reuters) - The United States should be able to develop within 10 years affordable technology to capture carbon dioxide spewed by coal-fired power plants and store it underground, a government panel said on Thursday.

Coal-burning power plants are a key source of man-made greenhouse gas emissions and controlling them is key to the Obama administration's efforts to fight global warming and build a green economy that promises millions of new jobs.

"If we can develop the technology to capture the carbon pollution released by coal, it can create jobs and provide energy well into the future," President Barack Obama said as he established the task force on carbon capture and storage (CCS).

The government panel sent the president a list of recommendations on how to reach his goal, saying five to 10 commercial demonstration projects could be online by 2016.

The most important step for commercial deployment of carbon capture and storage technology is for Congress to pass legislation that cuts U.S. greenhouse gas emissions and puts a price on carbon, the panel said.

Passing a climate bill "will create a stable, long-term, market-based framework to channel private investment into low-carbon technologies," the task force said in its report.

The House of Representatives passed climate legislation last summer to reduce U.S carbon-polluting emissions. But chances of passage are slim in the Senate due to strong opposition from most Republicans and some Democrats. The Senate's Democratic leadership hopes to bring up a bill in September when lawmakers return from summer break.

The report said there are hundreds to thousands of years of carbon storage in potential geological formations throughout the United States. To develop technology for capturing that carbon the panel's recommendations include:

* Establishing a roundtable to assist early CCS projects;

* Increasing coordination in applying drivers and incentives to assist early projects;

* Finalizing and implementing regulations to ensure safe and effective deployment of CCS;

* Continuing efforts to improve long-term liability and stewardship frameworks;

* Enhancing and coordinating public outreach to raise awareness of CCS.

(Reporting by Tom Doggett; Editing by David Gregorio)