US DOE quit FutureGen on funding, other issues

HOUSTON, Feb 14 (Reuters) - Rising costs for the FutureGen Alliance's advanced clean-coal project were not the only reason that the U.S. Department of Energy pulled its funding last month from the project, the deputy secretary of the agency said on Thursday.

The DOE decided that a $1.8 billion FutureGen price tag was too high for the the project to build a near-zero emission coal plant and develop technology to gasify coal for underground storage of carbon dioxide emissions, said Clay Sell, DOE deputy secretary. The agency also came to view the FutureGen project as trying to serve "too many masters" Sell said at an energy conference in Houston.

He said FutureGen tried to do too much by having international participation and varied goals including not only carbon capture and storage but also testing gasification of several types of coal. It also planned to produce hydrogen for power generation.

The DOE's decision was a serious blow to the FutureGen Alliance which had just completed a public competition and chosen a site in Illinois.

For years the agency supported the project, Sell said, adding that the department remains "very committed to the objectives of FutureGen" - developing technology to capture and store carbon dioxide underground - and will attempt to achieve those goals in a restructured format.

In its restructured format, Sell said, "it would be a better platform and we could pay 100 percent of the carbon capture and sequestration piece."

He noted that there were more than 30 Integrated Gasification Combined Cycle (IGCC) projects scheduled for construction in the United States, some of which are already receiving DOE grants. Few IGCC projects seek to sequester CO2 emissions.

Future DOE funding needs to address the carbon storage question.

"Can we demonstrate carbon capture and sequestration on a commercial scale as quickly as possible?" said Sell.