DOE to Spend $126M to Put CO2 Underground

After nixing its support of the $1.8 billion FutureGen project earlier this year, the U.S. government announces $126.6 million for two other carbon-storage projects.

by: Rachel Barron

May 07, 2008

Only a few months after pulling out of the FutureGen project, a low-emission coal-fired power plant expected to cost at least $1.5 billion, the U.S. Department of Energy is ready to support carbon-sequestration technologies again.

The federal agency announced Tuesday that it would spend $126.6 million on two projects aimed at capturing the carbon dioxide emitted when coal is turned into energy.


West Coast Regional Carbon Sequestration Partnership and the Midwest Regional Carbon Sequestration Partnership, which both include a mix of government agencies, companies, research universities and nonprofits, are spearheading the projects in California and Ohio.

The groups will combine the funding, which will be doled out over a decade, with $56.4 million of their own money to inject more than 1 million tons of carbon dioxide deep into rock formations for long-term storage.

As the cheapest fossil fuel and one of the most abundant, coal is an alluring source of energy for countries striving for energy independence.

According to the 2007 International Energy Outlook, the U.S. Department of Energy expects world coal consumption to increase by 74 percent from 2004 to 2030, reaching 199 quadrillion Btu annually.

Of course, coal is hardly green. Some companies and governments hope technologies to sequester carbon-dioxide underground could reduce the pollution from coal-fired plants.

But a number of challenges, including concerns about whether carbon storage can be safe and economical, have led industry insiders to forecast that its widespread practice is still years away.

Some industry watchers called the DOE news a welcome move after the implosion of the highly anticipated, government-sponsored FutureGen project.

In January, the DOE said it was going to be "restructuring" the275-megawatt project, citing projected cost overruns up 58 percent from the $950 million originally expected (see Clean Coal Firms Not Worried About FutureGen Setback and DOE Pulls Back on FutureGen's Reins).

Instead of backing a single low-emission project, the agency had decided to spread the wealth around to a bunch of smaller projects.

John Quealy, an analyst at investment bank Canaccord Adams, said that although the clean-coal industry is still trying to assess the FutureGen breakdown, the DOE announcement is positive.

"We are still in the early days for carbon sequestration," he said, which needs more money, time and research.

Matt Horton, a principal with @Ventures, said the funding will help test whether sequestration can be cost-effective and safe.

"But personally, I'm not convinced that it's the best technological approach for clean coal," he said.

More appealing are technologies like gasification, he said. Rather than burning coal directly, gasification breaks down coal, setting off chemical reactions that can produce a mixture of carbon monoxide, hydrogen and other gaseous compounds.

According to the DOE, gasification technologies are more efficient and produce fewer noncarbon greenhouse-gas emissions than other approaches.

Horton said he would like to see the DOE support technologies that reduce carbon-dioxide emissions rather than technologies that treat tailpipe emissions after the fact.