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WASHINGTON — The Energy Department is moving forward on a futuristic coal-burning power plant in Illinois that the Bush administration had declared dead.
Energy Secretary Steven Chu said Friday that reviving the FutureGen plant is an important step that shows the Obama administration's commitment to carbon-capture technology.
"Developing this technology is critically important for reducing greenhouse gas emissions in the U.S. and around the world," Chu said in a statement.
Negotiations for the FutureGen project have been under way since the Obama administration announced it would consider reviving the project. Under President George W. Bush, the project was canceled after cost overruns that a congressional auditor later said were based on false projections.
The Energy Department will commit more than $1 billion to the project, under the agreement announced on Friday, with the government's contribution drawn almost entirely from federal economic stimulus funds.
The project's business partners, known as the FutureGen Alliance, will agree to contribute as much as $600 million during the next six years. The FutureGen Alliance will be allowed to raise funds for the project to defray government costs. The agreement also opens the possibility of eventually selling the facility — which initially will be largely an experimental project to show the feasibility of carbon capture and sequestration — to private entities for use as commercial power plant.
Preliminary design work on FutureGen could restart as soon as July. By early next year, the Energy Department expects to have an updated cost estimate and a complete funding plan for the project.
Friday's announcement is the latest sign of the Obama administration's commitment to carbon capture technology.
The project, planned for Matoon, Ill., is part of a broader effort to develop large demonstration projects on carbon capture and sequestration. The Energy Department is considering as many as seven such projects that would capture and put into the ground at least 1 million tons of carbon dioxide a year. FutureGen would be the project likely to be furthest along in development.
The economic recovery plan includes $3.4 billion for carbon capture research and development, about a third of that going for FutureGen. An energy bill being considered in Congress urges development of as many as 10 such projects. Climate legislation before the House would provide as much as $60 billion for carbon capture and sequestration, including $1 billion a year for the next 10 years to fund large demonstration projects.
"There are a number of projects being reviewed," Chu told the AP earlier this week before the tentative FutureGen agreement was announced. "I agree with the notion that we have to begin commercial scale demonstration" of carbon capture.
Coal burning power plants are the leading source of carbon dioxide, the major greenhouse gas linked to global warming, and finding economical ways to capture carbon from such plants is viewed as key for the future of coal if a price is put on carbon to combat climate change.
The FutureGen plant would use Illinois coal, which is high in sulfur and has been used less frequently after changes to the Clean Air Act in 1990. As originally planned, the plant would have experimented with coal from Texas and Wyoming, too.
The commitment to the state's coal could help the Illinois mining industry rebound from a decline from around 10,000 jobs in 1990 to about 4,000 now, said Phil Gonet, a spokesman for the Illinois Coal Association.
"Eighty percent of our coal now goes out of state because almost every power plant in this state decided to switch to (cleaner) western coal," he said. "When you have a market in your own state that may open up for the first time in 20 years, that is significant."
Illinois officials said they were elated with FutureGen's resurrection. U.S. Sen. Richard Durbin, D-Ill., called the plant's revival a "historic moment."
"In my time in Congress, I can't recall a project that has greater scientific and practical significance than FutureGen," Durbin said.
The FutureGen Alliance's chief executive, Michael J. Mudd, praised the department's decision.
"The jobs created at FutureGen will result in important technology to reduce emissions from coal-fueled power plants at home and around the world," Mudd said in a statement.
David Wortman, public works director for the city of 18,000, was among the jubilant local officials sitting on a stage in a local theater in December 2007, when the decision to build in Mattoon was announced. His response on Friday was more measured.
"It's something that we always were optimistic about and believed would happen," Wortman said. "I've think we've learned to continue working and fighting for it until the ground's broken and the plant's under way."
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Associated Press Writers H. Josef Hebert in Washington and David Mercer in Champaign, Ill., contributed to this report.
