Obama Administration Pouring $1 Billion Into Clean Coal Project

Since taking over as energy secretary, Steven Chu, a Nobel Prize-winning physicist, has been talking up the importance of clean coal technology. The world won't abandon coal anytime soon, he has argued, so the United States has to start doing more to develop technologies that capture carbon dioxide from coal-fired plants.

In a sign the Obama administration is taking his argument seriously, Chu on Friday announced that the Department of Energy is pouring $1 billion from the economic stimulus package into relaunching FutureGen, an ambitious but long-stalled project intended to show how carbon dioxide can be captured on a large scale from coal-fired power plants.

Initially conceived in 2003, FutureGen was pitched as having the potential to be the first "zero-emissions" coal plant in the United States. In 2007, after several years of initial planning, Mattoon, Ill., was selected as the site. But in January 2008, the Bush administration pulled the project's funding, citing cost overruns. Since then, FutureGen has been stuck in something of an existential purgatory.

Effectively reversing that decision, Chu said on Friday that the Department of Energy has signed a new deal with the FutureGen Alliance, a consortium of roughly 20 coal producers and other companies that have backed the project from the start. Project officials will resume design activities and make new cost estimates, and a final decision on whether to green-light the project, officials say, will come next year.

The Energy Department will put up more than $1 billion to restart FutureGen, and the Alliance will chip in more than $400 million. Both will be working to bring in new partners.

"The FutureGen project holds great promise as a flagship facility to demonstrate carbon capture and storage at commercial scale," Chu said. "Developing this technology is critically important for reducing greenhouse gas emissions in the U.S. and around the world."

The decision to revive FutureGen has been in the works for months. In January, even before President Obama's inauguration, Chu sat down with Illinois lawmakers and listened to their arguments for including FutureGen as part of the then tentative stimulus package. In recent weeks, those conversations became more frequent and more serious. Illinois Sen. Dick Durbin, a big FutureGen advocate, said this morning that he had talked frequently with Chu for several weeks in the lead-up to today's announcement.

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