Stimulus Debate Could Clarify How Much Obama Supports 'Clean Coal'

The coal industry wants the bill to revive a massive "clean coal" plant project in Illinois.

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Steven Chu, President-elect Barack Obama's pick for energy secretary, met this week with several Illinois lawmakers to hear their pitch for a stimulus-related project: the revival of a $1.9 billion advanced coal plant in Mattoon, Ill. The project had its funding revoked last year by the Bush administration, which at the time cited "restructuring" as the cause. Chu, according to one congressional aide, listened intently during the meeting but made no promises about restoring the project, which is arguably the world's most ambitious "clean coal" effort, at least in conception.

Resuscitating the controversial plant, known as FutureGen, is one of several requests the coal industry is making to Congress and the Obama administration as they work to assemble a massive economic stimulus package over the next month or so.

Among other things, the coal industry is asking for money to help expand and, ideally, commercialize carbon capture and storage projects—widely seen as the most plausible way for the coal industry to reduce its emissions of carbon dioxide—as well as for additional investments in coal research and technology. And like many energy groups, it is asking the federal government to get serious about expanding the transmission grid, which in coal's case would allow new plants to be built closer to mines, thereby lowering costs.

Says Luke Popovich of the National Mining Association: "The bigger point here is that you can't talk seriously about a green energy grid and a greener, less impactful energy supply without spending on carbon capture and storage, because not only the U.S. but the developing world especially will increasingly use coal owing to its low cost and abundance."

To the degree the final stimulus package does—or does not—include coal-related incentives, it could help begin to answer questions about the extent of the Obama administration's support for coal as an energy source, in particular its willingness to spend money on bringing coal's pollution problems in line with efforts to tackle climate change.

As with so many other policies, the incoming Obama administration's position on coal remains vague. Obama spoke favorably of advanced coal technology while campaigning—most vocally in big coal states like Kentucky and Pennsylvania—and in 2007, he cosponsored legislation to subsidize liquefied coal. In his Denver acceptance speech, he promised "to invest in clean-coal technology." But at least two of his close advisers have recently given the coal industry cause for concern. In September, Vice President-elect Joe Biden was caught on tape telling a woman at a campaign rally, "We're not supporting clean coal." Chu also has spoken negatively of coal, calling it a "nightmare"—although his comments came well before he was on anyone's political radar.

For the coal industry, reviving the FutureGen project is the top priority. Announced in 2003 by the Department of Energy, FutureGen is intended to be a near-zero-emission coal plant using the latest coal technologies to produce electricity and hydrogen. Illinois was eventually picked for the site. But in January of last year, the administration withdrew about $700 million to $800 million—in effect, suspending the project.

Rising project costs were cited as one factor. But many observers also suspect politics played a role. "When the final four sites were announced, there were two in Illinois and two in Texas," says Phil Gonet, president of the Illinois Coal Association. "We knew we were going against the home state, but we were sure the decision would be based on science. Our geology was far superior." When Mattoon, Ill., was announced as the winner in December 2007, Gonet says, "we thought, great, no politics." But shortly thereafter, the Bush administration announced its decision to pull out.

FutureGen's backers, eyeing the stimulus, say construction at the site could potentially begin in 2009, because most of the necessary environmental work, as well as some initial engineering and design work, is already completed.