Texas towns lose out on FutureGen project

The town of Mattoon, Ill. was chosen as home for a $1.7 billion high tech coal-fired power plant project, beating out two Texas towns and one other Illinois community, to play a leading role in the fight against growing greenhouse gas emissions.
The FutureGen Alliance, a public/private partnership between the U.S. Department of Energy and a dozen companies, announced the site selection this morning at a press conference in Washington, D.C.

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Take that, Texas! Mayor David Cline of Mattoon, Ill., right, celebrates as the town is selected for the FutureGen project. AP photo.

Mike Mudd, CEO of the FutureGen Alliance, the business side of the team, said the key reasons for Mattoon’s selection were clear legal title to the power plant site, a good and secured water source and onsite carbon sequestration.
Jewett and Penwell, near Odessa, were the two Texas towns up for the project. Both were going to rely on CO2 pipelines — either existing or new build — to get the gas to sequestration sites dozens of miles away.
It also appears the Department of Energy is looking to renegotiate their share of the project, which grows more expensive all the time (like any other power plant project). DOE officials were conspicuously absent from the press conference this morning.
Officials in Texas and Illinois were willing to put up millions of dollars in incentives for the project, which will develop and test technology that will turn coal into a cleaner-burning gas and store carbon dioxide emissions deep underground.
Texas promised $260 million in cash and tax credits, while Illinois offered $80 million in grants, low-interest loans and tax breaks. Both states offered developers protection from liability in the event that carbon dioxide leaks from the ground.
FutureGen was launched in 2003 to test the technical and economic feasibility of making electricity and hydrogen from coal while capturing and sequestering the CO2 generated. The estimated price tag at the time of the announcement was $1 billion, but rising materials, equipment and labor costs have brought the project up to $1.7 billion.
The federal government has committed to fund 74 percent of the costs while an industry consortium will cover 26 percent. Including $300 million in revenue expected from electric sales from the 275-megawatt plant in the first few years, the DOE is on the hook for a little over $1 billion while the industry share stands at about $400 million.
Many states submitted applications for the project but the field was narrowed to the two in Texas and the two Illinois sites this past summer.
The technologies needed for the project are in varying states of development.
Coal gasification has been used by a growing number of power plants over the years, but the systems have not reached the same levels of efficiency as other forms of coal burning.
Carbon sequestration is being tested on a limited scale, including at a number of sites along the Gulf Coast and near Houston. Only recently did researchers begin projects to test the injection and storage of the millions of tons of CO2 that a power plant would produce.
The Jewett site, located in Limestone County about 130 miles northwest of Houston, was donated by NRG Energy, which owns and operates a nearby power plant. Westmoreland Coal, which operates the adjacent lignite coal mine, has donated engineering and site preparation services.
“The community has embraced coal for many generations up here, and we’ve got the infrastructure in place to make this project happen,” said Tom Wilkinson, regional coordinator for Jewett’s bid for FutureGen.
The underground brine formations that Jewett proposes to use for CO2 storage are about 50 miles away and can be reached via a pipeline that San Diego-based Sempra Energy has committed to build, Wilkinson said. One site is privately owned while the other is on state land.
The Odessa-area site, in a rural community called Penwell, doesn’t have nearby coal mines but it is along major rail lines that can easily bring in the supplies, said Smith.
There are existing CO2 pipelines in the area, however, because it’s been used for enhanced oil recovery in older oil fields in West Texas for many years, said Smith.
“We’re used to working with CO2 here,” Smith said. “We look at it as more of a commercial opportunity than a hazardous waste.”

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