A mathematical mix up at the US Department of Energy caused the clean coal project to be shelved last year

The Bush administration shelved the US Department of Energy’s (DOE) flagship clean coal project, known as FutureGen, for erroneous reasons last year, according to new congressional analysis. Congress’ non-partisan Government Accountability Office (GAO) has just released a report blaming a mathematical error for FutureGen’s cancellation, and now the new DOE director is considering reviving the programme. 

The original $1 billion (?0.7 billion) FutureGen proposal, announced by former President Bush in February 2003, aimed to build a near zero-emissions coal-fueled power plant to produce hydrogen and electricity while using carbon capture and storage (CCS). The goal was for the DOE to partner with industry to build a revolutionary 275-megawatt, integrated gasification combined cycle coal (IGCC) power plant. 

The DOE was to cover nearly three-quarters of the costs associated with the project, while industry partners would fund the remainder. But in January 2008, the department announced that it was restructuring FutureGen because its costs had doubled and would continue to escalate. The DOE said it would only cover the carbon capture and storage component of the plant, and spread most of the money that had been targeted for FutureGen across a variety of clean coal projects. 

DOE’s sudden about-face came shortly after the FutureGen Alliance selected Mattoon, Illinois as the site for the plant over other possible locations - including Texas, Bush’s home state. This timing led lawmakers and other stakeholders to publicly question whether the DOE’s later decision was politically motivated. 

Last February, a group of Illinois lawmakers - including current President Obama, who was then a senator from Illinois - wrote to Bush and questioned the reasoning behind the FutureGen decision. The DOE, however, insisted that it was simply trying to be more efficient with its resources. 

Half billion dollar accounting error 

Lawmakers requested a GAO analysis of the situation over a year ago. The results of that investigation, released on March 11, conclude that the DOE inaccurately estimated the costs for the FutureGen project. 

The department tried to equate two cost estimates for FutureGen that were not comparable: DOE’s original figure that was in constant 2004 dollars, and a $1.8 billion estimate by industry partners that was inflated through 2017. 

The former head of DOE, Samuel Bodman, explained his decision to restructure FutureGen by noting that the projected programme cost had ’nearly doubled’. However, the GAO found that the industry estimate in constant 2005 dollars would have worked out to about $1.3 billion - an increase of only 39 per cent over the DOE’s initial estimate. 

’As its restructuring decision did not consider a comprehensive analysis of costs, benefits, and risks, DOE has no assurance that the restructured FutureGen is the best option to advance carbon capture and storage,’ the GAO concludes. 

Meanwhile, a separate report from the House of Representatives’ Science and Technology Committee goes a step further and claims that Bush’s team at the DOE knowingly relied on inaccurate cost figures to derail FutureGen. Democratic staff on the committee reviewed thousands of DOE internal documents and concluded in a 10 March report that the Bush administration never fully committed to the FutureGen project or its goal of developing technology to allow the use of coal without large emissions of carbon dioxide and other greenhouse gases or pollutants. 

’In retrospect, FutureGen appears to have been nothing more than a public relations ploy for Bush Administration officials to make it appear to the public and the world that the United States was doing something to address global warming despite its refusal to ratify the Kyoto Protocol,’ the report reads. 

Outrage from Illinois lawmakers 

The committee further suggests that Bodman in particular strongly disliked FutureGen and sought to either destroy it or restructure it in a way that was guaranteed to fail. 

Several Illinois lawmakers have come forward to express their outrage at the loss of at least a year and a half that could have been used to develop carbon capture and sequestration technologies. 

’Given the fact that over half of US electricity is produced from coal, and that China and India are accelerating coal plants in their own countries, it is essential that we find a way to burn coal as cleanly as possible,’ said Rep. Jerry Costello, a Democrat from Illinois. 

The DOE had estimated that FutureGen would generate 1,300 construction jobs and 150 permanent jobs, but subsequent economic impact analysis by Southern Illinois University was even more promising. It found that the state’s labour income would rise by $34 million, profits by $91 million and tax revenue by $11 million, and 510 new jobs would be created in the power generation sector. 

Meanwhile, FutureGen has virtually stalled at DOE, and the department has made no decisions about the applications it received from industry back in October for the restructured programme. But the recently enacted stimulus bill gives the department an extra $3.4 billion to pursue ’fossil energy research and development’, which could help FutureGen move forward. 

Also promising for FutureGen proponents is that fact that Steven Chu, recently installed by Obama at the helm of DOE, says the project is meritorious. He is currently reviewing both congressional reports to determine the next steps to be taken. Addressing the matter quickly is a priority for Chu, says the DOE. 

Rebecca Trager, US correspondent for Research Europe