The Los Angeles Times today reported that “Coal-fired power plants are the largest source of heat-trapping gases that cause global warming, but President Obama’s plan to fight climate change would result in the nation burning more coal a decade from now than it does today.”  It was further noted:  “The administration’s plan, the centerpiece of a 700-page legislative package, proposes strict limits on emissions of greenhouse gases, such as carbon dioxide.”LA Times, clean coal

Yet just last week The Department of Energy announced that it would restart FutureGen, a demonstration project using “clean” coal technology. The FutureGen project is an Illinois-based public-private demonstration project to capture and store carbon dioxide emissions from a coal-fired power plant.

This is the same project that Bush Administration unceremoniously stopped 18 months ago because of projected rising costs.  After discovering an accounting error in cost estimates, the current DOE Secretary, Stephen Chu indicated a willingness to restart the project.

FutureGen -artist rendering

The government is slated to spend $1billion on the project and the FutureGen Alliance, a consortium of large coal producers and users partners approximately $400 to $600 million. New York Times

At the same time that Secretary Chu was saving the clean coal project, there were news reports that natural gas prices are continuing their yearlong tumble.

Natural gas prices have been falling dramatically from $13 per million Btu a year ago to $4 today.  The drop is due to new discoveries of natural gas, new techniques for extraction, and a decrease demand for electricity due to the global economic slow down. Wall Street Journal

The downward spiral of natural gas prices has put pressure on coal producers as more power companies increase their investment in natural gas power plants and take coal plants off line.

Power companies are also looking at the very distinct possibility of Congress passing some sort of  cap & trade legislation. Because natural gas power plants produce half as much carbon dioxide as coal plants, they will be more able to meet a mandated cap using natural gas to generate electricity instead of coal.

Gas power plants convert fuel into electricity more efficiently than coal units and, in some cases, natural gas is cheaper to transport than coal.

Natural gas prices are expected to stay low because of the new natural gas discoveries in Texas, Louisiana, Pennsylvania and elsewhere around the globe that are projected to result in a gas glut. Wall Street Journal

Given the lower cost, increase supply, proven CO2 reduction, better efficiency of natural gas, critics ask if it makes sense at this time to invest $1billion in tax dollars to fund a clean coal demonstration project.

The other side contends we need public investment in clean coal technology simply because:

1.  Coal is our most abundant fossil fuel;

2.  Coal still accounts for approximately ½ of our electricity production;

3.  An actual demonstration power plant at scale is required to test the carbon capture and sequestration technology; and

4.  Because of the risk and expense, no individual company or consortium could fund it without government help.  New York Times

If  the Obama Administration’s goal is to reduce CO₂ in the atmosphere in the short term, then natural gas is the clear winner.  Clean coal technology will be years in the future and even then the question remains - will it be economically feasible without government participation?

–KJC

Additional reading:

Gas Attack: Coal (And Clean Energy) Under Assault From Cheap Natural Gas

What is clean coal technology?

Clean Coal: Fuel of the Future of Fallacy?

Will Coal Finally Get a Chance to Clean up its Act?

Photo: Department of Energy  image - artist rendering

Photo: http://www.flickr.com/photos/library_of_congress/2179929940