After 10 Years: Time for FutureGen to Retire
Ten years ago, the United States made an investment in a new environmental idea of clean coal through a cutting edge project known as FutureGen. FutureGen, a public-private partnership between the U.S. Department of Energy (DOE) and the FutureGen Industrial Alliance, was intended to construct a net zero-emission fossil-fueled power plant. To reduce carbon emissions, FutureGen uses carbon capture and sequestration (CCS) technology to inject carbon into geological formations rather than allowing emissions into the atmosphere. Yet, ten years and two restructuring efforts later, the project has yet to materialize. The precedents set by FutureGen and similar projects should serve as red flags to the Department of Energy (DOE) and federal government picking winners and losers in the field of energy technology.
The FutureGen project was dead in the water by 2008 because the Bush administration’s funding concerns over such a massive project. Yet, in the midst of the Great Recession, President Obama decided to invest a billion dollars in FutureGen 2.0 to revive the failing program. The cost of development pales in comparison to the projected cost for implementing clean coal. Xina Xie, a senior research engineer at the University of Wyoming, ran calculations with Michael J. Economides about the cost of the CCS process, concluding, “the total cost of such an ambitious carbon dioxide geo-sequestration effort could easily surpass $1.5 trillion per year.” Even if clean coal is a fraction of the cost, it would undermine the coal industry. Government funding cannot transform uncompetitive technology into a viable market solution to environmental dilemmas.
Because of the cost of CCS technology, coal plants have resisted the investment. Yet, the Environmental Protection Agency and members of Congress have urged emission standards that require near zero emissions. But the Congressional Research Service in April 2012 raised additional questions on the value of the investment due to the emergence of natural gas. Mandating clean coal would be extremely costly and ignores the emerging role of natural gas in the energy sector. As natural gas becomes cheaper, more available, and emits half the emissions of coal, the market will be more likely to invest in this new resource. Market forces and energy investors have a better record than government regulations and false incentives.
Yet, cost aside, there is little guarantee that carbon capture and sequestration (CCS) technology, which intends to store the emissions underground, will be successful. CCS technology stores carbon emissions deep in porous rock formations. Numerous reports have expressed concern due to potential earthquakes or water contamination which would damage the environment and release emissions into the environment. Curt M. White, who ran the DOE carbon sequestration group until 2005, stated it simply, “Red flags should be going up everywhere when you talk about this amount of liquid being put underground.” FutureGen’s CCS project could undermine the whole purpose of the project and instead make the environment less safe.
With the increasing cost and delays of FutureGen, the government should reconsider funding FutureGen. FutureGen is another failed example of the government picking winners and losers in the energy market. Instead, FutureGen and other ventures should be allowed to compete in the market where investors can gauge the investments for profitable payouts without taxpayers footing the bill. After ten years, it’s time for the federal government to stop playing favorites in the energy sector and allow green energy to compete on its own merit.
