The Department of Energy … will embark upon a $1 billion initiative to design, build and operate the first coal-fired, emissions-free power plant—FutureGen.

Secretary of Energy Spencer Abraham, 2003

The thing went south.

Deputy Secretary of Energy Clay Sell, 2008

FutureGen is history. Secretary of Energy Samuel W. Bodman pulled the plug on “the thing,” as his deputy called it, in January 2008. Five years earlier, Secretary of Energy Spencer Abraham had announced FutureGen would be “one of the boldest steps our nation takes toward a pollution-free energy future.” He was talking about the world’s first clean coal-fired power plant.

President George W. Bush touted the project for five years as big spending for clean coal—a cornerstone of his comprehensive energy strategy. “We’re developing clean coal technology. We’re spending over $2 billion in a ten-year period,” he said in 2006. In fact, the Department of Energy (DOE) canceled FutureGen after five years, having spent only $40 million. That’s what the government spends on the military every forty-two minutes.

Coal-fired power generation is the largest, fastest growing contributor to global warming. The DOE is restarting the clean-coal project on a different track—no demonstration plant this time—but five years is a lot to lose in this race against carbon emissions.

China is at the center of the coal problem. It built one large coal plant every other day in 2006. These plants will run until at least 2046. Between now and 2030, China will build more new electric power plants than the United States now has, and most of them will be coal fired. In 2007, China passed the United States as the most prolific emitter of carbon dioxide (CO₂). India is behind both but is following a similar path; by 2050, India is projected to have a larger population than China.

Here in the United States, the Department of Energy predicts, coal-produced electricity will grow eight times more slowly between 2010 and 2030 than it will in China, but thirty times faster than electricity from renewable energy sources.

Although the coal problem is difficult, one somewhat new technology holds promise. Producers can capture CO₂ from power plants, pump it underground, and store it there almost permanently. No one has yet done this, although commercial operations have tested all the pieces of the system. But the question remains: Is this a viable solution to the coal problem, and if not, is there one?

China: Villain or Hero?

Between 1990 and 2004, China’s CO₂ emissions—mainly from coal—more than doubled, an increase of 110 percent, according to the DOE. In the same period, U.S. emissions grew only 19 percent. In this respect, China set the record as the worst of all the countries and regions the DOE tracks.

But wait. President Bush’s Global Climate Change Initiative, announced on Valentine’s Day 2002, is a promise to reduce U.S. CO₂ intensity by 18 percent in ten years. Before we condemn China as the worst offender, let us first rate China by intensity, Bush’s scoring method. CO₂ intensity is CO₂ emissions divided by gross domestic product (GDP).

CO₂ intensity = CO₂ / GDP

Over that same time period, 1990 to 2004, China reduced its CO₂ intensity by 65 percent, according to the DOE. That’s the best record among all the countries and regions tracked by the DOE. China was the fastest growing producer of CO₂ but showed the most improvement in CO₂ intensity.

During that same fourteen-year period, the United States reduced its CO₂ intensity by only 40 percent. The changes in both the United States and China occurred at a time when neither country had an energy policy to speak of. How did this happen? Two factors can improve CO₂ intensity. Emissions can fall, or the economy (GDP) can grow. One helps the climate, and the other does not. So intensity does not tell us much about whether the climate is getting into more trouble or not. The country causing the most trouble for the climate might, and actually did, get the best intensity score.

Checking both China’s CO₂ emissions and China’s CO₂ intensity helps answer the question of whether China is a hero or a villain. It’s really neither. China is growing fast, and growth leads quite naturally to more emissions. Growth is good, especially in a poor country like China, so China’s growth is no reason for criticism. But growth is a problem for the global environment unless the world spends a sufficient portion of its increased wealth on curbing pollution. As we’ve seen, that necessary portion of income—about 1 percent—is eminently affordable.

Carbon Capture and Storage

If you’ve downloaded Google Earth, which is free online, you can take a virtual flight over the only operating synfuel plant in the United States. To do so, copy the following address into the Fly To box and click on the little magnifying glass:

47°21’37.62”N, 101°50’19.67”W

The plant exists because of the Carter/Reagan synfuel program.

Sidebar: A Brief History of the Great Plains Synfuels Plant

The production of synfuels emits much CO₂, as I explain in the last chapter, but since 2000, the Great Plains Synfuels Plant has come close to solving that problem. It is now the largest example of carbon capture and storage in the world. The North Dakota plant compresses most of its CO₂ under 5,000 pounds of pressure and pumps it through a two-foot diameter pipe for 205 miles to Weyburn, Saskatchewan. There the CO₂ is injected almost a mile underground to help breathe new life into an old oil field by thinning out whatever thick oil is left so producers can pump it out. And there the CO₂ will stay for thousands of years. Investigators are closely monitoring the gas field for geological leaks and so far have not detected any.

But this isn’t quite a “clean-coal” plant. The natural gas it makes from coal contains carbon, and when it is burned, it releases CO₂. The whole process is no better, from a global warming perspective, than using natural gas. But it could be, if someone changed things around a little.

In fact, if the creators of the Great Plains Synfuels Plant had built it a little differently, it would have been the world’s first clean-coal electric generator. Such a plant would make hydrogen instead of natural gas. To oversimplify the process, coal, which is carbon (C), and water (H₂0) are turned into hydrogen (H₂) and carbon dioxide (CO₂). This moves the carbon’s energy to the hydrogen, a clean fuel.

In other words, a synfuel plant could gasify coal into hydrogen instead of into natural gas. Power companies would then use the clean hydrogen fuel to generate electricity. The CO₂ produced as a by-product of making the hydrogen would be pumped underground exactly as the companies in North Dakota and Saskatchewan are now doing. A power producer can burn the hydrogen in a standard gas turbine—basically a jet engine—just as today’s most efficient electricity plants burn natural gas in turbines. The current leading clean-coal power-plant design is called Integrated Gasification Combined Cycle (IGCC) technology.

Gasifying the coal has another advantage. It makes removing other pollutants, such as mercury, cheaper and more effective than in a conventional power plant.

Once the CO₂ is captured and compressed, the cost of transporting it is only about $1.50 per hundred miles per ton of CO₂. Typically it is pumped 3,000 feet below ground and trapped for thousands of years, dissolved, for example, in brackish water. It might seem like the CO₂ would leak out, but remember that the natural gas you use to cook with was trapped underground for more than a hundred million years. Geologists believe there is likely to be plenty of room underground for all the CO₂ we need to store, but we need more research concerning storage locations.

You might think the tricky part of clean coal is learning to store the CO₂ underground, but oil companies have been doing it for thirty years. Just as the Great Plains Synfuels Plant does, oil producers have pumped CO₂ down into old oil fields, not to get rid of the CO₂, but as a form of “enhanced oil recovery.” In fact oil-recovery projects usually make extra CO₂ just for this purpose. The CO₂ dissolves in the remaining thick oil, making it thin enough to pump out. In the process, a lot of the CO₂ becomes trapped. Producers can recycle what does come out with the oil, pumping it back in again, just as the operators of the Saskatchewan oil field do with Great Plains’ CO₂.

So the benefits of clean-coal power plants are twofold: They can capture and store 90 percent or more of the CO₂. And they remove other pollutants, such as mercury, more cheaply and more completely. The disadvantage is cost. At present, that cost is uncertain, which is why we need a demonstration plant. A typical estimate is that it would raise the cost of coal-fired electricity by about three cents a kilowatt-hour. Compare that with a national average retail price of about nine cents per kilowatt-hour. Of course, it will take many years to make the switch, and as clean coal technology improves, the costs may come down.

Sidebar: Is Clean Coal Clean?

Solving the Coal Problem

Coal’s CO₂ problem can be partly solved in three ways: by conserving electricity, by carbon capture, and by using alternative energy sources instead. Alternative generation includes wind, nuclear, and solar. The carbon untax I propose in chapter 7 would encourage all these approaches equitably. The untax would raise the price of using dirty coal, making the other approaches more competitive. Since all would be favored equally, the market would choose the cheapest approach.

Initially, the most cost-effective approach would almost certainly be conservation, though the beauty of the untax is that we don’t need to know which alternative is cheapest. The market will tell us. But history suggests that the largest, quickest response would be from households, businesses, and industry, as they all spend a little more on efficient appliances and equipment so they can spend a little less on electricity. This could greatly slow down the need for new coal plants, and by the time we need to start building power plants again, we might have clean coal technology or more wind, nuclear, or solar.

The conservation argument holds doubly true for China. Its government still subsidizes coal, which has the opposite effect of an untax on carbon. But even with a double effect—stopping the subsidy and starting the untax—China’s economic growth is so great that it will keep building coal-fired generators, just more slowly. This makes research into clean coal technology all the more urgent.

The fourth strategy that I propose in chapter 7 is government-sponsored research. Because of the high financial risk involved in building the first plant based on a new technology, new clean-coal power plants should be at the top of the list in the energy research budget. An interdisciplinary team at the Massachusetts Institute of Technology (MIT) agrees.

In 2007, MIT published the team’s comprehensive study, called “The Future of Coal,” which recommends steps that could put clean coal on track. Because several approaches to carbon capture and storage are possible, the MIT team recommends three to five demonstration projects, one for each of the technologies. These should be commercial-scale projects, according to the researchers. They also recommend three to five projects testing CO₂ storage in various geological formations.

The team recommends a sensible, market-based approach to subsidizing these projects. The group suggests that the government pay only for CO₂ actually stored. Companies that wish to gain this subsidy by building a demonstration project would bid on a certain subsidy rate. The bidder who offers to build the project for the lowest subsidy wins the project and the subsidy. If the project fails, it will capture and store no CO₂, and the government will owe the bidder no money. This will force bidders to be realistic in their bids, and the process will select the project with the best chance of success as well as the lowest cost to the government.

Carbon capture and storage will add to the cost of producing electricity, so the MIT team considers a charge of $25 per ton of CO₂ emitted as an incentive to the proposal’s adoption. If the proposal went into effect in 2015 and increased carbon capture and storage by 4 percent per year, the MIT group predicts that 60 percent of coal use would be subject to carbon capture by 2050. In spite of the increased cost, the researchers predict that coal use would expand 20 percent to 60 percent. The only amendment I would make to the MIT group’s recommendations is that the carbon charge be an untax—that is, all revenues should be returned to consumers to compensate them for higher electricity costs.

* * *

Coal has now passed oil as the largest source of CO₂ emissions, and it will pull further ahead in the years to come. Because coal is used mainly to produce electricity, coal-fired generation of electricity has become the number-one greenhouse gas problem. Fortunately, coal plants don’t have wheels, so they stay in one place, making it possible to capture their CO₂ and store it underground permanently.

The cost of doing so effectively doubles the price of coal, but coal is still several times cheaper than oil per unit of energy produced. Requiring new coal power plants to capture their carbon would eventually cost the United States about 0.2 percent of GDP—two-thousandths of the value of what we produce as a nation. Our government has been spending what amounts to three cents per person per year trying to build the first pilot plant. After five years of this, in January 2008, the government pulled the plug.

Clean coal technology may not be the best answer, but it is almost certainly one solution to a critical problem. It deserves a high-priority, federally sponsored research program, starting immediately.