Remarks by
Robert W. Gee
Assistant Secretary for Fossil Energy
U.S. Department of Energy
at the
Energy Council's
2000 Federal Energy & Environmental Matters Conference
Washington, D.C.
March 12, 2000

I am excited about being here today, and I'm glad to have the opportunity to speak at your first conference of the new millennium.

I understand that congratulations are in order -- on the Council celebrating its silver (25th) anniversary this year.

As I look around the room, I see many familiar faces, including many from my home state of Texas.

First thing I'd like to say is, it is good to come here today to talk about something other than oil prices - even though the price of gasoline and home heating oil and other petroleum commodities is something that is on everyone's mind at the Energy Department - especially the Secretary's.

But your request to me today is to talk about our efforts to develop cleaner, more efficient ways to use our coal reserves. And I'm glad to do that. Unlike oil - where we are forced to buy more than half of what we use from suppliers outside of our borders - coal is one of the true symbols of this country's energy strength.

We have more coal within our borders than the rest of the world has recoverable oil. At current rates of consumption, our coal reserves will last at least another 200 to 300 years. This is a resource that, quite frankly, we cannot afford to turn our back on. And I don't think we will have to.

Let me quote the late conservationist and writer Joseph Wood Krutch who said, "Technology made large populations possible; large populations now make technology indispensable."

And as this country's - and the world's - population increases, and as our economy becomes increasingly electrified, we are going to need ever more increasing sources of reliable electricity.

Just look at the impact of the digital economy. Today, somewhere between 8 and 18 percent of the electricity consumed in this country goes to power the computers that have become an integral part of everyday commerce. That percentage is going to grow. And as it does, our economy will become increasingly dependent on the ability of our energy industry to supply clean, reliable, and affordable electricity.

Let me put this growth in demand for power in perspective. Between now and the year 2010, the United States will have to add between 100,000 and 200,000 megawatts of new generating capacity. That is equivalent to adding the entire electrical grid of Germany to the U.S. power sector in the next 10 years.

Most of this new power capacity will be fueled by natural gas. But demand for electricity is not going to stop growing after the year 2010. In fact, by the year 2020, we could be using a third more electricity than we consume today. And the numbers keep going up.

We at DOE believe America's future power generation needs MUST be met by a diverse mix of resources. We cannot risk linking our economic future to a single energy resource -- even if that resource is as abundant as natural gas or as promising as solar or other renewable energy technologies.

Coal remains our primary fuel for power generation. It provides more than 56 percent of the electricity we produce today. Under any reasonable energy scenario, coal's contribution to our growing demand for electric power is unlikely to fall below 50 percent for well into the future. And because electricity demand is growing, even 50 percent in 2010 or 2020 means that this country will need to produce and consume a lot more coal.

Since 1995, there has been a steady increase in U.S. coal production. In 1998, this country produced over 1.1 billion tons. The 1999 figures will be very close to that when the numbers are released.

Coal plays a key role in our national and state economies. For example, my home State consumes more coal than any other State, in fact, a third more than any other State. It is the 5th largest producer of coal (lignite), and ranks 3rd among the States that benefit most from the direct and indirect employment of the coal industry.

In fact, nearly 40 percent of the coal produced in the United States comes from the 10 States comprising your Council.

So, is a future in which coal continues to play a major -- if not dominant -- role a future we need to fear?

Our answer is a very clear NO. There is no reason why coal cannot continue to play a significant role in our Nation's - or the world's - energy future. I see no reason why we shouldn't consider coal for what it is: a massive wealth of raw carbon and hydrogen, and assorted other molecules. Given the right technology, it can be extracted, manipulated, and used by society just as cleanly as any other source of raw energy.

We are investing a significant amount of funding at the Department of Energy to prove that this can be done. That's what our programs are all about.

Moreover, we are building on a solid base of progress achieved over the last 15 years in the initiative we call the Clean Coal Technology Program.

Fifteen years ago, the Clean Coal Technology Program began as a partnership between government and industry. Today, that program has produced 38 pioneering demonstrations -- most of them showcase examples of how technology can make coal environmentally acceptable.

Not all of the efforts succeeded. Some are still underway. But there is no question that after a $6 billion investment - $2 billion from the U.S. Government, $4 billion from the private sector - we can safely say that this program has fundamentally changed the outlook for coal and changed it for the better.

Today, because of this program:

• We have NOx-reduction technology that costs only $200 per ton - more than a 10-fold reduction compared to the $3,000 dollars for every ton of nitrogen oxide reduced in the 1980's. Today, 75 percent of the coal-burning capacity in this country is equipped with low-NOx burners that can trace their roots to our R&D and Clean Coal programs.

• In the future, as EPA tightens NOx standards, additional controls may be necessary -- especially for plants in the East and Midwest. Selective Catalytic Reduction is the name of the technology most utilities will likely have to use to meet the tighter standards. When the Clean Coal program began, we weren't sure if Selective Catalytic Reduction would even work on U.S. coals and in U.S. power plants. Trace elements in many U.S. coals were a poison to the chemical catalysts these devices used.

  Now, not only do we have catalysts that will work, we have cut the cost of Selective Catalytic Reduction in half.

• We have more reliable and lower cost flue gas scrubbers. Because technology helped drive down costs, today's scrubbers are less than half the cost of those available when the Clean Coal program started.

• We have entirely new options for generating electricity from coal -- for example, gasifying it rather than burning it, then separating impurities from the gas before using it like natural gas to drive a turbine. Today, there are gasification-based power plants in Florida and Indiana that are showcases of this technology. These plants are the cleanest, most efficient coal-based power generators in the world.

• We also know how to make high-quality chemicals and transportation fuels from gases made from coal. In Kingsport, Tennessee, Eastman Chemical is demonstrating a Clean Coal technology that makes methanol for plastics manufacturing from coal. In fact, if you have a transparent plastic toothbrush or ink pen, there is a good chance it was made from plastics manufactured from coal gas.

Now, based on these achievements, we are ready to take the next step.

We believe it is possible not just to reduce pollutants from coal but to virtually eliminate them. We believe by the year 2015 - if our R&D program is successful - we can develop the technology for a new fleet of energy plants that would emit virtually NO air pollutants, NO solid wastes, and NO waste water.

In other words, NO environmental impact outside of the "footprint" of the plant - and that footprint will be much smaller and less intrusive than the power plants we have today.

We call this program our Vision 21 program. It could revolutionize the way coal is used in the future.

Vision 21 would be unlike anything that exists today - and yet, it would be based on many of the technologies we currently have in our Clean Coal and R&D programs.

It might rely on new gasification processes, or new coal combustion processes -- perhaps mixing coal with biomass or with municipal waste. That would help solve a major disposal problem that many of our cities are facing.

It would extract oxygen from the air with revolutionary solid-state membranes -- rather than the expensive and energy intensive way we produce oxygen today, namely by supercooling it to several hundred degrees below zero.

Oxygen is the 3rd most marketed chemical commodity in the country. One of the most important spinoffs of Vision 21 could be a way to produce oxygen at 20 to 40 percent lower cost than is possible today. That could have benefits that extend well beyond the energy sector.

Vision 21 plants would generate electricity at twice the efficiencies of today's power plants -- meaning double the power from a given amount of coal. It would produce electricity at 10 to 20 percent lower costs than today's coal plants.

But Vision 21 plants would produce more than just electricity.

Even at 60 percent efficiencies - which is our target - that means more than one third of coal's energy value would still be discarded. We think we can do even better.

We believe we can develop technologies to transform the portion of coal that isn't converted into electricity into other useable products. Perhaps coal-based chemicals like the current Clean Coal plant in Tennessee. Or perhaps into high-quality, ultra-clean transportation fuels. Or perhaps as heat for industrial manufacturing.

Vision 21 is our concept of the "ultimate" energy facility,capable of processing multiple fuels, capable of producing multiple products - and again to reemphasize, with virtually no air, water or solid waste pollutants.

It starts us down the final path of making coal part of tomorrow's environmental solution, rather than today's environmental problem.

But it doesn't get us all the way there. To do that, I believe we need to add to the clean coal "menu" the relatively new technology of carbon sequestration. Carbon sequestration is the name we give to technologies that might one day capture and dispose of the gases that contribute to global warming.

I believe carbon sequestration is one of the most exciting new areas of research in the field of energy - or for that matter, in the twin fields of energy AND the environment.

We believe it may be possible to capture and sequester carbon gases for as low as $10 per ton of carbon. Again, let me put that into perspective: $10 per ton of carbon is equivalent to adding only two-tenths of a cent per kilowatt-hour to the cost of electricity.

That makes carbon sequestration one of the most affordable options for greenhouse gas control.

How would we do it? Right now - at this early stage of research - there are a host of promising approaches ranging from injecting carbon dioxide into geologic formations, such as oil fields, coal seams or into deep, unuseable aquifers - perhaps the possibility of deep ocean disposal -- or perhaps several innovative concepts that mimic, for example, photosynthesis to convert carbon dioxide into other products.

We even have some promising research underway to transform carbon dioxide into minerals -- doing in hours what it takes Nature a couple of hundred thousand years to accomplish.

Last summer, Secretary Richardson elevated the visibility of carbon sequestration -- calling it the "third leg" of the Administration's climate change technology efforts, joining energy efficiency and the greater use of low-carbon fuels such as natural gas.

But carbon sequestration offers one major advantage over all other climate change options -- it doesn't require wholesale changes in the world's energy infrastructure. As a result, if our program is successful, we could fundamentally change the equation of future climate change strategies, not only in this country but in both the developed and developing countries globally.

In his State of the Union Address last month, President Clinton called on the Nation to renew its commitment to a clean energy future. Investments in advanced technology, the President has said, will allow us to continue to expand our economy while improving our environment.

There is no better example of what the President has in mind than the kind of technologies we are developing in our Vision 21 and carbon sequestration programs.

In closing, I think that for these programs to be successful, decisionmakers such as you must understand the potential of new technology - whether it is the silicon technology of photovoltaic solar cells OR the carbon technology of coal and other fossil fuels. People like you -- public policy makers and industry experts - must recognize the direct and beneficial impact on every American that these programs can have.

That's why I'm especially pleased to be able to give you this status report. We need your support. There are still a lot of people who hear "coal" or "fossil fuels" and think only about the negatives of the past, not about the potential of the future.

I would like to see this Council become more engaged in shaping our future R&D portfolio -- and in conveying the message of clean coal and other clean energy technologies to the public. I think the Council can serve a valuable role in this aspect.

If the last 20 years in the coal industry are a template, expect dramatic changes in the next 20. We need to move into that future together. Because I think it is going to be an exciting time.

Thank you.