Remarks by
Robert S. Kripowicz
Acting Assistant Secretary for Fossil Energy
U.S. Department of Energy
to the
Clean Coal and Power Conference
Washington, DC
November 19, 2001

Good morning. It is my pleasure on behalf of Secretary Abraham and the rest of the Department of Energy, to welcome you to this conference.

This is something of a new beginning for us - and for our approach to clean coal technology. The theme of this conference is "A Clean Look at Coal," and you'll hear more about our changing focus as we move forward with the agenda today and tomorrow.

Even as certain things change, however, other things remain the same. And one facet of this conference that has remained constant is the strong support we continue to receive from Steve and his staff at CEED, and from the National Mining Association, EPRI, and the Council of Industrial Boiler Owners.

This has been a good team in planning past Clean Coal Technology conferences, and I'm glad it has stayed intact for this one.

Of course, all of our high-level planning doesn't really mean much unless we have someone who can take the ideas and translate them into the actual logistics that make a conference run smoothly.

We are extremely fortunate to have such a talented individual working at the Energy Department - and even more fortunate because she works in our fossil energy office. She has helped put together all of our past Clean Coal conferences, and this time, almost single-handedly, she has been in charge of making this one come together.

So I want Faith Cline to stand up and raise her hand in the back - and I would like us all to give her a round of applause for her outstanding efforts.

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It is appropriate that we are meeting today in the Ronald Reagan Building.

As most of you recall, it was President Reagan who, in March of 1987, expanded the fledgling clean coal program into a multi-billion dollar initiative - carrying out the recommendations of the U.S. and Canadian Special Envoys on Acid Rain. In doing so, President Reagan placed great faith in both the industry and the government to provide innovative technology solutions to the problems of acid rain.

But as I was thinking about my remarks today, my recollection went back a couple of years before President Reagan's announcement.

In those days, I was working on Capitol Hill, and for me, the clean coal story began in 1985 when Congressman Ralph Regula from Ohio walked into my office and said, "Bob, we have to find a way to get the House to support appropriations for clean coal technology."

Many of you may remember that the year before, the Synthetic Fuels Corporation had been abolished, and largely at the urging of Senator Byrd, $750 million of the Corporation's funding had been set aside in a reserve fund for new coal technologies.

The only problem was that a reserve fund is one thing - actual appropriations are quite another. And there were skeptics on Capitol Hill that questioned whether the government should be spending tax dollars on the coal industry.

But Congressman Regula was a major supporter of coal, and he was - and continues to be - a visionary on the potential for advanced coal technology.

The only problem was that he had to sell his vision to his colleagues - many who thought that ""clean coal" was an oxymoron.

So he asked me to give some thought as to what would make federal funding for clean coal technology acceptable to the Congress.

I thought about it for quite a while - probably talked with some of you in this audience - and I had a lot of discussions with Mr. Regula and our subcommittee chairman, Sidney Yates. Ultimately, my recommendations included two essential requirements:

First, there would need to be a reasonable assurance that projects to be funded would be commercialized. To sell the program, we had to make the case that there would be tangible results.

Second -- industry had to do its part, right up front. That meant cost-sharing. And it couldn't be the standard cost-sharing that was the rule in prior research programs - 15 or 20 percent. It had to be more substantial.

I remember saying to Mr. Regula that the only way I believed we could gain the support of Congress was to require that the industry contribute a full 50 percent cost-sharing. And it had to be "up-front" cash - a dollar-for-dollar match from Day One.

That was virtually unheard-of at the time: industry matching federal dollars one-for one, with cash on the barrel head for large demonstrations of still unproven, high-risk technology. DOE had required such cost-sharing before - we had a 50-50 cost-shared synthetic fuels demonstration program - but in most cases, the federal dollars went in first, and industry's contribution would come later, once the project was assured or, in some cases, once it was up-and-running.

The previous demonstration program had not been successful - a lot of tax dollars were spent, and no plants were constructed.

If the clean coal program was to have a chance, we knew we would have to break that mold. So we mandated a minimum of 50-50 cost-sharing up-front, and we stuck to it. Mr. Regula took that to his fellow Members and secured passage of the first appropriations in the House of Representatives for clean coal technology - $400 million in compromise funding for fiscal year 1986.

I don't believe that any of us ever imagined during those early days in 1985 what we had helped start.

Two years later, the Reagan Administration endorsed an expansion of the Clean Coal program and retained the cost-sharing criteria we had worked out.

And industry stepped to the plate big time, ultimately matching the federal funding share NOT 1 to 1, but 2 to 1.

Industry also met our requirement for producing tangible results.

Today, nearly three out of every four coal-burning power plants in this country are equipped with technologies that can trace their roots back to the Clean Coal Program.

The current generation of low-NOx burners alone are a major clean coal success story. Today, nearly $1.5 (one-and-a-half) billion dollars of these burners have been sold.

Selective catalytic reduction now costs half what it did in the 1980s, and systems are on order or under construction for 30 percent of U.S. coal-fired plants. Sales of this technology will probably approach $5.5 (five-and-a-half) billion dollars by the end of next year.

Flue gas scrubbers are a third of their cost in the 1970s, and they are more reliable - due, in many cases, to innovations tested in clean coal projects.

Fluidized bed technology demonstrated in the Clean Coal program has recorded global sales of nearly $8 billion through 2000, and another $2.7 billion in sales are projected over the next three years.

And in Tampa, Florida, and West Terre Haute, Indiana, the first pioneering, full-size coal gasification power plants have opened a new pathway for the next generation of clean, fuel-flexible power plants.

Never could we have imagined back in 1986 that the commitment to clean coal technology would lead to economic benefits that one utility - Southern Company - conservatively estimates at nearly $100 billion.

And if they could be accurately measured, I suspect the health benefits of better air quality are many times that figure.

So when President Bush called for a new commitment to clean coal technology, he did so based on a solid track record of results.

He did so with a clear realization that America's economy cannot thrive without coal - with a clear understanding that there is no better example of America's energy strength than the abundant coal reserves within our borders - and with the clear recognition that there is no better example of America's ingenuity than the technologies we now label "clean coal."

So now we have embarked on a new clean coal initiative. A few weeks ago (October 16), we announced eight new projects with a total value of $110 million. They will be a precursor to the President's $2 billion clean coal initiative.

Importantly, the Power Plant Improvement Initiative originated in Congress - reflecting the priority that Members place on initiatives to improve the reliability and efficiency of the nation's power generating industry.

This coming year, we will begin implementing President Bush's call for a new national effort to develop even more advanced technologies that can meet the new challenges confronting coal.

Today, reducing emissions of mercury and ultra-fine particulates has joined the priorities of sulfur and nitrogen reduction that dominated the environmental debates of the 1980s.

Today, the need for greater power plant reliability and efficiency has been brought to the forefront by concerns over threats of brownouts and blackouts.

Today, the issue of climate change continues to loom over the long-term future of coal. And the President has directed a major technology push to develop more acceptable carbon mitigation approaches.

At the Department of Energy, we have turned much of our attention toward these new challenges.

Our research program now includes major efforts to develop new mercury control technologies - ones that will be one-half to one-fourth the cost of today systems and that will work reliably across the full spectrum of coal-fired power systems.

We continue to develop the data and tools to distinguish between various sources of PM2.5 and to reduce their precursor emissions.

We have put into place the R&D building blocks for a new concept in power plants - a pollution-free, multi-product energy facility we call Vision 21.

And to address climate change, we have taken the concept of carbon sequestration from "back of the envelope" status a few years ago to the threshold of full-fledged tests in the field.

Consider for a moment that as recently as 1997 we had only the barest of evidence that affordable sequestration might be possible. We issued a notice offering $50,000 to anyone with a good idea of how carbon sequestration might be made practicable.

Today, from that modest start, carbon sequestration research has grown to over $30 million a year - Congress appropriated $32 million in FY 2002. Last June, President Bush singled out carbon sequestration as one of the most promising approaches in our portfolio for addressing climate change.

So the technical foundation is in place - and it is strong. Now we are challenged to build on that foundation.

I envision much of what I have described ultimately converging:

• advanced pollution controls integrated into new power generation processes,
• liquid fuels technology producing value-added co-products,
• carbon sequestration becoming an integral part of the overall energy cycle.

I believe President Bush's new clean coal initiative will provide the impetus for such power plants - the likes of which we can only imagine today. Truly a Vision 21.

It is not inconceivable that the new clean coal journey we are beginning could lead to the day when environmental concerns over the use of coal can be eliminated.

"Eiminated" may seem too strong a term for many to imagine today - but remember "clean coal" was also a term many believed to be too strong 15 years ago.

The real key is the word "we" - the "clean coal journey WE are beginning." Because as it was in the past, it still is a partnership, as [Deputy Energy Secretary] Frank Blake said, between government and industry. And it is that partnership that offers the best possibility for achieving tomorrow what can only be imagined today.