DOE - Fossil Energy: Remarks of Mark Maddox at the Governing Board of the International Energy Agency and the Coal Industry Advisory Board in Paris, France

Members of the Coal Industry Advisory Board, members of the International Energy Agency's Governing Board, ladies and gentlemen:

Today both the industrialized and emerging nations face mounting and conflicting pressures. All of us share the desire for cleaner, more environmental-friendly sources of energy. And by all reports that desire is growing among our citizenry.

Yet each of our nations' leaders has a mandate from their constituents to deliver increased economic growth and, by extension, an increased standard of living for our citizens. Implicit in that demand is a requirement to deliver the energy required to fuel a growing economy. The relationship between energy growth and economic growth is a proven.

A recent study in the United States estimates that in order for the American economy to average a "normal" 3 percent growth over the next 20 years, it will need 40 percent more energy, with power generation and industrial use among the foremost considerations. This growth in energy use assumes an increase in efficiency of almost 15 percent over the same time period.

The world faces a similar challenge. The U.S. Energy Information Administration's estimates of world growth through 2025 foresee:

A near doubling of Gross Domestic Product in the industrialized nations exclusive of the U.S.;
A near tripling of GDP in the transitional nations of the former Soviet Union and Eastern Europe;
And a tripling of GDP in the developing nations.

This growth is expected to boost energy requirements by:

30 percent in the industrialized nations exclusive of the U.S.;
54 percent in the transitional nations;
And, 94 percent in the developing nations.

Meeting this demand will require all of our sources of energy to do more. We will need more nuclear, more renewables, more natural gas, more oil and more coal.

But, perhaps it is one source - coal - that tends to be the energy provider which creates the greatest challenge to reconciling conflicting policies. Coal is almost 70 percent of global fossil reserves. It represents more than twice the energy of world oil and gas combined. And EIA projects that worldwide use will increase by 45 percent through 2025.

In a world where future energy demand will be central to economic and environmental security, coal will be central to world energy. This is why Secretary of Energy Abraham said in his Berlin speech on energy and climate, "…it is unreasonable to expect any country that possesses abundant supplies of inexpensive fossil fuels to forego their use."

And this is why we are mobilizing in the U.S. to get the best possible use out of coal - the best for ourselves and the world. We see in the link between coal and advancing technology the basis for both multi- and bi-lateral approaches to deal with a number of the world's shared concerns.

Our mobilization is marshaling the intellectual and financial resources of:

The federal government;
Our national defense and energy laboratories;
Private industry;
Our universities;
And other institutions, including international participants and partners.

We specifically seek the involvement of private industry to benefit from:

Its creative drive;
Its keen eye for the practical;
And its force in transferring technology into the marketplace.

The means of mobilization is the principle of joint-venture research, development and demonstration. In this approach, government, industry and other participants share the costs of specific projects to leverage up capital and effectiveness. The project agreements include provisions for information sharing and due regard for intellectual property rights.

Toward this end, $380 million has been appropriated this year for coal-specific activities - activities that support President Bush's comprehensive and mutually supporting initiatives in energy security, environmental improvement and climate change. These funds will be matched by industry and other participants in the following ratios:

Up to 20 percent from the private sector for high-risk, basic research oriented toward critical and breakthrough technologies;
And, at least 50 percent from the private sector for demonstration of the promising technologies identified by basic research.

The starting point and a model for our new initiatives is the very successful Clean Coal Technology Program. This 17-year effort is just now coming to a close. It recognized and incorporated the import of an early CIAB finding on thermal efficiency and carbon dioxide - the finding that every 1 percent gain in efficiency results in a 3-to-4 percent reduction in carbon dioxide emissions per kilowatt of output.

The original Clean Coal Technology Program saw approximately $2 billion in federal investment leveraged by private participation into a total $5 billion. It has demonstrated:

Pollution control technologies for retrofit that remove more than 90 percent of sulfur dioxide and nitrogen oxide; that lower costs; and that often raise efficiencies;
Plus, fluidized bed combustion - both atmospheric and pressurized - for both repowering and new capacity with gains in efficiency and pollution control;
And, commercial scale gasification for both repowering and new capacity with significant gains in thermal efficiency and pollution control.

In the near term, these technologies will increase power output from the standing fleet and from new plants. At the same time, they will drive down emissions and generally reduce carbon intensity.

The U.S. technology mobilization is part of the President's Coal Research Initiative. This initiative will complete the original Clean Coal program and elevate activity in three other program areas. In general, these activities are directed toward:

Sharply reducing and then eventually eliminating all regulated pollutants;
Doubling the efficiencies of generation;
Sharply moderating and then eventually eliminating the carbon dioxide emissions that are central to discussions of climate;
And, elevating energy security.

The first of these areas is a Basic Research program that covers:

Innovations for existing plants;
Advanced systems and gasification;
Combustion systems;
High-efficiency turbines;
Fuels derivation, including lower-cost hydrogen;
And, carbon capture and sequestration.

From these activities and from the original Clean Coal Technology Program will emerge the improvements and innovations to be demonstrated in the next program: The President's Clean Coal Power Initiative. The President's Clean Coal Power Initiative is a new but now-established activity envisioned as a 10-year, $2-billion demonstration program to move technology ahead.

This initiative's first-round demonstrations were selected this year and a second round solicitation is in preparation for 2005. The first round of solicitations comprised seven projects totaling $286 million in federal funding that will be matched by $800 million from industry and other sources.

Goals for the Clean Coal Power Initiative include:

Continued improvement of existing plants;
Continued improvement of gasification technology;
Higher efficiency turbines;
Linking these turbines and combined-cycle generation with fuel cells in power production;
Pushing generation efficiencies toward 60 percent;
Economic hydrogen production at lower costs and higher efficiencies;
Plus, carbon separation and sequestration that is economic and effective;
And, finally, the sequestration-ready power plant.

From these activities will emerge the improvements and innovations to be demonstrated in the FutureGen Initiative. Last month Congress appropriated $9 million to support the FutureGen partnership's initial activities. These activities are moving forward.

FutureGen will be a 10-year, $1-billion, commercial-scale demonstration of a 275 megawatt plant based on the next steps in gasification and combined-cycle generation.

Objectives include commercial demonstration of:

Electric power from coal with very low and, ultimately, zero-emissions of pollutants and carbon dioxide;
With reuse of heat, overall energy efficiency up to 85 percent;
Plus, effective, safe and very long-term carbon sequestration;
And, commercial hydrogen production.

FutureGen will be both a prototype plant and a commercial-scale laboratory to which new technologies can be added and tested. Most of the nation's major power producers, coal producers and equipment makers are expected to be in partnership behind it. It is open to international participation.

In turn, FutureGen supports the President's Hydrogen and FreedomCAR initiatives. Their objectives include displacement of the internal combustion engine in automobile and highway transportation.

Moving forward in policy, FutureGen supplements and supports:

The new international Carbon Sequestration Leadership Forum, a coalition of developed and developing nations dedicated to identifying the most effective ways of separating, capturing and storing carbon;
And, the International Partnership for a Hydrogen Future, a coalition of developed and developing nations dedicated to establishing a hydrogen economy as soon as possible.

An additional word on international participation and partnerships might be in order before I close. It is the aim of the United States not only to see technology developed for the best use of coal, but to see this technology deployed for the betterment of world's energy, economic and environmental security.

Toward this end, we are engaging in bi-lateral as well as multi-lateral activities. Our bi-lateral agreements on coal technology include partnerships with India and China, which together will account for almost 80 percent of the projected increase in coal use. We are also working with nations in South America, Africa and Asia, and with many of the nations represented here today.

In addition we are facilitating relationships between our industry and companies in these nations. Our objective goes beyond changing the rules of the game in energy. It is to change the game itself by establishing over time a hydrogen-centered economy.

This is how the United States sees the role of government in research, development and demonstration. On behalf of the Secretary and the Department, thank you for your interest in these important matters and for your invitation to participate in this forum.