Remarks by
Secretary of Energy Spencer Abraham
to the
National Coal Council
in Washington,DC
on
December 4, 2003

Thank you, Tom Kraemer and good morning.

It's good to see you all again.

When I accepted the invitation to join you here today, I anticipated that my remarks would focus on the first comprehensive energy bill enacted in more than a decade -- and a discussion of its coal technology provisions.

I thought we would be examining some key provisions of landmark legislation that would launch America on a new path toward greater energy security -- a path that would make our nation's energy supply cleaner and more reliable than ever before.

Unfortunately, as you know, Congress will not pass the energy bill this year.

While I am deeply disappointed, I understand the challenge the congressional leadership faces. 

Passing comprehensive energy legislation is an extremely difficult undertaking. 

There are many competing considerations among consumers, producers, energy sectors, and regions of the country that must be addressed. 

The very fact that no comprehensive energy bill has been enacted by Congress in 11 years demonstrates just how difficult a challenge we face.

But, as I've noted, the energy bill before Congress contains significant provisions to address almost every energy-related concern Americans have -- from reducing our reliance on foreign oil, to developing new technologies, to promoting energy efficiency, to finding cleaner, more efficient fuels.

The energy bill includes the largest package of incentives ever proposed to encourage the adoption of clean, renewable energy technology.

• It contains the President's hydrogen fuel initiatives to develop cars powered by pollution-free hydrogen, rather than gasoline, and the fuel infrastructure to support them.

• The transformation from gasoline to hydrogen will over time dramatically reduce our dependence on foreign oil. 

• The bill would also help ease the volatility of natural gas markets by providing incentives for existing and new resource development, and speeding the construction of a much-needed natural gas pipeline from Alaska to the lower 48 states.

• The bill would promote investment in a modern and reliable transmission grid that would bolster the benefits of competitive electricity markets.

• Electricity producers must meet more than just non-binding, voluntary operation standards to prevent widespread and costly blackouts. 

• This bill would require mandatory federal reliability standards -- standards that I believe would have prevented the August 14 blackout.

• The energy bill includes far-reaching research and development projects for virtually emissions-free clean coal, and provisions to encourage the construction of advanced design, clean, and safe nuclear power plants.

• The bill would, by stimulating investment in the energy sector, create jobs for Americans in industries ranging from construction, to steel and other metals, to every level and variety of modern, high-tech goods and services.

• And it includes tax incentives for the production of ethanol, our cleanest fuel for transportation, as well as a 70 percent increase in funding for the Low Income Home Energy Assistance Program.

Add all these provisions together and you have a common-sense, practical -- and at the same time visionary -- comprehensive energy bill that enjoys the bipartisan support of majorities in both houses of Congress.

Majority Leader Frist has indicated that the energy bill will be at the top of the Senate's agenda when Congress returns early next year.

Senator Frist and the President understand that our nation's energy security is tightly interwoven with our economic and national security. 

A stable, secure and affordable supply of energy is the lifeblood of the American economy. 

And the American people deserve an up or down vote by the Senate on this key issue.

Fortunately, a number of the President's National Energy Policy's recommendations are already in force because of administrative action. 

And a number of programs associated with our Clean Coal Technology effort are included in those.

Since our last meeting, we have made significant progress with the three big initiatives of the President's energy policy related to coal: the Clean Coal Power Initiative, the FutureGen Initiative, and Carbon Sequestration research and development.

Let me discuss our progress in each of these areas in more detail.

President Bush's 10-year, $2 billion Clean Coal Power Initiative received a boost last month when Congress approved a 2004 appropriations bill that increased clean coal research to $380 million, $42 million more than we had requested.

As you know, the Department kicked off the Initiative's $1.2 billion Round One earlier this year and we began Round Two last week with the Department's release of a draft solicitation.

Congress included $170 million in its appropriations bill for the first of two installments for Round Two projects.

The appropriations bill also contained $9 million in seed money for the President's FutureGen project, the world's first zero emissions coal facility that will produce both electricity and hydrogen while sequestering greenhouse gas emissions.

The Department recently completed the internal process required to clear the way for action on FutureGen.

We expect soon to begin discussions with private sector partners on the FutureGen project, which has the potential to alter the way we think about coal use in the decades to come.

FutureGen will integrate new technology to virtually eliminate emissions of NOX, SOX and mercury.

The development of technologies for Carbon Sequestration is another key element of FutureGen -- and of all our plans for the continuation of fossil fuels as vital contributors to our diversified, balanced energy portfolio.

Our current activities include 65 carbon sequestration projects across the country, funded with $110 million in public and private funds.

Seven Regional Carbon Sequestration Partnerships were recently selected to evaluate and promote technologies that are best suited to each unique region.

Interest in clean coal, in carbon sequestration, and in the potential of a hydrogen energy future is a worldwide phenomenon.

We are garnering support and interest for our initiatives from many nations, including the world's largest coal producers and consumers.

Last June, 14 countries, including China and India as well as the European Union, joined the United States in signing the Carbon Sequestration Leadership Forum's charter.

The signatories to the U.S.-led Carbon Sequestration Leadership Forum seek to realize the promise of carbon capture and storage, making it commercially viable and environmentally safe.

We plan to follow up on that founding meeting with a working meeting in January.

Just two weeks ago, the Department of Energy and the State Department hosted a Clean Coal Conference that attracted hundreds of participants from the United States and China.

And one day after the Clean Coal Conference, we hosted a meeting at which Ministers representing 14 nations and the European Commission signed an agreement formally establishing the International Partnership for the Hydrogen Economy.

This international partnership will serve as a mechanism to coordinate hydrogen research, and hydrogen technology development and deployment.

The establishment of the International Partnership for the Hydrogen Economy marks a significant advance in a global effort to work together for a safe and environmentally benign hydrogen economy.

That is a powerful vision and a spectacular goal to shoot for -- and the hydrogen-producing capacity of FutureGen will help to ensure that coal has an important role to play in the new hydrogen economy of the future.

We are massing enormous resources of talent, knowledge, experience and capital to tackle coal's environmental challenges and the larger challenge of our overall energy future.

I am confident that we will successfully meet all of these challenges.

We have good reason to be optimistic about the prospects for making the scientific breakthroughs and developing the technologies that will guarantee our long-term energy security.

But -- and there is always a "but" -- we do face a short- to medium-term challenge that I haven't yet mentioned.

I want to conclude my remarks today by requesting the help of the Coal Council to meet and surmount continuing, successful opposition to the timely construction of new clean coal plants.

We have technology available today that trumps even the industry's remarkable environmental successes of the last 30 years -- and we should put it to work.

You know the story but it is worth repeating.

Since 1970, coal use in the United States has doubled, from 520 million tons to 1.1 billion tons in 2002.

About 95 percent of that coal is used to generate electricity, and coal accounts for just over 50 percent of all our produced electricity.

But while coal use has been rapidly rising, air pollutants from coal-fired power plants have been dramatically declining.

Particulates -- ash and soot -- have been reduced by 97 percent.

Sulfur dioxide emissions are down by about two-thirds, and oxides of nitrogen by about one-third.

These downward trends will continue under the provisions of the Clean Air Act, and accelerate under the President's Clear Skies Initiative, which will also for the first time begin to reduce mercury emissions.

All that is very good news.

But we can do better, and we should not have to wait 10 to 15 years for the FutureGen power plant of the future to do so. 

Currently available technology can push particulate emissions reductions to 99.5 percent, SOX reductions to as much as 98 percent, and NOX reductions to 80 percent.

At the same time, available technologies can improve plant efficiency by 10 percent or more, producing more electricity with less fuel -- and with a consequent reduction in greenhouse gas emissions.

The long-term price outlook for natural gas, coal's principal competition for power generation, makes clean coal plants outfitted with these new technologies price competitive.

There is, in short, every reason to begin building clean coal power generation plants, and no reason not to.

Yet burdensome permitting rules for new coal plants, and opposition from state and local governments and the general public, have combined to create lengthy and frustrating processes that discourage potential investors in these needed plants, as well as the companies that want to build them. 

We need to find ways to get timely approvals for new clean coal plants. 

When I say timely I mean we need to reduce the approval process from 10 to12 years, as prevails today, to one to two years.

And we need to do it quickly.

That is why I am requesting that the National Coal Council conduct a study to determine options for the expeditious construction of new, coal-based electricity generation plants to maintain our nation's fuel diversity.

I would like in particular to ask you to examine options for the conversion of our oldest coal-burning plants to new clean coal facilities.

No better organization than the Coal Council exists to carry out this study.

Your members have unmatched knowledge and expertise concerning the industry, and you represent a broad spectrum of industry, state and public interest organizations.

You know the territory -- and I am confident that you will be able to find the path through it to a proper appreciation of the environmental advances clean coal has made and will continue to make, and of its essential role in assuring America's energy security.

Thank you.