Remarks by Mark Maddox
Acting Assistant Secretary for Fossil Energy
to the Eighth International Conference on Inorganic Membranes
Cincinnati, Ohio
July 19, 2004

Thank you, and good morning. It's great to be home again in Ohio, and it's a real pleasure for me to be here to talk about a subject of great importance to the energy and environmental future of our country and the world.

Many of you have traveled great distances to be here to learn of recent developments in your field and to share insights and experience with your scientific colleagues.

I want to take this opportunity to welcome our foreign visitors to the United States.

On behalf of President Bush and his Administration, I'd like to commend Conference Chairman Professor Jerry Lin of the University of Cincinnati, and Co-Chairmen Arun Bose of our National Energy Technology Laboratory and Richard Noble of the University of Colorado, as well as Conference Coordinator Gerri Burke and all the organizations and individuals responsible for organizing this eighth annual conference.

I also want to thank all of you here today for your dedication to solving the technological challenges presented by inorganic membrane research.

I am not a scientist, so I will not presume to discuss the finer points of inorganic membrane technology research with an audience of experts from all over the world.

I won't talk science but I do think you might find it worthwhile to hear why President Bush, the Department of Energy, the Office of Fossil Energy, and the National Energy Technology Laboratory appreciate and strongly support your efforts to develop advanced inorganic membrane technology.

It is because technological advances will play the primary role in reaching America's energy and environmental goals – and because advanced membrane technology is a key research avenue to a clean, secure energy future.

President Bush has stated our goals, and how we will reach them through:

• His National Energy Policy, which will provide for dependable, affordable, environmentally sound energy for the future;
• His Clear Skies Initiative for the reduction of polluting air emissions by 70 percent by the year 2018, and
• His Global Climate Change Initiative for the reduction of greenhouse gas intensity by 18 percent in 2012.

Our energy policy is practical as well as visionary. It recognizes that fossil fuels will supply most of the world's energy for the long term.

Our goal is to develop the technologies that will allow us to use those fuels - particularly coal - in a way that significantly reduces and eventually eliminates their impact on the environment.

With your help, our technology research programs will get us to our goal in 10 to 15 years. Your work is integral to our plans for the creation of the FutureGen clean coal power plant of the future - and to the production of the hydrogen that will power the hydrogen-based economy of the future.

The continued contribution of coal and natural gas to energy production, and the move from reliance on petroleum to a hydrogen-based economy, depend on the success of your research. Its importance cannot be overestimated.

A few statistics and projections from the U.S. Energy Information Administration will help to illustrate my point. Fossil fuels now account for about 85 percent of America's and the world's total primary energy production.

The Energy Information Administration projects that growing economies and rising standards of living around the world will raise the world's energy requirements almost 60 percent by 2025, with fossil energy's share of total primary energy generation rising to approximately 90 percent.

Coal alone accounts for 22 percent of the primary energy America consumes today, and generates more than 50 percent of our electricity supply. U.S. coal consumption is expected to grow by 36 percent over the next 20 years.

Worldwide, coal accounts for 25 percent of total primary energy consumption, and generates 36 percent of the world's electricity. World coal consumption is expected to grow by 40 percent in 2025 to meet increasing energy demand.

Coal's energy contribution is vital to our shared future. Fortunately, there is more than enough to go around.

Coal accounts for almost 95 percent of America's fossil fuel reserves, and it accounts for almost 70 percent of the world's fossil reserves. At current rates of consumption, the world has enough coal reserves to last more than two centuries.

Imagine what would happen to the world's economies if fossil fuel use, and particularly coal use, were subtracted from the energy equation with no affordable alternative in sight. Imagine what would happen to our shared dream of a better life for future generations.

That is why Secretary Abraham, in Berlin last fall, told the European nations: "...it is unreasonable to expect any country that possesses abundant supplies of inexpensive fossil fuels to forego their use." And that is why we are mobilizing in the United State to get the best possible use out of fossil fuels, notably coal.

Coal stands for flexibility and diversity in primary energy, especially in producing reliable and affordable supplies of electric power, the most critical factor in a modern economy.

To make sure we will get the most out of our coal resources, the Department of Energy reconfigured the Fossil Energy budget to focus on the future of coal.

The President's $2 billion, 10-year Coal Research Initiative is proof of the importance of coal to our energy future. In fact, under President Bush's leadership, coal R&D budget requests are more than double past requests and appropriations.

To fulfill the commitment to develop affordable clean coal technologies, the Office of Fossil Energy's Fiscal Year '05 clean coal research budget request was increased to $447 million, 40 percent more than the previous year's $320 million request, or more than double the previous Administration's final request.

The House of Representatives approved most of our budget request last month and it now awaits Senate action.

Funding for our FutureGen Initiative, one of our most visionary and promising projects, has been supported in the House and, like the rest of our budget, awaits Senate action. Everyone in coal or power production is familiar with FutureGen, the 10-year, $1 billion project that lies at the heart of the President's $2 billion overall Clean Coal program.

Future Gen will further advance the already advanced power generation technology of IGCC. It will bring together in one power plant the capability to:

• Generate electricity at efficiency greater than 60 percent;
• Achieve total energy-use efficiency exceeding 80 percent;
• Produce hydrogen to support a hydrogen economy and the development of emissions-free automobiles — the first step to the end of dependence on imported oil;
• Remove and permanently sequester carbon dioxide, and
• Accomplish all this with virtually zero emissions of any kind — no sulfur dioxide, no nitrogen oxide, no mercury, no particulates, no carbon dioxide — and without significant increase in the cost of electricity or transportation fuel.

Advanced inorganic membrane technology is vital to at three of FutureGen's projected capabilities: hydrogen production, carbon sequestration, and cost-effective, efficient plant operation.

Let's take these one at a time, beginning with hydrogen.

The key visionary element in President Bush's national energy plan is the commitment to set the stage over the next two decades for a rapid transition to the hydrogen economy of the future.

A hydrogen-based economy would, by itself, essentially eliminate the energy security concerns that preoccupy us today.

Imagine a world, some decades from now, in which worries over energy supply and demand, and their environmental effects, are subjects for the history books. It's hard to imagine, but the day is coming - and the success of your research is central to our vision of the energy future.

Hydrogen produced from coal-based power plants such as FutureGen will be an important contributor to the hydrogen supply that will fuel the new economy.

By my count, the Office of Fossil Energy and NETL and its partners are devoting over $21 million to 18 membrane technology research projects for the separation of hydrogen from coal-derived synthesis gas.

The research is being conducted at NETL itself, at three national laboratories - Argonne, Los Alamos, and Oak Ridge - at several university research centers including the University of Cincinnati, and at a number of other research institutions.

Natural gas will also be an important source of hydrogen. We are working with private sector partners on a $105 million project to research and develop ceramic membrane reactor systems for converting natural gas to hydrogen and synthesis gas for liquid transportation fuels.

And we're also collaborating on a $31 million project aimed at developing an oxygen transport membrane syngas process and testing syngas-derived ultra-clean fuels in diesel engines.

As you can see, we are seriously committed to realizing the potential of hydrogen - and that means we are seriously committed to the development of advanced membrane technology.

President Bush has committed the United States to leadership in bringing a hydrogen-based economy to the United States and the world. Secretary Abraham followed up that commitment two years ago when he suggested the creation of an International Partnership for a Hydrogen Economy.

Last November, representatives of 15 nations, the European Union and the International Energy Agency met in Washington for the Inaugural Ministerial Meeting of the Hydrogen Partnership.

As Secretary Abraham said at that meeting, "Every one of our nations should and will benefit when the hydrogen age arrives. Indeed, virtually every nation on the planet should benefit. That is why it is so important that we work together, joining forces in those areas that will best serve the interests of unlocking the door to the hydrogen future. This International Partnership for a Hydrogen Economy will ensure that we do just that."

I would add only that meetings such as ICIM8 will also ensure that we do just that.

This Administration is committed to addressing the climate change issue by working to reduce greenhouse gas intensity — defined as carbon emissions divided by GDP — even as we encourage robust economic growth. Because greenhouse gas emissions are an inescapable result of fossil fuel use, carbon sequestration could play a large role in helping us to do our job.

We are attacking the carbon sequestration challenge in several ways and we hope to produce several different beneficial effects.

We want to reduce the quantity of produced greenhouse gases by increasing the efficiency and optimizing the performance of fossil fuel-based power generation, particularly from coal and natural gas.

The more efficient the process, the less fuel will be required, and the less greenhouse gas will be produced. In fact, every one percent increase in efficiency causes a three-to-four percent reduction in carbon dioxide emissions per kilowatt-hour of output.

We want to capture and safely and permanently store produced greenhouse gases and, where possible, we want to get two bangs for our buck by permanently storing carbon dioxide in depleted oil reservoirs and coal-bed methane fields, where the pressure of injected CO2 will increase the production of our still-abundant oil and gas reserves.

The capture and permanent storage of produced carbon dioxide is a promising avenue of research for solving the problem of greenhouse gas emissions from the coal-based power plants — the plants we must have to generate the electric power and produce the hydrogen required by a growing population and economy.

Carbon sequestration is a central and unique feature of the FutureGen concept — and advanced inorganic membranes will be a key to its success.

We are currently collaborating with the Los Alamos and Idaho National Engineering and Environmental laboratories, university research centers and energy companies on four inorganic membrane projects related to carbon sequestration with a total value of over $18 million.

As with the President's hydrogen initiatives, we are working with a host of other countries in a cooperative international effort to accelerate carbon sequestration research and development, and bring the benefits of new technology to the world.

The Carbon Sequestration Leadership Forum, another U.S.-led international partnership, was formed in February of last year to help unite interested governments and focus attention on the development of carbon sequestration technologies as a means of reducing greenhouse gases, both here at home and around the globe.

I traveled here almost directly from wide-ranging and productive meetings of the Leadership Forum and the International Energy Agency in Paris and London.

At those meetings, The Leadership Forum's members made progress on a number of issues, including the formulation of a set of non-binding principles on legal, regulatory and financial issues for ministerial approval.

It's important to note that most of the Carbon Sequestration Leadership Forum's members are also part of the Hydrogen Partnership.

The cooperative international element in carbon sequestration research and development in particular, and energy/environmental issues in general, has grown so large that I assume some of you in the audience this morning also journeyed here from the CSLF meetings.

Finally, we have been engaged with our research partners since 1998 in an $85 million, three-phase project to develop an ion-transport membrane, or ITM, oxygen technology for use in Integrated Gasification Combined Cycle and other advanced power generation systems.

The cost of oxygen has proven to be a barrier to the widespread application of oxygen-enriched combustion and to oxygen-blown gasification of coal-fired power plants. ITM offers a one-third reduction in the cost of oxygen, which significantly increases the potential of oxygen-enriched combustion in our existing coal-boiler fleet.

A recent study demonstrated that ITM Oxygen reduces the power consumed by a conventional, cryogenic plant by 69 percent and the required capital expenditure by 27 percent.

The ITM technology also provides several significant economic benefits when applied to IGCC power plants, among them a 2.2 percent improvement in overall power plant efficiency, a 37 percent improvement in the power requirement of the oxygen plant, a seven percent improvement in power output, and important reductions in costs.

This performance is especially important because we believe IGCC will be integral to coal's future — and the sooner the better.

A study done recently by the National Association of Regulatory Utility Commissioners and the National Energy Technology Laboratory looked into the challenges of IGCC's early deployment. The study concluded that that "...the rapid commercialization and deployment of coal gasification in the U.S. electric power sector should be a critical policy objective...of federal and state governments."

It is easy to see why. The same study found that the IGCC demonstrations at the Wabash River plant in Indiana and the Polk plant in Florida are among the world's cleanest and that both have compiled strong records of reliability.

In fact, Environmental Protection Agency data for 2002 confirms that these are the cleanest coal plants in the United States based on combined control of sulfur dioxide and nitrogen emissions.

In addition, current reliability at Wabash River is 84 percent while at the Polk plant it is 79 percent. In 2002 the Polk plant operated at an average 89 percent capacity factor and won a place among the nation's top 20 coal plants for reliability. The Office of Fossil Energy put IGCC's ultimate reliability at 93 percent.

The potential cost and performance improvements ITM can add to the already impressive performance of the two demonstration plants, give us good reason for enthusiasm about IGCC.

IGCC can add to the nation's energy and environmental security now, while the FutureGen technology achieves commercial readiness for near-flawless performance in 10 to 15 years.

In conclusion, I want to emphasize that advances in science and technology related to energy and the environment are coming so rapidly that it is difficult not to be optimistic about the future.

The progress you have made and continue to make in inorganic membrane R&D is one of many examples of technology now being developed and tested that will have dramatic effects on our energy and environmental future.

I and my colleagues – and your partners – at the Department of Energy are pleased to be working alongside you on projects that promise a future of secure, affordable and clean energy — and continued economic growth.