Remarks by Mark Maddox
Principal Deputy Assistant Secretary for Fossil Energy
to the
Clean Coal and Power Conference
Washington, DC
November 21, 2005

Good morning everyone.

Let me add the Department of Energy's formal welcome to this tenth in our series of clean coal conferences. 

I should begin by acknowledging the presence today of observers from the coal-rich and key developing nation of India.  They are here for separate meetings of the Coal Working Group under the new U.S.-India Energy Dialogue.  India's participation is a result of change rapidly taking hold in the way the world thinks about coal and advanced coal technology. 

This change also was reflected in our conference two years ago by the attendance of a senior delegation from China. 

I should also acknowledge the contributions made by two of the other keynoters.  They did much to put in motion the coal-related developments that are underway here at home and in international affairs. 

Senator Hagel's leadership caused the pairing of policy and technology in practical and constructive ways with the Byrd-Hagel Resolution on the climate treaty and the Hagel-Pryor Amendment to the new energy act. 

And General Lawson rallied timely support with early advocacy of advanced technology and coal as bulwarks of improved energy, economic and environmental security – tireless and strategic advocacy at home and overseas.  

We have begun to experience a sea change in the way the world views coal in the last five years.  Let's take a few minutes to look back.   

Here in the United States the 1990s were dominated by a belief that natural gas would remain abundant and cheap. Public policy soon came to reflect that belief and invited the wider use of natural gas in the generation of electric power. Natural gas generation grew rapidly and came to represent about 17 percent of the power supply. 

Still, coal continued to provide more than 50 percent of electric power through the 1990s and to grow as well.  The growth in coal generation met much of the growth in power demand.  On-line plants were simply run at higher capacity factors to meet the increase in demand.

Federal investment in coal research and development averaged about $165 million a year during the 1990s.  No new initiatives were undertaken for eight years. 

The Bush Administration saw the danger of over-dependence on natural gas in electric generation and made a decision almost as soon as the President took the oath of office in 2001.  The decision was to make the most of coal because it is the most abundant energy. The decision was to emphasize ultra-clean technology for the use of coal.  The decision was to almost double investment in technology research, development and demonstration. 

Budget requests for the five years before the President took office averaged $165 million a year.   Since he took office they have averaged around $375 million.  

Our goal in the Office of Fossil Energy is to make coal-based generation soon as competitive with natural gas environmentally as it now is economically. 

For perspective: The average delivered price of natural gas in power generation for the first six months of this year was $6.67 per million British thermal units; and the price of coal was $1.51.  

The Bush administration linked technology development and policy goals for the first time. 
Policy sets reduction goals averaging 70 percent in sulfur dioxide, nitrogen oxide and mercury.  It calls for voluntary increases in efficiency across the economy that will mean a national reduction of 18 percent the intensity of carbon dioxide emissions.

Research and development follows paths meant to ensure that these goals can be achieved at the lowest possible cost to consumers. 

The Bush Administration oriented technology toward nullifying any possibility that increased coal use might also increase harmful pollution.   We oriented policy toward ensuring that the technology will be used to make emissions continue to fall even as coal use rises: And to fall dramatically.   

The President pledged to investment $2 billion in cleaner and more efficient coal-based technology over 10 years.  His first five budget requests total almost $1.9 billion and actual appropriations are closer to $2 billion. 

Let's see what's being done with the money.

Our activities range from the bench right on up through field tests and commercial demonstrations.  We engage industry.  We want industry's sure eye for what's needed and sure instinct for what works.  We engage academia and others for the same reason. 

Five years ago electric power producers faced a sudden requirement for mercury control and had no technology capable of achieving the required reductions.  Five years later we have a tough mercury control requirement: But we also have a program of accelerated research and development for lower-cost applications. 

Our goal is to have in commercial demonstration applications:

• For 50-to-70 percent removal from higher rank coal during this year;
• For 50-to-70 percent removal from low rank coal by 2007;
• And for 90 percent removal from all coal by 2010. 

We have more than 25 capture projects in all stages of development.

Three mercury projects were selected for early demonstration in the demonstrations in the President's still-young Clean Coal Power Initiative.  This is an key inititiative and I'll come back to it in a moment. 

The first-round demonstrations all are multi-pollutant applications:

• Peabody Energy's Mustang Project in New Mexico;
• The Pegasus Project in Texas;
• And the Toxecon Project in Michigan.

All three are ambitious in their goals but those of the Mustang Project are worth specific mention for context:

• 99.9 percent elimination of sulfur dioxide;
• 98 percent elimination of sulfur trioxide;
• 98 percent reduction of nitrogen;
• And 90 percent elimination of mercury. 

The mercury effort arises in the Office of Fossil Energy activity called Innovations for Existing Power Plants.

This effort makes possible the continuing improvement of the 320,000 megawatts of generation capacity that last year delivered more than 50 percent of the nation's power and required more than 1 billion tons of coal to do it.

Yet emissions continue to fall because of technology.

Last week we entered into two pilot scale projects with industry to advance the concept of oxy-combustion – high-oxygen combustion that is believed to be suited for carbon dioxide capture and storage. 

The sum total of the Office of Fossil Energy's efforts in technology development come under an umbrella heading – under the heading of the President's Coal Research Initiative.

We didn't attempt to reinvent anything when we re-oriented our activities.  We used as a starting point some achievements of the Clean Coal Technology Program begun in the 1980s.    This program was established to pursue the development of some promising technologies when the ill-fated Synthetic Fuels Corporation was dismantled. 
One of these was integrated-gasification-combined-cycle generation.  IGCC was in its small, first-of-a kind demonstration in the California desert at the Cool Water Generating Station then.  Another was fluidized bed combustion.  Others were advanced and lower-cost retro-fit technologies to control sulfur and nitrogen emissions as the Clean Air Act tightened. 

Among the old program's many achievements were successful commercial scale demonstrations of IGCC and fluidized bed combustion. Almost 40 first-of-a-kind technologies were successfully demonstrated and all of them are available for deployment today.

IGCC has been identified as an enabling technology by the National Academy of Science:

• Because it is inherently clean – it holds pollutants to levels the Academy called de minimus;  
• Because it comes now with high generating efficiency and low carbon intensity;
• Because it is capable of much greater efficiencies and much lower intensities;
• Because it is capable of producing electric power plus low carbon fuels and hydrogen to eliminate emissions in transportation.
• And because it is adaptable to CO2 mitigation technologies of carbon capture and storage.

Development of IGCC's potential for flexibility is an area of emphasis.  

The first components to consider in an overall look at the President's Coal Research Initiative are: 

• Innovations to Existing Plants; 
• Advanced Power Systems;
• Advanced Research;
• And Carbon Sequestration.  

We've touched on the Innovations effort.  It concentrates on mercury control, improved NOx control and mult-pollutant control systems.

Advanced Power Systems deals in high efficiency systems for an on-coming generation of emissions free plants.  Its concentration is on IGCC and gas turbines.  This activity seeks to lower the costs and raise the efficiencies of IGCC's key components – those that come at a high cost in either dollars or a high penalties in efficiency.  It deals in gasification, gas stream cleanup, advanced syngas turbines and hydrogen turbines.

Advanced Research deals in new materials and computations technologies.   

The Carbon Sequestration program is an important part of the research initiative. Five years ago this research budget was less than $20 million. The current year's request was $67.2 million.  The appropriation was $67 million. 

Five years ago many who had heard of carbon dioxide capture and sequestration thought of it as science fiction rather than applied science and engineering. Now it is the subject of the international coalition the Carbon Sequestration Leadership Forum.  The Forum includes all the leading industrialized nations and all the key key developing nations.  They represent at least three-quarters of the world's carbon dioxide emissions and more of its economic activity.

Last summer the G-8 Summitt designated the Forum as a medium of international cooperation in its Plan of Action on Climate Change, Clean Energy and Sustainable Development. 

The Office of Fossil Energy provides the Forum's Secretariat but our core program of carbon sequestration research and development concentrates on:

• Carbon dioxide capture technology – pre- and post-combustion capture;
• Carbon dioxide storage with an emphasis on geologic storage;
• And, on technologies to measure and monitor and verify the carbon dioxide stored to be sure it causes no harm to humans or the environment. 

Today we're actively pursuing more than 80 projects at some scale. 

The last part of the sequestration program is the Regional Carbon Sequestration Partnerships.  This network of seven stake-holder partnerships covers most of the North American land mass – 40 states and four Canadian Provinces.  Their activities include determining the geologic storage capacity of their states and provinces and laying the other institutional groundwork to engage in commercial sequestration if it becomes necessary. 

The best products of all of these activities will feed into the President's Clean Coal Power Initiative.  The best from that initiative will be integrated into the FutureGen Project.

We see the FutureGen Project as the prototype for a FutureGen class of zero-emissions power plants that can meet all the demands of the 21st century through the duration of the 21st century – stabilization of atmospheric carbon dioxide included.

The FutureGen class will be a key to stabilization and other important matters. 
Goals of the President's Clean Coal Power Initiative in support of FutureGen include: 

• Continued improvement of existing plants;
• Continued improvement of gasification technology and IGCC generation;
• Higher efficiency turbines;
• Linking these turbines with gasification and with fuel cells in power production;
• Pushing generation efficiencies beyond 40 and 50 percent and toward 60 percent in stages;
• Economic hydrogen production from coal at lower costs and higher efficiencies;
• Carbon sequestration that is economic and effective;
• And, the sequestration-ready power plant. 

This initiative has completed two rounds of solicitation and includes three gasification demonstrations. 

The Round One gasification project is in Pennsylvania and its objectives include:

• Electric power at ultra-low emissions from waste anthracite;
• 5,000 barrels a day of ultra-clean liquid fuels;
• Industrial sulfur and an ingredient for building material;
• Plus a stream of sequestration-ready carbon dioxide stripped from fuel gas. 

Round Two has two gasification projects – one in Minnesota and one in Florida.

The Minnesota project is a scale-up to 530 megawatts of a gasification technology successfully demonstrated in the old Clean Coal Technology Program as a 250 megawatt re-powering application. 

This demonstration will integrate cost savings and efficiency gains identified in the first demonstration.  They include:

• Improved gasification efficiency;
• Better nitrogen control;
• Improved air separation;
• Improved syngas cleanup;
• Integration of mercury control with activated carbon;
• And the first commercial use of the GE's new 7FB syngas turbine if it is available in time. 

The 285 megawatt Florida project proposes to:

• Adapt gasification technology to low-rank coals;
• Prove a first-of-a-kind gasifier that is based on the petroleum industry's principles of catalytic cracking;
• Achieve high reliability without a spare gasification train;
• Advance techniques for mercury, sulfur and particulate removal;
• And eventually to supply fuel-gas to 170 megawatts of simple cycle peaking capacity. 

There will be subsequent rounds, but no solicitation is planned for next year. 
Here's what we expect from FutureGen:

• Power at 60 percent efficiency – it will squeeze many more kilowatt hours out of a ton of coal;
• Economic use of waste heat to achieve total energy-use efficiency of 80 percent;
• Production of low-carbon motor fuels to help moderate oil demand along with other poly-generations products;
• An early source of commercial-scale hydrogen to support the founding of a pollution-free hydrogen economy;
• Capture, transportation and safe storage of carbon dioxide on a commercial scale;
• And no virtually no emissions of any kind –  the zero emissions concept. 

Our objective is to achieve all this while keeping additions to the cost of electricity at a minimum. The goal is to have the prototype sited and under construction sometime in the first half of the next decade.

We're in the middle of a sea change in the way the world thinks and talks about coal. 

When this series of conferences began in 1992 a prominent spokesman for the environmental think-tank the World Resources Institute was quoted in The Wall Street Journal as taking a position that I want to quote directly for full perspective. He said, "Coal burning is a fundamental threat to life on the planet.  Eventually we'll have a fight over every new coal-fired plant."

Florida's capital city of Tallahassee has just finished such a fight.  This was a full-scale and text-book perfect community debate in which the newspaper endorsed, spirited debate was had pro and con, all the issues aired and a vote taken.

Last Thursday Tallahassee said yes to coal by a landslide – by 60 percent of the vote in an advisory referendum.  Voters endorsed city participation in an 800 megawatt coal-based plant to be built in a nearby county.  In 1992 the same city amended its charter to stop the municipal utility from building a coal fired plant.

Some may be tempted to attribute the change of heart entirely to the price of natural gas; but that would be an error of judgment. A significant share of the recognition must be accorded the men and women who labor to develop generating technologies good enough to support a case that coal-based generation should be accepted – people like you in this room today.  

The best bumper-sticker line to come out of the discussion was phoned in to the newspaper:  "If coal is good enough for Santa Claus, it's got to be good enough for Tallahassee."

Today there are 129 coal-based plants representing 77,000 megawatts of new coal baseload in some stage of development in the United States.  The capacity additions are up by 10 percent from this spring and 25 percent from last year. 

It should be noted 17 of these plants are IGCC and another 17 are fluidized bed combustion and that both technologies were in the old Clean Coal Technology Program which picked up where the Cool Water demonstration left off in the California desert so long ago.  

These new technologies are beginning a literal journey from promise to practical application – a figurative journey from the Cool Water era and into the era of coal as a hot prospect. 

The terms of the policy debate are changing daily. You in this room who develop technology and deploy technology are changing it. 

Due to your dedicated and aggressive pursuit of ever-improving technology the question is becoming something it was not five years ago. 

The emerging question is not whether the primary energy coal should be used, but how it should be used. And that's a change that can never be rolled back as technology and coal deliver what America requires.
 
Acceptance will mount as we bring good technology into the market. 

Take time to appreciate what you have accomplished in the discussions and workshops of today and tomorrow.  And then channel that energy into what we can achieve in the future. 

We've opened the door.  Now let's resolve to walk through it. 

Thank you for your attention and your attendance.