Remarks by Mark Maddox
Principal Deputy Assistant Secretary for Fossil Energy
at the
Renewal of the U.S.-China Protocol for Cooperation
in the
Field of Fossil Energy Technology Development and Utilization
Beijing, China
April 5, 2005

China, the United States, and Their Fossil Energy Protocol:
Prime Movers in World Economic and Environmental Affairs

Secretary General Shi, honored guests, distinguished scientists and engineers, respected colleagues:

I think it is fitting to begin our discussions on a note that at first may not seem directly related to the business at hand: The renewal of our Protocol for Cooperation in the Field of Fossil Energy Technology Development and Utilization.   I want to express on behalf of the U.S. delegation our good wishes for all possible success with the Beijing Green Olympics in 2008 and the World Exposition in Shanghai in 2010. These will be signal events that summon other nations to note China's well-earned and accelerating advances in the world. 

We of the U.S. delegation are pleased to stand in support of these efforts to the degree that our proposed and possible joint activities in pollution control can assist the Peoples' Republic in setting the stage for them. 

In this same sense of sending a message, the renewal of our protocol is an important signal on other matters.  It signifies to the world that we are jointly committed to a constructive search for real-rather-than-symbolic answers to the rising global concerns about the interlocked problems of economic growth, energy use and environmental dangers.  

This is true whether the concern is the state of world oil supply, or the projected rise in greenhouse gases, or something in between like the emerging discussions of mercury and transoceanic pollution. 

Our governments share the vision of enabling our citizens to create a better and ever-improving quality of life.  But a rising quality of life depends on personal economic security and a healthy environment.  In turn, these two critical components of national contentment depend on sound and growing economies in the context of the global economy.  And, the relationship of energy growth to economic growth is proven and direct. 

China's take-off into rapid industrial growth underscores the point.  Growth demands energy, and the availability of energy is a pre-requisite condition for growth.  Constrained energy generally means constrained growth. 

I understand that China intends to add 120 gigawatts of new power capacity in the next two years to meet surging electricity requirements.  And I fully appreciate that this new capacity is more generation than all but three other nations now have on-line.  

The United States also will have to begin adding baseload capacity in the next few years. 
The sound economies and sound societies we want to build for the future will depend on energy of a certain kind.  It will have to be available, reliable, and low-cost.  It also will have to be clean. 

No two nations have better reason to engage in the kinds of collaboration envisioned by our protocol and its annexes.  China and the United States are prime movers of the global economy, the most robust parts.
 
China is its fastest growing component and the United States the largest.  If we stumble in these roles, the rest of the world economy falters too.  When we succeed, the world succeeds.  

Because of this energy demand is high and rising in our two nations.  The U.S. and China are the largest present and projected consumers of petroleum, and its largest importers.
China and the U.S. are the largest present and projected consumers of electric power.

Our combined increase in demand over then next 20 years will exceed the total amount of electric power now generated by any nation, the U.S. included. 

One of our greatest shared needs is for primary energy to support electricity generation. 
Electric power is indispensable in a modern economy.  And coal is more than 90 percent of the domestic fossil fuel available to either of us for generation. 

Together our recoverable coal reserves total almost 400 billion tons.  This is significantly more energy than the world's total proved reserves of oil.   Yet the coal of China and the U.S. is only about 40 percent of world coal. 

Having recognized the depth and importance of the coal resource, we must also come to terms with its potential to do great harm.  It can put our citizens and our countrysides at risk if not used wisely. 

Too much coal and too little technology can harm public health and welfare.
In the converse, improved and ever-improving technology can nullify and then remove this potential for harm. 
U.S. research, development and demonstration is aimed at achieving ever-improving technology.  It is driven by the participation of private enterprise in joint ventures with the government.  These efforts are based on industry's consensus judgment of what it requires to meet specific objectives. 

We invite private enterprise to take a leading role for several reasons.  We want our technology development to benefit from industry's keen sense of the market's practical requirements.  We want industry's creative drive in developing useable applications.  And we want its force in quickly transferring proven technology into commercial use. 

This experience-directed approach will shape the important FutureGen project, to which I'll return in a moment. 

In the present, our societies and our governments face two big challenges with coal:  
? We must elevate the performance of on-line power plants with efficiency gains, where possible, and with improved pollution control. 
? And, we also must think carefully through today's decisions about the direction of coal-based power over the next 20 years because those decisions will lay the foundation for our century.  

The Bush administration is embarking on a new round of pollution reductions from operating plants.  Our initiatives will further cut emissions of sulfur dioxide, nitrogen oxide and mercury by an average 70 percent.  We will cut them and then cap them for all time.  

For this, we have developed – and continue to develop – a portfolio of more efficient and lower-cost applications to control sulfur and nitrogen oxides and other pollutants.  We are at work on low-cost, high-percentage mercury removal.   If these applications are found to be of interest to the Peoples' Republic of China, you also shall find willing vendors in the suppliers and equipment-makers who perfected them.
  
As we strive to improve existing operations, it's very important to think ahead and not settle for the idea that reaching a plateau of achievement – even high achievement – is good enough. 

To satisfy the rise in power demand over the next 20 years, we both will be required to add huge increments of capacity.  Coal is the bulk of our resource bases.  Coal is the low-cost source of large-scale power for both of us.  Much of our new capacity will have to be coal-based.  And most of it will be in operation for the better part of the century. 
If we make the right decisions today about this expansion, we will pass on to our children and their children three priceless legacies – a healthier, ever-improving environment; sturdy economies; and a tool for mastering many other problems as they appear.  

If we decide to rely on technologies that are simply good enough, we will be sentencing our next generations to repeat the tensions and discontents of the present. 
U.S. research and development is oriented toward flexibility.  I've touched on our efforts in sulfur, nitrogen and mercury control. 

Other activities include:  

• Reclamation and clean use of coal wastes in applications that provide energy, including liquid fuels, and clean up the countryside.
• Pre- and post-combustion removal and management of carbon dioxide, including oxyfuel combustion;
• Advancing fuel-cell generation and distributed generation;
• Improved oxygen production to support gasification and non-gasification activities related to CO2 control;
• And a range of activities that will lower capital costs and elevate the efficiencies of integrated-gasification-combined-cycle generation, the technology application called IGCC. 

IGCC-related activities include: 

• A new class of high-efficiency turbines specifically for IGCC;
• Integrating fuel cells with IGCC technology in electricity production;
• The co-production of electricity, of liquid fuels with high-hydrogen content and of hydrogen;
• And, finally, the deep geologic storage of carbon dioxide.

IGCC is a core technology in U.S. planning and policy.  Today IGCC offers higher thermal efficiencies than state-of-the-art pulverized coal applications.  It is deployment ready.  Its potential of 60 percent efficiency exceeds that of the emerging technology ultra-super-critical generation, which is in the mid-to-high 40 percent range. 

Deployment-ready IGCC is superior to both super-critical and ultra-super-critical applications in control of sulfur and nitrogen oxides and particulates.  It also eliminates some mercury.  And, in commercial gasification of coal for feedstock, the Eastman Chemical Company achieves 90 percent mercury removal. 

Once deployed, IGCC can be readily adapted by retrofit to other uses and other needs as advances are proven and new applications become feasible.  IGCC is approaching commercial takeoff in the United States.  There is increasing discussion among our power producers about first deployment and how to facilitate it. 

China's deepening interest in IGCC electric generation is a matter of note as well.  Your large body of experience in coal gasification for other purposes may hold lessons of mutual interest. 

In the U.S., we see IGCC leading to electric power with zero emissions of pollutants or the greenhouse gas carbon dioxide, plus the early commercial production of low-cost hydrogen. 

And so, I am in full agreement with the observation Secretary General Shi made in his remarks at our Joint Conference on Clean Energy in Washington when he said: 
"We believe coal will become another clean energy."

Protocol activity will benefit our nations directly and other nations indirectly. 

We have immediate potential in areas such as pollution control, China's liquefaction initiative, development of coalbed methane resource as a new reserve of clean-burning gas and carbon sequestration.  China has vast experience in coal gasification for other purposes that may complement U.S. activities.
 
Meantime, our multi-lateral activity can lead in showing the world how to make more and better use of the enormous store of energy that is coal.  I'm speaking of the Carbon Sequestration Leadership Forum and the International Partnership for a Hydrogen Economy, both of which include China and the United States. These coalitions seek to open a new era in world energy and world affairs.  

One unifying step remains in regard to coal and a new era: Construction of the FutureGen prototype plant, which I mentioned earlier.  Everyone here has heard of FutureGen.  But I'd like to take a moment to refresh the memories of those who may have heard of it less often than others. 

This large-scale research initiative of the Bush administration is taking form now in the United States. FutureGen will integrate the technologies I have mentioned into a single operation for the first time.  It will test a variety of applications.  It will establish the practicality of the concepts and the hardware.  Some details might be in order.

FutureGen will be a commercial scale plant of 275 megawatts that will use IGCC and coal:

• To generate electric power at thermal efficiencies approaching 60 percent;
• To deliver ultra-clean liquid fuels and hydrogen to support other uses; 
• To deliver other commercial by-products; 
• To remove all harmful pollutants
• And, while doing this, it will capture and sequester one million metric tons of carbon dioxide a year.

The purpose is not to prove IGCC generation.  This technology is ready. The purpose is successful combination of IGCC with the companion technologies of hydrogen production and carbon dioxide management.
 
Coal is the workhorse energy for our two nations.  FutureGen will harness this reliable workhorse to deliver a new range of energy products at competitive costs.  And it will eliminate all harmful pollutants while capturing and sequestering the carbon dioxide that such activities would normally release. 

This is why we call FutureGen the first zero-emissions coal plant.  It will be a transforming technology.  FutureGen will be a joint venture of government and industry, but provision is being made for international participation. 

In Washington, we are nearing completion of the necessary legal agreements and cost-sharing arrangements with a consortium of industry participants. When those arrangements are complete, FutureGen will be open to international participation by members of the Carbon Sequestration Leadership Forum. 

I invite China to be among the first to join FutureGen.   

A $950 million project, it will set aside a sponsorship share totaling $80 million for international participation.  To put first things first: We will always welcome participation through cost sharing.  But other means of joining the effort will be available as well.

There will be government-to-government participation on the steering committee that will help chart FutureGen's course.  And other entities may join by providing test articles and hardware, or by providing scientists and engineers to fill specific positions as needed.  

With the U.S. and China and other coal-reliant nations joined in FutureGen, it will a constitute signal the world can neither miss nor misinterpret.  This signal will say, we are committed to finding technological answers to global concerns about economic growth, energy availability and environmental integrity. 

It will say, we want to lead the world toward solutions that all nations can use, developing and developed alike.”   And like Secretary General Shi and his co-chairman it will say, we believe coal will be another clean energy.  

Thank you for your invitation to speak and for your attention.