Remarks by Mark Maddox
Principal Deputy Assistant Secretary for Fossil Energy
to the
30th International Technical Conference
on Coal Utilization and Fuel Systems
Clearwater, Florida
April 19, 2005

Good morning everyone, and thank you for your welcome. 

Barbara Sakkestad has organized 25 of these conferences, and she tells me this is the best attended in recent memory. 

On behalf of U.S. Department of Energy, I want to extend a warm welcome to one and all here this morning.   

Before we begin I want to extend special recognition to the first-time participation of coal executives from Serbia and Montenegro.  Their presence underscores the increasingly important fact that coal is an international resource and not an exclusive concern of the United States.  

Seventeen nations, including the U.S., have participants here this year.  Most are partners in companion international initiatives that look to coal and coal-based technology for success – the Carbon Sequestration Leadership Forum and the International Partnership for a Hydrogen Economy. 

I'll connect these world-spanning activities to our technology efforts before we're finished today. But the better part of my remarks will deal with the interplay of domestic concerns and national policy.

In this country, we're rapidly approaching a point-of-no-return for some critical decisions about electric power – decisions that America's on-coming generations will have to live with for most of the century.  For this reason, I want to speak directly to the power producers here today. 

Here's a summary of the converging array of challenges we face as a nation over the next 20 years, or so.

We have to eliminate 70 percent of the sulfur, nitrogen and mercury pollution from operating plants, and then cap them for all time.  Our citizens expect it.  We have the technology to handle it with the exception of elemental mercury.  And the mercury technology is in development.  This initiative has begun in regulation and is also is embodied in the pending Clear Skies legislation.  

At the same time, we have to voluntarily reduce greenhouse gas intensity in economic activity such as power generation by at least an average 18 percent under the President's Climate Change Initiative.  

In power generation, greenhouse gases mean carbon dioxide, and reducing CO2 output per kilowatt hour can be achieved only by gains in generating efficiency.  With coal, the rule of thumb ratio is 3-to-4 percent less CO2 for every one percent gain in efficiency.   At the same time, we have to deliver almost 50 percent more electric power if our nation is to sustain economic growth. 

In turn, this means we have to keep existing coal-based stations in operation, upgrading some for efficiency gains and repowering others for the same reason. 

Then, on top of that, we have to add at least another 87,000 megawatts of coal-based capacity.  And we have to do all of this while continuing to lower harmful pollutants toward those inevitable caps. 

This is a lot, but there is more. 

Lurking in the background is the possibility that, at some point in the near future, new developments in climate science may lead to a requirement for a similar phased elimination of carbon dioxide emissions. 

In the last 20 years, we have jointly developed coal technologies that can handle most of these challenges and some I did not mention.   These technologies include: 

•  High percentage, low-cost sulfur and nitrogen controls for retrofit that are now immediately useful;
• Other advances that up-grade existing plants and raise their efficiencies, such as turbine improvements;
• And, advanced generating technologies for repowering and new capacity;

Yet many, perhaps most, are languishing on the shelf.  

Now is the time to talk about putting these technologies into service. Let's use them to meet demand as it occurs, not in a scramble to catch up afterwards. And let's try to avoid the trap of missing the opportunity to do better because we wanted to wait for the best. 

To wait for perfection is to wait forever.  Most power producers can't afford such a strategy, and the country certainly can't. It's time to get started. 

Among the best of the new, deployment-ready applications is the one we call IGCC for short – integrated gasification combined-cycle generation. 

The National Academy of Sciences has declared that IGCC reduces harmful pollution to "de minimus," or insignificant, levels and brings with it the potential for:

• Generating efficiency beyond 40 percent and toward 50 and 60 percent; 
• Low-cost electricity from coal plus liquid fuel and hydrogen to help balance other markets and support other trends;  
•  And, the flexibility to adapt to a zero emissions requirement later in the century, if necessary. 

The Academy identified IGCC as an enabling technology in dealing with the challenges of the future.  IGCC can be fitted – or easily retrofitted without economic penalty – for all of these tasks. 

And only coal can serve all these purposes.  

IGCC is one of the technologies we ought to be deploying now alongside the other emerging technology of ultra-super-critical pulverized-coal generation. IGCC is deployment-ready now.  It has been successfully demonstrated.  The demonstrations produced power at low costs and ultra-low levels of pollution.   They were so successful the plants remained on-line after their conclusion. 

IGCC is needed in the mix – needed now. 

The baseload capacity we put in place between today and 2025 will be in service toward the end of the century.  If one of our legacies is a big increment of capacity that cannot meet the paired challenges of climate change and energy demand, then the lives America's on-coming generations will be poorer than ours both literally and figuratively.  But, if we make the right decisions, we will pass on three priceless legacies:       

• A healthier, ever improving environment;
• A strong and productive economy sustained by low-cost primary energy; 
• And a new tool for mastering other problems as they appear. 

Our on-going programs of joint-venture technology development involve pulverized coal generation, fluidized bed combustion and gasification.  We seek higher efficiencies, lower costs and the widest possible application of advances. 
In our planning and policy related to climate, IGCC is a core technology.  Points on the roadmap include:       

• Lowering capital costs;
• Raising efficiencies;
• Adapting the technology to low-rank coals;
• Improved oxygen production to support gasification and non-gasification activities such as oxy-fuel combustion in pulverized coal generation;
• Low-cost carbon-dioxide separation and removal; 
• Integrating fuel cells with electric power production;
• The co-production of electricity, of liquid fuels with high hydrogen content and of hydrogen on a commercial scale, all at low costs; 
• And, finally, the deep geologic storage of carbon dioxide. 

Most of this activity will take place under the President's Clean Coal Power Initiative, a $1 billion development and demonstration program of four rounds, two of which are underway at present.  

We plan to seek solicitations for Round Three projects next year.  I invite all here who are qualified and interested to submit proposals.  

By the way, proposals need not be limited to IGCC.   We seek to advance all applications.  We look to our power producers to say what they need to perform as required.  And we look to our equipment suppliers to provide applications that can be used the day they are proven, or the day after.

Our technology activities depend on the scientists and engineers of industry, and their counterparts in academia, to ensure rigor, vigor and imagination in our research, development and demonstration.  

We want industry in a leading role for more than one reason.  We want our technology development to benefit from your keen sense of the market's practical requirements.  We want your creative insight and drive in developing immediately useful and useable applications.  And we want your force in rapid transfer of proven technology into commercial use.  

One of our program managers explained it to me this way when I joined the Fossil Energy team: We want to solve real problems for which no suitable answer currently exists.  It's not a bad standard to use in proposing a project. 

Our IGCC activities culminate in FutureGen, the $950 million research project to create the prototype for coal-based powerplants that can serve through the 21st century.   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.  FutureGen will integrate the technology gains from the Clean Coal Power Initiative and other efforts into a single operation for the first time.  It is meant to test a variety of applications.  It will measure the practicality of the concepts and utility of the hardware. 

FutureGen will be a commercial scale plant of 275 megawatts organized around IGCC that will use 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 eliminate all harmful pollutants, mercury included;
• And, while doing this, to capture and sequester one million metric tons of carbon dioxide a year.

This is why we call FutureGen the first zero-emissions coal plant.  It should be in operation in the first part of the next decade.  Preliminary work is underway now. 

FutureGen is not to be a re-demonstration of IGCC.  Its purpose is to establish the feasibility of hydrogen production and carbon sequestration.  IGCC already has been successfully demonstrated. 

Here's why the National Academy identified IGCC as an enabling technology and why the Bush administration thinks of it as a transformative technology – it is a change in technology which itself leads to a chain of changes in a cascade of cause and effect.  Linked with safe, long-term carbon sequestration, it can steadily arrest, then reverse and, finally, eliminate all emissions from power production as deployment progresses throughout the century. 

Sequestration itself can be used for enhanced oil recovery in declining fields.  This would add to immediate supply and expand the world's proven reserves, thus relieving some of the pressure behind today's world prices.  

Canada is running such a demonstration right now.   And it relies on CO2 which is a by-product of coal gasification in North Dakota.  The synthetic gas is used to augment commercial supply. 

Linked with the low-cost production of hydrogen in large volumes, IGCC leads to the steady displacement of gasoline in motor transportation and other applications of the internal combustion engine. 

Hydrogen can serve in either direct combustion or fuel-cell propulsion of cars and trucks when other technologies are developed in other initiatives.  And by displacing gasoline, it begins to choke down on our largest requirement for imported oil.  This also would moderate oil demand.   And – since water is the only by-product of hydrogen combustion – it would further enable the steady elimination of pollution and carbon dioxide emissions from cars and trucks, which are major sources of both pollutants and CO2.  

In a world where energy is central to all progress, coal is central to all energy, and technology is central to making the best use of coal.  All projections say the world will have to rely on fossil fuels for almost 90 percent of its primary energy at least for the next 20 years.

In the U.S., our 270-plus billion tons of recoverable coal is the world's largest single national reserve of energy.  It is the approximate equivalent of the world's proven reserves of oil. 

President Bush went right to the point with remarks on energy policy in Ohio last month.  I'd like to quote directly from the speech.  The President said:  
"Increasing our energy security begins with a firm commitment to America's most abundant energy resource – coal.

• "Coal…should be at the heart of America's energy strategy….
• "[It] presents an environmental challenge… and that's why clean coal technology is critical. 
• "By utilizing the brains of America…we can come up with ways to burn coal cleanly…"

In the same vein, technology development activities are taking place on a worldwide level among member nations of the Carbon Sequestration Leadership Forum and the International Partnership for a Hydrogen Economy, which I mentioned at the outset.  

The membership of these two international partnerships includes developed and developing nations alike, most of them partners in both.  Together they bring into cooperative activity the countries that account for:   

• Most of the world's coal reserves;
• Most of the world's present and projected coal use;
• Most of the world's present and projected economic activity and growth;
• Most of the world's present and projected energy demand;
• Most of the world's present and project population;
• And, most of the world's potential for increased pollution and growth in greenhouse gases. 

All of these nations want the same thing for their citizens that we in the U.S. want: The opportunity to create a better and ever-improving 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 national economies in the context of a solid global economy.

The relationship of energy to economic growth is proven and direct. 

When the right technologies are developed and deployed among the nations that want and need them, then the world will have real-rather-than-symbolic answers.  Then we can deal constructively with rising global concerns about the interlocked problems of economic growth, increasing energy demand and rising concerns about the influence of greenhouse gases on climate. 

Not unless we do this, and not until we do this, will real change be possible. Much of it begins with – depends upon – coal and coal technology. 

It depends, as the President Bush said, on the brains of America – that is, on you in this room today.  

It's appropriate to close with another thought from the President's Ohio speech: 
"Clean coal technology advances…and when it does…our society will be better off." 
Coal is more than the fuel of the future.  It will be a prime mover in getting us to the future successfully.  

Thank you for your attention and for your attendance.