Image: Rendering of FutureGen plant
U.S. Department Of Energy via AP
An artist's rendering of the next-generation FutureGen power plant is shown.
updated 7/16/2009 12:41:26 PM ET 2009-07-16T16:41:26

Long-delayed efforts to build an experimental coal-fired plant in Illinois have passed a crucial milestone with President Barack Obama's administration formally signing off on the proposed site as environmentally fit.

Saying it'll decide early next year whether to go ahead with the cleaner coal project known as FutureGen, the Energy Department issued its "record of decision" Tuesday giving its stamp of approval to Mattoon, the eastern Illinois city tapped in late 2007 as the place for the next-generation plant.

The department now can negotiate with FutureGen developers including a consortium of big energy and utility companies, moving toward construction of the plant that would burn coal for power but store — or sequester — emissions of carbon dioxide underground.

Coal burning power plants are the leading source of carbon dioxide, the major greenhouse gas linked to suspected global warming, and finding economical ways to capture carbon from such plants is viewed as key for the future of coal if a price is put on carbon to combat climate change.

In reviving the project the Bush administration had declared dead, the Energy Department last month announced it would commit just more than $1 billion, mostly in federal economic stimulus funds, to building FutureGen in Mattoon. The caveat: The power and coal companies known as the FutureGen Alliance pick up the rest of the estimated $2.4 billion tab.

The department also said it will work with the companies to spend the rest of the year looking for the best way to both build FutureGen and keep costs down.

Over the next eight to 10 months, the department said Tuesday, the FutureGen Alliance is to complete a preliminary design, hone its cost estimate, develop a funding plan and expanding the alliance's membership.

After that, the alliance and the Energy Department would decide whether to press on with the project, the department said, still noting that both sides "agree that a decision to move forward is the preferred outcome and anticipate reaching a new cooperative agreement for the full project."

"The carbon capture and sequestration technologies planned for this flagship facility are vitally important to America and the world," Energy Secretary Steven Chu said in a statement announcing the record of decision he said reflects the Obama administration's push for greener energy.

Michael Mudd, the alliance's chief executive, called Tuesday's development an "important objective for the project," saying the consortium continues to look forward to working with Obama's administration to make FutureGen happen.

The project is part of a broader effort to develop large demonstration projects on carbon capture and sequestration. The Energy Department is considering as many as seven such projects that would capture and put into the ground at least 1 million tons of carbon dioxide a year.

The FutureGen plant would use Illinois coal, which is high in sulfur and has been used less frequently after changes to the Clean Air Act in 1990. As originally planned, the plant also would have experimented with coal from Texas and Wyoming.

"FutureGen represents an opportunity for the United States to take the lead on research to develop important technology that will reduce emissions from coal-fueled power plants," Sen. Dick Durbin of Illinois, the Senate's No. 2 Democrat, said Tuesday in heralding the record of decision he had pressed for more than a year.

FutureGen's developers picked Mattoon over other sites, including two in Texas, in December 2007. But the Energy Department under President George W. Bush pulled its support for the project last year, blaming costs it said had ballooned to nearly double the price tag when Bush first laid out the project in 2003.

A congressional auditor later said the Bush administration's cost estimates were based on false projections.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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