'Clean Coal' Backers Pitch Project for Stimulus Plan

By SIOBHAN HUGHES
WASHINGTON -- Backers of a big "clean coal" project scuttled by the Bush administration are banking on President-elect Barack Obama to revive their venture, setting up a fight with the anti-coal wing of Mr. Obama's base.
The FutureGen Alliance, a coalition of utility companies and coal producers, is hoping to revive plans to build the first commercial-scale project to capture and store emissions from coal-burning power plants. In one sign of its confidence, the FutureGen Alliance, along with a development group for Coles County, Ill., last week bought a 400-acre site for $7 million. The coalition includes American Electric Power Co., Consol Energy Inc. and Peabody Energy Corp., which had originally agreed to contribute 26% of the cost, with the U.S. paying the rest.
The Bush administration abruptly pulled out of the project, to be based in Mattoon, Ill., in early 2008 after the project's costs almost doubled, to $1.8 billion, threatening to expose taxpayers to even higher costs in the future.
"There's been extensive reaching out to the Obama administration and I think we've gotten a strong reception," said Mike Mudd, chief executive of the FutureGen Alliance. "We think it would be an excellent fit for a stimulus package."
A big supporter of putting the FutureGen Alliance project in Illinois is Sen. Dick Durbin (D., Ill.), an Obama ally who threatened to hold up the nomination of any new Bush appointees to the Department of Energy when the project was pulled.
The FutureGen Alliance is touting the carbon-capture-and-storage project as something that would create jobs immediately, one of the criteria that Mr. Obama has established for determining what to fund in a stimulus package.
Illinois estimates that the project could create 1,300 construction jobs and 150 permanent jobs. Over the four-year construction period, the project could create 1,225 other jobs in areas such as manufacturing, as parts are needed in order to begin construction.
Coal is a divisive issue within the coalition that lifted Mr. Obama to the White House. Coal is cheap and abundant in the U.S., but scientists say coal is a major source of the greenhouse gases linked to climate change. Government forecasters say that mandatory cuts in greenhouse gases, which Mr. Obama endorses, would force a decrease in U.S. coal use. Technology to take the carbon dioxide out of the exhaust from a coal-fired power plant could take 10 to 15 years to develop on a commercial scale, and even then would be costly.
Mr. Obama's choice for Energy Secretary, Nobel Prize winning physicist Steven Chu, called coal "my worst nightmare" in a 2007 speech. Mr. Chu said carbon capture technology is "not a guarantee that we have a solution." He emphasizes conservation, along with a greater reliance on renewable energy.
Write to Siobhan Hughes at siobhan.hughes@dowjones.com