Energy Secretary Backs Clean-Coal Investments

By SIOBHAN HUGHES

WASHINGTON -- Energy Secretary Steven Chu said the U.S. should invest in technology to reduce the carbon produced by burning coal, but he said it will take at least eight years to be sure such systems work.
"It absolutely is worthwhile to invest in carbon capture and storage because we are not in a vacuum," Mr. Chu told reporters Tuesday following an appearance at an Energy Information Administration conference. "Even if the United States or Europe turns its back on coal, India and China will not," he said. Mr. Chu added that "quite frankly I doubt if the United States will turn its back on coal. We are generating over 50% of our electrical energy from coal."
As for so-called clean-coal technology, Mr. Chu said "it would take probably a minimum of eight years or more to really have confidence that these technologies will work in a cost-effective way." As a result, "energy efficiency, energy conservation are where the greatest gains will be."
Coal-producing states are lobbying the Obama administration to keep coal -- abundant and cheap -- a part of the country's energy mix. Coal backers have looked to clean-coal technology, which aims to store emissions from coal-burning power plants underground. If the U.S. aims to transition away from coal, a question is whether such technology is worth the investment.
Last week, Baard Energy, which is developing a project to create fuel from a coal and biomass mixture, withdrew from the Energy Department's loan-guarantee program after disclosing that the government said it would consider environmental lawsuits when conducting risk evaluation of a project.
Mr. Chu said he didn't want to comment on "any specific proposal." He said that the Energy Department was "thinking of investment in" research projects that gasified biomass to separate out the carbon dioxide.
"When you gasify it, you can capture the carbon and sequestrate the carbon -- that actually becomes a net sink of carbon, meaning that as the plant grows, it takes carbon dioxide out of the atmosphere," Mr. Chu said. "I would be very enthusiastic about anything that goes in that direction."
Mr. Chu said a proposal by oil and wind magnate T. Boone Pickens to use natural gas as a transportation fuel was "a possibility," then declared himself "agnostic" about it, before finally emphasizing the virtues of making more fuel-efficient cars and turning to biomass-based transportation fuels. Mr. Chu said that using natural gas as a transportation fuel "will put a strain on natural gas for industrial uses, for heating, and other things," concluding that it was "a complicated issue."
Congress is circulating a proposal to impose mandatory reductions in greenhouse-gas emissions by requiring companies to hold allowances for each ton of carbon dioxide emitted into the atmosphere. Some companies have been calling for some allowances to be handed out for free.
"It's the president's position that he would like all the permits to be auctioned," Mr. Chu said. "We'll see how that plays out, but that's the president's position."
Write to Siobhan Hughes at siobhan.hughes@dowjones.com