huntly-cropped.jpgCarbon Capture and Sequestration (CCS), the technological poster child for the future of the global coal industry has just had its biggest supporter pull the rug out from underneath its feet.

With the Bush administration withdrawing its support for the FutureGen CCS project the future of the project and the unnecessary and unproven technology seems doomed.

CCS was the last hope of the coal industry to stay relevant in a world hungry for carbon free energy. The idea behind CCS is simple enough, as the carbon dioxide is released from burning coal, you capture it, and dump it underground and hope it doesn't escape and end up in the atmosphere.

The problem is that no one has successfully done it on the scale required to halt climate change and no one can guarantee that the carbon dioxide will behave and stay where it was dumped.

Solar Power Soars

At the same time that the coal industry is pinning its hopes on CCS, world demand for renewable energy continues to soar. Between 2000 and 2005, the global market for solar panels alone increased by an incredible 40 percent per year.

FutureGen's official supporters read like a Who's Who of the global coal industry with the likes of the US Department of Energy (DOE), BHP Billiton, Rio Tinto, American Electric Power Service Corp., Anglo American, and China's largest coal-based power company, China Huaneng Group all part of the FutureGen alliance.

Massive hand outs

Despite the impressive list of friends, the project still put its hand out for plenty of tax payers' money. Some of the hand outs the project managed to get are:

* US Department of Energy had agreed to pay 75 percent of the project costs * US$17 million investment grant package to bring FutureGen to Illinois, US * Sales tax exemption on building materials and selected equipment * US$50 million of cheap loans by the Illinois Finance Authority

If the cash hand outs weren't enough, FutureGen was also fortunate enough to have a law passed by Illinois lawmakers to take ownership of any sequestered carbon and thereby, somewhat ironically, relieving FutureGen of any future financial and legal liability if there was an accidental release of carbon dioxide.

The coal addicted lawmakers also agreed to indemnify FutureGen from lawsuits and pay for insurance policies to cover the plant if it does get sued. It appears that the only things CCS is good at capturing is tax payers hard earned cash.

The FutureGen power station was originally scheduled to be operational in 2012 but has still not left the drawing board. Although President Bush announced the project in 2003, it took the coal consortium 4 years to decide on the town of Mattoon, Illinois, as the preferred construction site.

Cost blow out

FutureGen was then further delayed as the US Department of Energy required a reassessment of the power station's design due to the projected cost for building the station rising in just three years to a staggering US$1.76 billion, an 85 percent cost blow out.

With the US Department of Energy's promise to pay for 75 percent of the project costs now topping out at over US$1.3 billion, even the coal loving, big spending US President decided the price for the unnecessary and unproven CCS technology was too high.

Other CCS projects like BP's Miller oil and gas field in the UK and a joint venture between Statoil-Hydro and Shell in Norway have also hit financial troubles forcing their cancellations.

Source: Greenpeace International