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New Life for 'Clean Coal' Project
Illinois Plant Was Abandoned by Bush; Now Its Backers Are in Power

By Kimberly Kindy
Washington Post Staff Writer
Friday, March 6, 2009

Deep inside the economic stimulus package is a $1 billion prize that, in five short words, shows the benefits of being in power in Washington.

The funding, for "fossil energy research and development," is likely to go to a power plant in a small Illinois town, a project whose longtime backers include a group of powerful lawmakers from the state, among them President Obama.

They were unable to prevent the "clean coal" research project known as FutureGen from being abruptly killed last year by the Bush administration, which had created it and promoted it across the world as an environmentally sound way to produce power.

But now those same Illinois legislators -- including Rahm Emanuel, now White House chief of staff, and Ray LaHood, now transportation secretary -- control the White House and hold key leadership positions in Washington, and FutureGen is on the verge of resurrection.

Energy Secretary Steven Chu said yesterday that he would support the plant with "some modifications."

"I have to say, there are many, many good things about it," Chu said after testifying before a Senate committee.

If FutureGen lived up to its promises, it would revolutionize the use of coal. On what is now 400 acres of cornfields in Mattoon, Ill., backers plan to build a commercial-size power plant that would produce 275 megawatts of electricity, enough to power 150,000 homes. Instead of releasing the resulting carbon dioxide emissions into the air as pollution, however, the plant would pump them into deep geologic formations thousands of feet below Earth's surface.

The project's goal is to test and develop affordable technology, on a commercial scale, that can remove 90 percent of emissions produced by coal plants. Chu said he thinks that the plant -- which would be built with a group of private coal and utility companies known as the FutureGen Alliance -- will move forward with some changes that have not yet been determined and will become a part of larger "portfolio" of research plants developed with other countries.

The FutureGen plant is expected to create jobs, and backers are currently pushing it as a stimulus project that could employ as many as 11,000 workers. The alliance must compete for the stimulus funds, but Chu's support adds significant momentum to the effort.

FutureGen's destiny is being decided as the debate over clean coal technology takes center stage in Washington, drawing big money in lobbying fees and campaign contributions. More than $20 million has been spent to hire lobbying firms that have petitioned members of Congress on FutureGen and other clean coal issues, according to a Washington Post analysis. And employees of the energy companies in the FutureGen Alliance have donated $3 million to congressional and presidential candidates.

The battle over FutureGen accelerated about a year ago when the Bush administration blocked the project hours after Mattoon was chosen over two towns in President George W. Bush's home state of Texas. The Illinois delegation responded with a bitter, bare-knuckle fight to save the plant. Without any assurance that their efforts would pay off, backers in Illinois spent tens of millions of dollars to buy land and have the project "shovel ready" -- before there was ever talk of a stimulus bill.

Senate Majority Whip Richard J. Durbin (D), who led the Illinois delegation's efforts, worked the system, blocking some Bush administration appointments and holding hearings to publicly vilify the officials who stood in his way.

"This has been my longest, most difficult battle in Congress," Durbin said.

The fight got a lot easier after Obama was elected. Within weeks, his transition team met with FutureGen's industry partners. In January, when Obama announced his plans for an economic stimulus bill, Durbin and other members of the Illinois delegation quickly crafted a $2 billion line item to fund a "near zero-emissions power plant(s)," and Sen. Byron L. Dorgan (D-N.D.) placed it in the Senate version of the legislation.

Republicans in both chambers pointed out that only one shovel-ready project in the country met the criteria spelled out in the bill: the FutureGen plant in Mattoon.

"We all know what this is about. It's an earmark for a single plant," said Sen. Tom Coburn (R-Okla.), who railed against the item, securing support to keep it out of the House bill. Coburn labeled it "pork," placing it at the top of his government-waste list, which is emblazoned with the image of a pig.

The $2 billion in the Senate bill was zeroed out by the joint House-Senate conference committee that met to resolve differences in the chambers' two bills. In a compromise that Durbin helped craft, the final version of the legislation cut the funding to $1 billion and specified that it go to "fossil energy research and development." The new language still described the project but deflected mounting criticism by opening the door to other proposals.

When the Bush administration moved to kill FutureGen, officials cited its cost, with estimates rising from $1 billion to $1.8 billion as it approached construction. They also objected to a cost-sharing arrangement with industry that required the government to pay for more than two-thirds of the project.

"The likelihood that it would fail, leaving the American people with hundreds of millions of dollars in sunk cost and none of the benefits, is not acceptable," then-Energy Secretary Samuel W. Bodman said in a Feb. 6, 2008, letter to the editor in the St. Louis Post-Dispatch. Bodman declined to comment for this article.

After Bush rolled out FutureGen in 2003, coal mining unions and coal states immediately started leveraging to host the plant. Among the most aggressive was Illinois. Then-Gov. Rod Blagojevich (D) formed the FutureGen for Illinois Task Force, which included the state's entire congressional delegation. He paid D.C. lobbying giant Cassidy and Associates more than $460,000 to help land the plant.

In July 2006, it was clear that the strategy was paying off when the FutureGen Alliance announced the four site finalists -- two in Illinois and two in Texas.

Over the coming months, Illinois further ginned up its self-promotion. The towns of Tuscola and Mattoon held a joint rally at a high school where a man dressed as Santa Claus passed out pieces of coal to cheering residents, politicians and schoolchildren.

In December 2007, the alliance announced its choice of Mattoon, a community of 17,000 people, 190 miles south of Chicago, that had the strongest local support and a geological edge: Beneath the site is a natural sandstone formation that could serve as an ideal trap to keep carbon dioxide emissions stored underground.

But in the weeks after that announcement, the Bush administration began moving behind the scenes to stop the project, even while promoting it publicly.

The reasons behind the Bush administration's decision to kill the plant are the subject of two year-long probes -- one by the Government Accountability Office and another by a congressional committee -- that will be released this month.

Internal department e-mails and memos show that Bodman directed his staff to develop an alternative plan, exploring whether to scrap the large plant and replace it with five or six smaller plants to test pieces of the same technology. The e-mails show that staff members were skeptical of the new plan, dubbed "FutureGen Plan B," which would call on the industry to pay a higher share of the cost.

"New money riding in to save the day seems unlikely," said one e-mail. Staff members described the new plan as unworkable and came up with their own name for it -- "the Frankenstein."

Incensed by what he viewed as duplicity on the part of the Bush administration, Durbin began making frequent calls to Bodman's office, records show, and quickly organized a campaign to keep the plant alive. He aligned 19 other members of Congress to join him in late December 2007, first by signing a protest letter to Bodman, then by gathering fellow lawmakers to confront the energy secretary.

The meeting in Durbin's office quickly became heated, as Bodman told lawmakers for the first time that the plant in Mattoon was dead.

"This is a meeting unlike any meeting I've been a part of. Members of Congress are literally screaming and waving their fists at the secretary," said someone in attendance, who spoke on the condition of anonymity because of the ongoing debate over FutureGen.

"We won this competition fair and square," Durbin said. "I told Bodman point-blank, 'We are going to keep this alive for the next president.' "

The next day, Bodman went public with his decision to replace the FutureGen project with multiple smaller plants. Obama and the rest of the Illinois delegation wrote to Bush, charging that the secretary had "misled us and the people of Illinois, creating false hope in a FutureGen project which he had no intention of funding or supporting."

The group organized three congressional hearings in the spring, challenging Bodman to explain his decision. In July, the Senate Appropriations Committee voted to protect $134 million in funding for FutureGen in Mattoon, prohibiting the Energy Department from spending it on anything else.

Still, Bodman moved forward with Plan B, hoping to set the new plan in motion before the next administration was in place. But just four sites submitted proposals; two did not qualify and two others were incomplete, according to lawmakers and former department staffers.

Last week, Durbin and the delegation persuaded Congress to lift a freeze on $73 million of the money set aside in July, directing Chu to use it for the project if it is revived. The same day, the delegation sent Chu a letter, arguing that the plant in Mattoon should get the stimulus money because it is "five years ahead of any comparable project. . . . We cannot further delay on this promising technology."

Research editor Alice Crites contributed to this report.

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