Dec 18 - Chicago Tribune

Just hours after Illinois won a national competition for a cutting-edge clean coal project, the Department of Energy on Tuesday cautioned that costs were getting out of hand and it wasn't ready to sign off on the $1.8 billion FutureGen power plant.

"Projected cost overruns require a reassessment of FutureGen's design," read a statement from Energy Department official James Slutz. He said the department would provide more details next month on plans to restructure FutureGen.

The downcast statement quickly soured the party atmosphere in Mattoon, Ill., which just hours earlier had been picked by a consortium of utilities, coal companies and the Energy Department as the site for the plant designed to test whether abundant coal can be used to make power with little pollution.

Federal officials had asked the consortium to delay Tuesday's announcement, but were rebuffed. The private power firms largely control the project, though the Energy Department will pay most of the costs and has the power to stop it from going forward. As costs have risen, the department has tried to get the private sector to pick up a greater share, but has so far not been successful.

The scuffle lent a note of confusion to a day that appeared a triumph for Mattoon, which was picked over two sites in Texas and another in Illinois in nearby Tuscola.

Mike Mudd, the CEO of the FutureGen alliance, said Mattoon got the nod because it offered sound geology, good water resources and was ready for work crews to move in without fear of legal battles over property rights.

FutureGen is one of the biggest research plums of the energy crisis.

It is designed to marry a range of sophisticated technologies to demonstrate that coal, which fouls the air when burned by traditional methods, can be tapped as a clean fuel of the future.

Instead of burning coal, FutureGen will use a proven process called gasification that breaks down coal into chemical components while releasing energy. The technique still produces carbon dioxide, a major contributor to global warming, but instead of releasing the greenhouse gas into the atmosphere, it will be liquefied and pumped deep in the earth where it is believed it will be retained in a thick layer of sandstone.

The major test of FutureGen is to prove that greenhouse gases won't percolate back to the surface.

The FutureGen plant will be small, producing only enough energy for about 150,000 homes. It is expected to open in 2012, and there will be years of testing before its techniques could have widespread application.

Success could have major ramifications for the ailing Illinois coal industry, which sits on large reserves of dirty, high-sulfur coal. Demand for Illinois coal has been hurt by clean-air laws.

In the short term, however, the plant will bring a major new source of investment and jobs to a region in desperate need of both. Coal mining and related industries had long been the primary economic engine of the state's southern half, and the economy there has suffered since the industry went into a deep swoon two decades ago.

In addition to the science, another goal of FutureGen is to bring down the costs of making power in ways that don't foul the air. Gasifying coal and burying greenhouse gases adds at least 20 percent to 40 percent to the costs of making electricity, so utilities may be reluctant to adopt FutureGen-like technologies unless the costs can be reduced.

The selection of Mattoon gives the city of 18,000 a new claim to fame. It is perhaps best known as the sister city to Charleston, home of Eastern Illinois University. Mattoon also is home to a soybean museum that holds the world's largest collection of soybean hybrids. New Yorkers might disagree, but Mattoon has proclaimed itself the bagel capital of the world because of a Lender's bagel factory that opened there two decades ago.

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