Long term and industrial-scale carbon capture and storage from coal-fired
power plants received its latest major backing on Tuesday as the US Department
of Energy and private sector partners pledged $318 million for three projects
to sequester a total of 2.5 million tons of carbon dioxide per year.

The projects "will show that capture and storage can be conducted safely
and effectively," Deputy Secretary of Energy Clay Sell said in a speech at the
US Chamber of Commerce in Washington. DOE will put forward $197 million toward
the projects with the remaining $121 million coming from the private sector.

The three projects will be conducted by regional US carbon storage
partnerships, formed in 2003, with members from the private sector, academia,
and DOE.

The projects will involve a series of underground geological structures.
These will include sandstone formations in New Mexico, a saline aquifer in
Alberta, enhanced oil recovery in a deep carbonate formation in North Dakota,
and porous and permeable sands near the Gulf of Mexico coast. Injection will
begin as soon as 2008 for the sandstone formation on the Gulf Coast.

There are seven partnerships in total and each one will have an
industrial-scale project, Sell said. He added that politicians in Washington
frequently see permanent CCS "as if it's simply a matter of building" plants.

Instead, he said that to put CCS "on the path to commercialization," seed
money like this must help address the cost of building and planning new power
plants and provide the expertise to form a new regulatory and legal framework
for permanent carbon storage. "No one should underestimate the scale of that
challenge," Sell said.

DOE's other major carbon storage effort is the FutureGen project. This is
a $1.8-billion, 275-MW coal-fired power plant with up to 90% carbon capture
and storage. It is being funded 76% by DOE and 24% by major industry players
such as Southern Company and Peabody Energy. It is hoped that the project will
be operational by 2012 and final site selection is slated for later this year.

"I think we're looking at somewhere...around 15 years for developing
[CCS] technology that would be economically, commercially attractive," Sell
said.

--Alexander Duncan, Alexander_Duncan@platts.com