The U.S. Dept. of Energy this week entered into a cooperative agreement with the FutureGen Industrial Alliance to develop and site FutureGen, a $1 billion prototype of a coal-fueled power plant with a target of zero emissions, hydrogen production and carbon dioxide sequestration.

Secretary of Energy Samuel W. Bodman on Tuesday announced that the United States Department of Energy (DOE) has entered into a cooperative agreement with the FutureGen Industrial Alliance to develop and site FutureGen, a prototype of the “cleanest coal-fueled power plant in the world,” with a target of zero emissions, hydrogen production and carbon dioxide sequestration. The government-industry project will cost nearly $1 billion, according to Fuel Cell Works, to produce electricity and hydrogen.

The Wall Street Journal (here via CNN/Money) reported that the goal is “to capture 90 percent of the plant’s carbon dioxide once it begins operation and later raise that to 100 percent of the greenhouse gas, which is believed to cause global warming, using advanced technologies.”

Operating the plant would cost only about 10 percent more than current market costs, according to the report. The plans call for the carbon dioxide waste to be injected into deep underground rock formations, but other waste products, including hydrogen, sulfur dioxide and nitrogen oxides could be gasified and sold to industry.

FutureGen is expected to produce about 250 megawatts of electricity, making it a medium-sized generating station, the WSJ reported.

“The FutureGen prototype will serve as a model for clean energy production and a technology response to climate change concerns,” said FutureGen Alliance Chairman Dr. Charles Goodman, Senior Vice President of Generation Policy for Southern Company, in the press release of the new project.

Goodman further commented:

FutureGen enhances continuous environmental improvement while strengthening energy security through our domestic coal resources. The prototype will prove the best technology and economic path for commercialization while addressing environmental concerns associated with the large-scale use of coal for U.S. and global energy needs. The robust use of coal will ensure a better life for current and future generations.

Under pressure from other industrialized countries during numerous talks on global warming, the Bush administration signed the agreement with a coalition of energy companies to build the prototype coal-burning power plant with no emissions. The project, called FutureGen, has been in planning stages since 2003, according to the New York Times. “But the Energy Department said here that a formal agreement had been signed under which companies would contribute $250 million” of the estimated $1 billion cost.

“After being pushed to one side in the ‘dash for gas’ in the 1990s,” as BBC News recently pointed out, “attention is returning to the role of coal in the global energy mix because of its widespread availability and stable price.”

The U.S. has an abundant supply of coal, unlike its far more limited supply of oil or natural gas. Globally, coal use has grown more than five times faster than projected in the past three years, and use has far outpaced nuclear, natural gas, oil and renewables. (Two of the companies that are contributing to the plant are from China and Australia, both of which also have abundant coal reserves.)

The recent volatility in the markets for oil and gas, combined with concern of an “energy gap” between rising demand and suppliers’ struggle to provide the electricity, has positioned coal as a realistic option, both economically and politically. Politicians and industry experts hope the development of “clean coal technology” will also make the fuel environmentally acceptable among climate conscious citizens.

The talks that led to the FutureGen project are simply one factor in an international effort to rein in heat-trapping smokestack and tailpipe gases. Climate scientists, with widening consensus, have linked a global warming trend to increasing levels of those gases in the atmosphere.

Yet environmental advocates at the talks have criticized this week’s announcement, said the NYT, saying the project announcement is intended “to distract from continuing efforts by the American delegation to block discussion of new international commitments to cut emissions of carbon dioxide and other heat-trapping gases that scientists link to global warming.”

Alden Meyer, a representative of the Union of Concerned Scientists, a group that has long criticized the Bush administration’s climate approach, was quoted by the NYT:

You are watching 163 nations do an elaborate dance to try to make progress when the United States is sitting in the middle of the road trying to obstruct. It’s getting to be like Charlie Brown with Lucy holding that football. Every time, at the last minute, the U.S. pulls it away.

The Alliance and the Department of Energy are partnering in all development aspects of the FutureGen project, including siting, technology selection, construction and operation. The Alliance and DOE will seek an aggressive schedule that includes announcing a site selection process next year, beginning construction within three years and targeting plant operations in 2012.

The FutureGen initiative is a multiple-year project comprised of several budget periods. The first budget period, which will end Jan. 31, 2007 and cost $10.2 million, will focus on establishing the configuration and cost of the facility and developing a short list of potential sites. The facility configuration and siting process will take into consideration a full range of U.S. coal types.

The six U.S. companies that will contribute to the plant include the following: utilities American Electric Power and Southern Co. and coal producers Consol Energy Inc., of Pittsburgh; Foundation Coal, Peabody Energy and Kennecott Energy, which is owned by Australian mining company Rio Tinto Group. As well, Australian mining conglomerate BHP Billiton and China Huaneng Group are participating.