The stunning record of failure for “clean coal” projects in the U.S. has not kept the coal industry—and its allies in the Trump administration—from using more federal subsidies for reckless projects.
The latest comes by way of a recent Department of Energy offering of $100 million toward “Fossil Fuel Large Scale Pilots.” DOE, along with the National Energy Technology Laboratory (NETL), is seeking to award the money to projects that include design, construction and operation of large-scale “transformational coal technologies.” The RFP was posted Aug. 24; applications are due Oct. 19 (more details below).
This is yet another dead-end scheme to bilk the public—taxpayers and electricity customers—with another government-backed program akin to the multibillion-dollar debacles at Kemper in Mississippi, at Edwardsport in Indiana and at FutureGen in Illinois.
We see this new funding announcement also as a transparent lobbying success by Peabody Energy, which has designs on it as a way to keep its Kayenta Mine in Arizona on life support. Peabody would benefit. Its potential partners, including the Hopi and Navajo Nations, would not.
The premise of the DOE program is that a series of small-scale coal-burning technologies have been laboratory-tested and are now ready for prime-time application. DOE says the $100 million it wants to spend now will get these experiments from late-stage development to commercial-ready operational phases that will be attractive to investors.
In the funding announcement, the DOE—in defiance of the facts—touts its record of research funding for “transformational coal technologies”:
“The Department of Energy (DOE) supports a number of potentially transformational coal technologies aimed at enabling step-change improvements in coal powered system performance, efficiency, and cost of electricity. Examples include, but are not limited to, chemical looping, pressurized oxygen combustion, supercritical carbon dioxide (SCO2) turbines, solid oxide fuel cells, advanced ultra-supercritical power generation cycles, advanced cooling systems, controls, materials. In addition, there are a number of transformational pre- and post- combustion CO2 capture technologies including, but not limited to, non-aqueous solvents, advanced membranes systems, and sorbents that could significantly improve the performance, efficiency, and cost of electricity of a coal-fueled system.”
The new plan requires eligible applicants—for-profit corporations, tribal entities, non-profits, foreign interests—to submit applications that lay out a three-phase process or processes that use domestic coal. Phase I would support the formation of a technology, team, site identification, plans for cost-sharing and preliminary costing, and an overall schedule for design, construction, and completion of environmental reviews. Phase II and Phase III, which would be developed over the next five years, would bring the project to commercial viability and operations.
Applicants must provide evidence that the technology is ready for commercial roll-out. U.S. workers must receive 75 percent of project jobs. Applicants that have received federal funding in the past are preferred. Twenty percent of the funding for the total cost of the project would have to come from non-federal sources.
IEEFA’S CRITICISM OF THIS OFFERING IS NOT THAT THE DOE IS FUNDING SPECULATIVE ENERGY DEMONSTRATION PROJECTS—that’s its job. The problem with this solicitation is that the department is throwing good money after bad. No “clean coal” project exists that is “proven and commercially viable,” and none are likely.
This truth has been demonstrated time and again over the last decade, and has cost at least $10 billion in wasted shareholder value, ratepayer and taxpayer dollars (see Edwardsport, Kemper and FutureGen, above).
The program is questionable:
It requires that projects come up with 20 percent of their funding from non-federal sources. Project costs for the scale of the work in question would run upward of $8 billion, meaning $1.6 billion would be needed from those non-federal sources.
Where might this type of matching money come from?
Even if the 20 percent matching criteria were to be met (say with foreign investors), the federal government would have to come up with at least $6.4 billion—an action for which there is no Congressional authorization.
We remain on Swamp Watch to see whether other federal tax dollars are siphoned off into this scheme. A picture of favored Trump Administration lobbyists is beginning to sharpen, Peabody and the coal industry are practiced at the art of pay-to-play campaign financing, and DOE Secretary Rick Perry is no novice to the game.
Red flags abound!
THAT $100 MILLION COULD BE FAR BETTER SPENT IN THE SUPPORT OF initiatives that many in the Navajo and Hopi nations are advancing around a responsible energy transition that will support healthy economic growth once the Navajo Generation Station and Kayenta mine close.
That amount of money—$100 million—would go a long way to securing new jobs, offsetting the fiscal losses to the tribes from the closure of the plant and the mine, and spurring local and regional development beyond coal.
The more resources, federal and otherwise, are wasted on repeating “clean coal” mistakes, the harder it will be to move forward.
Tom Sanzillo is IEEFA’s director of finance.
IEEFA Swamp Watch: A New Coal Mine, the Russians, an Amsterdam Connection, and Trump …