Site Picked For FutureGen Pollution-Free Coal Plant

Tuesday, December 18th 2007, 2:21 pm

By: News On 6

MATTOON, Ill. (AP) _ Residents celebrated when this central Illinois city was chosen Tuesday as the site of a futuristic power plant that would burn coal without emitting global warming gases, then got to work figuring out what comes next.

The $1.8 billion plant known as FutureGen, which would store carbon dioxide deep underground, is expected to bring hundreds of jobs to this central Illinois town and will be built on several hundred acres. Mattoon was chosen over nearby Tuscola and two Texas towns, Jewett and Penwell.

``I know this is the biggest economic development opportunity for east-central Illinois in decades, so Merry Christmas Mattoon,'' said Gov. Rod Blagojevich, who arrived in town after the announcement.

A standing-room-only crowd that gathered in the old Times Theater to watch the announcement on a big screen erupted in a roar when Mattoon was announced as the winner. People raised their hands in the air, exchanged high-fives and some began to cry.

``I brought two speeches today for two possible outcomes and this is what I'm going to do with one of them,'' said a teary-eyed Angela Griffin, president of the Coles County economic development group, as she held a consolation speech in the air and ripped it to pieces.

``Game over,'' she said.

Griffin said representatives from the FutureGen Alliance would be in Mattoon Wednesday to begin seismic surveys of 16 square miles of land. Officials have said the plant is expected to be operating by 2012, and said Tuesday that they hope to begin construction by July 2009.

Meanwhile, city officials say they must determine how to get water to the site, build a road that can handle heavy construction equipment and hire a city planner. City attorney Preston Owen said they'll even examine their subdivision code to see if the city is prepared to handle an influx of new housing construction.

Mike Mudd, chief executive of the FutureGen Alliance, a consortium of 12 U.S. and foreign energy companies, said Mattoon was chosen because of its ``very good'' water resources and geologic conditions and because carbon dioxide could be injected underground directly at the site, possibly simplifying construction.

President Bush has touted FutureGen as key to developing carbon-free coal-burning power plants. It is supposed to be virtually pollution-free and produce both electricity and hydrogen _ while its carbon dioxide, a leading greenhouse gas, is to be captured and stored deep underground.

Jerry Oliver, chief operating officer of the FutureGen Alliance, said bids for the first major project _ the core technology that would turn coal to gas _ will be sought beginning Jan. 2. Oliver said The Washington Group already has been hired as the engineering and construction manager and there eventually will be three to four major contractors at the site.

Environmentalists said they're eager to see if the technology delivers on its promises,

For the coal industry, besieged by questions about its role in global warming, ``this is sort of their last stand. This is it,'' said Bruce Nilles of the group's Midwest Clean Energy Campaign.

``We welcome an honest discussion about is it technically and financial feasible for coal to be burned in a responsible manner,'' he said. ``Obviously ... this is a very important research project.''

But the project, three-fourths of which is taxpayer funded, has been under increasing scrutiny in Congress. Some lawmakers have questioned its soaring cost _ nearly double the $950 million originally projected _ and its long delays.

The long-awaited site announcement had become enmeshed in controversy in recent weeks.

Energy Department representatives last week told the industry group it was ``inadvisable'' to announce a site yet, saying the DOE still was examining some of public comments received in response to environmental reviews of the four sites.

Messages left Tuesday seeking comment from the Energy Department were not immediately returned.

The project has been the subject of intense lobbying.

Illinois offered a $17 million grant to help pay for various project costs and an estimated $15 million in sales tax exemptions on materials and equipment through local enterprise zones. The state also set aside $50 million for below-market rate loans to the FutureGen alliance.

Both Illinois and Texas passed laws indemnifying the alliance of any legal entanglements arising from the plant's carbon dioxide.

The alliance members _ including major U.S. coal-burning utilities American Electric Power and Southern Co., and the country's largest coal producer, Peabody Energy _ have committed $400 million over 10 years.

Congress is giving the program $75 million this year, $33 million less than the administration had wanted. Committees overseeing Energy Department spending expressed concern that FutureGen was siphoning money away from other clean-coal programs.