"To build a future of energy security, we must trust in the creative genius of American researchers and entrepreneurs and empower them to pioneer a new generation of clean energy technology... Together we should take the next steps: Let us fund new technologies that can generate coal power while capturing carbon emissions."

That was President Bush in his State of the Union address in January, 2008. Even reading between the lines wouldn't tip us off that a major "restructuring" of the FutureGen project had already been decided.

Two days later, this is how a Department of Energy press release explained the cancellation of the billion-dollar "clean coal" research project:

"Under this [restructuring] plan, DOE’s investment would provide funding for no more than the CCS [carbon capture and sequestration] component of the power plant – not the entire plant construction, compared with the FutureGen concept announced in 2003 where the federal government would incur 74% of rising costs."

The DOE press release is a masterpiece of double-speak and spin, careful not to make a direct statement about FutureGen's fate until the fifth paragraph.

Coal is burned to produce about 43 percent of America's power. The process also churns out two billions tons of greenhouse gases annually. (Photo by Malcolm Romaine)

The FutureGen program would have built an integrated coal gasification power plant, which would convert coal into electricity and hydrogen while capturing and sequestering the carbon dioxide underground. It was intended to be a living laboratory for developing similar plants around the country and the world. An alliance of utilities have invested time and money in the project. Almost exactly five years after FutureGen was born, it is dead, with little to show for the effort.

Public concern over climate change has put billions of dollars in corporate profits at stake for the coal industry -- the companies that extract the nation's most abundant domestic fuel and turn it into electricity.

The private-sector FutureGen Alliance members are, needless to say, livid. Accusations have been flying from both sides.

The Bush administration knew more than a month earlier that the government would pull its funding. Trouble had been brewing since March 2007, when Energy Secretary Samuel Bodman and Deputy Energy Secretary Clay Sell first acknowledged the project's 100 percent cost overrun. Sell admitted in an Associated Press interview that he tried to postpone site selection in December 2007, to avoid the inevitable disappointment for residents of Illinois, the chosen location.

It's deja-nuke all over again

According to a report released last week by Synapse Energy Economics, Inc., utilities with proposed new coal-fired power plants now face "comparable risks and uncertainties" to those that derailed the U.S. nuclear power industry in the 1970s.

When the American people turned against nuclear energy, each new plant was fiercely opposed in court, which led to construction delays, which caused cost overruns, which set investors running for the door.

This new report, prepared for a coalition of nearly 300 faith-based institutional investors known as the Interfaith Center on Corporate Responsibility (ICCR), concludes that "coal is losing its appeal as a predictable investment and is instead fraught with uncertainty."

The full ICCR report -- "Don't Get Burned: The Risks of Investing in New Coal-Fired Generating Facilities" -- is available online.

"Until the 1970s, building new nuclear power plants appeared to be a relatively low risk investment because construction and operating costs were relatively stable and easy to predict," the ICCR analysis notes. "However, starting in the 1970s, the costs of building new nuclear power plants began to spiral out of control. As a result, the actual costs of new plants were two to three times higher than the costs that had been estimated during licensing or at the start of construction ..."

Several major investment banks recently announced that their financing for new plants would be contingent on addressing greenhouse gas emissions.

Can't buy me love

The coal industry is spending tens of millions of dollars to influence members of Congress and the top presidential candidates.

"With 59 coal power plants scrapped last year, the industry is fighting to make sure it can emerge from the climate change debate with a guaranteed spot in the nation's energy future," two AP writers explain in "Coal industry spends millions on election-year ads."

The coal industry is promoting new uses for its product, such as converting it into synthetic fuel. TV ads in key primary states promote coal as a clean alternative to foreign oil.

Industry group Americans for Balanced Energy Choices expects to spend some $40 million this year, more than double its 2007 spending. ABEC has paid $5 million to co-sponsor CNN presidential debates and to air spots.

Can the coal industry spend enough in this election year to hold its prized position as the largest source of electricity in America? The companies behind ABEC include Peabody, Consol, and Arch Coal (coal mining); Union Pacific, Norfolk Southern, BNSF and CSX (railways); and Southern Company, American Electric Power and Duke Energy (utilities). Those companies together are worth more than $200 billion.

Nonetheless, it has some strong political opposition in both chambers of Congress.

"There's no such thing as clean coal," said Senate Majority Leader Harry Reid at Renewable Energy World in February. And House Oversight Committee Chairman Henry Waxman recently called for a ban on new coal-fired power plants unless they reduce carbon dioxide emissions. When presidential candidates talk about greenhouse gases, they're careful not to rule out a carbon cap.

Counting on grandfather

Meanwhile, over 800 "grandfathered" coal plants are operating exempt from the Clean Air Act of 1970, which restricted toxic emissions such as sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury. Today, 22 new coal-fired power plants are under construction, and more are on their way, in a rush to get them online before stricter carbon-emissions standards are enacted.

To read more about integrated gasification combined cycle (IGCC) coal plants, and about the hydrogen they could produce, read this interview with GE (scroll down to "Clean coal" and the "Hydrogen from Coal" factoid box).