New DoE Head, Illinois Line Up in Favor of Clean Coal

(MoneyWatch)  The stars are aligning up once again for clean coal as Barack Obama approaches his presidential coronation. At both the Federal and state level, policymakers are talking about the technology. And sensing an inexorable change on its way, utilities and energy companies are duly lining up to help, albeit for a price.

Within the states, several larger actors are working to pass laws encouraging or even mandating new clean coal plants. At the forefront is Illinois, which just passed a bill allowing $18 million for a full-size clean coal plant some 25 miles southeast of Springfield. The two companies that will construct and operate the plant are Tenaska and MDL Holding, both privately held, while ComEd, a division of Exelon, would be required to buy electricity from the plant, provided rates didn't rise too high.

The bill actually puts the Tenaska / MDL tag-team conveniently ahead of the curve. After 2017, all new coal plants in Illinois will be required to store 90 percent or more of CO2 emitted. And like many Northeastern states, Illinois has no plans to completely replace coal, so some plants are likely to end up coming under that ordinance.

Also a lucky score for the coal industry is the moral acquisition of Steven Chu, the likely new head of the Department of Energy. Chu is the former head of California's Lawrence Berkeley National Laboratory and, like many well-educated Californians, views coal as the enemy. He was even caught calling coal his "worst nightmare" at a speech last year.

But Chu appears to have been swayed by his new boss, Obama, into adopting a more conciliatory tone regarding the black stuff. At his confirmation hearing before Senate, Chu referred distantly to "some people in the United States who feel perhaps we should turn off coal," according to the SF Chronicle, thus setting himself apart from that group. His party line is now using coal "as cleanly as possible," as caught by the Washington Times.

It was around this time last year that the DoE pulled the plug on the FutureGen experimental clean coal project, a multi-billion dollar facility also to be located in Illinois. When that occurred, coal companies were furious. This time around, given the rising stakes, they might just get their wish.