What a tangled web the federal government has woven with the FutureGen project. Last week, we wrote about a new show of support from Energy Secretary Steven Chu for the scuttled public-private initiative to build a cleaner coal plant with experimental technology for capturing and storing carbon emissions. Today, we have two Congressional reports on just how and why the Bush administration came to drop funding for the R&D project. Among the highlights: A $500 million math error, apparent disregard for federal best practices, and a revelation that the feds ignored internal reports that it would set carbon capture and storage technology back by at least a decade if it went ahead with a restructuring plan.
[The] DOE did not base its decision to restructure FutureGen on a comprehensive analysis of factors, such as the associated costs, benefits, and risks. DOE made its decision, largely, on the conclusion that costs for the original FutureGen had doubled and would escalate substantially.
Problem is, aside from forgoing federal best practices for decision-making on program budgets, the DOE had the wrong numbers. It compared two cost estimates that didn’t match up: one was based on “constant dollars” and the other on inflated dollars. According to the GAO report, the DOE mistakenly told Congress that FutureGen’s estimated costs had nearly doubled, when in fact they had increased by about 39 percent, or $370 million, to $1.3 billion in constant 2005 dollars.
Of course, 39 percent and a billion dollars-plus is still more than a little over budget. But the DOE’s Office of Fossil Energy had apparently come up with several cost-cutting options — each having the potential to save $30-55 million apiece — that political appointees chose not to consider.
Perhaps more significantly, the agency’s failure to fully analyze the program before restructuring it put FutureGen 2.0 on predictably shaky ground. In theory, the restructured FutureGen project involves testing out technologies at existing coal power plants and a larger role for the private sector, rather than launching one big R&D project to experiment with integrating technologies, but it hasn’t produced results. According to the GAO report:
As DOE’s restructuring decision was not based on a comprehensive analysis of the associated costs, benefits, and risks, DOE has no assurance that the restructured program is the best option to accomplish the goal of promoting the accelerated and widespread commercial advancement of CCS [carbon capture and sequestration].
A second report, this one (PDF) from the House Subcommittee on Investigations and Oversight of the Committee on Science and Technology, said former Energy Secretary Samuel Bodman sought to kill FutureGen with or without a viable Plan B for addressing greenhouse gas emissions from coal-fired power plants. According to the subcommittee report, DOE staffers warned that the restructured FutureGen would mean “the availability of affordable coal fueled CCS plants would be delayed at least 10 years and will not allow widespread deployment of CCS until near 2040,” but political appointees did not consider these reports. Relative to the GAO, the Subcommittee draws a less diplomatic conclusion:
In retrospect, FutureGen appears to have been nothing more than a public relations ploy for Bush Administration officials to make it appear to the public and the world that the United States was doing something to address global warming despite its refusal to ratify the Kyoto Protocol.
Graphic credit FutureGen Alliance