HOUSTON (Reuters) - A Texas regulator said Tuesday that while the state was not able to land a $1.5 billion "near-zero" emission coal plant, he wants to find ways to attract other projects that seek to capture and store carbon dioxide, a gas blamed for global warming. Mattoon in central Illinois was named Tuesday as the home for the proposed FutureGen coal plant, beating out Jewett and Odessa, Texas, and another Illinois site in a national competition.
HOUSTON (Reuters) - A Texas regulator said Tuesday that while the state was not able to land a $1.5 billion "near-zero" emission coal plant, he wants to find ways to attract other projects that seek to capture and store carbon dioxide, a gas blamed for global warming.
Mattoon in central Illinois was named Tuesday as the home for the proposed FutureGen coal plant, beating out Jewett and Odessa, Texas, and another Illinois site in a national competition.
FutureGen, an international, public-private venture involving coal producers, users and the U.S. Department of Energy, will design and test technology to convert coal into a gas that can be stripped of harmful emissions, then burned to produce electricity and hydrogen.
FutureGen will also develop technology to capture carbon dioxide emissions and store underground permanently.
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Texas Railroad Commission Chairman Michael L. Williams said state officials learned valuable lessons in the four-year pursuit of FutureGen.
"I vow to begin working as quickly as possible to make FutureGen-like projects a reality in Texas," said Williams. "We still have a need."
Texas has a large supply of lower quality lignite coal, which needs to be studied as a potential fuel for integrated gasification combined cycle (IGCC) plants, Williams said. Supplies of petroleum coke, a refining byproduct, offer another opportunity, said Williams, who headed the state's effort to package incentives for FutureGen.
Once captured, the CO2 can be used in enhanced oilfield recovery operations or stored underground.
Legislators understand the benefits of carbon storage and what is needed top attract other projects, said Williams, and he wants to create a new initiative before the Texas Legislature meets in 2009.
Several companies have IGCC projects in the works in Texas but only a few plan to include carbon capture due to cost and regulatory uncertainty.
While disappointed that Texas was not chosen for FutureGen, "we are as committed as ever to exploring new, innovative, emerging technologies that will help produce cleaner, more efficient energy," said Mike Greene, chief executive of Dallas-based Luminant, Texas largest electric generator.
Luminant, a subsidiary of Energy Future Holdings and a FutureGen Alliance member, said it plans to build two IGCC facilities in Texas.
NRG Energy Inc, Texas' second-largest generator, offered to donate land and water to FutureGen if the Jewett site near its Limestone coal plant had been chosen.
In November, NRG said it will build a project to test carbon capture and storage technology at a conventional coal-fired plant near Houston starting in 2012, the same year FutureGen is scheduled to come online.
"We look forward to the advancements in coal gasification and sequestration that FutureGen will deliver," said NRG spokesman David Knox.
Houston-based Hunton Energy plans to build a synthetic gas plant at a Dow Chemical facility near Houston that will burn pet coke and capture CO2 to be sold.
Existing coal plants account for nearly 40 percent of all CO2 emissions.
(Reporting by Eileen O'Grady; Editing by Marguerita Choy)
