Math gaffe could mean new life for FutureGen
WASHINGTON -- The Energy Department failed to prepare a proper analysis and made a $500 million math error when it decided to shelve an experimental coal-fired power plant slated for central Illinois, according to a congressional auditors report released Wednesday.
The Bush administration withdrew its support from the FutureGen project a year ago, citing concerns that costs had doubled. But that premise was false, according to the report prepared by the Government Accountability Office for Rep. Bart Gordon, D-Tenn., and the chairman of the House Science Committee.
The Department of Energy based its decision on an assumption that FutureGen construction and material costs would "continue escalating substantially in the indefinite future" and that costs were likely to double, according to the report.
But, the report notes, economic forecasting organizations -- including the Department of Energy's own Energy Information Administration -- have concluded cost increases for building power plants do not generally continue in the long run.
"We always knew the DOE's logic was flawed," Illinois Sen. Dick Durbin, the Senate's No. 2 Democrat, said in a Wednesday statement. "Now it turns out their math was wrong too."
The math error resulted from a faulty comparison of project cost estimates, according to the GAO report. One estimate was based on so-called "constant dollars," which reflected the buying power of dollars in 2005. The other estimate was inflation-adjusted, with dollars worth less each year because of inflation.
Such calculations led the Bush administration to peg FutureGen's tab at $1.8 billion, up from $950 million -- or nearly double. But an apples-to-apples comparison puts the cost of FutureGen at about $1.3 billion, up 39 percent from its original price, according to the GAO.
FutureGen was conceived as a leading effort to capture and sequester carbon dioxide, a gas strongly linked to global warming. The east-central Illinois town of Mattoon was selected as the project site, beating out two proposed Texas towns, and FutureGen has been viewed as a potential boost for a region that has struggled with economic development and has significant quantities of coal.
The Bush administration invested $174 million in FutureGen before deciding to stop the project. Advocates insist if resumed, FutureGen could provide a roadmap for reducing overall carbon dioxide emissions from coal production.
In January, Durbin joined senators from Illinois, Missouri and Ohio in urging the nation's new Energy Secretary, Steven Chu, to revive FutureGen.
A letter from the senators stressed the project's virtually emissions free potential and asked Chu to release a "record of decision," the Energy Department's final stamp of approval indicating Mattoon, Ill. passes environmental muster as the project site.
Chu has recently said he would consider restoring FutureGen. He has indicated changes would need to be made to the project, but has not publicly cited specifics.
Michael J. Mudd, the chief executive officer of the FutureGen Alliance, seized on the GAO's report and Chu's recent comments Wednesday.
"The Alliance is looking to the future and planning for success," Mudd said in a statement. "Just last week, Energy Secretary Steven Chu said he wants to go forward with FutureGen 'in some modified way.' We are very encouraged by Secretary Chu's comments and look forward to discussing his ideas for advancing FutureGen at Mattoon."