E6-2222. Advance Notice of Intent To Prepare an Environmental Impact Statement for Implementation of the FutureGen Project

AGENCY:

Department of Energy.

ACTION:

Advance Notice of Intent to Prepare an Environmental Impact Statement.

SUMMARY:

The U.S. Department of Energy (DOE) is announcing in advance its intent to prepare an Environmental Impact Statement (EIS), pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), for the proposed action of providing Federal funding (up to $700 million) for the FutureGen Project. FutureGen would comprise the planning, design, construction and operation by a private-sector organization of a coal-fired electric power and hydrogen gas (H₂) production plant integrated with carbon dioxide (CO₂) capture and geologic sequestration of the captured gas. DOE has prepared this Advance Notice of Intent (ANOI) in accordance with DOE's NEPA regulations [(10 CFR 1021.311(b)] to inform interested parties of a pending EIS and to invite early public comments on the proposed action, including: (1) The proposed plans for implementing the FutureGen Project, (2) the potential range of environmental issues and alternatives to be analyzed, and (3) the nature of the impact analyses to be considered in the EIS. DOE will later issue a Notice of Intent (NOI) and initiate a public scoping process during which DOE will conduct public meetings and invite the public to comment on the scope, proposed action, and alternatives to be considered in the EIS.

Following President George W. Bush's announcement that the United States would sponsor a $1 billion, 10-year FutureGen initiative to build the world's first coal-based, near-zero emissions power plant that produces both electricity and H₂, the DOE signed, on December 2, 2005, a Cooperative Agreement (DE-FC26-06NT42073) that provides financial assistance to the FutureGen Industrial Alliance, Inc. (Alliance), which will undertake the planning, design, construction and operation of the project facilities. The FutureGen initiative would establish the technical and economic feasibility of co-producing electricity and H₂ from coal while capturing and sequestering the CO₂ generated in the process.

The Alliance is a consortium led by the coal-fueled electric power industry and the coal production industry. Members of the Alliance collectively own and produce over 40 percent of the Nation's coal and about 20 percent of its coal-fueled electricity. The Alliance would plan, design, construct and operate the FutureGen power plant and the sequestration facility. The Alliance would also monitor, measure, and verify geologic sequestration of CO₂. DOE will provide technical and programmatic guidance to the Alliance, retain certain review and approval rights as defined in the Cooperative Agreement, and oversee Alliance activities for compliance with the terms of the Cooperative Agreement. DOE will be responsible for NEPA compliance activities. Both DOE and the Alliance would consider ways for state and local agencies, local communities, the environmental community, international stakeholders, and research organizations to participate in the Project, including involvement in testing, monitoring and verification protocols for CO₂ sequestration.

DATES:

DOE invites Federal agencies, Native American Tribes, state and local governments, other organizations and members of the public to provide early assistance in environmental planning for the FutureGen Project and to identify significant environmental issues and alternatives to be analyzed in the forthcoming FutureGen Project EIS. DOE will consider public comments and other relevant information relating to environmental planning for the FutureGen Project. Comments in response to this ANOI are requested by March 20, 2006. DOE anticipates issuing a NOI to prepare an EIS for the FutureGen Project after DOE makes a preliminary determination regarding the alternative sites to be evaluated. After the NOI is issued, DOE will conduct public scoping meetings to assist in defining the scope of the EIS, including alternative sites and issues to be addressed. The dates and locations of the scoping meetings will be announced in the NOI or subsequent Federal Register notices and in local media before the meetings.

ADDRESSES:

Written comments or suggestions on the scope of the EIS should be submitted to Mark L. McKoy, NEPA Document Manager for the FutureGen Project, U.S. Department of Energy, National Energy Technology Laboratory P.O. Box 880, Morgantown, West Virginia, 26507-0880. Comments also may be submitted by telephone: [phone], fax: [phone], electronic mail: [e-mail], or toll-free telephone number: 800-432-8330 (ext. 4426).

FOR FURTHER INFORMATION, CONTACT:

For information on the FutureGen Project or to receive a copy of the Draft EIS for review when it is issued, contact Mark L. McKoy as described in ADDRESSES above. For general information on the DOE NEPA process, contact: Ms. Carol M. Borgstrom, Director, Office of NEPA Policy and Compliance (EH-42), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585-0119, telephone: [phone], fax: [phone], or leave a toll-free message at 800-472-2756. Additional NEPA information is available at the DOE NEPA Web site: http://www.eh.doe.gov/​nepa/​. Additional information on the FutureGen Project can be found at the following Web site: http://www.fossil.energy.gov/​programs/​powersystems/​futuregen. Information from the Alliance, including the draft Request for Proposals discussed below, can be found at http://www.FutureGenAlliance.org. Comments on the draft Request for Proposals are to be sent to the Alliance in accordance with the instructions provided by the Alliance. While comments related to the NEPA process are due to DOE by March 20, 2006, comments on the draft Request for Proposals are due to the Alliance by February 28, 2006.

SUPPLEMENTARY INFORMATION:

Background

President Bush announced during 2003 that the United States has committed to proceed with a $1 billion, 10-year project to build the world's first coal-fueled plant to produce electricity and H₂ with near-zero emissions. In response to this announcement, the U.S. Department of Energy unveiled plans for a FutureGen plant that would establish the technical and economic feasibility of producing electricity and H₂ from coal—a low-cost and abundant energy resource—while capturing and geologically storing the CO₂ generated in the process.

The FutureGen Project would showcase cutting-edge technologies that could address environmental concerns associated with the use of coal. DOE plans to implement the FutureGen Project through a cooperative agreement that provides financial assistance to the FutureGen Industrial Alliance, Inc., which is a non-profit corporation that represents a global coalition of coal and energy companies. Members of the Alliance are expected to provide an estimated $250 million to help fund project development. The Alliance members are: American Electric Power; BHP Billiton; the China Huaneng Group; CONSOL Energy Inc.; Foundation Coal; Kennecott Energy, a member of the Rio Tinto Group; Peabody Energy; and Southern Company. The U.S. government and foreign governments would invest about $700 million in the project.

The Alliance is a consortium of industrial companies that collectively own and produce over 40 percent of the Nation's coal and about 20 percent of the Nation's coal-fueled electricity. The Alliance is: (a) Geographically diverse by including both eastern and western domestic coal producers and coal-fueled electricity generators; and (b) resource diverse by including producers and users of the full range of coal types.

Purpose and Need for Agency Action

In pursuing its goal of providing safe, affordable and clean energy for the citizens of the United States, DOE has determined that coal, as the Nation's most abundant fossil fuel resource, must play an important role in the Nation's efforts to increase its energy independence. DOE has identified a need for a near-zero emissions, coal-to-energy option that would produce electric power and H₂ from coal while permanently sequestering CO₂ in deep geological formations. The technical, economic, and environmental feasibility of producing electric power and H₂ from coal, when coupled with geologic sequestration technology, must be proven.

The electricity and transportation sectors are responsible for nearly three-fourths of the country's anthropogenic greenhouse gas emissions. The continued use of coal entails the need to address environmental and greenhouse gas mitigation challenges. A key DOE mission is to ensure that fossil fuels—particularly coal—are available components of the future energy mix. An alternative source of fuel for the transportation sector, such as coal-derived H₂, could also reduce our dependence on fuel imports.

In the absence of proven operations of a large, integrated, near-zero emissions power plant, the contribution of coal to the energy mix could be reduced if environmental regulations continue to tighten. This could cause an imbalance in the diversity of the domestic energy portfolio, which would impact energy security. Accordingly, DOE needs to promote development of such a facility to address the environmental concerns over the use of coal, thus protecting both energy diversity and security.

Proposed Action

DOE proposes to provide financial assistance (up to $700 million) for the Alliance to plan, design, construct, and operate the FutureGen facility, an advanced integrated coal gasification combined cycle power plant and CO₂ sequestration facility sized nominally at 275 MW (equivalent output). The goal of this initiative would be to prove the technical and economic feasibility of a near-zero emissions, coal-to-energy option that could be deployed by 2020. During the first phase of the project, the Alliance and DOE will quantify the specific emissions objectives of the project. The facility would co-produce electric power and H₂ in an industrial/utility setting while capturing and geologically sequestering approximately one to two million metric tons of CO₂ per year. As discussed further below, the FutureGen Project would incorporate both cutting-edge research and demonstrations of emerging technologies ready for testing at a large scale to achieve its goal of validating the technical and economic feasibility of an integrated near-zero emissions plant.

Establishing the technical feasibility and projected economic viability of a near-zero emissions, coal-based system that integrates advanced technologies at a large scale through the FutureGen Project would contribute to DOE's goals by:

• Addressing environmental issues and barriers to fossil fuel use, while maintaining the availability and affordability of fossil-fuel-derived energy;
• improving energy efficiency;
• developing technologies that foster a diverse supply of reliable, affordable, and environmentally sound energy;
• providing scientific and technological information and analysis to assist policymakers and regulators in their decision-making on control of greenhouse gas emissions and use of fossil fuels; and
• focusing on public benefits-driven investment in high-risk, high-return technology that private companies alone cannot undertake.

The FutureGen facility is intended to be a near-zero emissions facility that would be the cleanest fossil-fuel-based power system in the world. The project would require approximately 10 years for completion, not including post-project monitoring. Performance and economic tests results would be shared among all participants, industry, the environmental community, and the public. DOE intends to invite participation from international organizations to maximize the global applicability and acceptance of FutureGen's results, helping to support an international consensus on the role of coal and geological sequestration in addressing global greenhouse gas emissions and energy security. Broad engagement of stakeholders early in the FutureGen effort is critical to the successful achievement of understanding and acceptance of geologic sequestration as part of a near-zero emissions, coal-based energy option.

FutureGen Project Processes

The FutureGen Project would employ advanced coal gasification technology integrated with combined cycle electricity generation, H₂ production, CO₂ capture and CO₂ sequestration in geologic repositories. The gasification process would combine coal, oxygen (O₂), and steam to produce a H₂-rich “synthesis gas.” After exiting the conversion reactor, the composition of the synthesis gas would be “shifted” to produce additional H₂. The product stream would consist mostly of H₂, steam, and CO₂. Following separation of these three gas components, the H₂ would be used to generate electricity in a gas turbine and/or fuel cell. Some of the H₂ could be used as a feedstock for chemical plants or petroleum refineries or as a transportation fuel. Steam from the process could be condensed, treated, and recycled into the gasifier or added to the plant's cooling water circuit. CO₂ from the process would be sequestered in deep underground geologic formations that would be monitored to verify the permanence of CO₂ storage.

Overall Project Objectives

• Establish technical and economic feasibility of producing electricity and H₂ from coal with near-zero emissions (including CO₂);
• Verify sustained, integrated operation of coal conversion system with geologic sequestration of CO₂;
• Verify effectiveness, safety, and permanence of geologic sequestration of CO₂;
• Establish standardized technologies and protocols for CO₂ measuring, monitoring, and verification;
• Confirm the potential of the FutureGen concept to achieve economic competitiveness with other near-zero emissions approaches through advances in technology by 2020; and
• Gain acceptance by the coal and electricity industries, environmental community, international community, and public-at-large for the concept of coal-based systems with near-zero emissions through the successful operation of FutureGen.

Power Plant Performance Objectives

• Sequester CO₂ at an operational rate of approximately one to two million metric tons per year;
• Produce electricity and H₂ at ratios (may be variable) consistent with market needs (equivalent to plant capacity of 275 MW electricity output);
• Sequester at least 90 percent of CO₂ initially with the eventual potential for up to 100 percent sequestration;
• Locate plant consistent with, inter alia, adequate coal feedstock availability, proximity to market for products (especially electricity) as part of proving potential economic viability, and proximity to geologic formations for sequestration (e.g., deep saline reservoirs, unmineable coal seams, depleted oil and natural gas reservoirs, basalt formations);
• Achieve environmental (near-zero emissions) requirements;
• Provide a design database for subsequent, near-zero emissions, commercial demonstrations and/or deployments; and
• Design capability for full-flow testing of advanced technologies and advanced technology modules, and design incorporation of loosely integrated units that increase flexibility and enhance operability and reliability.

CO₂ Sequestration Monitoring and Verification Performance Objectives

• Accurately quantify storage potential of the geologic formation(s);
• Detect and monitor surface and subsurface leakage, if it occurs (capability to measure CO₂ slightly above atmospheric concentration of 370 ppm), and demonstrate effectiveness of mitigation;
• Provide the scientific basis for carbon accounting and assurance of permanent storage;
• Account for co-sequestration of CO₂ impurities; and
• Develop information necessary to estimate costs of future CO₂ management systems.

Technology Alternatives

The FutureGen Project would incorporate both cutting-edge research and demonstrations of emerging technologies ready for testing at a large scale to achieve its goal of validating the technical and economic feasibility of an integrated near-zero emissions plant. The FutureGen power plant would be designed to provide a capability for full-scale testing of new technologies prior to their commercial demonstration and deployment. The FutureGen facility may integrate some combination of new technologies for gasification, O₂ production, H₂ production, combustion gas cleanup, H₂ turbines, fuel cells and fuel cell/turbine hybrids, CO₂ sequestration, advanced materials, instrumentation, sensors and controls, and byproduct utilization. Decisions on incorporation of specific technologies would be made by the Alliance keeping in mind the ability to achieve the overall project goal of proving the technical and economic feasibility of the near-zero emissions concept.

Alternatives, Including the Proposed Action

Under the proposed action, DOE would implement the FutureGen Project to achieve the President's goals. The EIS will analyze the reasonable alternatives for implementing the FutureGen Project. Once a list of best qualified sites is delivered by the Alliance to DOE, DOE will consider all of the available alternatives in ascertaining which ones are reasonable. The EIS also may analyze technologies and strategies for implementing important elements of the Project.

Under the no-action alternative, DOE would not fund the proposed Project. In the absence of DOE funding, it would be unlikely that the Alliance, or industry in general, would soon undertake the utility-scale integration of CO₂ capture and geologic sequestration with a coal-fired power plant. Absent DOE's investment in a utility-scale facility, the development of integrated CO₂ capture and sequestration with power plant operations could occur more slowly through a series of small steps, and only then in the presence of a regulatory requirement. Given a regulatory requirement for the curtailment of greenhouse gas emissions, the no-action alternative could result in higher costs of electricity due to the use of more expensive, commercially available technology and due to a reduction in plant availability as a result of the lack of integrated test operations data and experience that would have otherwise been available from a FutureGen-type facility.

DOE may consider other reasonable alternatives that are suggested during the public scoping period.

Preliminary Identification of Environmental Issues

DOE intends to address the issues listed below when considering the potential impacts resulting from the siting, construction and operation of the FutureGen power plant. This list is neither intended to be all-inclusive nor a predetermined set of potential impacts. DOE invites comments on these and any other issues that should be considered in the EIS. The environmental issues include:

• Air quality impacts: potential for air emissions during construction and operation of the power plant and appurtenant facilities to impact local sensitive receptors, local environmental conditions, and special-use areas, including impacts to smog and haze and impacts from dust and any significant vapor plumes;
• Noise and light impacts: potential impacts from construction, transportation of materials, and facility operations;
• Traffic issues: potential impacts from the construction and operation of the facilities, including changes in local traffic patterns, deterioration of roads, traffic hazards, and traffic controls;
• Floodplains: potential impacts to flood flow resulting from earthen fills, access roads, and dikes that might be needed in a floodplain;
• Wetlands: potential impacts resulting from fill, sediment deposition, vegetation clearing and facility erection that might be needed in a wetland;
• Visual impacts associated with facility structures: views from neighborhoods, impacts to scenic views (e.g., impacts from water vapor plumes, power transmission lines, pipelines), internal and external perception of the community or locality;
• Historic and cultural resources: potential impacts from the site selection, design, construction and operation of the facilities;
• Water quality impacts: potential impacts from water utilization and consumption, plus potential impacts from wastewater discharges;
• Infrastructure and land use impacts: potential environmental and socioeconomic impacts of project site selection, construction, delivery of feed materials, and distribution of products (e.g., power transmission lines, pipelines);
• Marketability of products and market access to feed stocks;
• Solid wastes: pollution prevention plans and waste management strategies, including the handling of ash, slag, water treatment sludge, and hazardous materials;
• Disproportionate impacts on minority and low-income populations;
• Connected actions: potential development of support facilities or supporting infrastructure;
• Ecological: potential on-site and off-site impacts to vegetation, terrestrial wildlife, aquatic wildlife, threatened or endangered species, and ecologically sensitive habitats;
• Geologic impacts: potential impacts from the sequestration of CO₂ and other captured gases on underground resources such as potable water supplies, mineral resources, and fossil fuel resources;
• Ground surface impacts from CO₂ sequestration: potential impacts from leakage of injected CO₂, potential impacts from induced flows of native fluids to the ground surface or near the ground surface, and the potential for induced ground heave and/or microseisms;
• Fate and stability of sequestered CO₂ and other captured gases;
• Health and safety issues associated with CO₂ capture and sequestration;
• Cumulative effects that result from the incremental impacts of the proposed project when added to the other past, present, and reasonably foreseeable future projects;
• Compliance with regulatory requirements and environmental permitting;
• Environmental monitoring plans associated with the power plant and with the CO₂ sequestration site; and
• Ultimate closure plans for the CO₂ sequestration site and reservoirs.

Host Site Selection

The Alliance will conduct a site competition to identify one or more candidate sites suitable for the FutureGen facility. The process will be an open competition in which States, tribes, private organizations and other interested parties can offer sites to the Alliance for consideration.

The selection process will include the use of both qualification criteria and scoring criteria. Qualification criteria will be used to initially screen proposals and thereby identify qualified sites meriting further evaluation for the FutureGen Project. Scoring criteria will be used by the Alliance to distinguish among the initial set of qualified sites to identify the candidates (proposals and sites) that merit evaluation under the NEPA process. Categories of criteria that will be considered by the Alliance include: Suitability of the proposed site for construction of the power plant, suitability of the proposed sequestration reservoir for permanently sequestering CO₂, availability of necessary infrastructure and resources (e.g. railroads, roads, natural gas lines, power transmission lines, and water), access, environmental factors, and costs.

Following the development of a site selection plan and the site screening criteria and subsequent to DOE approval of these items, the Alliance is issuing a draft Request for Proposals (RFP) for a two-week comment period. Following the public comment period, the Alliance will issue the final RFP (proposed for March 2006) seeking proposals for a host site. The draft RFP and other information provided by the Alliance will be available at http://www.FutureGenAlliance.org.

Site proponents will be required to submit information that the Alliance will use to determine how, and the extent to which, each of the screening criteria would be met at each site. Proponents of each site will be required to submit sufficient acceptable technical, environmental and economic information. The RFP will also state that, for those sites that will be analyzed in the EIS, additional information may be requested from site proponents. Such information may require some field work, but will not require drilling of exploratory wells or conducting seismic surveys, because the EIS will be based on readily available information.

The Alliance will review the proposals received to identify those sites that are reasonable from a technical, environmental, and economic perspective. At the conclusion of the review of proposals, the Alliance will provide DOE with a report that describes the screening process and findings and identifies the sites that the Alliance concludes are candidates (i.e., those believed by the Alliance to be reasonable alternatives). DOE will review the Alliance's selection process for fairness, openness and compliance with the established approach.

Based on its review of the Alliance's identification of candidate sites and other relevant information, DOE will then preliminarily determine the reasonable alternatives to be addressed in the EIS. DOE's NOI to prepare an EIS for the FutureGen Project will identify the proposed reasonable alternative sites.

The Alliance may assist the DOE and DOE contractors in gathering additional information to support completion of the EIS. However, the DOE and DOE contractors will develop the EIS. Following the completion of the EIS and the public involvement process, the DOE will announce in a Record of Decision (ROD) either the no-action alternative or those sites, if any, that are acceptable to the DOE for the project. If the action alternative is selected, the Alliance will subsequently select a host site from among those, if any, that are listed in the ROD as being acceptable to the DOE. Following the tentative selection of a host site, the Alliance will conduct extensive site characterization work on the chosen site. Information obtained from the characterization will be reviewed by the DOE and will support the completion of a supplement analysis by DOE to determine whether the newly gained information would have altered in a significant way the findings in the EIS. The supplement analysis will be used to determine whether a Supplemental EIS must be prepared.

Future Public Involvement

This ANOI does not serve as a substitute for the Notice of Intent that will initiate the public scoping process for the FutureGen Project EIS. Following publication of the Notice of Intent, DOE will hold scoping meetings, prepare and distribute the Draft EIS for public review, hold public hearings to solicit public comment on the Draft EIS, and publish a Final EIS. Not less than 30 days after publication of the U.S. Environmental Protection Agency's Notice of Availability of the Final EIS, DOE may issue a Record of Decision documenting its decision concerning the proposed action.

Preliminary EIS Schedule

DOE anticipates issuance of a NOI to prepare an EIS in July 2006. The NOI or subsequent notices published in the Federal Register will announce the dates for public scoping meetings and the target date for completion of a Draft EIS.

A Notice of Availability of the Draft EIS will be published in the Federal Register upon completion of the Draft EIS and will announce the locations and dates for public hearings on the Draft EIS and the means for providing comments. DOE will hold public hearings at locations comparable to those for the scoping meetings. DOE will consider all comments received at public hearings or otherwise during preparation of the Final EIS.

Issued in Washington, DC, on February 13, 2006.

John Spitaleri Shaw,

Assistant Secretary for Environment, Safety and Health.