It has been more than five years since the President committed to investing $2 billion to fund research in clean coal technologies.  And I think in that time our Administration has made it very clear that this was not an idle promise. 

 

We have been firm in supporting, and funding, clean coal as a necessary, even critical part, of our nation’s diverse energy portfolio, by pursuing the technologies that allow us to use coal for generating electricity, while meeting environmental regulations at low cost.  Our clean coal research and development programs are pioneering more effective pollution controls for existing coal-fired power plants, and an array of new technologies that would eliminate air and water pollutants from the next generation of power plants.

 

Now, I think everyone here can be very proud of the significant progress this industry has already made in reducing emissions.  We have come a very long way since Edison built the first practical coal-fired electric generating station in 1882. 

 

Coal-fired power plants being built today are over 90% cleaner in emissions of particulate matter, sulfur dioxide, and nitrogen oxides than their counterparts in 1970, when the Clean Air Act was passed.  They also must meet stringent limits for mercury emissions, a pollutant for which there was no national limitation for power plants until this past Spring.  Moreover, greenhouse gas intensity continues to decline.  We saw a 2.1% reduction in 2004, a rate faster than many Kyoto signatories, I might add, and we hope to see similar progress when the figures for 2005 are released in June.

 

These are genuinely impressive accomplishments.  But I think you will agree that there is more to do.

 

Certainly, our Department believes we need to do more.  So, we are building on our existing clean coal programs with additional funding and research under the President’s new Advanced Energy Initiative, which he announced in the State of the Union Address.  

 

This Initiative provides for a 22-percent increase in funding for clean-energy technology research at the Department of Energy, including $281 million in our 2007 budget request to fund the Coal Research Initiative.  These funds will nearly complete the President’s ten-year, $2 billion commitment four years ahead of schedule.

 

In conjunction with the President’s other major announcement, the American Competitiveness Initiative, the AEI seeks to harness the power of technology to maintain our economic leadership in an increasingly competitive world, and to develop the most promising clean energy sources.

 

And, indeed, new technologies are making coal an even cleaner, more reliable, and more indispensable part of our diverse energy portfolio.

 

That’s good for the United States, considering how much of this valuable resource we have.  And, increasingly, the promise of clean coal is being pursued around the world as well.

 

 I just returned from a week-long trip through Russia, Central Asia, and Eastern Europe.  I attended a G-8 Energy Ministers conference in Moscow, and I met with heads of state, as well as other government officials, in Pakistan and Kazakhstan.  And in Hungary I attended an important energy meeting with ministers from all across Eastern Europe.  The purpose of this trip was to discuss a wide range of issues related to improving global energy security and strengthening energy markets around the world.

 

I can tell you that Pakistan and Eastern Europe, in particular, are enthusiastic about using some of the clean coal technology pioneered here in the United States to help them meet their growing energy needs.  These nations are pursuing a variety of power sources, including nuclear and renewable energy sources.  But, of course, they also want to develop better ways for producing energy from their substantial coal reserves, without the environmental challenges created by earlier generation plants.

 

Now, in addition to looking for ways to make coal plants cleaner and more efficient, all nations, including, of course, the United State, are investigating ways to reduce greenhouse gas emissions.

 

So the Energy Department is working closely with industry leaders—many of you are here this morning—and with top research universities, to investigate both how to capture CO2, and how to keep it out of the atmosphere.

 

As you all know, the cutting edge of our carbon sequestration research is represented by the FutureGen project. 

 

I am very pleased that since the Council last met, the Cooperative Agreement has been signed with the FutureGen Alliance to formally initiate the FutureGen Project, so let me congratulate you all on that.   And you may know that the Alliance just recently issued the final, competitive solicitation requesting proposals for candidate sites for FutureGen.  Things are moving along and we are making progress.

 

In fact, we witnessed another major milestone just three weeks ago, when India became the first foreign government to join the U.S. Government on the FutureGen governmental steering committee.  And in the process of joining the steering committee, they agreed to contribute $10 million to the project.  

 

We are very happy to welcome India in to our effort to build the first zero-emissions coal power plant and we also hope that other nations participating in the Carbon Sequestration Leadership Forum will follow India’s lead, and accept our invitation to join FutureGen.

 

On this subject I want to make an important point.  I am aware that some people think we may be emphasizing FutureGen too much, putting too many resources into that project, at the expense of our Clean Coal Power Initiative.  I don’t agree.  My view is that while these may be separate projects on paper, they are not separate technologies.  Every step we make toward perfecting the technology of FutureGen brings us that much closer to our goals for affordable clean coal.  My view is that the CCPI and FutureGen are not mutually exclusive, but in fact are complementary.

 

Now, while our traditional clean coal programs are focused on producing electricity, and in the case of FutureGen, hydrogen, I believe that our abundant coal reserves could do even more to meet our nation’s energy needs.  One of the most exciting areas, I think, is the technology for turning coal into liquid diesel and jet fuel.

 

You may recall that in his State of the Union Address, the President committed to significantly reducing our dependence on imported oil.  This technology could be critical in helping us do that.  In fact, developing clean, domestic energy sources to power our transportation sector is one of the main goals of the Advanced Energy Initiative I mentioned.

           

The private sector sees the benefits of coal-to-liquid as well. David Neeleman, the president and CEO of JetBlue often mentions how his company is investing in this technology, so that JetBlue can eventually fuel its airplanes with coal-based methanol. 

           

Making liquid fuel from coal is not just speculative, as you know.  Germany made tank fuel from coal in WWII.  The challenge we face today is pushing the technology forward enough to make this energy source commercially competitive with petroleum.

           

In fact, there are quite a few promising energy technologies that work well on paper, but need help moving out of the laboratory and into practical production.   Congress addressed this challenge in last year’s Energy Policy Act by authorizing a series of new loan guarantee programs that could help move new and improved technologies into commercial use in the marketplace… including coal-to-liquid, as well as projects involving efficient electricity generation, pollution control technology, carbon capture and sequestration, and related technologies.

           

Let me say a word about this.  These loan guarantees are a priority for Congress.  So they are obviously something we take very seriously.  We recognize that doing these loan guarantees properly is a big responsibility.  And I am personally committed to doing it right.  So we are going to take our time because, frankly, our Department has not, historically speaking, always demonstrated an impeccable record in managing this type of program. 

           

That is why we are putting a great deal of thought and consideration into setting up the right process, which is underway right now.  We are creating an office to administer these loan guarantees, and expect to announce some details about that soon.  If all goes well, we hope to invite applications later this year.

           

Properly done, these loan guarantees could have enormous consequences for accelerating commercial use of promising clean energy technologies, and my priority is to see that the process is properly done.

 

Before I conclude, let me take this opportunity to express my personal thanks to all of you who serve on this Council and say how much I appreciate your time, your effort, and your expertise in advising me in my official role as Energy Secretary. 

 

It would be premature to thank you for the latest report you have prepared on the challenges and opportunities of more fully exploring domestic coal resources to meet future energy needs.  I know that you will be acting on that later this morning.  But I do hope you vote to accept the report, because I look forward to receiving it.

 

Thank you again for your service on this Council, and for your kind invitation to be with you this morning.