HR1009 95TH GENERAL ASSEMBLY

HR1009 LRB095 19100 KBJ 45307 r

HOUSE RESOLUTION

WHEREAS, FutureGen is the first of its kind coal-fueled power plant that will link state of the art technologies to produce electricity and hydrogen with near-zero emissions; the project will take a significant step in strengthening the United States' ability to produce reliable energy, improve the environment, and reduce our dependence on foreign oil; this effort will serve as a prototype for the next generation of power plants throughout the country and the world; and

WHEREAS, FutureGen represents an important and revolutionary scientific breakthrough; for the first time, the power of coal can be harnessed without releasing harmful emissions into the environment; and

WHEREAS, FutureGen will help ensure the long-term viability and affordability of coal as a major energy source for the United States; the project will represent a significant step in the United States' efforts to become a self-sufficient energy producer, further reducing our dependence on foreign oil; and

WHEREAS, FutureGen will serve as a research laboratory for discovering and refining clean coal technology, hydrogen production, and carbon sequestration; as new technology is discovered and evolves, it will be incorporated into the design and operation of the plant; FutureGen will foster innovations that will affect the energy industry for years to come; and

WHEREAS, The FutureGen Alliance is a consortium of the world's largest coal producers and energy generators; they bring valuable technical and industrial project management expertise to the project; the Alliance is a not-for-profit organization; as a result, none of the members of the Alliance will claim any direct financial benefit from their contributions; the Alliance will own the power plant and sell the electricity, hydrogen, and other useful byproducts; and

WHEREAS, Illinois has the ideal geological conditions necessary for the storage of carbon dioxide, enhanced oil recovery, and coal bed methane extraction; and

WHEREAS, Illinois is a global research and technology center, boasting top-tier research institutions and universities, as well as one of the largest state-sponsored coal research and development programs in the United States; the program is administered by the Office of Coal Development and is under the technical oversight of the Illinois Clean Coal Institute; and

WHEREAS, Illinois is home to one of the nation's largest supplies of high-energy bituminous coal; recoverable reserves in Illinois represent almost one-eighth of the total U.S. coal reserves and one-quarter of the nation's bituminous coal reserves; and

WHEREAS, Centered in the middle of the Midwest, Illinois is a significant interchange point among railroads serving either eastern or western states, with Chicago and East St. Louis being principal rail gateways; with 7,292 miles of rail network, Illinois is the center of the nation's rail system; and

WHEREAS, Communities throughout this State have been supporting the coal industry for more than 100 years; with broad support from the people of Mattoon and Tuscola, the Illinois Congressional Delegation, the Illinois General Assembly, and the states of Indiana and Kentucky, Illinois provides the kind of broad community support that is necessary for the project to be successful; leadership in the business, labor, environmental, and civic communities are united and working hard to bring FutureGen to Illinois; and

WHEREAS, The General Assembly offered numerous financial incentives for FutureGen in Illinois, including:

(1) a $17 million direct cash grant from clean-coal technology fund;

(2) up to $50 million in reduced-interest loans;

(2) sales tax exemptions and business tax credits;

(3) public improvement funding; and

(4) reimbursement for employee training costs; and

WHEREAS, The $1 billion project is a government-industry partnership between the U.S. Department of Energy and the FutureGen Alliance, a consortium of the world's largest coal and energy producers; and

WHEREAS, FutureGen will greatly benefit industries involved in mining, transportation, and the use of coal; these are industries that currently employ thousands of people across the State; FutureGen will also create jobs; the U.S. Department of Energy estimated that FutureGen would create approximately 1,300 construction jobs and 150 permanent jobs; and

WHEREAS, During the four-year construction period, there would be more than $1 billion in economic impact statewide; approximately 1,225 indirect spin-off jobs will be created as a result of the ripple effect generated by FutureGen; and

WHEREAS, The U.S. Department of Energy announced plans to build FutureGen in 2003; in July 2006, the FutureGen Alliance announced the 2 finalists for the facility in Illinois: Mattoon and Tuscola; the FutureGen plant will be a medium-sized, coal-fueled plant, generating approximately 275 megawatts of electricity, enough to supply approximately 150,000 U.S. households; and

WHEREAS, Mattoon and Tuscola are located in east central Illinois and are equidistant from Chicago, St. Louis, and Indianapolis; with nearby roads, railways, rivers, and airports, the region boasts the most advanced multi-modal transportation network in the United States; Mattoon and Tuscola are also in close proximity to oil refineries and hydrogen customers who can share in the success of FutureGen; and

WHEREAS, The region also contains two major state universities that lead in the fields of geology; these include the University of Illinois at Urbana-Champaign, home of the Illinois State Geological Survey, and Southern Illinois University's Coal Research Center, which focuses on clean-coal research; and

WHEREAS, Mattoon and Tuscola sit above vast coal reserves; the coal reserves beneath Illinois contain more energy than the oil reserves of Saudi Arabia and Kuwait combined; and

WHEREAS, In September of 2005, several large U.S. electric utilities and coal producers, including Peabody Energy of St. Louis, announced the formation of the consortium that will develop FutureGen using federal and private dollars; and

WHEREAS, In December of 2005, the Alliance, under a new CEO, signed a cooperative agreement with the U.S. Department of Energy; the Alliance would agree to pay 26% of the cost; and

WHEREAS, In March of 2006, the Alliance, through its technical consultant, issued a detailed Request for Proposals from states interested in hosting FutureGen; twelve locations from seven states, including four from Illinois, submitted bids; and

WHEREAS, In May of 2006, the General Assembly re-earmarked $17 million in Coal Bond Funds from inactive clean coal project to FutureGen as part of State's preliminary offer; and

WHEREAS, In July of 2006, the Alliance picked the Illinois sites at Tuscola and Mattoon for FutureGen; key reasons for these 2 sites were water resources, support from the community and State political leadership, and suitability for carbon dioxide storage in the Mt. Simon Sandstone, a mile below the surface; and

WHEREAS, In August of 2006, the U.S. Department of Energy and the Alliance launched an aggressive schedule for completing an Environmental Impact Statement within 12 months; hearings in Congress raised concerns about costs escalating, due primarily to inflation in construction materials, to $1.5 million; the total amount was $1.8 million, which included the estimate coal fuel costs for a 4-year test period; and

WHEREAS, Between May of 2007 and June of 2007, the drafted Environmental Impact Statement was published by the U.S. Department of Energy, after a month's delay awaiting federal agency approval, with none of the sites disqualified; the U.S. Department of Energy held formal public hearings on the Environmental Impact Statement on June 26, 2007 in Mattoon and June 28, 2007 in Tuscola, with community supporters turning out in large numbers; and

WHEREAS, Between June of 2007 and July of 2007, the Illinois General Assembly gives overwhelming support to Senate Bill 1704; this bill created the Clean Coal FutureGen for Illinois Act for the purpose of providing the FutureGen Alliance with adequate liability protection, land use rights, and permitting certainty to facilitate the FutureGen Project in Illinois; the bill was signed into law on July 30, 2007; and

WHEREAS, In August of 2007, Illinois submitted a detailed Best and Final Offer for both sites, including public and private incentives, which included direct grants, cost offsets, and tax exemptions; the total amount was valued at $90 million; and

WHEREAS, In September of 2007, an Illinois team met with the Alliance in Edwardsville to defend and clarify final offer issues; the U.S. Department of Energy still had not decided on the location for the plant; and

WHEREAS, Between October of 2007 and November of 2007, letters supporting the State's bid from all major coal producing states, representing 75% of the nation's tonnage, were forwarded to the U.S. Department of Energy; and

WHEREAS, On November 17, 2007, the U.S. Department of Energy published a final Environmental Impact Statement; this started the 30-day clock for a formal decision to be made regarding the location of the plant; and

WHEREAS, On December 4, 2007, the Alliance Board of Directors, meeting in Washington D.C., made a final site selection decision, but it was kept confidential; the U.S. Department of Energy issued a letter at that time urging the Alliance to delay announcing the final site; and

WHEREAS, On December 18, 2007, at a news conference in Washington D.C., the Alliance announced Mattoon was the unanimous choice to host FutureGen; the U.S. Department of Energy issued a statement that it plans to re-scope the FutureGen project after more than $40 million has already been spent; and

WHEREAS, On January 10, 2008, by letter, the Alliance made a counteroffer to take on a larger share of future cost escalation and, through negotiations over the assets of the project, repay the U.S. Department of Energy; and

WHEREAS, On January 16, 2008, it was disclosed that the U.S. Department of Energy will abandon FutureGen in favor of re-allocating the funds through a new solicitation of interest to assist with multiple power plant projects; and

WHEREAS, On January 29, 2008, it was disclosed to members of Illinois delegation that FutureGen will be cancelled and a new FutureGen Program will take its place; the U.S. Department of Energy disclosed that its new idea was to pay 100% of the carbon dioxide capture and storage costs, but it would fund nothing for the power side of several gasification facilities being planned by private firms; this new proposal further delays important technology advances on carbon dioxide capture by at least five years and largely ignores the participation by international members of the Alliance; and

WHEREAS, The Alliance, which has a contract with the U.S. Department of Energy extending through June, 15, 2008, continues to hold its regular monthly meeting in Mattoon; and

WHEREAS, The Alliance has pledged to continue its move ahead with private funds; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-FIFTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we urge the U.S. Congress and the U.S. Department of Energy to make any changes necessary to reverse the decision that resulted in the dismantling and abandonment of FutureGen; and be it further

RESOLVED, That the commitment is kept for all the researchers, private-sector supporters, and public officials and, most importantly, the people of Central Illinois who have worked to bring this landmark project to fruition; and be it further

RESOLVED, That suitable copies of this resolution be delivered to the Majority Leader of the U.S. Senate, the Speaker of the U.S. House of Representatives, the members of the Illinois Congressional delegation, and the Secretary of the U.S. Department of Energy.