Fossil Fuels:

Commercializing Clean Coal Technologies

RCED-89-80: Published: Mar 29, 1989. Publicly Released: Apr 12, 1989.

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In response to a congressional request, GAO reviewed the Department of Energy's (DOE) implementation of its Clean Coal Technology Program, focusing on: (1) the DOE process for negotiating cooperative agreements with project sponsors; (2) DOE changes to the project; (3) status of funded projects; and (4) interrelationships between acid rain control and commercialization of clean coal technologies.

GAO found that DOE: (1) timely signed only two of nine initial project agreements; (2) negotiated five projects later than expected and sponsors withdrew two projects, which DOE replaced with four alternative projects from a prepared list; (3) signed agreements for two replacement projects, terminated negotiations for one unfunded project, and selected three replacement projects for funding; (4) encountered difficulties with financing, business arrangements, and proprietary data; (5) completion of the project agreements was delayed by sponsors' attempts to renegotiate investment repayment requirements; and (6) changed its project requirements, including financial commitments for preliminary project design, reimbursement of preaward costs, repayment based on equipment sales revenues, and project review. GAO also found that: (1) sponsors' dissatisfaction with the revised repayment requirements and DOE access to proprietary data could further delay implementation; (2) DOE extended some projects by up to 13 months, and expected other projects to slip; (3) DOE indicated that equipment delays and failures, financing problems, and permit delays created the schedule slippage; and (4) proposed acid rain control legislation could impact commercialization of clean coal technology, if the legislation allowed development of new technology while requiring short-term emissions controls through conventional technologies.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE held briefing sessions to familiarize EPA regional offices with the Clean Coal Technology Program, major policy meetings between the Secretary of Energy and the Administrator, EPA, and in depth working sessions involving DOE, EPA, and others in which key features of the Administration's acid rain control proposal were formulated.

    Recommendation: The Secretary of Energy should work closely with the Administrator, Environmental Protection Agency (EPA), to ensure that the proposed legislation that is submitted for congressional consideration appropriately links compliance dates for emissions reductions with the expected commercial availability of emerging clean coal technologies.

    Agency Affected: Department of Energy

 

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