Reports: Energy agency to bail from FutureGen carbon capture project

The U.S. Department of Energy plans to pull its support of a $1.8 billion project to build a power plant that captures pollution underground, according to published reports.

The FutureGen project is meant to test cutting-edge carbon capture and storage technology, which is supposed to dramatically reduce emissions from fossil fuel-burning power plants.

Carbon capture and storage is considered an important technology to reducing overall greenhouse gas emissions, but the technology is unproven at a large scale. A study from the Massachusetts Institute of Technology last year called for government funding of carbon capture projects in the United States to work out technical issues.

In December, the FuturGen Alliance, which includes participation of oil and coal companies, announced plans to build its first facility in Matoon, Ill.

But ballooning costs and a dispute over the location prompted the Department of Energy to pull its support, according to an Associated Press article citing lawmakers who were briefed by the agency. An announcement is expected in the coming days.

A Department of Energy representative issued a statement saying only that the agency needs to reassess the project because of rising prices and technological advances.

Separately, Energy Secretary Samuel Bodman said at a U.S. Chamber of Commerce speech on Tuesday that President Bush's budget proposal next week "will start to deal with" tariffs on imported ethanol. "I think this industry is pretty close to being able to stand on its own," he was quoted as saying.