Thank you, Georgia. I am grateful for the opportunity to be here with you this morning.
As you well know, we very much rely on coal to meet our vast energy needs. Put another way, I don't think anything our country uses 1.1 billion tons of in a given year is going to go away any time soon. Clearly, the better and frankly inescapable answer is to find ways to use this abundant resource more cleanly and efficiently.
Of course, you all know this in fact, it is the topic of the study you have just completed, "The Urgency of Sustainable Coal." Over the past 5 years, the Council has submitted a series of reports to the Secretary of Energy outlining how the U.S. can use coal to solve some of our most pressing energy needs. We at the Department appreciate the thoughtful insights you have provided and look forward to studying your recommendations in this latest report.
The premise of course is that, while coal plays a critical role in meeting both our domestic and global energy needs, the burning of this tremendous resource for electricity generation results in a release of emissions, including carbon dioxide, which contributes to climate change.
This topic is appropriately generating a lot of discussion among policymakers and politicians alike. All 3 remaining Presidential candidates are talking about cap and trade bills. And Congress is doing what they do especially well calling hearings. The Secretary is testifying this very morning in fact about what will and won't work to increase our energy security and reduce greenhouse gas emissions. And Howard Gruenspecht of the Energy Information Administration testified yesterday about an analysis EIA recently completed of Senate Bill 2191 also known as the Lieberman-Warner suggestion which would set a limit on the emissions of greenhouse gases, mainly carbon dioxide from the combustion of coal, oil, and natural gas.
EIA looked at a number of scenarios, including a case that assumed the availability of advanced technology in 2030 including nuclear power and CCS, as well as a case that assumed limited availability of this technology.
The analysis showed that, without an aggressive push forward on these technologies, this legislation could result in a cumulative negative impact on our economy of between $531 billion to $1.5 trillion in current year dollars, and a potential loss of up to one million jobs.
And according to their analysis, if the nuclear and carbon capture and storage technologies are not deployed, electricity prices could increase up to 65 percent by 2030, and gasoline prices could go up as much as a dollar more per gallon and that's also in today's dollars.
Even if the emission targets of the bill were fully met by the US, without the rest of the world's commitment to address climate change, our actions by themselves would barely make a dent. One need look no farther than China which is building new coal power plant capacity at an astounding rate of one per week to understand the magnitude of the issue at hand and the compelling imperative to act.
The President of course acknowledges this. On a global scale, we are identifying solutions through the Major Economies Meetings process, which I know Jim Connaughton will address in greater depth a little later. On a domestic level, the President announced just a few weeks ago a new countrywide goal to stop the growth in U.S. greenhouse gas emissions by 2025. This is a necessary endeavor. But the question remains: how do we do it?
One answer is clear. The development, commercialization and use of new, lower emission technologies for fossil fuels must continue to advance. Since 2001, this Administration and Congress have invested in excess of $2.5 billion in clean coal research and development.
The President's FY 2009 budget requests $648 million for the Department's advanced coal research, development and demonstration program, the biggest amount requested for our coal plan in in excess of 25 years. And with private sector matching funds, over $1 billion should be invested in advancing clean coal technology next year.
Money isn't the only solution. As we all know, advanced coal technologies have major regulatory hurdles that must be overcome before they can be widely deployed. That is why we are working closely with the E.P.A. to increase regulatory certainty with regard to the siting and operation of carbon capture and storage projects.
But what I'd really like to talk about today is what we are doing to advance the technologies themselves. And I'd like to highlight 4 things: Regional Partnerships, FutureGen, the Loan Guarantee Plan and international collaboration.
First, the Department's regional carbon sequestration partnerships. As you know, in 2003, the D.O.E. launched Regional Carbon Sequestration Partnerships to facilitate the development of the infrastructure and knowledge base needed to place carbon sequestration technologies on the path to commercialization.
During the 1st phase of the program, 7 partnerships consisting of organizations from government, industry and academia, and extending across the U.S. and into Canada conducted an assessment of CO2 storage capacity in this country. Demonstrating the tremendous potential of CCS technologies, these partnerships preliminarily identified underground geologic formations across the U.S. with the potential to sequester and store in excess of 600 billion metric tons of CO2 the equivalent of in excess of 200 years of emissions from energy sources in the United States.
In the program's 2nd phase, the partnerships implemented a portfolio of small-scale geologic and terrestrial sequestration projects. The purpose of these tests was to validate that different geologic formations have the injectivity, containment, and storage effectiveness needed for long-term sequestration.
The 3rd phase of the program, the deployment phase, was initiated last fall. 6 of the 7 partnerships have now been announced, with the 7th expected this summer. These partnerships are working on large-volume testing that is one million or more tons of CO2 intended to demonstrate the feasibility of CO2 capture, transportation, injection, and storage at a scale comparable to future commercial deployments. We believe these plans hold tremendous promise, and experts agree we're on the right track.
The IEA Greenhouse Gas R&D Plan recently conducted a technical review of the deployment phase (phase III) of the Partnership Program. The expert review panel found it to be an excellent Plan that should achieve significant results for carbon capture and sequestration in the United States, Canada and internationally. For this reason, the panel recommended that this Plan and all of the plans reviewed should be implemented immediately.
Second, FutureGen. The D.O.E. is also committed to demonstrating cutting-edge carbon capture and storage technology at multiple commercial-scale coal plants through our FutureGen project. As you know, earlier this year we announced a restructured approach for this project.
The focus remains the same as the original approach announced in 2003 to maximize our countrywide investment in clean coal research through demonstration of cutting-edge system integration of CCS technologies. The difference is that under the restructured program, our project aims not just to support a single large-scale R&D testing laboratory, but rather to provide backing for commercial demonstration of integrated advanced CCS technologies.
To move this restructured FutureGen Plan forward and ensure commercial operations are possible by 2015, the Department has launched an aggressive schedule for its implementation. Several weeks ago, we announced a outline Backing Opportunity Announcement (FOA) to allow prospective applicants an opportunity to provide additional input before we release the final solicitation this summer. The review period for this FOA closed yesterday, and we will now be carefully evaluating the input we have received.
Third, loan guarantees. This Plan plays a significant role in spurring clean coal innovation. Later this summer, the Department intends to issue a solicitation for up to $8 billion in loan guarantees for advanced fossil energy projects. This would mark the 3rd round of solicitations for our Loan Guarantee program, which encourages the development of new, clean energy technologies.
As part of an earlier round of solicitations, pre-applications were submitted, and sixteen plans including 3 advanced fossil energy plans were selected to submit full applications.
Plans supported by loan guarantees will help fulfill the President's goal of reducing our reliance on foreign oil by diversifying our nation's energy mix and increasing energy efficiency.
Fourth, international collaboration. While the U.S. must play and certainly is playing a leading role in the advancement of carbon capture and storage technologies, other countries are also taking action. To maximize the benefits of our individual efforts, we are sharing data and lessons learned through the Carbon Sequestration Leadership Forum, formed in 2003, which held its regular yearly meeting last month in Cape Town, South Africa.
I recently attended the International Energy Forum in Rome, where CCS technologies were being discussed both at the ministerial itself and informally on the sidelines of the meeting. There is no doubt that advancing these technologies is a topic of global interest.
Through our Regional Carbon Sequestration Partnerships, our restructured FutureGen project, our loan guarantee program, and our global collaboration efforts, as well as our ongoing work under the Clean Coal Power Initiative and our clean coal R&D program, the D.O.E.'s commitment to fulfilling the promise of clean coal technology is clear.
There is no doubt that our challenge to meet rapidly increasing energy demand in an environmentally responsible way is formidable. But with your continued support, we can build on the successes we have achieved and ensure that coal will be an environmentally-safe and plentiful source of energy for the U.S. and the world well into the future.
Thank you very much.
