Three months ago, Crain’s reported that the costs of the downstate clean-coal FutureGen plant were going out of control. Yesterday the consortium behind FutureGen admitted that was true:
The estimate to repower the plant now is $1.1 billion, up 49% from the $740 million originally pegged to handle that part of the project. Crain’s had reported the soaring costs nearly three months ago. Another $550 million is needed to build a pipeline to transport carbon dioxide from the plant to a nearby burial site, bringing the total project cost now to $1.65 billion.
This is interesting because of how FutureGen got to this point. The whole process began in 2003 under the Bush administration, which killed it in 2008 because it cost too much. But it turned out the estimate on which that evaluation was based was itself based on a math error:
The DOE mistakenly said the plant had doubled in price to $1.8 billion, prompting the Bush administration to dump the project after investing $170 million in it, according to a report from the U.S. Government Accountability Office.
In dismissing the project, former Secretary of Energy Sam Bodman inaccurately compared 2005 constant dollars, or dollars that reflect the purchasing power of money in 2005, with inflated dollars that would have been spent over the following years, according to the report.
In constant 2005 dollars, the plant would cost $1.3 billion, an increase of about $370 million, or about 39 percent, over DOE’s estimate, rather than a near doubling of costs, according to government auditors.
So the plant got killed because of bad math. Discovery of that error led the DOE to reconsider FutureGen, and it committed a billion dollars to the project as part of the American Recovery and Reinvestment Act of 2009. Now the costs, based on Crain’s good math, are approaching the bad-math costs that got it killed in the first place. Now Ameren is pulling out of the consortium, the St. Louis Dispatch reports.
Spiraling costs for gasification are going around. Just over the border in Edwardsport, Duke Energy is building a less-sophisticated (in terms of emissions) gasification plant, and the Indianapolis Star recently discovered that Duke was pushing to push that plant’s increasing costs onto Hoosiers, after the plant’s expense increased by a third over original estimates.
I think all this came to a head for me because I’ve been reading about the simpler aspects of our nation’s infrastructure recently:
In 2008, 12% of the nation’s major rural roads were rated in poor condition and another 43% were rated in fair condition. Vermont has the highest percentage of roads rated poor, at 43%, followed by Oklahoma at 30%; Kansas, 28%; Missouri, 20%; California, 18%; South Dakota, 17%; and Illinois, 16%.
In Indiana, for instance, on a rating system of 1 to 10, the quality of the state’s roads was reduced from 5.5 in 2001 to 4.3 in 2009. “We’ve gone from the high end of fair to borderline poor,” says John Habermann, program manager for the Indiana Local Technical Assistance Program.
One thing that surprised me from that Farm Journal article is how many people die on rural roads:
In 2009, non-Interstate rural roads had a traffic fatality rate of 2.31 deaths for every 100 million vehicle miles of travel, compared with a fatality rate on all other roads of 0.76 deaths for an equal number of miles. Crashes on the nation’s rural, non-Interstate routes resulted in 17,075 fatalities in 2009, accounting for 51% of the nation’s 33,808 traffic deaths in 2009.
And as another Farm Journal piece points out, it’s not just roads and rail:
The U.S. lock and dam system is 50 to 100 years old. More than half are beyond their designed life span.
It also reminded me a bit of the briefly controversial but still ongoing Solyndra story, which got sold as a political scandal but was really more of a bet that turned sour:
Basically, Solyndra was working on a solar technology that promised to be cheaper than silicon, and at the time of the loan it looked really promising both to DOE and to private investors. But then the market turned: Silicon prices dropped, and China started producing super low-cost silicon PV. That spelled doom for Solyndra. They had a good idea, but it didn’t work out.
Speaking of that low-cost solar, China does it by heavily subsidizing its manufacturing sector with cheap debt.
I’m not sure what to make of FutureGen, but it seems like a sizable risk on a halfway measure that tries to satisfy all comers, none well: in the context of a limited infrastructure budget in a terrible economy, it seems like a needlessly large risk; in the context of the larger energy scenario, it seems like insufficently small beans.
Photograph: Bistrosavage (CC by 2.0)