Coal

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Budget backs coal, hydrogen, nuclear

By Stephanie I. Cohen, MarketWatch
Last Update: 3:18 PM ET Feb. 7, 2005


WASHINGTON (MarketWatch) -- The Bush administration's budget for fiscal 2006 would provide more dollars to advance the production of domestic energy from coal, hydrogen and nuclear sources.

Coal commitment

The budget would increase funding for the White House's Coal Research Initiative by $13 million to $286 million in fiscal 2006, according to the Office of Management and Budget. The funding would support the Clean Coal Research and FutureGen initiatives.

The Clean Coal Initiative, a government-industry partnership proposed by President Bush in 2002, would receive $68 million. The program shares with industry the cost of developing new technologies to burn coal to generate electricity while reducing or capturing harmful emissions.

The budget also provides $218 million to develop long-term storage solutions for carbon emissions generated by coal-fired utilities, as well as for technology able to convert coal into a gaseous fuel that can then be used to generate electricity with fewer emissions.

Additionally, the budget proposes that Congress consider a $257 million appropriation for the FutureGen program aimed at creating a zero-emission, coal-based power plant. This funding level would pay the federal government's share of the program costs through 2007, eliminating the need to seek an annual appropriation next year for fiscal 2007.

The president's Hydrogen Fuel Initiative would receive an additional $35 million in funding in fiscal 2006, bringing total funding to $260 million. In 2003, Bush proposed $1.2 billion over five years to further the development of technologies to produce hydrogen and store hydrogen energy.

The budget would also provide $3.6 billion in tax incentives through 2010 to spur renewable energy, as well as hybrid and fuel-cell vehicle purchases.

Nuclear revival

The budget calls for $511 million to revive the nuclear power by funding advanced nuclear-energy technologies, according to a summary released by the Office of Management and Budget.

This request represents a $25 million, or 5.2 percent increase, in the budget for nuclear programs, according to the Energy Department.

The nuclear industry has been dormant for more than 20 years following the 1979 accident at the Three Mile Island site in south-central Pennsylvania.

The 2006 request includes a 13 percent increase for the Nuclear Power 2010 program. The president launched this government and industry cost-sharing program in 2002 with the hopes of locking in new orders for nuclear reactors by 2005 and to have plants operational by 2010.

The program is focused on identifying potential sites for new plants, developing new technologies and improving the regulatory and licensing process.

Two industry groups already have formed and received funds under the program. One consortium is headed by Dominion Resources (D: news, chart, profile) and a second by NuStart Energy, which is made up of utility companies including Constellation, Duke Energy (DUK: news, chart, profile) , Exelon Generation (EXC: news, chart, profile) , Entergy Nuclear (ETR: news, chart, profile) , Florida Power & Light (FPL: news, chart, profile) , Generation Group (CEG: news, chart, profile) , Progress Energy (PGN: news, chart, profile) and Southern Company (SO: news, chart, profile) .

The budget also recommends $45 million, a 14 percent increase, for the Generation IV research program, aimed at developing technologies to make nuclear an economically competitive energy option before 2030.

Additionally, the budget includes $651 million to complete the controversial Yucca Mountain underground nuclear-waste repository in Nevada.


Stephanie I. Cohen is a reporter for MarketWatch based in Washington.

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