Clean Coal Technology

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) Clean Coal Technology Demonstration Program, focusing on the: (1) status of 13 Clean Coal Technology projects that preliminary information indicated could have over $1 million in unspent funds; and (2) extent to which DOE's participants in completed projects have sold demonstrated Clean Coal technologies to coal users.

GAO noted that: (1) the 13 projects had a total of $588.3 million in unspent funds; (2) GAO found that these projects fell into two categories--those nearing completion and those that have been substantially delayed or will not be completed at all; (3) the five projects nearing completion--that is, they are within 2 years of their completion date--had $58.9 million in unspent funds; (4) three of these projects are in their operation phase--the last phase before project completion--and one is in the construction phase; (5) these four projects have $52.2 million that was not spent; (6) the fifth project had been withdrawn as an active project but had $6.7 million that was not spent; (7) DOE is in the process of negotiating a final closeout amount for this project; (8) eight projects had serious delays or financial problems; (9) seven of these projects had $529.4 million in unspent funds; (10) the eighth project, whose participant is in bankruptcy, did not have any funds left; (11) six of the eight projects are ongoing but are behind their original schedules by 2 to 7 years, while two projects are bankrupt and will not be completed at all; (12) GAO found two common reasons for the slippage in schedules and the inability to complete projects: (a) six projects were moved from one location to another; and (b) two projects will not be completed because the participants' assets were sold in bankruptcy proceedings; (13) one way DOE measures commercial acceptance is by collecting data on project participants' sales of demonstrated technology; (14) under the program, DOE has completed 24 projects at a cost of about $400 million; (15) of these 24 projects, 15 had sales of a demonstrated clean coal technology: (a) 3 in domestic markets; (b) 3 in international markets; and (c) 9 in both domestic and international markets; (16) these 15 projects cost DOE $282 million; (17) the nine projects without sales cost DOE $119 million; (18) DOE provided several reasons for the lack of sales: (a) the deregulation of the power generation and distribution industry; (b) various amendments to the Clean Air Act; and (c) the overall dynamics of the market place; and (19) DOE told GAO that "less tangible benefits need to be illustrated in order to have a complete understanding of the value gained from the investment."