As the election approaches and energy and budgetary issues continue to be high-profile topics at the water cooler and in Congress, Secretary Sam Bodman of the Department of Energy (”DOE”) may be wondering whether the FutureGen project he thought he canceled may have better prospects for realization than the “restructured” FutureGen project he put in its place.

Since Bodman officially pulled the plug on the $1.8 billion state-of-the-art facility slated for Mattoon Illinois, DOE has faced stiff opposition from the project’s Congressional supporters.  Recent actions have included attempts by Congressional supporters to protect or reinstate the FutureGen project in appropriations and supplemental bill language; an ongoing investigation into the timing and basis for DOE’s decision to cancel the FutureGen project; and recent threats by Senator Richard Durbin (D-IL) to block political appointments to DOE until the Bush Administration reverses its position on the FutureGen cancellation or, at least, postpones definitive action for the next Administration.

At the same time, Congress has shown little enthusiasm for the “Restructured FutureGen” program.  After originally announcing a 1.3 billion dollar long-term funding program, DOE has had difficulty obtaining the $290 million in securing the funding it will need for even the first year of awards in early FY2009.  This is partly a consequence of Congressional efforts to protect the original FutureGen program and partly a function of the larger appropriations impasse that is raging as Congress approaches elections.  Without progress on the 2009 appropriations process, the Bush Administration’s first - and last - opportunity to kick off the “new” FutureGen program will be limited to a one-time $145 million allocation - a relatively small amount to spread among multiple projects given the costs involved in a single commercial-scale carbon capture and sequestration project.

A second challenge for Bodman’s DOE is the aggressive schedule needed to review, evaluate, select, and fund projects before the end of the Bush Administration.  Under the Administration’s current timeline, DOE must make funding decisions under the Restructured FutureGen program by mid-December, a mere two months after the deadline for submitting project proposals.  This schedule is ambitious under any circumstance, but may be particularly challenging at a time when Congressional supporters of the original FutureGen project are actively seeking to delay any action on FutureGen until next year.

The bottom line is that, given the impending election, the aggressive timetable required for DOE to follow through with funding under the “Restructured” FutureGen project, and vocal opposition in Congress to Bodman’s plans, both the original and restructured FutureGen projects may be in the same place on January 21, 2009 - waiting for the new President to decide their fate.

For further information about this topic, please contact Akin Gump.