coal resources. FY 1995 funding has been requested to implement an international initiative for "showcase" demonstration projects in clean coal technologies in China and Eastern Europe. Specifically, DOE has proposed that China receive approximately $50 million for an IGCC demonstration plant, and $25 million in support is proposed for power plant refurbishment in Eastern Europe. DOE expects these funds to be available from projects that were selected in the first five rounds of the CCT program but have dropped out of the program or may do so in the future.

The first priority for the existing CCT program, mandated by Congress in Section 1301 of EPACT, is to conduct a research, development, and demonstration program that will result in CCT technologies that are ready for commercial use by 2010. Thus, in the view of the committee, the impact on the existing CCT program of using CCT program funds to support technology demonstrations in a foreign country requires careful examination. Funding of CCT technology in foreign countries in lieu of domestic demonstrations runs a risk of delivering little if any technology advancement, export opportunities, or lasting U.S. jobs. It is entirely possible that the demonstrations will provide a basis for a foreign country to copy the technology and provide subsequent installations itself.

A further question raised by the committee concerns the suitability of IGCC technology to meet China's major increases in demand for electricity and significant environmental problems. Commercially available pulverized coal plants with modern flue gas cleanup technology may be more cost-effective and beneficial (see Chapter 3). Supporting funding for commercially available technology, including retrofit technologies for environmental control, could come from the traditional sources of overseas aid, without impacting the existing CCT program or the FE R&D program budget.

ADVANCED FUEL SYSTEMS DEMONSTRATION PROJECTS

As noted in Chapter 2, the objective of the Advanced Fuel Systems program is to develop systems that can produce coal-derived transportation fuels, chemicals, and other products at costs competitive with oil-derived products. At the present time, the prices of coal-derived liquid fuels are significantly greater than of those derived from petroleum or natural gas. Oil prices are not expected to rise sufficiently in the near future to change this situation. As a result, there is currently minimal private sector support for developing and demonstrating technologies for the conversion of coal to fuels at a commercial scale. One exception is in mild gasification technology. The FE R&D program has sponsored a process development unit for mild gasification (the Illinois Mild Gasification Facility) that is supported by 20 percent private sector investment. In addition, the CCT ENCOAL Mild Coal Gasification project aims to demonstrate the production of both a solid and a liquid fuel from coal. This approach has been attempted many times in the past and has not been successful (Probstein and Hicks, 1982), princi-



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