Recent Department of Energy Funding Opportunity Announcements for Clean Coal Power, Industrial CO2 Capture and Sequestration and CO2 Beneficial Use

AdThe Department of Energy (DOE) has released three anticipated funding opportunity announcements (FOAs) since June 3, 2009, regarding (i) site characterization for CO2 geologic sequestration (the Site FOA),¹ (ii) industrial CO2 capture and sequestration and beneficial use of CO2 (the Industrial FOA),² and (iii) an amendment of an earlier FOA for Round 3 of the DOE’s Clean Coal Power Initiative (CCPI) that increases the funding available for it by approximately $800 million (the CCPI FOA).³

Applicants under these FOAs must have a DUNS number and must be registered with the Federal Government’s Central Contractor Registration (CCR) and with FedConnect.⁴ The FOAs suggest that potential applicants not already so registered allow 21 days for these registrations.

All three FOAs will be funded in whole or in part by the American Recovery and Reinvestment Act (Recovery Act), which was enacted in February of this year and included hundreds of billions of dollars intended to stimulate the US economy. The Recovery Act also provides new and expanded procurement, transparency and oversight measures. The three FOAs are subject to special terms and conditions under the Recovery Act, including:

• Reporting, tracking and segregation of incurred costs
• Reporting on job creation and preservation
• Publication of information on the Internet
• Access to records and to employees by Inspectors General and the Government Accountability Office
• Ensuring that iron, steel and manufactured goods are produced in the United States
• Ensuring that wage rates are comparable to those prevailing for similar projects
• Protecting whistleblowers and requiring prompt referral of evidence of a false claim to an appropriate Inspector General
• Subpoenas for testimony regarding any perceived waste fraud or abuse to the Recovery Accountability and Transparency Board

We have previously described these and other Recovery Act requirements in more detail in our prior webinars and client alerts (links to which are included in the footnote below⁵). Also, note that on May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA), which amended the civil False Claims Act (FCA) to broaden liability and enhance the ability of the government and whistleblowers to bring actions. Among other reasons, Congress believed these changes were necessary due to the huge amount of federal bailout/stimulus funds. Companies interested in pursuing work under any of the three FOAs should be aware of the FCA, including these recent FERA amendments.⁶

Here are brief summaries of each FOA.

1. The Site FOA.

        The purpose of the Site FOA is to increase understanding of potential formations to safely and permanently store CO2 by focusing on regional site characterization of promising geological formations. Each application should focus on at least one specific site, formation, or area not previously characterized by public data, unless a strong case can be made for further characterization due to deficiencies in the available data sets. Geological forms to be evaluated may include saline formations, depleting/depleted oil fields, or coal seams. The site should have the potential to store a minimum of 30 million tons of CO2 and be able to accept CO2 from a large commercial source over the lifetime of the source. The objectives include developing comprehensive data sets of formation characteristics and determining the usefulness of potential geological storage sites. DOE anticipates no fewer than 10 awards, and awards are expected to last no longer than three years. The maximum DOE funding for each cost-share award will be $4.975 million. Applications are due August 3, 2009.

2. The Industrial FOA.

        DOE announces this FOA to solicit applications for cost-share projects that will increase investment in clean industry technologies and sequestration projects. The FOA has two objectives: (i) to demonstrate large-scale industrial CO2 capture and sequestration (at least one million tons per year) from industrial sources into underground formations (funded at $1.322 billion), and (ii) to demonstrate innovative concepts for beneficial use of CO2 (funded at $100 million). Applications selected for funding will initially receive Phase One award(s), with Phase Two to be selected in accordance with a process provided in the FOA; applicants therefore must propose two phases. The FOA states that “[m]ultiple awards are expected with each award having two phases such that DOE can down-select based on merit and other criteria set forth in the cooperative agreements.” The application due date is August 7, 2009.

3. The CCPI FOA.

        Under the CCPI FOA, DOE is soliciting applications for Round Three of its CCPI. This is a cost-share collaboration between government and industry to increase investment in low-emission coal technology by demonstrating advanced coal-based, power generation technologies, consistent with the Energy Policy Act of 2005. DOE’s specific objective under the CCPI FOA is to demonstrate advanced coal-based technologies that capture and sequester, or otherwise put to beneficial use, CO2 emissions. Applicants are encouraged to focus on one or more of several geological sequestration options: saline formation, enhanced oil recovery, coal seams, basalt formations, or stacked storage. Currently, DOE is developing a large-scale field test of geologic CO2 sequestration in the United States under a separate program. DOE is interested in allowing demonstration projects under CCPI to integrate with these sequestration field tests, which may be fully operational by the time the CCPI projects come on-line. DOE anticipates that $1.4 billion will be available for awards under the CCPI Round Three. Letters of intent are due July 24, 2009, and applications are due August 24, 2009.

The related customary notices of intent regarding the three FOAs indicated that they would be released in May rather than June. Nevertheless, these FOAs are welcome steps by the DOE to make available the funding appropriated by the Recovery Act for the advancement of CO2 capture and sequestration.

For more information about any of the matters discussed in this Client Alert, please contact Cameron S. Hamrick at +1 202 263 3381, J. Paul Forrester at +1 312 701 7366, or Marcia G. Madsen at +1 202 263 3274.

Learn more about our Climate Change, Energy, Environmental, and Government Relations practices.

Endnotes:

1. See, http://fossil.energy.gov/programs/sequestration/publications/arra/DE-FOA-0000033_sc.pdf.
2. See, http://www.fossil.energy.gov/programs/sequestration/publications/arra/DE-FOA-0000015.pdf.
3. See, http://www.fossil.energy.gov/programs/sequestration/publications/arra/DE-FOA-0000042.pdf.
4. See, http://www.fedconnect.net/.
5. See, related webinars from March 5 and 19, 2009, available at:
https://www.mayerbrown.com/events/material.asp?id=5444 and https://www.mayerbrown.com/events/material.asp?id=5450, respectively, and our May 12, 2009, Client Update “Meeting the Recovery Act’s Buy American Standards: US and Foreign Firms Face Complicated Regulatory Guidelines,” available at https://www.mayerbrown.com/publications/article.asp?id=6677&nid=6.
6. The FERA changes to the FCA were covered in greater detail in our Global Financial Markets Initiative teleconference on April 30, 2009, available at: https://www.mayerbrown.com/events/material.asp?id=5497 and in our Client Updates from May 12, 2009, “Meeting the Recovery Act’s Buy American Standards: US and Foreign Firms Face Complicated Regulatory Guidelines,” available at https://www.mayerbrown.com/publications/article.asp?id=6677&nid=6 and May 28, 2009, “New US Law Combats Fraud, Waste and Abuse in Federal Contracts, Programs, and Financial Institutions, Including New Federal Bailout/Stimulus Programs,” available at https://www.mayerbrown.com/publications/article.asp?id=6840&nid=6.