FARMERSVILLE, Ill. – After years of watching the Illinois coal industry struggle, miner Randy Henry could use a little good news. He hopes it will arrive this fall under the name FutureGen.

The $1.5 billion high-tech project is supposed to demonstrate a new, environmentally friendly way of burning coal. Illinois is competing against Texas to land the power plant, and Gov. Rod Blagojevich signed an incentive package into law Monday to make Illinois more attractive to the project’s developers.

FutureGen would mean a new customer for the state’s higher-pollution variety of coal. More importantly, it might be the first in a wave of new power plants that could burn coal with little damage to the environment.

Demand for Illinois coal has been shrinking because of pollution restrictions. An industry that offered jobs to about 17,900 workers in 1983 employed less than 3,500 in 2000. Things have picked up a bit as rising oil prices made coal a more attractive choice, and FutureGen might increase the momentum.

“It’s got to help the industry overall,” said Henry, who works at Freeman Energy’s Crown III mine about 30 miles south of Springfield. “Anything that can help recoup that loss is great as far as I’m concerned.”

FutureGen would be a prototype plant that its developers – a consortium of coal and power companies and the Department of Energy – say would have almost no emissions. Instead, the carbon dioxide it generates would be injected into sandstone deposits deep underground.

Potential FutureGen sites include Mattoon and Tuscola in eastern Illinois, and Jewett and Odessa in Texas. One study found that it would create more than 300 jobs and $20 million in annual wages if built in eastern Illinois.

A decision on the location is expected in November.

Illinois is offering $82 million to the FutureGen developers – $17 million in grants, a $50 million low-interest loan and $15 million in tax breaks.

“Illinois coal is the future,” Blagojevich said just before he signed the legislation into law at the Crown III mine.

The legislation included the tax portion of the incentives and an agreement that the state would protect FutureGen from liability due to accidents or injuries. In essence, the state would take out an insurance policy to cover the cost of any lawsuit.

Illinois officials say the state’s incentive package is competitive with Texas’s and other factors are even better. Easy access to coal weighs in Illinois’ favor, they argue, and the job of “sequestering” pollution underground will be simpler because Illinois isn’t riddled with oil and natural gas wells that could allow the gas to escape.

Texas officials see it differently, of course.

The Texas oil and gas industry means the state’s geology has been mapped thoroughly, said Chuck McDonald, spokesman for FutureGen Texas. He said the industry also is familiar with pumping carbon dioxide underground as a means of forcing oil and gas to the surface, giving the state and its workforce expertise in a key part of the FutureGen process.

Environmentalists are divided over FutureGen and its significance.

Becky Stanfield, director of Environment Illinois, questioned the use of taxpayers’ money to aid the project, arguing the technology has been proven sound enough that the private sector should support it now.

Storing pollution underground eventually might prove useful, she said, but the focus should be on more conventional conservation efforts. “I don’t think it’s a silver bullet by any stretch of the imagination,” Stanfield said.

The coal industry, however, hopes FutureGen will show how coal can become an environmentally friendly source of energy in years to come.

“We have to make progress in reducing CO2 emissions,” said Luke Popovich of the National Mining Association, “and this plant will be exhibit A, B and C on how this can be done.”