WASHINGTON - The U.S. Energy Department on Friday announced it will award up to $979 million to three projects aimed at developing technology to trap and store carbon emissions from coal plants.

Such technology is not yet viable on a commercial scale, but would likely be key to the survival of the coal industry under any government system that limits climate warming greenhouse gas emissions.

This investment is part of our commitment to advancing carbon capture and storage technologies to the point that widespread, affordable deployment can begin in eight to ten years, Energy Secretary Steven Chu said in a statement.

Coal is cheap and abundant in the United States, but it is also one of the biggest sources carbon emissions.

The companies that will receive funding are: American Electric Power Co, Southern Company Services, Inc, and Summit Texas Clean Energy, LLC.

AEP is set to receive $334 million from the government to help develop a commercial scale project that will capture carbon from its Mountaineer coal fired plant in West Virginia and then inject the gases underground.

The department will provide Southern Company with $295 million to demonstrate carbon trapping technology at Alabama's Power's Plant Barry in Mobile, Alabama. The captured carbon will be stored in deep saline formations, but Southern will also explore the potential to use the gases for enhanced oil recovery.

Summit's clean coal project will get $350 million from the government. The project will capture carbon at a 400 megawatt plant to be built near Midland-Odessa, Texas. Summit plans to transport the captured carbon by pipeline to oil fields in West Texas for enhanced oil recovery operations.

(Reporting by Ayesha Rascoe; Editing by Marguerita Choy)

Energy