Wilsonville, Ala. – Southern Company, the nation’s largest generator of electricity, and the U.S. Department of Energy announced today that they have reached a milestone in their efforts to transform coal – America’s most abundant and economical energy resource – into a cleaner, more efficient source of energy.

At the Power Systems Development Facility in Wilsonville, Ala., researchers have successfully tested a technology that turns coal into gas, which then would be used to produce electricity more cleanly than traditional power plants. Southern Company operates the facility – the world’s most advanced test center for future power technologies – for the Energy Department.

“The research we’re doing in Wilsonville will set the foundation for coal as an efficient and environmentally friendly fuel for the future,” said Dr. Charles H. Goodman, Southern Company’s vice president for research and environmental affairs. “Our goal is to make coal both cost competitive and environmentally comparable to natural gas, and we’re almost there.”

Researchers at the Power Systems Development Facility have made advances in an innovative power technology that uses a device called a transport reactor, developed by Kellogg Brown & Root – a business unit of Halliburton Company (NYSE: HAL) – and Southern Company. Researchers successfully operated the device, which is similar to technology used in the petroleum industry, as an “advanced pressurized combustor” for about 5,000 hours and then converted the transport reactor to operate as a “gasifier.” An advanced pressurized combustor is different from traditional coal-based power generation because it operates at high pressures instead of normal, atmospheric conditions. A gasifier converts coal into a combustible gas that advanced power plants can use to power gas turbines or run fuel cells.

The transport reactor and associated equipment significantly reduce emissions of sulfur dioxide, nitrogen oxides and particulate matter. They also are expected to reduce carbon dioxide emissions by more than one-third compared with conventional coal-fired power plants. Researchers anticipate that the technology can be applied to both new and existing generation.

“When operating as a pressurized combustor, the transport reactor performs better than any in the world, and we’ve now demonstrated that we can operate smoothly as a gasifier,” Goodman said. “We’re now trying to optimize the process of converting coal into gas.”

Goodman said Southern Company is on track to make a decision as early as next year whether to build a commercial power plant using this technology.

More than half of the nation’s electricity comes from coal, and the United States has more coal than Saudi Arabia has oil. The Wilsonville facility is a test center for U.S. companies to evaluate new technologies that would dramatically improve the environmental performance of coal.

“Future coal systems will have to become increasingly cleaner and more efficient if the United States wants to continue to use its most abundant and economical fuel to meet energy needs and sustain economic growth,” said Robert W. Gee, DOE’s assistant secretary for fossil energy. “We are pleased to report that we are making huge progress in our clean coal research at the Power Systems Development Facility.”

The Wilsonville facility is a $275 million project that receives on-going funding from Southern Company, the Electric Power Research Institute, Foster Wheeler Corporation, Kellogg Brown & Root, Peabody Group, Combustion Power Corporation and Siemens Westinghouse Power Corporation. DOE, as part of its Coal and Power Systems Program, funds 80 percent of the project.

The Power Systems Development Facility is the focal point for much of the advanced coal-based power generation research supported through the Energy Department’s Office of Fossil Energy. The Energy Department’s involvement in the facility is overseen by the National Energy Technology Laboratory, the major fossil energy research arm of the agency. To access the Energy Department’s fossil energy Web site and its news announcement today, log on to www.fe.doe.gov.

Our environmental Web site, Planet Power, offers more information about the facility. From there, you can link to the Power Systems Development Web site, which includes more detailed information on the technologies being researched at the facility as well as diagrams, flowcharts and photos.

Southern Company (NYSE: SO) is an international energy company that operates more than 48,000 megawatts of electric generating capacity worldwide. Based in Atlanta, it is the largest producer of electricity in the United States and one of the world’s largest independent power producers.

Southern Company has invested more than $4 billion in the past decade on environmental control systems, research, and new technologies and is a leader in DOE’s Climate Challenge Program to reduce, avoid or offset emissions of carbon dioxide. The company is involved in fuel cell research projects with the Houston Advanced Research Center and Daimler-Chrysler and is in partnership with others to research a new technology that generates emission-free energy with coal. Southern Company also is testing ways to blend coal with fuel derived from plants to reduce emissions and is planting 30 million trees in the Southeast – the largest utility reforestation and carbon removal project in the United States.

Headquartered in Houston, Kellogg Brown & Root is an international, technology-based engineering and construction company providing a full spectrum of industry-leading services to the hydrocarbon, chemical, energy, forest products, manufacturing, and mining and minerals industries. Kellogg Brown & Root is a business unit of Halliburton Company, the world’s leading diversified energy services, engineering, energy equipment, construction and maintenance company. The company’s World Wide Web site can be accessed at http://www.halliburton.com.