June 19 (Bloomberg) -- The U.S. should create a multibillion dollar program to prove that carbon-dioxide from the nation’s coal-fired power plants can be captured, vastly reducing emissions, a report by the Massachusetts Institute of Technology said.

A “quasi-government corporation” should be established with funding from electricity taxes to support the program, the report recommended. The study, released today, summarizes views from a symposium held by the university’s “Energy Initiative,” a research partnership with energy companies including BP Plc and Siemens AG.

Coal-fired power plants contribute more than 80 percent of the carbon-dioxide emissions from the U.S. power industry, according to Wayne Leonard, chief executive officer of New Orleans-based Entergy Corp. They are also generally the cheapest source of round-the-clock power, he said.

“If we are to sustain an effective climate program and grow our economy, we can’t kill coal; we have to save it,” Leonard, co-chairman of the symposium, said in a foreword to the report.

There were 617 facilities that burned coal to generate power in the U.S. in 2007, according to the Energy Information Administration.

Entergy, owner of the second-largest fleet of U.S. commercial nuclear reactors, relies on coal for less than 10 percent of its power generating capacity.

The Energy Department last week announced it was moving forward with plans for the FutureGen project in Illinois, which would create a new coal-fired plant with carbon capture capabilities.

The report recommends the department put more support behind carbon-capture projects at existing plants. An current funding program “has neither sufficient funds nor project management resources to support the large-scale projects called for,” the report concludes.

The House Energy and Commerce Committee last month approved legislation to curb greenhouse-gas emissions, including carbon dioxide, 17 percent by 2020. The measure has a provision that would fund clean-coal projects with $1 billion annually from electricity surcharges.

‘No Pathway’

“There is no credible pathway towards prudent greenhouse gas stabilization targets without CO2 emissions reduction from existing coal power plants,” Ernest Moniz, director of the Energy Initiative and a member of President Barack Obama’s Council of Advisors on Science and Technology, said in a statement.

“We urgently need technology options for these plants and policies that incentivize implementation,” said Moniz, who served as undersecretary of the Energy Department during the Clinton administration.

To contact the reporter on this story: Tina Seeley in Washington at tseeley@bloomberg.net.

Last Updated: June 19, 2009 00:10 EDT