On Friday, the U.S. Department of Energy announced it will award $979 million to three different projects that will develop new technologies focused on storing carbon emissions from coal-fired power plants.

Despite the optimism that has surrounded this kind of technology, it has historically been too costly to pursue. And while this funding could certainly help move it along, there are still obstacles ahead. One in particular that hasn't been given much attention is the liability issue.

Kinder Morgan Energy Partners CEO Rich Kinder hit the nail on the head this past summer when he told the UK's Guardian newspaper that carbon capture and storage, the plan on which "clean coal" technology rests, is a bunch of hooey until legal liability gets sorted out.

Having talked with a few environmental lawyers about this issue, they agreed with Kinder - though "hooey" was not their word of choice.

Of course, even if you are able to capture and store this stuff, you still haven't fixed the mercury and other heavy metal issues associated with the mining and burning of coal. Not to mention the liquidation of natural capital. It's hard to believe we're still blowing the tops off of mountains.

Bottom line: Capturing and storing CO2 from coal-fired power plants does not make it clean. But now that the government has ponied up nearly $1 billion for it - certainly there could be some near-term opportunities for investors in 2010. For the sake of clarification, we do not cover clean coal stocks.

Jeff