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On D.C.'s burner: Coal at the pumps

Lawmakers want to break U.S. dependence on foreign oil. But their new plan may worsen global warming.

May 10, 2007|Richard Simon and Janet Wilson | Times Staff Writers

WASHINGTON — For years, coal-country lawmakers have talked about turning the abundant natural resource into a fuel for motor vehicles.

The idea went nowhere.

But now it has taken on momentum, oddly enough, just as Congress appears ready to pass legislation to fight global warming. Even though coal has been attacked as a major culprit in climate change, lawmakers say a coal-derived fuel could solve another problem: U.S. dependence on foreign oil.

A bipartisan group of lawmakers, including one presidential candidate, Sen. Barack Obama (D-Ill.), is pushing to provide federal loan guarantees, tax breaks and other subsidies to spur the production of fuel from coal.

But the process of turning coal into a liquid emits carbon dioxide, so much that each gallon of the fuel would create more greenhouse gases than gasoline -- unless the carbon dioxide released in production could be captured and stored.

For The Record
Los Angeles Times Wednesday June 13, 2007 Home Edition Main News Part A Page 2 National Desk 1 inches; 44 words Type of Material: Correction
Coal production: A graphic accompanying an article May 10 in Section A about a congressional effort to increase production of motor vehicle fuel from coal listed states with the most coal reserves. Those numbers reflected the reserves at active mining sites, not total reserves.

The idea of using the nation's coal reserves, the largest in the world, has drawn new attention as President Bush has pushed for domestically produced alternative fuels, citing national security concerns. Politically jittery lawmakers also are eager to show they are responding to high pump prices.

The idea, however, remains controversial, as a Senate hearing on a coal-fuel measure showed last week. "Here is an opportunity to vote for U.S. coal and against Saudi oil," Sen. Larry E. Craig (R-Idaho) said. But Sen. Bernie Sanders (I-Vt.) responded, "At best, coal-to-liquids will be equal to conventional gasoline. Frankly, we've got to do much, much better."

The debate offers a glimpse of the clashes that lie ahead as lawmakers writing climate-change legislation wrestle with the future of coal.

Coal interests remain a powerful force on Capitol Hill, with significant deposits in about 15 states. And congressional action involving coal could prove vexing for presidential candidates when they are stumping for votes in key producing states, such as Pennsylvania and Ohio, while also trying to win the support of environmentalists.

Strange bedfellows

The issue has created unusual alliances.

"What unites President Bush and Barack Obama?" Frank O'Donnell of Clean Air Watch asked in a recent e-mail update on energy legislation. "Why, support for plans to subsidize conversion of coal to liquid fuel."

Obama, who favors tough government action to combat global warming, has teamed up with regulation foe Sen. Jim Bunning (R-Ky.) to sponsor legislation to promote the coal-derived fuel. Both senators have coal reserves in their states.

Their bill aims to reduce the upfront costs and financial risks of building plants, which can be as much as $4 billion per facility. It would provide loan guarantees for up to 10 plants, each capable of producing at least 10,000 barrels a day; allow the Pentagon to enter into a long-term contract to buy coal-derived fuel for military use; and authorize a study on using it in the nation's emergency supply. It's unclear how much this would cost.

Obama, who is sponsoring separate legislation to cap carbon dioxide emissions, said his support for coal fuel depended on finding a way to remove the greenhouse gases emitted in production.

"If it is used simply to compound the problem of greenhouse gases, then it's not going to be a credible strategy," he said.

The bill does not require that the fuel be produced without increasing greenhouse gas emissions, though it does offer tax incentives to encourage the use of technology that captures carbon dioxide.

Proponents narrowly lost a bid last week to add a measure to promote the coal-derived fuel to an alternative fuels bill. But when that bill reaches the Senate floor, they hope to add a requirement that the United States use 21 billion gallons of coal-derived fuel annually by 2022.

The country consumes about 140 billion gallons of gasoline a year.

In the House, government support to develop coal-based fuel has the backing of key committee chairmen from coal-producing states.

Rep. Rick Boucher (D-Va.) -- who heads the Energy and Commerce subcommittee on energy and air quality -- is preparing to introduce a bill that would offer an additional incentive to spur production: guaranteed federal payments for coal-fuel producers if the price of oil dropped so much that coal fuel could not compete. Boucher plans to require companies receiving government support to install carbon-capturing technology.

"The truth is coal is our most abundant energy resource," Boucher said. "We absolutely must use it if we have any hope of achieving a greater degree of energy self-reliance."

The U.S. imports about 60% of the oil it uses.

The bills have picked up support from lawmakers outside coal country.

"Quite frankly, it needs to pass," Rep. Devin Nunes (R-Visalia) said of the coal-derived-fuel bill. Nunes recently showed up for a Capitol Hill kickoff of a coalition of energy companies and labor groups lobbying for coal-based fuel. "We can't get to energy independence without using our own natural resources."

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