"They are not going to build those because of the massive capital costs," Slocum said. "This will encourage an industry where no one wants to invest -- for a reason. The question is, should taxpayers' money be used to shovel subsidies for coal?"
Converting solid coal into a liquid transportation fuel, an industry that does not exist in the United States, could nearly double the global warming effects of the fuel and increase air and water pollution associated with coal mining, according to some scientific estimates. The bill extends production credits for coal gasification plants and includes the end product, aviation fuel, in the alternative fuel category.
The coal investment credit will cost $389 million next year, the CBO said.
Oil shale and tar sands processing are decades-old technologies that have endured drastic boom and bust cycles. Both involve heating sand and hard rock to draw out fossil fuels. Neither has reached commercial production in the United States. Processing oil shale, which is abundant in parts of Colorado, Wyoming and Utah, requires large amounts of water and energy to create a product that must then be refined.
The bailout package includes a 50% tax write-off on refinery construction, which would assist the oil shale and tar sands industries.
The next refinery expected to come on line is the Hyperion Resources Inc. plant in Elk Point, S.D., which would be the first built in the Untied States since 1976, excluding expansions. The facility, which could cost $10 billion, is intended to refine crude oil extracted from tar sands pits in Canada's Alberta province.
The breaks for refineries are expected to cost $72 million, but, said Bobby McEnaney of the Natural Resources Defense Council, "they are the best guesses from the Congressional Budget Office. There are no industries to use as an economic model."
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julie.cart@latimes.com
