Democrats Push Coal-to-Liquids Energy Plan

By Steven Mufson
Washington Post Staff Writer
Wednesday, June 13, 2007

A group of Senate Democrats from coal-rich states is drafting an amendment to proposed energy legislation that would provide as much as $10 billion in federal loans to pay for capturing and storing greenhouse gases produced by plants that would turn coal into liquid transportation fuels or chemicals.

Concerned about the growing likelihood that a majority of senators will back a coal-to-liquids program to satisfy the powerful coal industry and to reduce U.S. reliance on oil imports, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) has pressed colleagues to ensure that such a program would address not only energy security, but also climate change concerns.

Bingaman, who opposed a coal-to-liquids measure that Republicans proposed in committee, "has been very clear that he is unwilling to look at one without looking at the other," a committee spokesman said.

Environmental groups oppose coal-to-liquids programs because, they say, such technology produces twice as much greenhouse gas as conventional petroleum-based motor fuels, and because they say it would greatly expand destructive coal mining.

Meanwhile, two House committees working on an energy package delayed sessions that had been scheduled this week, but Speaker Nancy Pelosi said the House would still come up with a bill by July 4.

The postponements were prompted by disputes that pit two key Democratic constituencies -- blue-collar unions and liberal environmentalists -- against one another. A source close to the House leadership said that some members wanted to see what emerges from the Senate, which took up its own energy package yesterday.

The House Ways and Means Committee sent a one-line e-mail to its members saying that the meeting scheduled for today to draw up tax provisions for an energy bill "has been postponed until further notice." The Energy and Commerce Committee's energy and air quality subcommittee put off a session until next week in order to "work out some issues within the committee," a staff member said.

Rep. Rick Boucher (D-Va.), chairman of the subcommittee, has supported a measure that would boost coal-to-liquids projects. Boucher has proposed another provision that would undercut the ability of states such as California to set tougher standards for vehicles' tailpipe emissions of greenhouse gases.

Pelosi and many other Democrats oppose both those positions. The heads of 14 leading environmental groups issued a letter yesterday saying a liquid coal provision would be "a poison pill that would make any bill totally unacceptable."

A spokesman for Pelosi said the speaker met with Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) and was enthusiastic about his proposal, which is likely to extend some existing tax incentives for biofuels and create a "green bond fund" that would provide loans for energy projects with environmental benefits.

Despite the delay, Pelosi vowed that the House would adopt some kind of energy legislation before the July 4 recess, even if other energy measures are introduced later.

The Senate, meanwhile, took up its version of an energy bill, embracing an amendment that would fix targets for deep reductions in oil imports that the executive branch would have to meet. It also adopted an amendment to promote job training for "green collar" jobs that involve installing energy efficiency or "clean energy" equipment.

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