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.

Much of the maneuvering on the bill was taking place away from the Senate floor.

Sen. Carl M. Levin (D-Mich.) is working on an amendment that would blunt the impact of a proposal that would effectively raise average motor vehicle fuel efficiency to 35 miles per gallon by 2020.

Levin has proposed softer requirements on light trucks, which include sport-utility vehicles, minivans and most pickup trucks, than rules already endorsed by the Senate Commerce Committee. The proposal would also give automakers more time to meet new standards and give the National Highway Traffic Safety Administration more authority to set new rules.

The proposal could contain a provision that would free automakers from the new rules if they promised to put more fuel-efficient vehicles on the road.

Other Democrats said they would stick with the tougher standards. Sen. Byron L. Dorgan (D-N.D.) said that he thought there were enough votes to defeat a move to weaken the fuel-efficiency provisions. On the Senate floor, Sen. Dianne Feinstein (D-Calif.) said the Senate had "bent over backwards" to accommodate the automobile industry. She said the standards were reasonable and achievable with current technology.

Separately, environmental groups said they were pleased with revisions to the Senate measure, made last Friday, that removed provisions that would have prevented the Environmental Protection Agency from allowing California to set its own standards for carbon dioxide emissions from automobile tailpipes.

Staff writer Sholnn Freeman contributed to this report.

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