Wyoming fails to get coal subsidy

Despite being the nation’s largest coal producer, Wyoming failed to win a share of $1 billion in federal subsidies for advanced, coal-based power projects.

Wyoming energy officials say they are not surprised, noting that qualification for the investment tax credits is based on a general standard that penalizes Western sub-bituminous coal.

Steve Waddington, executive director of the Wyoming Infrastructure Authority, said the state would like to see Congress change the standards so companies looking at building clean-coal power plants in Wyoming can get the federal tax credit.

Among several stringent criteria for the federal tax credits is one to capture 99 percent of sulfur from power plant flue emissions. Western coal tends to have a lower sulfur content than Eastern coal, but the federal standards don’t take that into account.

Waddington said that if Eastern coal has 100 units of sulfur, then all but one unit must be captured to meet the standard. Western coal may have only 10 units of sulfur to begin with, but would still have to capture all but .1 of a unit – a much smaller quantity in comparison.

“Congress needs to take into account the different chemical makeup of coals when it sets these standards, and not set a general standard that penalizes Western coal,” Waddington said.

Department of Energy spokesman John Grasser confirmed that Western coal was left out of the tax credit awards, but he wouldn’t say it was specifically related to the sulfur criteria.

“I know that is a difficult standard to meet for sub-bituminous coal,” Grasser said.

He indicated that the agency will be discussing the standard.

The Department of Energy is expected to issue $650 million in “Phase 2″ awards in June. The United States will likely add 150,000 megawatts of new coal-based electrical generation in the next 25 years, according to the agency. One megawatt is enough to power about 900 average U.S. homes.

The clean-coal provision of the Energy Policy Act of 2005 authorized $1.65 billion in tax incentives. The investment tax credits are separate from another provision of the Energy Policy Act calling for the demonstration of coal gasification using Western coal at an altitude of 4,000 feet or higher.

However, the incentives could be used together, and that would speed up Wyoming’s prospects to land a clean-coal project, Waddington said.

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