Capito, Rahall back coal-to-liquid loans

Capito, Rahall back coal-to-liquid loans

Rep. Shelley Moore Capito, R-W.Va., and Rep. Nick Jo Rahall, D-W.Va., are among the sponsors of a bill that would promote the construction of factories that would turn coal into liquid fuels.

Capito said in a prepared statement, “As our country looks to wean ourselves from our dangerous addiction to foreign oil, it only makes sense that we take full advantage of the abundance of coal in West Virginia and other parts of coal country.”

She noted that President Bush, in his State of the Union address, called for an increase in the use of alternative fuels.

“The president’s goal to cut gasoline use through an increase in alternative fuels presents a great opportunity for coal country,” Capito said. “Our nation has the potential to meet this goal and I believe it will be much easier to achieve if we utilize West Virginia coal and the coal-to-liquid technologies that have been proven to work.”

The new legislation contains features that are not in the Energy Policy Act of 2005. That law authorized the federal Department of Energy to provide loan guarantees for alternative fuels.

Jeffrey Jarrett, the U.S. Department of Energy’s assistant secretary for fossil energy, said during a meeting in Charleston on Jan. 18 that the federal government is not poised to provide the loan guarantees needed to build a commercial-scale coal-to-liquids plant. He said a $2 billion loan guarantee program for such projects is not yet up and running. He also said the Department of Energy doesn’t have the expertise to act like a bank for such a project.

Jordan Stoick, Capito’s press secretary, said the new legislation differs from the 2005 law “because it authorizes the Department of Energy to administer a loan guarantee program specifically for coal-to-liquids and sets the parameters for this program.”

The new proposal also authorizes funds for the Department of Defense to research the possible use of coal-to-liquid fuel in the military’s fleet of aircraft and vehicles.

Stoick said the Air Force has used some of its general research money on coal-to-liquid research. “This legislation differs in that it authorizes the Air Force to spend money specifically on coal-to-liquids research and development,” he said.

He said the new proposal also: # Authorizes the departments of energy and defense to develop regulations that allow current and former military bases and Department of Energy facilities to be considered as sites for commercial coal-to-liquid plants. # Allows the Defense Department to enter into contracts of up to 25 years in order to provide some long-term market stability. # Requires a Defense Department report on coal-to-liquid fuel storage.

# Authorizes the construction of Strategic Petroleum Reserve storage facilities for coal-to-liquid fuel and authorizes the Strategic Petroleum Reserve to hold up to 20 percent of its reserves in the form of coal-to-liquid fuel.

The bill has been referred to the House Committee on Energy and Commerce.


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