Senators Re-Introduce Coal-to-Liquids Legislation
05 January 2007
US Senators Jim Bunning (R-KY) and Barack Obama (D-IL) have re-introduced a piece of legislation that would help create the infrastructure needed for large-scale production of Coal-to-Liquids (CTL) fuel in the US.
The proposed “Coal-To-Liquid Fuel Promotion Act of 2007” is based on the bill first introduced by Senators Bunning and Obama last spring and expands tax incentives, creates planning assistance, and develops Department of Defense support for a domestic CTL industry.
The Coal-to-Liquid Fuel Promotion Act of 2007 enables the Department of Energy to provide loan guarantees for construction and direct loans for the planning and permitting of CTL plants. Loan guarantees will encourage private investment and planning loans will help companies prepare a plant for construction.
This legislation also will expand investment tax credits and expensing provisions to include coal-to-liquids plants, extend the Fuel Excise Tax credit, and expand the credit for equipment used to capture and sequester carbon emissions.
Finally, the bill provides the Department of Defense the funding and authorization to purchase, test, and integrate these fuels into the Strategic Petroleum Reserve and military fuel supplies.
The Senators also announced they will form the Senate Coal-to-Liquid Fuel Caucus to help drive the legislation forward.
Both Kentucky and Illinois have massive coal reserves. Obama also sponsored the just-introduced BioFuels Security Act of 2007 that would institute a 60 billion gallon Renewable Fuel Standard by 2030. (Earlier post.)
I thought Obama was in the Gore camp w.r.t. climate change. Perhaps lobbyists have worked on him. There are no problems with CTL provided a meaningful CO2 cap is in place. More CTL would then mean less coal fired electricity for air conditioned shopping malls.
Posted by: Aussie | 05 January 2007 at 02:17 PM
Are we trading air-dirty oil for air-dirty coal? Don't know what's in the bill; but, I hope it includes at least smoke stack scrubbers for the current acid- rain problems and smog-less burning requirements for the autos.
Posted by: Lad | 05 January 2007 at 02:26 PM
Coal mining is a large industry in IL but not as big as some other states like KY. WY easily does 1/3 of all coal mining in the US so I'm surprised they didn't get a senator from that state involved as well.
Posted by: Patrick | 05 January 2007 at 02:51 PM
I would also hope it contains sequestration of the extra CO2 generated by the process (or at least algae culture).
Posted by: Neil | 05 January 2007 at 02:51 PM
Obama is from a coal state.As are other now powerful dems.The best bet is to push for adapting algea tech to these kinds of plants.There are to many dollars and votes to expect dems to shy away from this tech.Ctl is a powerful security tool for national and military independence.Perhaps Obama and others will push for loan guarantees to be coupled with sequestration.This will happen so its probably more productive to look for best mitigation as opposed to fighting it.
Posted by: earl | 05 January 2007 at 02:58 PM
Coal in Wyoming is low sulphur - CTL favors cheaper high-sulphur (less desirable for burning in coal power plants because of acid rain) coal because the FT process cleans out the sulphur. Illinois and Kentucky have high sulphur coal, so a robust CTL infrastructure would benefit those states the most in terms of production/jobs/pork etc.
Posted by: Nate Fairchild | 05 January 2007 at 02:59 PM
The Governor of Montana has been preomoting CTL with sequestration for years. He was on 60 minutes one night showing what can be done. Maybe they can get something going that the private sector has not.
Posted by: SJC | 05 January 2007 at 03:01 PM
I don't know if this includes sequestration. If it does not, that will be one less candidate I need to analyze for 2008. Now, I guess, we know what Obama means when he says he supports alternative fuels. Obama appears to be in the camp that will do everything possible to ensure that we continue easy motoring in America.
We don't need a renewable fuel standard. What we need to do is realize what a disaster ethanol is with respect to reasonable food prices in America. If anything, we need a moratorium on anymore ethanol plants in America.
Obama is like virtually like every other politician; he is afraid to tell people that we can't have both, a livable planet and one that is banking its future on coal.
Posted by: t | 05 January 2007 at 03:52 PM
Obama just lost my vote....
Posted by: eric | 05 January 2007 at 04:28 PM
Good stuff, t!
Obama must have learned about supply side economics (without regards to external costs CO2) in a moment of bipartisanship. He's certainly doing a good job grabbing the low-hanging fruit!
Posted by: FYI co2 | 05 January 2007 at 04:29 PM
1. Does anyone know if CTL can be performed with salt water?
Like someone else said, this will probably happen; Big Coal is too big for it not to happen. All we can do is hope for the best.
CTL wouldn't be a terrible thing if it is done the right way. I'd support the bill if it had conditions that stated that all excess CO2 emissions be captured by algae.
Dirty air from U.S. CTL beats dirty air from Arab oil in my book...but not by much...
Posted by: John | 05 January 2007 at 05:52 PM
Gee I don't know guys, the image of new belching smokestacks in the midwest seems unbelievable even for greedy politicians these days. Yeah, the deal is CTL provided the emissions are controlled or better, captured by algae for another source of revenue. It's not stellar navigation to get greedy energy producers to produce more energy for more income... is it?
Posted by: gr | 05 January 2007 at 06:55 PM
Does anyone know if CTL can be performed with salt water?
The cost of desalinating the water that's used for CTL will be a small fraction of the cost of CTL. Remember, the water actually consumed in the chemical reactions isn't much, roughly the same volume as the liquid produced. Desalinated sea water is about 500 times cheaper, per unit volume, than crude oil.
Posted by: Paul Dietz | 05 January 2007 at 07:05 PM
It might be okay even with the salt; the Wabash River plant needed a chloride scrubber even running on fresh water, so it may just be a question of efficiency.
The lousy efficiency and GHG emissions should rule this out, though. Why on earth would these guys go for CTL instead of IGCC and electric vehicles? Don't they know it's possible, or is there a hidden agenda?
Posted by: Engineer-Poet | 05 January 2007 at 07:40 PM
Digging permanently sequestered carbon (coal) out of the ground and spewing it into the air in the form of CO2 would be a total non-starter if the true long-term costs were factored in. (Got to get to that worldwide carbon cap and trade system somehow...)
Posted by: Nick | 05 January 2007 at 08:27 PM
WY easily does 1/3 of all coal mining in the US so I'm surprised they didn't get a senator from that state involved as well.
Finding large reliable year-round supplies of even relatively clean water is a problem in Wyoming. Not only is there the scarcity issue, but Western water law is strange and twisted. In addition to the problems of senior and junior rights (and a new application like CTL would be very junior in its standing), there are the difficulties presented by the various interstate compacts regarding required deliveries across state lines.
If you have to do CTL, probably far easier to obtain water in IL or KY. Assuming it's done on a large scale, might also be easier to find refinery capacity for a million bbl/day relatively nearby.
Posted by: Michael Cain | 05 January 2007 at 08:33 PM
Water is very scarce in the west. heck in the 1890s Kansas and Colorado almost went to war with national guard troops at each side of the border. Last guy to get killed over water in Wy was in 1999...hmm, maybe pipe it in from Canada? Great lakes? move the coal to the water?
Anyway on the bright side cant CTL go to BTL in the future with some conversion? Setting up an infrastructure now is very much needed. Likewise Wy coal is very clean. In fact the energy used to make this post is produced from one of the cleanest coal plants in the US using Wy coal at .06 per KWH
It may be feasible one day to attach algae bio farms to CTL plants. Likewise the surfer that is removed from any power plants stack can be converted into sulfuric acid! That can be used to break down biomass to make cellulistic ethanol...or if your using BTL just toss it all in there.
Its amazing what can be done with lots of C and H and O and also the N and S
Reality is nothing is perfect. But change is not always bad despite it not always being good.
Posted by: fstvette78 | 05 January 2007 at 11:27 PM
Hi everyone,
How do you feel Obama compares with Vilsack on energy and the environment? I had some mixed feelings when I watched this:
http://www.cfr.org/publication/11767/energy_security_video.html
Maybe I'm being too hard on Vilsack. There were a few spots where I was genuinely impressed with what he said.
Posted by: netscrooge | 06 January 2007 at 12:32 AM
This blog once again performs the incredible by ignoring the economic implications of its own discussion. Although someone got it exactly right - it is better to burn off our carbon then the carbon that Osama and Hugie Chavez sells us. Which part of we have a three hundred billion current account deficit with foreigners born on top of oil swamps - do you not understand? Does anyone at all realize that we have a huge unemployment and industrial plant dissappearing problem here? Never mind Washington's unemployment statistics, take a drive through upstate New York or Brooklyn New York and see it there.
Yes algae CO conversion is a good solution, however algae is hard to grow in that quantity, surprise surprise, and still some years away. Some Cambridge biologists are getting close to solving that, but give them time. However do not let that stop us from CTL.
On the other hand, mopers and hand wringers, let's make perfect the enemy of good, since that is our best skill.
Posted by: calvino | 06 January 2007 at 01:28 AM
The reason coal to liquids is racing upright now is a new process discovered just a year or so ago dropped the cost by a ton. Thusits a coal rush.
nd of course politicians want to look like they are doing something so they are desperate to sign bills and fling money before the oil cmpanies build the plants anyway.
Posted by: wintermane | 06 January 2007 at 02:07 AM
Calvino:
Picture is not so grim. US adsorbed recently no less than 10 millions illegal’s workforce. Population (and economic might) is actually growing, not shrinking like in most developed countries. 300 B trade deficit means that US consumed these goods and services inside, instead of sending them overseas. Everybody knows this, and happily returning these 300 B back in US as investments. Now, it is vastly simplified picture, but so is yours. US is blessed with domestic consumer driven economy, to the awe of the rest of the world which economies are dependent on Uncle Sam who sometimes buy their products, sometimes not.
But getting rid of oil dependency from nations routinely spitting in your face, I agree, is the matter of dignity, not just economy.
Posted by: Andrey | 06 January 2007 at 02:19 AM
I would say they go for CTL instead of IGCC and BEV because there are over 100 million liquid fueled cars and virtually zero BEVs. This is just a guess, we would have to ask the Senators.
Posted by: SJC | 06 January 2007 at 02:54 AM
Ok, lets assume we do find a cost effective way to mass produce algae using the C02 from the CTL plant. What are you going to do with all the algae. Some people want to make bio-d and ethanol out of it. The carbon still goes in the air, though, when you burn the fuel. I guess you could bury it?
Posted by: JC | 06 January 2007 at 05:07 AM
We currently have almost zero CTL too, but I don't see that stopping the policymakers. Besides, building new vehicles to use electricity (which we have, and can get more of) fixes more problems than CTL.
What we have here is a huge failure of imagination.
Posted by: Engineer-Poet | 06 January 2007 at 05:57 AM
"it is better to burn off our carbon then the carbon that Osama and Hugie Chavez sells us."
That's a simple rationalization. How about developing/advancing NEW technology (a carbon tax) and informing the great consumers of the world of their narcissistic means?
Posted by: FYI co2 | 06 January 2007 at 06:49 AM