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Lawmakers mull coal-to-liquid fuel plans Senators from coal-rich states support idea, environmentalists warn against it. May 24 2007: 5:46 PM EDT
WASHINGTON (Reuters) -- A Senate panel Thursday weighed plans to turn plentiful U.S. coal supplies into transport fuels, but some experts warned that building "coal-to-liquids" plants will boost greenhouse gas emissions.
Policymakers are looking at America's 250-year supply of coal as a way to fuel vehicles while reducing dependence on crude oil imports, which meet about 60 percent of daily needs and are supplied by companies such as BP (Charts), Exxon Mobil (Charts, Fortune 500), ConocoPhillips (Charts, Fortune 500) and Chevron (Charts, Fortune 500). TXU_coal_plant.ap.03.jpg
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Countries like South Africa already use a process commercialized by Germany in World War II to turn coal into fuel for use in cars, trucks and airplanes. China also is eyeing ways to boost its coal-conversion capacity.
The U.S. coal-to-liquids industry is still in its infancy, but Democrats and Republicans from dominant coal states like Illinois and Kentucky want to offer incentives to build new plants - which can cost billions of dollars.
But skeptics warn increased coal use runs counter to a global push to cut heat-trapping carbon dioxide emissions, linked to global warming.
Coal burning already is responsible for about a third of carbon dioxide emissions from the United States, the globe's biggest greenhouse gas emitter.
"If we make a mistake and encourage the development of plants that we later find to be incompatible with our need to reduce greenhouse gas emissions, it will be a very costly mistake," said Sen. Jeff Bingaman, New Mexico Democrat and chairman of the Senate Energy Committee.
Bingaman, who has raised environmental concerns about coal-to-liquids, presided over a hearing about the issue. Panel Republicans have proposed legislation that would set a federal mandate to produce 21 billion gallons of coal-derived fuels by 2022. Crunch time for Hitler's fuel
"If we don't put [coal-derived fuels] in the picture we are limiting our options," said Sen. Jim Bunning of Kentucky, who is sponsoring the bill with fellow Republican Sen. Craig Thomas of Wyoming.
Sen. Barack Obama, Illinois Democrat, also has co-sponsored legislation that would set the stage for more U.S. coal-derived fuel production.
But Obama only supports coal-derived fuels that emit less carbon than gasoline, and wants to reduce carbon content in transport fuel by 10 percent by 2020, his spokesman said. Obama also is a sponsor of separate legislation to cut greenhouse gas emissions to one-third of 2000 levels by 2050.
Peabody Energy Corp., (Charts, Fortune 500) the world's largest private-sector coal company, is pushing for a massive expansion in CTL production.
That plan would require more than 30 new, huge coal-conversion plants costing more than $6 billion to build, according to Peabody plans cited by the Natural Resources Defense Council, an environmental group.
Antonia Herzog, an NRDC climate change scientist, warned that even if all the carbon dioxide from coal-to-liquid plants was captured and stored in underground reservoirs, net carbon emissions would still be higher than using crude oil.
Using coal for transportation fuels "would make the task of achieving any given level of global warming emission reduction much more difficult," Herzog said.
However, William Fulkerson, a senior fellow at the University of Tennessee, said carbon dioxide emissions could be slashed to nearly zero if coal was used to power refineries that convert crops like soybeans and corn to liquid fuels.
http://money.cnn.com/2007/05/24/news/economy/...ion=money_mostpopular |