Senators want federal agencies to buy CTL fuel
plattsenergyweektv.com
Coal Trader (08-Jun-11)
Senators argued that restrictions on buying certain alternative fuels such as coal-to-liquids are hurting the nation's ability to achieve energy independence, but witnesses said at a hearing Tuesday the restrictions need to stay in place to protect the environment.
"As we talk about our dependence on foreign oil, I think we have to recognize some of our dependence allows us to be more vulnerable," Senator Lisa Murkowski, an Alaska Republican and ranking member of the Senate Energy and Natural Resources Committee, said during the hearing. "Yes, we need to be working to reduce our environmental impacts, but we have technology in this country that allows us to use our most affordable resource."
The hearing focused on three bills, including the American Alternative Fuels Act of 2011, S. 937, which was introduced in May by coal-state Senators John Barrasso, a Wyoming Republican, and Joe Manchin, a West Virginia Democrat, along with Murkowski and Republican Senators Roy Blunt of Missouri, Dan Coats of Indiana and Mike Enzi of Wyoming.
Among the bill's provisions is the repeal of Section 526 of the Energy Independence and Security Act of 2007. The section prohibits federal agencies from procuring synthetic fuel unless its life-cycle greenhouse gas emissions are less than those for conventional petroleum fuel. The bill's sponsors say repealing the section will allow the federal government and the military to purchase alternative fuels such as CTL, which can be higher in greenhouse gases.
"I believe the use of coal as a transportation fuel will decrease our dependence on foreign oil," Barrasso said during the hearing.
CTL facilities without any control technology have about twice the greenhouse gas emissions of conventional petroleum fuels. The GHG emissions are reduced when coal is blended with biomass and in some cases "could be slightly over or under" the limits required by Section 526, James Bartis, senior policy researcher for Rand Corporation, said during the hearing.
The Obama administration is still reviewing the legislation and does not have a formal position at this point, Steven Chalk, deputy assistant secretary of the Office of Energy Efficiency and Renewable Energy in the Department of Energy, said in his testimony. But Chalk said the administration thinks that Section 526 is "very important."
"We are agnostic on the type of feedstock used. But the environmental attributes are very important," Chalk said. "We want to address climate change. We want to reduce greenhouse gases."
Brian Siu, a policy analyst with the Natural Resources Defense Council, said the organization opposes the repeal because of its potential climate-change impacts from increased use of "high-carbon fuels."
"It is noteworthy that Section 526 does not categorically prohibit any type of fuel nor does it require emissions to actually decline," Siu said in his written testimony. "It simply ensures that the federal government does not exacerbate climate change by expanding or commercializing high-carbon technologies before measures are taken to capture and dispose of the carbon pollution."
The bill would also allow the Department of Defense to enter into long-term contracts for purchasing alternative fuels. DOD is currently limited to contracts of no more than five years or $500 million, unless given Congressional approval.
"The main benefit would be to allow the use of the purchasing power of the Defense Department for the promotion of early commercial experience in the production of alternative fuels," Bartis said in his testimony. Bartis also said this would promote the use of coal-derived fuels.
Need for carbon-capture environmental safeguards expressed
NRDC opposes the effort because it "fosters alternative fuels without the necessary safeguards to avoid unacceptable environmental costs," Siu said in his testimony.
Chairman Jeff Bingaman, a New Mexico Democrat, applauded the effort to diversify the country's transportation fuel portfolio, but said he had some reservations about the possible high environmental costs of the bill.
"I hope that we can focus on ways to enhance national, economic and environmental security simultaneously, and avoid policies that might sacrifice any one kind of security in pursuit of another."
Bingaman also said that he believes some of the bill's provisions are outside the committee's jurisdiction, such as the long-term contracting for DOD, which would fall to the Senate Armed Services Committee.
The ENR Committee is expected to have a markup hearing next week, but the agenda has not been set on what bills will be considered, Bingaman said after the hearing.
Bingaman will look at options for slightly modifying Section 526, but will not consider a straight repeal, spokesman Bill Wicker said in an email after the hearing.
In his testimony, Bartis suggested amending the bill to require the use of a control technology such as carbon capture and storage to reduce the GHG emissions from alternative fuels such as CTL.
Senator Al Franken, a Minnesota Democrat, said he "would love to see carbon sequestration for coal-fired utility plants work magnificently."
"I have concerns about using liquid coal before we can do that," he said.
Last month, TransGas Development Systems broke ground on a $4 billion coal-to-gasoline facility in Mingo County, West Virginia. The facility will use an estimated 7,500 short tons of coal to make about 18,000 barrels of gasoline per day (PCT 5/10).
Beth Ward |
