On D.C.’s burner: Coal at the pumps

For years, coal-country lawmakers have talked about turning the abundant natural resource into a fuel for motor vehicles.

The idea went nowhere.

But now it has taken on momentum, oddly enough, just as Congress appears ready to pass legislation to fight global warming. Even though coal has been attacked as a major culprit in climate change, lawmakers say a coal-derived fuel could solve another problem: U.S. dependence on foreign oil.

A bipartisan group of lawmakers, including one presidential candidate, Sen. Barack Obama (D-Ill.), is pushing to provide federal loan guarantees, tax breaks and other subsidies to spur the production of fuel from coal.

But the process of turning coal into a liquid emits carbon dioxide, so much that each gallon of the fuel would create more greenhouse gases than gasoline -- unless the carbon dioxide released in production could be captured and stored.

The idea of using the nation’s coal reserves, the largest in the world, has drawn new attention as President Bush has pushed for domestically produced alternative fuels, citing national security concerns. Politically jittery lawmakers also are eager to show they are responding to high pump prices.

The idea, however, remains controversial, as a Senate hearing on a coal-fuel measure showed last week. “Here is an opportunity to vote for U.S. coal and against Saudi oil,” Sen. Larry E. Craig (R-Idaho) said. But Sen. Bernie Sanders (I-Vt.) responded, “At best, coal-to-liquids will be equal to conventional gasoline. Frankly, we’ve got to do much, much better.”

The debate offers a glimpse of the clashes that lie ahead as lawmakers writing climate-change legislation wrestle with the future of coal.

Coal interests remain a powerful force on Capitol Hill, with significant deposits in about 15 states. And congressional action involving coal could prove vexing for presidential candidates when they are stumping for votes in key producing states, such as Pennsylvania and Ohio, while also trying to win the support of environmentalists.

Strange bedfellows

The issue has created unusual alliances.

“What unites President Bush and Barack Obama?” Frank O’Donnell of Clean Air Watch asked in a recent e-mail update on energy legislation. “Why, support for plans to subsidize conversion of coal to liquid fuel.”

Obama, who favors tough government action to combat global warming, has teamed up with regulation foe Sen. Jim Bunning (R-Ky.) to sponsor legislation to promote the coal-derived fuel. Both senators have coal reserves in their states.

Their bill aims to reduce the upfront costs and financial risks of building plants, which can be as much as $4 billion per facility. It would provide loan guarantees for up to 10 plants, each capable of producing at least 10,000 barrels a day; allow the Pentagon to enter into a long-term contract to buy coal-derived fuel for military use; and authorize a study on using it in the nation’s emergency supply. It’s unclear how much this would cost.

Obama, who is sponsoring separate legislation to cap carbon dioxide emissions, said his support for coal fuel depended on finding a way to remove the greenhouse gases emitted in production.

“If it is used simply to compound the problem of greenhouse gases, then it’s not going to be a credible strategy,” he said.

The bill does not require that the fuel be produced without increasing greenhouse gas emissions, though it does offer tax incentives to encourage the use of technology that captures carbon dioxide.

Proponents narrowly lost a bid last week to add a measure to promote the coal-derived fuel to an alternative fuels bill. But when that bill reaches the Senate floor, they hope to add a requirement that the United States use 21 billion gallons of coal-derived fuel annually by 2022.

The country consumes about 140 billion gallons of gasoline a year.

In the House, government support to develop coal-based fuel has the backing of key committee chairmen from coal-producing states.

Rep. Rick Boucher (D-Va.) -- who heads the Energy and Commerce subcommittee on energy and air quality -- is preparing to introduce a bill that would offer an additional incentive to spur production: guaranteed federal payments for coal-fuel producers if the price of oil dropped so much that coal fuel could not compete. Boucher plans to require companies receiving government support to install carbon-capturing technology.

“The truth is coal is our most abundant energy resource,” Boucher said. “We absolutely must use it if we have any hope of achieving a greater degree of energy self-reliance.”

The U.S. imports about 60% of the oil it uses.

The bills have picked up support from lawmakers outside coal country.

“Quite frankly, it needs to pass,” Rep. Devin Nunes (R-Visalia) said of the coal-derived-fuel bill. Nunes recently showed up for a Capitol Hill kickoff of a coalition of energy companies and labor groups lobbying for coal-based fuel. “We can’t get to energy independence without using our own natural resources.”

Proponents dispute claims that the fuel would harm the environment. “The new technologies that are out there are making a big difference today,” said Kenneth J. Nemeth, executive director of the Southern States Energy Board, a group that supports development of coal-derived fuel. “Those people who are against fossil energy are against it because they have always been against it.”

Used in World War II

Coal-to-liquids, or CTL, as the process is known, was developed in the 1920s by German scientists and used by the German military during World War II. It was later used by South Africa when its access to foreign oil was largely cut off in response to its apartheid policies.

Massive amounts of coal are heated at temperatures of 1,000 degrees, with water added to create steam. The coal becomes gasified, is run over a catalyst and transformed into a clear, yellowish-brown liquid that can be used as diesel or jet fuel.

UC Berkeley scientists concluded that making and using CTL created about twice the amount of greenhouse gases as petroleum.

Proponents of coal-derived fuel say they believe they can build plants to capture the carbon dioxide and pump it into the ground. But opponents say it is not clear the technology will work on a large scale.

“If you take coal and convert it into gasoline, basically what you’re doing is taking coal, which has far more carbon relative to petroleum, and burning it instead of petroleum to drive your car,” said Bill Chameides, chief scientist for Environmental Defense.

He calls the development of coal-derived fuel a “terrible, terrible idea,” but said that if it was done, the carbon dioxide must not be emitted into the air. “If you capture the carbon and sequester it, now you’ve got a fuel that’s about the same as petroleum in terms of climate impacts.”

Dueling studies

John Ward, vice president of marketing and public affairs for Headwaters, a Utah-based energy firm that has formed partnerships with coal companies to try to build CTL plants, said it was “absolutely possible to build environmentally responsible” facilities.

He said studies showed that CTL produces lower levels of other types of pollution, including nitrogen oxides, sulfur dioxide and particulates.

A new study has concluded that turning coal into liquid fuel yields 125% more carbon dioxide than producing diesel fuel and 66% more than gasoline. If the carbon dioxide is captured and permanently stored, liquid coal emits 20% more greenhouse gas than diesel but 11% less than conventional gasoline, according to the study to be released next week by Argonne National Laboratory, a research arm of the Energy Department.

With both sides disputing the environmental impact of coal-based fuel, Rep. Henry A. Waxman (D-Los Angeles) has asked the National Academy of Sciences to convene experts to examine the environmental issues.

But environmentalists remain skeptical of coal-fuel advocates.

“They see dollar signs here. What they need to see is little CO2 clouds too,” said David Friedman, the clean vehicles research director for the Union of Concerned Scientists. “You can’t just sell something on the promise that someday it will be better.”

Every dollar invested in coal-to-liquids, a coalition of groups including the Sierra Club and the Natural Resources Defense Council wrote in a letter to lawmakers, is a dollar unavailable for investment in “efficient vehicles, improved transportation systems, smart growth and sustainably made renewable fuels.”

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richard.simon@latimes.com

janet.wilson@latimes.com

Simon reported from Washington and Wilson from Los Angeles.

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(BEGIN TEXT OF INFOBOX)

Coal as liquid fuel

Lawmakers hope to tap U.S. coal reserves, the world’s largest, to produce a liquid fuel that would reduce dependence on foreign oil. But coal-to-liquid can be more polluting than gasoline.

Where the coal is

Coal is concentrated in several regions in the U.S., which produces more than a billion tons a year, more than one-fifth of the world’s coal.

Production by region in 2006

(Millions of tons)

[Please see microfilm for full map information]

1) Western: 619

2) Interior: 152

3) Appalachia: 390

Emission comparisons

Turning coal into liquid emits carbon dioxide and other gases. Each gallon would create more greenhouse gases than gasoline unless the carbon dioxide is captured and stored (CCS) during production.

*--* Change in greenhouse gas emissions Liquid coal With CCS Without CCS vs. diesel +20% +125% vs. gasoline -11% +66%

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Top coal reserve states

States with the most recoverable coal reserves in 2005.

(Billions of tons)

*--* 1. Wyo. 7.98 2. W. Va. 1.74 3. Mont. 1.23 4. N.D. 1.21 5. Ky. 1.17 6. Texas 0.77 7. Ill. 0.75 8. Pa. 0.62 9. Colo. 0.38 9. Ind. 0.38 10. Ala. 0.36

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Note: Figures are for producing mines

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World reserves

Although coal deposits are widely distributed, 67% of the world’s recoverable reserves are located in four countries:

United States - 27%

Russia - 17%

China - 13%

India - 10%

Other - 33%

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Sources: Dept. of Energy, MIT, Argonne National Laboratory. Graphics reporting by Julie Sheer