NCPA - National Center for Policy Analysis


June 15, 2007

The Senate is debating another energy bill -- and the direct cost to the government is already estimated at between $140 billion and $205 billion over 15 years in subsidies, tax preferences and loan guarantees.  Most of it will go to "alternative" energy.  But now the country's cheapest and most abundant source of normal energy -- coal -- is also sidling up to this federal trough.  But is this what the global warming alarmists had in mind, asks the Wall Street Journal?

  • The new political enthusiasm for coal rests on something called coal-to-liquid technology, or CTL, which converts coal into a diesel-like fuel that can be used for transportation.
  • CTL is part of President Bush's "20-in-10" initiative, which aims to cut gasoline consumption by 20 percent over the next 10 years.
  • The Air Force is also pursuing a program that would use almost a billion gallons a year of coal-based jet fuel.

CTL by itself will do nothing to reduce greenhouse gas emissions, and at worst doubles the carbon emissions volume over petroleum.  Proponents point to carbon-sequestration systems, which capture the gas produced by combustion and then bury it in aquifers or spent oil fields, but even this would only keep the carbon status quo.

It's also extremely expensive:

  • The best sequestration programs could remove up to 90 percent of CO2 but add about 50 percent to the costs, according to an authoritative Massachusetts Institute of Technology study.
  • The capital costs for a new plant are estimated at between $2.5 billion and $6 billion, and perhaps higher, because sequestration projects are years away from a working pilot phase.

So making CTL viable requires a great deal of taxpayer -- that is, your -- money, says the Journal.

Source: Editorial, "Congress Loves Coal," Wall Street Journal, June 15, 2007.


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