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U.S. Senator Robert C. Byrd, D-W.Va., has joined a bipartisan effort to increase the use of coal as a transportation fuel source.
"Coal can -- and should -- be a major part of America’s energy independence. Alternative fuels made from coal can burn cleaner and perform better than petroleum fuels. We can produce alternative fuels and other by-products right here in the U.S., using our own abundant supplies of coal and other resources. That is a major reason why I am working to expand the incentives for coal-to-liquid fuels initiatives," Byrd said.
"As a nation, we must break the chains of foreign oil. Too much of our future is invested in the sands of the Middle East. We cannot rely on one single alternative fuel source. Instead, we must develop a fleet of new fuels, from coal-based to solar to biomass. We will need them all. And when we make that investment, we will produce jobs and economic security, as well as a cleaner environment," Byrd explained.
Byrd, Republican Senator Jim Bunning of Kentucky, and Democratic Senator Barack Obama of Illinois are writing legislation that would spur significant private investment in the development and construction of plants to create coal-to-liquid (CTL) fuels.
Several companies are considering West Virginia sites as potential locations for a new coal-to-liquid plant. Byrd’s legislation would potentially serve as a boost for any private investment.
"The bipartisan legislation to expand coal-to-liquids technology would open the doors to new investments and new opportunities. It would take the power of the coalfields and turn it into the power for our vehicles and airplanes. The technologies exist and more could be done very soon if only the United States government would wake up and understand that it is cheaper to invest in new technologies and markets than it is to fight wars," Byrd said.
According to federal experts, America spends $800 million a day, or $300 billion annually, on its 20-million-barrel-a-day oil habit. Passenger vehicles alone burn 8 million gallons of oil each day. Because the U.S. imports 60 percent of its oil, much of it from the Middle East, Senator Byrd believes that dependence on oil is clearly a national security issue.
The Bunning-Byrd-Obama proposal is expected to be part of a key Senate debate on comprehensive energy legislation later this month.
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Highlights of the Bunning-Byrd-Obama effort:
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This bill helps to pull together the investors and the billions of dollars needed to build a coal-to-liquids (CTL) plant. It expands and enhances the Department of Energy loan guarantee program included in the Energy Policy Act, approved by Congress in 2005. The new legislation also provides a new program of matching loans to address funding shortages for front-end engineering and design for a CTL plan. The loans are capped at $20 million and must be matched dollar-for-dollar by non-federal money.
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This legislation will fundamentally alter the economics of constructing CTL plants, spurring investment and construction. It will expand the investment tax credit and expensing provisions enacted in the Energy Policy Act of 2005, providing a 20 percent tax credit, valued at up to $200 million, for each of the first ten CTL plants.
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Bunning-Byrd also extends the fuel excise tax credit, passed in the last highway authorization bill, from 2009 to 2022. The current provision will expire long before the first CTL plant is operational. This extension will provide a meaningful timeframe for coal-to-liquid plants to benefit from the same tax incentives that are available for renewable fuel and hydrogen fuel.
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The legislation authorizes funding for Department of Defense to purchase, test, and integrate these coal-based transportation fuels into the military. It also authorizes a study on coal-to-liquid fuel storage and inclusion in the nation’s Strategic Petroleum Reserve.
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