[Congressional Record Volume 152, Number 68 (Friday, May 26, 2006)]
[Senate]
[Page S5390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BUNNING (for himself, Mr. Obama, Mr. Lugar, Mr. Burns, and 
        Mr. Pryor):
  S. 3325. A bill to promote coal-to-liquid fuel activities; to the 
Committee on Finance.
  Mr. BUNNING. Mr. President, I rise today to introduce the Coal-to-
Liquid Fuel Promotion Act of 2006. Last month, I chaired an Energy 
Committee hearing on this promising technology that can turn coal into 
diesel fuel. Working with industry and the scientific community, I have 
put together a comprehensive piece of legislation with the goal of 
providing the right combination of incentives to create a backbone of 
coal-to-liquids infrastructure in the United States.
  The first step is for the Department of Energy to help with planning 
these large-scale coal-to-liquids plants. This legislation will create 
a loan program where the private sector can obtain a loan of up to $20 
million, matched dollar-for-dollar by non-federal money, to pay for the 
significant costs of planning, permitting and engineering a coal-to-
liquid facility. This program will have minimal cost to the taxpayers 
as these loans will be repaid, within 5 years, after a planned plant is 
financed. The federal government will also provide loan guarantees for 
coal-to-liquids facilities by expanding the program authorized in the 
Energy Policy Act of 2005.
  It is not enough to simply help engineer plants or provide a loan 
guarantee--there must be an economic motivation for investors to put up 
the $1 to $2 billion it costs to build a large-scale coal-to-liquids 
plant. To that end, this bill will create a separate investment tax 
credit for coal-to-liquids technology. It will also extend the fuel tax 
credit for coal-to-liquids fuels until 2020. The combination of these 
incentives will be the one-two punch needed to jumpstart investment in 
this marketplace. This package of incentives is essential to developing 
a domestic coal-to-liquid fuels market.
  With this domestically produced fuel from coal, we can bring down gas 
prices and be closer to energy independence. And these two goals, which 
are essential to our national security, bring me to the last part of 
this legislation. The Department of Defense consumes large amounts of 
fuel--for our airplanes, ships and tanks--and nearly all of it is based 
on petroleum and too much of it comes from the Middle East. It is time 
we ensure that our military has a safe, domestic source of 
transportation fuel. My legislation will authorize funding for the 
continued testing and evaluation of coal-to-liquid fuels by the 
military. It includes authorization to engage in long-term contracts 
with producers to ensure a stable, domestic fuel for our armed forces. 
This bill also authorizes the Department of Energy and Department of 
Defense to evaluate coal-to-liquids fuels for storage in the Strategic 
Petroleum Reserve and allows the government to turn to this domestic 
source of fuel for filling the reserve.
  With this legislation America can take a huge step toward energy 
independence. My bill will foster a domestic marketplace for coal-to-
liquids fuels, bring down gasoline costs and provide our military with 
a secure, domestic fuel source. I urge my colleagues to support this 
bill.
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