[Congressional Record (Bound Edition), Volume 152 (2006), Part 7]
[Extensions of Remarks]
[Page 9324]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  COAL-TO-LIQUIDS TRANSPORTATION FUELS

                                 ______
                                 

                         HON. NICK J. RAHALL II

                            of west virginia

                    in the house of representatives

                         Tuesday, May 23, 2006

  Mr. RAHALL. Mr. Speaker, for decades this Nation has been 
researching, debating, drafting, and redrafting national energy policy. 
Unfortunately, the long gas lines of the 1970's that motivated the kind 
of original thought needed to end our dependency on foreign oil slipped 
from our memories as supplies increased and prices dropped. Today, we 
are punished with oil prices floating in the range of $75 a barrel, 
record prices at the pump, and an unstable world market for the 
foreseeable future.
  At the same time, according to the Department of Energy, $35-$45 a 
barrel oil is attainable from a source within our borders. It is our 
most abundant domestic energy resource--coal. With technology that has 
been around for decades, coal can be liquefied and turned into a liquid 
fuel, and eventually sold for approximately half of what we are paying 
now per barrel.
  The true value of coal is misunderstood and many ignore its potential 
to free us from foreign oil at our own peril. We risk stepping into the 
same trap that has caught so many promising energy policy advances by 
the ankle for decades.
  Research has brought us a long, long way from the days of smokestacks 
and gray skies. True, there remain many less efficient, older 
generation power plants in this Nation, but largely because, while the 
Government draped oil companies in rich tax advantages, it devoted mere 
dribbles of money to providing incentives for clean burning coal 
plants.
  Thirty years of government and private-sector research and 
development has created a product, according to the Department of 
Energy, that is cleaner than required under EPA Tier II fuel standards. 
And with this Nation's refinery capacity operating on all cylinders, 
these fuels would fit right into our energy mix as they would require 
very little additional processing. Coal-to-liquids can curb our 
appetite for foreign fuel.
  Dtsturbingly, however, for all of our Nation's pride in our 
competitiveness and innovation, we stand behind a number of other 
countries in liquefying coal to end our foreign oil dependence.
  For instance, these fuels represent about one-third of the 
consumption in South Africa, which began its production and use in the 
1950's using the Fischer-Tropsch process developed during the 1920's by 
two German researchers. China, India, and Indonesia, recognizing the 
problems of relying on foreign sources of oil, are all aggressively 
pursuing coal liquefaction as key components of their energy 
production. For the U.S., our continued myopia about coal liquefaction 
is particularly numb-headed, since coal is our most abundant natural 
energy resource.
  In order to catch up to the rest of the world, a position to which 
the U.S. is unaccustomed, we must invest in our future and Congress 
began to travel down this road with the reauthorization of the Nation's 
surface transportation laws last year by including two new excise tax 
credits aimed at promoting the use of alternative transportation fuels, 
including liquid fuel derived from coal.
  While a helpful first step, due to the restrictive nature of the 
existing tax credit, I am pleased to join my colleague John Shimkus and 
others in introducing legislation aimed at helping far-sighted firms 
better afford their foray into coal liquefaction. Our bill would reduce 
some of the risk that these firms and their investors take as they try 
to lead our Nation into a new energy frontier.
  Simply put, our legislation would extend until 2020 the 50 cents per 
gallon tax credit for liquid fuel derived from coal that is set to 
expire in 2009. The legislation does not address other alternative 
transportation fuels, just coal-to-liquids.
  The aim is to provide a level of predictability for a number of years 
to those willing to put money into coal-to-liquids production. It would 
help to smooth out some of the ups and downs associated with 
fluctuating oil prices and the gamble investors make in the financing 
of these high-tech energy ventures.
  Unfortunately, while other governments have been footing the bill for 
this kind of research and development for decades, our Government has 
been ``playing footsie'' with Big Oil. In comparison to the big tax 
giveaways enjoyed by the oil industry, precious few U.S. budgetary 
resources have been devoted over the years to cutting-edge coal 
technologies. This is mind-boggling policy, given coal's abundance on 
our own shores.
  The United States will never drill its way out of our oil dependency. 
But using proven, coal-to-liquid technology and American initiative, we 
could revolutionize our way to a new energy era. This bill helps to 
level out Federal tax policy that has long been tilted against the 
public in favor of rich oil companies.

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