October 7, 2008

Coal Industry Gets $2.8 Billion Help From Bailout Bill

By Ken Ward Jr.

When it passed the massive Wall Street bailout legislation last week, Congress threw in a $2.8 billion package of tax breaks for the coal industry.

The coal subsidies account for more than one-quarter of the $10.8 billion in energy incentives in the Energy Improvement and Extension Act of 2008, which was tacked onto the government bailout of the nation's financial industry.

Sen. Jay Rockefeller, D-W.Va., was among the architects of the coal provisions, which offer a mixed bag of programs where coal's impacts on climate change are concerned.

Most of the coal incentives focus on encouraging power producers to limit greenhouse gas emissions. But other parts of the bill seek to promote turning coal into liquid fuel, a move that could double greenhouse gas emissions from vehicle fuels.

Coal industry supporters have been pushing both ideas. They say that programs to capture and store coal's carbon dioxide emissions can keep the fuel viable as the world tries to deal with global climate change. And industry officials say that turning coal into liquid fuel can help eliminate dependence on foreign supplies of oil.

"These programs have an economic stimulus component to them," Rockefeller press secretary Steven Broderick said Monday. "It was important for the Senate to be doing something for families in West Virginia."

The $700 billion financial industry bailout, signed by President Bush on Friday, extended some key tax breaks for solar and wind power, as well as incentives for biofuels and electric plug-in hybrid vehicles.

Coal provisions included $1.4 billion in tax breaks over 10 years to power projects that will capture and store at least 65 percent of their total carbon dioxide emissions. Also, the bill included $1.1 billion for a $20 per ton tax credit for carbon sequestration.

The legislation also included a one-year, $61 million program to give producers of liquid coal a 50-cents-a-gallon tax break. Liquid coal jet fuel was added, as was fuel specifically made for the military, which is one targeted market for such products.

Rep. Shelley Moore Capito, R-W.Va., voted against the bailout bill twice last week. Reps. Alan Mollohan and Nick Rahall, both D- W.Va., voted for the bill twice.

Hal Quinn, president of the National Mining Association, said the legislation is an "important step to continue progress on the development and deployment of technologies that will result in cleaner electricity generated from coal - America's most abundant energy resource - and coal-to-liquid fuels, which can help secure our energy future."

But a coalition of seven national environmental groups opposed the liquid coal provisions of the bill.

In a letter to lawmakers, the groups, led by Earthjustice, said, "Relying on liquid coal could nearly double the global warming pollution per gallon of transportation fuels and increase the damage of coal mining to communities and ecosystems across the country.

"This fuel has yet to emerge as a significant transportation fuel in the United States and is not a viable fuel in a world where carbon must be reduced," the groups said.

Reach Ken Ward Jr. at [email protected] or 348-1702.

Originally published by Staff writer.

(c) 2008 Charleston Gazette, The. Provided by ProQuest LLC. All rights Reserved.