A funding resolution passed yesterday by a Democrat-led House panel could be used to pay for liquid coal projects, angering environmental groups that campaigned to remove such provisions from both House and Senate versions of the energy bill.
"It's a boondoggle for industry, no matter how they word it," said Julia Bovey of the Natural Resources Defense Council, which is opposed to the expanded use of liquid coal. "It's cynical and dishonest to call it an alternative."
After objections from environmental organizations to yesterday's vote in the House Ways and Means Committee, House Speaker Nancy Pelosi, California Democrat, directed members of the Energy and Commerce Committee to oppose a resolution that would have provided loan guarantees for liquid coal projects.
The provision passed by Ways and Means would allow the proceeds from tax credit bonds to be used for alternative energy projects that "promote the commercialization of technologies for the capture and sequestration of carbon dioxide."
A former Ways and Means staffer said the process for converting coal to liquid fuel meets the requirements of the resolution's language.
"We were just as surprised as the environmental lobby when we heard there was a hint of potential energy buried in the Ways and Means bill," said Brian Kennedy, spokesman for House Minority Leader John A. Boehner, Ohio Republican. "Until this minor setback, the speaker and activist community were batting 1,000 in their fight to keep all forms energy out of every 'energy' bill in the House. There may be hope for the consumer yet."
The Sierra Club, another environmental group that lobbied to have liquid coal funding removed from the bill, said it will push to have the provision changed to prohibit funding for liquid coal projects.
"We don't support funneling money for liquid coal," said Sierra Club official Alice McKeown.
Proponents of coal-to-liquid technology say the United States is home to more than a quarter of the world's usable coal reserves, the equivalent of 1 trillion barrels of oil.
"We know coal to liquid works," said Myron Ebell, an energy analyst with the Competitive Enterprise Institute, which favors free-market solutions to energy issues. "The question is whether it can be competitive."
Mr. Ebell said liquid coal was used as a gasoline alternative during World War II, but fell out of use after the war because technology at the time was not as readily viable or clean as that used to convert crude oil into gasoline.
Rep. Joe L. Barton of Texas, the ranking Republican on the House Energy and Commerce Committee, said the votes yesterday showed that Democrats were struggling to appease environmentalists while paying attention to the needs of Democratic lawmakers who represent coal-producing districts.
"All this left-hand-doesn't-know-what-the-other-left-hand-is-doing business wouldn't pass most laugh tests, but now it passes for energy legislating," Mr. Barton said. "Still, it brightens the day of anybody in the unhappy position of hoping that Democrats on another committee succeed after Democrats on his own committee had their minds changed by the speaker."