Subsidizing oil addiction?

Edmund Andrews in yesterday's Washington Times reports on a plan to subsidize American's continued dependence upon fossil fuels:

Even as Congressional leaders draft legislation to reduce greenhouse gases linked to global warming, a powerful roster of Democrats and Republicans is pushing to subsidize coal as the king of alternative fuels.

Prodded by intense lobbying from the coal industry, lawmakers from coal states are proposing that taxpayers guarantee billions of dollars in construction loans for coal-to-liquid production plants, guarantee minimum prices for the new fuel, and guarantee big government purchases for the next 25 years.

How much pork do they plan to offer up to keep us headed down the same ol' road?

Among the proposed inducements winding through House and Senate committees: loan guarantees for six to 10 major coal-to-liquid plants, each likely to cost at least $3 billion; a tax credit of 51 cents for every gallon of coal-based fuel sold through 2020; automatic subsidies if oil prices drop below $40 a barrel; and permission for the Air Force to sign 25-year contracts for almost a billion gallons a year of coal-based jet fuel.

According to the story, key supporters of this effort include:
  • Representative Nick V. Rahall, Democrat of West Virginia and chairman of the House Natural Resources Committee
  • Representative Rick Boucher, a Virginia Democrat
  • Senator Barack Obama, the Illinois Democrat,
  • Senators Jim Bunning of Kentucky and Larry Craig of Wyoming, both Republicans.
  • Former House Democratic Leader Dick Gephardt, who has been hired to lobby for the initiative.
Some may remember the boondoggle known as the Synthetic Fuels Corporation back in the 1980s. When it failed to create markets to make alternative fuels commercially viable, it was shuttered by the federal government in 1985. Likewise, this approach has been questioned from studies done by MIT and the U.S. Energy Department:

“At best, you’re going to tread water on the carbon issue, and you’re probably going to do worse,” said Howard Herzog, a principal research engineer at the Massachusetts Institute of Technology and a co-author of “The Future of Coal,” a voluminous study published in March by M.I.T. “It goes against the whole grain of reducing carbon.”

The M.I.T. team expressed even more skepticism about the economic risks. It estimated that it would cost $70 billion to build enough plants to replace 10 percent of American gasoline consumption.

The study estimates that the construction costs for coal-to-liquid plants are almost four times higher than the costs for comparable petroleum refineries, and it argues that cost estimates for synthetic fuel plants in the past turned out to be “wildly optimistic.”


In a new report last week, the Energy Department estimated that a plant capable of making 50,000 barrels of liquefied coal a day — a tiny fraction of the nearly 9 million barrels in gasoline burned daily in the United States — would cost $4.5 billion.

There's a lot to suggest this proposal offers no real solutions to the greater problems we face with regard to our oil supplies, as well as environmental concerns. It the end the only guarantee we're getting from this raw deal is that one way or another, we'll continue paying for our oil addiction.

This is one proposal we can't afford.

7 Response to "Subsidizing oil addiction?"

  1. JMC 31/5/07 08:09
    Hmmm... I agree. Perhaps we should take a look at this map and consider how we could possibly change those colors around. We really need to try to cut our energy consumption - we're the pigs of the world. Spending billions of dollars to not even make a drop in the bucket is ridiculous.
  2. Anonymous 31/5/07 08:38
    TREE HUGGER RINO
  3. JMC 31/5/07 09:44
    Well, anon838, if you're saying that republicans should have no concerns whatsoever about the environment, then you are a complete moron. We still have to live on the planet, you know, regardless of the political party's ideals to which we subscribe. And as for American's being pigs in the world when it comes to oil consumption, it's just plain true, no getting around it. Whether or not I'm a republican is completely beside the point.
  4. west_rhino 31/5/07 10:32
    anon, I don't hug no tree, less the deer stand suffers a catastropic failure, akin to your logic circuits.

    Earl, it is notable that two leading your list of proponents are from coal mining areas...

    Notable also is their lack of consideration or mention of working the oil shale, tapping ANWR or as an upstate leftwing pundit has exhorted, drilling off the SC coast. Mayhaps we need to do some exploratory drilling in the Santee Cooper lakes to justify the Clyburn bridge to SC 261.
  5. Anonymous 31/5/07 10:37
    intersting how obama is named. you know - the barack obama who is the bold new face of the democratic party.

    or maybe he is just another politician sucking up to pork barrel corporate welfare schemes that threaten our environment?

    in no time at all, he'll be the jim clyburn of the senate, hard at work pushing environmentally unsound pork barrel projects.

    i see good old suck-my-gephardt is their lobbyist. well, isn't that just peachy keen?
  6. Anonymous 31/5/07 10:41
    even if at least some of the republicans may not like what you have to say, it's very good of you to expose this!
  7. moye 2/6/07 14:48
    I am for anything that works. I personally do not mind making fuel from coal. I worked on a shale oil refinery we were building in Colorado back in the days and it was a joint effort of several companies. It never went on line due to the changes in administration in DC. Sounds like a job for Haliburton.

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