Worldwatch Perspective: U.S. Government Dumping $100 Million Into Filthy Fuels Project

Open-pit Mine
Heavy machinery extracts coal from an open-pit mine. Will this be the source of future transportation fuels?
Photo by James Russell

The U.S. Department of Energy (DOE) recently released the final environmental impact statement (EIS) on its proposal to contribute $100 million toward a new plant that will convert coal to liquid fuels. According to the statement, emissions estimates cited in earlier drafts of the EIS were only a small fraction of the expected releases of carbon dioxide (CO2) from the facility. Based on the revised estimates, the plant will directly emit more than 114 million tons of the greenhouse gas over its lifetime. The massive injection of public funds into this major new emissions source stands in stark contrast to growing demands for meaningful U.S. action to mitigate climate change.

The project, proposed by the Gilberton, Pennsylvania-based company WMPI Pty., LLC, was selected for funding under the DOE’s Clean Coal Power Initiative. It is being described as “the first clean coal power facility in the United States using coal waste gasification as the basis for power, thermal energy, and liquid fuels production.” But critics have questioned the merit of applying the “clean” label to a facility that will emit as much CO2 as 450,000 passenger cars, plus 200 tons per year of so-called “criteria pollutants,” as well as air toxins, such as mercury, sulfuric acid, and arsenic. Semantics aside, an examination of the technical merits of the project reveals little to support the proposed allocation of public funds.

The DOE justifies funding the project as a way to demonstrate that coal waste gasification, synthesis of liquid fuels, and power production can be integrated at commercial scale. Yet at the same time, the agency acknowledges that the gasification and liquid fuel synthesis technologies are already “commercially available with extensive development histories (20–40 years).” Nor is the combined-cycle turbine system that will be used to generate electricity particularly novel. Tacking these robust technologies together will certainly require finesse, but is this maneuver worth the $147 million of public funds being allocated (the DOE’s $100 million, plus $47 million in incentives from the state of Pennsylvania)?

Proposals to limit the damages of climate change, including several now being considered by Congress, require the United States to reduce greenhouse gas emissions by 60 to 80 percent by 2050. Based on recent estimates of U.S. emissions, that would mean eliminating more than 5 billion tons of annual CO2 emissions. The scale of this endeavor demands that public funds for research, development, and deployment of energy technologies flow to energy efficiency and to low-carbon energy sources, including wind and solar power and other renewables.

Subsidizing the deployment of coal-to-liquids erects an enormous obstacle to achieving emissions reductions. While the United States chases fictitious “clean” coal fuels, Japan and Europe are targeting vehicle fuel economy of nearly 50 miles per gallon. Directing the subsidy for the Gilberton project toward advancing fuel efficiency rather than coal-to-liquids would have increased the 2007 federal budget for vehicle technologies by more than 50 percent.

Carbon sequestration has been suggested as a possible remedy for the massive CO2 emissions from coal-to-liquid fuel facilities. In comments provided to the DOE, the American Petroleum Institute urged the agency and WMPI Pty. to further explore this possibility, citing large-scale projects such as Sleipner in the North Sea, In Salah in Algeria, and Snøhvit in the Barents Sea as evidence that it is practicable. The DOE responded that, “Geologic carbon sequestration was not part of the project as proposed to DOE. There is no basis for DOE to direct the industrial participant to pursue its potential implementation during the demonstration period.”

Under the Clean Coal Power Initiative, the DOE has no authority to suggest project modifications, only to fund or not fund. In the case of this facility, only a denial of federal funds could be considered consistent with good climate policy. The fact is, even if carbon sequestration were used at this type of coal-to-liquids facility, it would still result in more overall CO2 emissions than conventional petroleum fuels. In other words, even in the best scenario, this coal-to-liquids project would still be a loser in terms of climate change. Considering the alignment of public opinion, state action, and major U.S. corporations in favor of a swift and effective response to climate change, the DOE should reconsider its support of this project.

James Russell is the Sustainable Energy Fellow at the Worldwatch Institute.

The U.S. Department of Energy (DOE) recently released the final environmental impact statement (EIS) on its proposal to contribute $100 million toward a new plant that will convert coal to liquid fuels.