Senate Hearing On Coal Gasification

May 24: The Senate Energy & Natural Resources Committee, Chaired by Senator Jeff Bingaman (D-NM), held an oversight hearing entitled, Coal Gasification: Opportunities and Challenges. The hearing addressed opportunities and challenges associated with coal gasification, including coal-to-liquids and industrial gasification. Witnesses included representatives from: Natural Resources Defense Council (NRDC); Institute for a Secure and Sustainable Environment, University of Tennessee; Eastman Gasification Services Company; the RAND Corporation; and SAIC-Energy Solutions Group.

In an opening statement Chairman Bingaman indicated, "Although the fundamental technology we are talking about today has been around for many decades, relatively recent developments in the technology point to a pathway that may allow us to use the our abundant coal reserves in a way that is responsible to our children and their children." Bingaman said that additional, longer, more in depth, hearings or workshops on coal gasification including coal to liquids will be held in the near future. He said Senators Tester (D-MT), Corker (R-TN), Dorgan (D-ND), Salazar (D-CO) and Conrad (D-ND) had all requested additional hearings.

Bingaman said, "I don’t think anyone here would seriously dispute that coal is an important part of our fuel mix for the foreseeable future. Our domestic reserves are abundant and the price spread between coal and other fossil fuels is likely make coal an attractive option for a long time to come. However, the capital costs associated with coal facilities, and particularly coal gasification facilities, are very high – often in range of four billion dollars or more -- and their expected useful life is over 20 years. As a result, if we make a mistake, and encourage the development of plants that we later find to be incompatible with our need to reduce greenhouse gas emissions, it will be a very costly mistake."

Senator Pete Domenici (R-NM), Ranking Member of the Committee, said that development of coal-to-liquids technology is essential for strengthening U.S. energy security over the coming years. He said, "...other nations, like South Africa and China, are well on the way to using coal converted to liquid form. In fact, China is constructing an 80,000 barrel per day coal-to-liquid facility, and the Chinese government has proposed using as much as 1 million barrels of coal-to-liquid a day by 2020. Coal is a resource that we have in abundance, and if we develop it wisely and lead the march to new clean coal technology, it will give us the economic potential to compete with the world’s emerging economies. We can’t afford to fall much farther behind.”

The American Chemistry Council (ACC) President & CEO Jack Gerard issued a statement highlighting the testimony of Eastman Gasification Services Company, and saying, “We applaud the Committee for looking at coal gasification and industrial gasification systems, which represent emerging technologies that can help the nation make use of its abundant domestic resources and develop a comprehensive energy policy. Industrial gasification, in particular, is a logical economic and technological path forward to achieve policy objectives such as environmental protection, energy security, reduction of natural gas prices and volatility, enhanced global competitiveness and job retention and growth. That’s because industrial gasification processes have unique characteristics that enable or advantage high levels of carbon capture. As Mr. Denton noted in his testimony today, industrial gasification is the ‘low hanging fruit’ as Congress considers programs to test and develop carbon capture and geologic sequestration (CCGS) technologies, protocols and financing issues. Gasification also has significant potential and benefit as a new source of feedstock for chemical manufacturers."

NRDC testified that, "One of the primary reasons that the electric power, chemical, and liquid fuels industries have become increasingly interested in coal gasification technology in the last several years is the volatility and high cost of both natural gas and oil. Coal has the advantages of being a cheap, abundant, and domestic resource compared with oil and natural gas. However, the disadvantages of conventional coal use cannot be ignored. From underground accidents and mountain top removal mining, to collisions at coal train crossings, to air emissions of acidic, toxic, and heat-trapping pollution from coal combustion, to water pollution from coal mining and combustion wastes, the conventional coal fuel cycle is among the most environmentally destructive activities on earth."

NRDC said, we can do better with both production and use of coal. And because the world is likely to continue to use significant amounts of coal for some time to come, we must do better... coal use and climate protection do not need to be irreconcilable activities... development and use of technologies such as coal gasification in combination with carbon dioxide (CO2) capture and permanent disposal in geologic repositories under certain circumstances could enhance our ability to avoid a dangerous build-up of this heat-trapping gas in the atmosphere while creating a future for continued coal use... we need to focus government funding more sharply on the most promising technologies [and] More importantly, we need to adopt binding measures and standards that limit global warming emissions so that the private sector has a business rationale for prioritizing investment in this area."

Access the hearing website for links to all testimony and an archived webcast (click here). Access the statements from Senators Bingaman (click here); and Domenici (click here). Access the ACC release (click here). [*Energy]