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May 29, 2007 3:30 PM, EDT
Feds Push Coal-Liquid Technologies

Federal officials and the coal industry are making a push for big subsidies to develop technologies to turn coal into liquid fuel, the New York Times reported Tuesday.

The push — which includes loan guarantees that could run into the billions — has received bipartisan support ranging from coalfield state lawmakers in West Virginia and Wyoming to presidential candidate Barack Obama, the Times said in a front-page story.

Peabody Energy, the world’s biggest coal company, has hired former House Majority Leader Richard Gephardt, a former Democratic representative from Missouri, to head up its lobbying efforts in Congress, the paper reported.

The Bush administration has not backed any specific projects, but in general has supported the idea of alternative fuels, the Times said.

Coal-produced fuels — while technically feasible and able to be used in cars and trucks — have been expensive to produce in the past and produce more greenhouse gas emissions than standard transportation fuels, the paper reported.

Their economic success depends in large part on high oil prices, and the programs being developed would include subsidies if oil dropped below $40 a barrel, the Times said. Oil closed Friday at $65.20 a barrel on the New York Mercantile Exchange.

The government-owned Synthetic Fuels Corp. in the 1980s, which also came about in reaction to high oil prices, was an economic bust that lost billions, the Times said.

Several firms are trying to build coal-to-liquid plants, including a $4 billion plant planed in Ohio by a Vancouver, Wash., company, the paper reported.