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Tuesday, November 16, 2010

Clean Coal Authorizations, Appropriations, and Incentives

Anthony Andrews
Specialist in Energy and Defense Policy

Molly F. Sherlock
Analyst in Economics

Coal-burning power plants provide nearly half of the electricity generated in the United States. They are also responsible for emitting carbon dioxide, a greenhouse gas associated with global warming. A major goal of current federal support and incentives for coal is managing carbon dioxide emissions. The term “clean coal” is applied to technologies that would capture the COfrom burning coal and sequester it underground in geologic reservoirs.

Most of the current clean coal related programs have been authorized through four titles under the Energy Policy Act of 2005 (P.L. 109-58). Title III (Oil and Gas) directed the Secretary of Defense to develop a strategy for using fuel produced from coal. Title IV (Clean Coal Power Initiative) intended to demonstrate advanced clean coal-based power generation technologies on a commercial scale. Title IX (Research and Development) included programs for coal related technologies, carbon capture, and coal mining. Title XVII (Incentives for Innovative Technologies) offered loans to eligible projects that “avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases” while employing new or improved technologies (which included coal gasification).

Recent appropriations made over $900 million available for Department of Energy clean coal programs, and recent economic stimulus legislation appropriated an additional $3.2 billion. Department of Defense certification of coal-based synthetic jet fuel potentially offers a stimulus for private investment in coal-to-liquid jet fuel plants. The Department of Energy has also announced loan guarantee opportunities for innovative technologies to capture and sequester carbon. Investment tax credits have also been available for investments in clean coal facilities. The American Clean Energy and Security Act (H.R. 2454) would establish a government chartered corporation to research carbon storage through fees charged to customers of coalburning utilities.

Date of Report: November 1, 2010
Number of Pages: 16
Order Number: R40662
Price: $29.95

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