WASHINGTON – WASHINGTON – Saying that West Virginia coal must play a role in our nation’s efforts to decrease imported oil, Rep. Shelley Moore Capito has cosponsored legislation that would encourage the domestic development of liquid fuel from coal.  The legislation, the Coal Liquid Fuel Act (H.R. 2208), would establish price certainty for coal-to-liquid fuels, the lack of which has been the leading contributor to the unwillingness by private investors to fund coal-to-liquids facilities.

The legislation would authorize the U.S. Department of Energy to enter an agreement with six coal-to-liquids projects.  The Energy Department would then set “floor” and “ceiling” prices for crude oil that would act as a federal price guarantee for coal-to-liquid fuels.  If the price of crude oil rises above the agreed upon price ceiling, the facilities would have to make payments to the federal government, ensuring participating facilities are not earning windfall profits simply because they are participating in a federally backed program. 

However, if crude oil falls below the price floor, the federal government would make payments to facility operators, ensuring that coal-to-liquids fuels are still profitable even when crude oil is cheap. 

Analysts have stated coal-to-liquids fuels are economically feasible if the price of crude oil is above $40.  The current price is above $60, and the Energy Information Administration forecasts that prices for crude oil will remain above this level for the foreseeable future.

By establishing price certainty for coal-to-liquids, Capito says the legislation will provide the investment incentive that has been missing in the past. 

"Coal-to-liquids technology has been utilized in other parts of the world for nearly 60 years, so it is not a question of whether or not the technology works," Capito said. 

"We know the technology works and we know that West Virginia coal is up to the task," the congresswoman added.  "With the price certainty provided by this legislation, I am optimistic we can overcome the last hurdles and begin constructing coal-to-liquids facilities that utilize West Virginia coal."

Coal liquefaction has been in use since World War II, and today South Africa uses the technology to produce approximately 40 percent of its transportation fuels. 

The U.S. currently imports approximately 60 percent of the oil we consume.  Capito says that just doesn’t add up. 

"In West Virginia, we are literally sitting on the homegrown energy to help wean us from our addiction to foreign oil," Capito said.  "It is past time we begin utilizing our coal to not only provide electricity, but also to fuel our vehicles, machinery and airplanes."

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