Bingaman on Coal Gasification

“Thank you all for coming here to give us your thoughts on coal gasification technology and how it may be used to meet our needs both for energy security and reducing our contribution to global warming. 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. Your testimony today will help us develop the policies that will guide that development in the right direction.

“I want to let members know that this hearing will not be the last word on the subject this year and we will be holding a longer, more in depth, hearing or workshop on coal gasification including coal to liquids in the near future. Senators Tester, Corker, Dorgan, Salazar and Conrad have all requested that we do so. Coal to liquids, in particular, has received great attention lately due to strong advocates like Montana’s Governor Brian Schweitzer and I believe we have much more to explore in that area and the related areas of industrial use of coal. So, I hope today’s hearing will be a good first step in assessing the future uses of clean coal technologies.

“We are entering a challenging time for energy in the United States. While our fuel prices are going up and we are becoming increasingly reliant on unstable or unsavory regimes for that fuel, we are facing an increasingly urgent need to begin addressing the real problem of global warming. I think we are reaching a point of consensus around this place on this last point and that’s a positive development, but we will need to start unifying our policies toward meeting this challenge soon.

“As the “stabilization wedges” developed by Princeton, and referenced by several witnesses today, make clear, we must make advances on many fronts at the same time if we are to get where we need to be in carbon emissions. No one technology or policy will suffice and it’s very difficult, for me at least, to be sure today what technologies will be the most important in the future. The investments we are going to be making in the coming years are significant and I think we’re well advised to be careful to make sure we don’t make our challenges greater in other areas in trying to address our fuel needs.

“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.

“For this reason, I think it makes sense for us in Congress to be careful to structure incentives so that we do not lose sight of where we need to be some years down the road. I believe we should try to get a greenhouse gas emissions framework in place as soon as possible, but if it doesn’t happen this year I think most would agree it is coming sooner rather than later.

“The price signals are not in place today to force deployment of the cleanest technologies, but that doesn’t mean commercial development and demonstration should wait. The best way to avoid economic shocks down the road is to lay the foundations today for the clean technologies we’ll be deploying tomorrow through forward-looking, technology-forcing incentives.

“I hope to hear more from all of you today about the state of technology in this important area so that we can have an informed discussion about the best way to move forward in a way that meets all of our goals.”

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