Washington (Platts)--12Jun2007

New ways to develop fuels that would substitute for oil -- such as
coal-to-liquid fuel, oil shale and tar sands -- could "dramatically increase"
emissions associated with global warming and threaten habitats in the US and
Western Canada, the Natural Resources Defense Council said Monday.

The environmental group urged that "clear safeguards" be adopted quickly,
particularly as lawmakers face "growing pressure" to give new incentives to
companies working to develop unconventional oil. 

"Industry and political leaders are pushing us blindly down a dangerous and
expensive energy path," said NRDC energy analyst and report author Deron
Lovaas, in a statement. "The vast amounts of energy need to make these fuels
means that overall emissions from every gallon could double or even triple.

"Mining fuels to put in gas tanks would have devastating impacts on local
communities and the landscape. It will suck up valuable water in places where
it is already in short supply."

The energy required to produce CTL fuels would mean "twice as much global
warming pollution as ordinary gasoline," from production and then from use,
NRDC said. Replacing 10% of oil demand would result in a 42% increase in coal
mining to produce an additional 475 million short tons/year. New processing
plants would add to the pollution, NRDC said. 

Both sides in the energy debate are placing serious pressure on the Senate as
it debates the energy bill this week. Numerous amendments are expected,
including some supporting CTL fuels, but neither side is certain of passage.
Other amendments will address fuel and plant efficiency, carbon capture and
storage and reducing greenhouse gas emissions. The House passed the bill some
months ago, but the Senate has been deliberating over various components and
support. 

Capitol Hill friends 

Though the CTL industry in the US does not exist yet, it has friends on
Capitol Hill, NRDC said. Two amendments by Representative Steve Pearce,
Republican-New Mexico, were added last week to a measure sponsored by House
Natural Resources Committee Chairman Nick Rahall, Democrat-West Virginia, that
would benefit the industry.

--Cathy Landry, cathy_landry@platts.com and 
--Jean Chemnick, jean_chemnick@platts.com

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