Washington (Platts)--19Jun2007

The US Senate on Tuesday voted down two pieces of legislation that would
have boosted efforts to commercialize the transformation of coal into liquid 
transportation fuels, handing a victory to environmental groups that argued
that coal-to-liquids should be scrapped because it would generate carbon
dioxide emissions and exacerbate global warming. 

     The two CTL measures -- one sponsored by Democrats, and the other pitched
by Republicans -- were both offered as amendments to a major energy bill that
the Senate has been debating since June 11.

     The Democratic amendment, sponsored by Senator John Tester of Montana,
would have provided billions of dollars in loans and other incentives to
companies that planned to build CTL plants that would capture and sequester at
least 75% of their carbon dioxide emissions. The sequestration aspect is
critical, Democrats argued, so that CTL does not worsen global warming. 

     But Tester's measure was apparently not protective enough to calm those
fears, as 20 Democrats broke party ranks to oppose the measure, which failed
by a tally of 33-61. Among the Democrats to vote against the amendment was
Senator Barbara Boxer of California, who is a cosponsor of one of the most
stringent global-warming bills circulating on Capitol Hill. 

     The Republican amendment, sponsored by Senator Jim Bunning of Kentucky,
would have required the US to manufacture and use at least 6 billion gallons
of CTL transportation fuel between 2016 and 2022. But Bunning's measure would
not have required CTL plants to sequester their CO2 emissions, because
Republican lawmakers say the necessary technology has not yet been fully
developed.

     Bunning's amendment failed 39-55, with six Republican lawmakers siding
with Democrats to sink the measure. Senators Jon Kyl of Arizona and Lamar
Alexander of Tennessee were perhaps the most surprising defectors, as they
typically vote with the Republican leadership on energy issues.

		--Brian Hansen, brian_hansen@platts.com