Opening Statement of Sen. Alexander - Energy Committee Hearing on Coal Gasification

Posted on May 1, 2006

-Prepared remarks- Washington, D.C. – The following is the opening statement of U.S. Senator Lamar Alexander (R-TN) at today’s Senate Energy and Natural Resources Committee Hearing on Coal Gasification: “We hear a lot today about the high price of gasoline. The hearing today is about gas, a different type of gas, natural gas. In 2005, along with Sen. Tim Johnson (D-SD), I introduced the Natural Gas Price Reduction Act. Many of its provisions in the act were included in the Energy Policy Act of 2005. “Natural gas had an average price of $2.50 per unit in the year 2000. The economy of the United States was geared to operate at that level. But the price got as high as $15 per unit last December. We had testimony before the Committee at that time that if gasoline prices had gone as high as natural gas prices had, the price of gasoline would be $7 per gallon. So while we hear more about the price of gasoline, and the affect of it the ordinary American is a major affect, the price of natural gas has as large an affect on farmers, on homeowners and on keeping jobs here in this country that might otherwise go overseas, as does the price of gasoline. “The price of natural gas fortunately has dropped back down, to a level of about $7 per unit, but that’s still too high. It’s still hurting farmers, it’s still hurting homeowners who are using natural gas, and it’s still an incentive to drive American manufacturing jobs overseas. “One of the most interesting provisions included in the energy act dealt with the idea turning coal into synthetic gas as a substitute for natural gas. Increasing the supply of synthetic gas would help stabilize and maybe even bring down the price of natural gas. “Coal can be turned into a synthetic gas which is then used to make chemicals. That is what Eastman Chemical does. We’re familiar with that in Tennessee because Eastman has, for generations, provided a stable source of thousands of jobs. Eastman has been gasifying coal since 1984 to make specialty plastic products. We’ll hear more about that today. “It is not just coal that can be gasified. Petroleum coke, heavy oils, and wastes (seemingly anything with carbon in it) can be gasified “Gasification is very flexible -- it can convert these into valuable products, including hydrogen, electricity, steam, and chemicals “Gasification produces significantly fewer emissions, uses less water, and generates less waste than other technologies “And gasification facilities can be designed to capture carbon dioxide for further industrial use or for sequestration “Finally, gasification is a link to the hydrogen economy “Because of these many positive attributes and because of the high price of natural gas in recent years, the Energy Policy Act of 2005 contains two provisions we in Congress hope will speed the development and deployment of industrial gasification technologies “The first is a tax credit for qualifying industrial gasification projects. We authorized these tax credits for a total of $350 million. The deadline for applying for these credits is June 30 of this year. Projects must be certified by Treasury in consultation with DOE. A competitive bidding process will be used by the government. “The second provision in the Energy Policy Act to speed development and deployment of industrial gasification technologies is the federal loan guarantee provision. “So this is an oversight hearing. We are here to hear from the Under Secretary of Energy, we’re delighted he has taken the time to be here, about the status of the Administration’s implementation of these two provisions in the Energy Policy Act. “We will also hear from companies on the cutting edge of industrial gasification technology. And we will hear from the Natural Resources Defense Council.”