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10/07/2008 07:48 AM

Bailout Package Incentivizes Dirty Fuels

SustainableBusiness.com News

The $700 billion economic bailout package signed into law last Friday did more than aid Wall Street and the renewable energy industry. It also increased incentives for dirty, fossil-fuel initiatives, continuing a one-step-forward-one-step-back approach to U.S. energy policy.

In addition to extending tax credits for the renewable energy industry, the bailout package also expands a tax credit to refinery property that is used to directly convert oil shale and tar sands into liquid transportation fuels. The extraction, refining and combustion of oil from shale is likely to generate more than 50% more greenhouse gasses than conventional fuels and would be mined from wildlands in the Rocky Mountain West.

The bill also extends production credits for coal gasification plants and includes the end product, aviation fuel, in the alternative fuel category.

Converting solid coal into a liquid transportation fuel, an industry that does not currently exist in the United States, could nearly double the global warming effects of the fuel and increase air and water pollution associated with coal mining, according to some scientific estimates, the New York Times reports.

Relying on liquid coal could nearly double the global warming pollution per gallon of transportation fuels and increase the damage of coal mining to communities and ecosystems across the country. This fuel has yet to emerge as a significant transportation fuel in the United States and is not a viable fuel in a world where carbon must be reduced.

The plans to store carbon emissions underground will require billions more in additional taxpayer subsidies to be developed, have never been proven at a commercial scale, and won't be online for nearly decade--long after the window to act on global warming has closed, according to scientists.

"In the wee hours of the night, a bailout originally intended to rescue us from the credit crisis now contains billions in subsidies for oil shale, liquid coal, and unproven schemes to store carbon dioxide from coal and oil," Greenpeace USA Executive Director John Passacantando said in a statement.

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