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Repeal sought for ban on U.S. Govt. use of CTL, oil shale, tar sands-generated fuel
A five-month old ban on the use of coal-based fuels, CTL, oil shale and tar sands by U.S. government agencies-has upset the U.S. Air Force, the Canadian Government, and members of Congress now seeking its repeal.

Author: Dorothy Kosich
Posted: Friday , 11 Apr 2008

RENO, NV -

Two Texas congressmen Thursday introduced legislation to repeal section 526 of the Energy Independence and Security Act of 2007 (EISA), which prohibits federal agencies from contracting to buy coal-based fuels, and fuels from coal-to-liquids, oil shale and tar sands.

The U.S. Air Force and the Canadian government are both pushing for an exception to section 526, which was placed in EISA by Rep. Henry Waxman, D-California, who is also the Chairman of the U.S. House Committee on Oversight and Government Reform.

In a letter to Senate Committee on Energy and Natural Resources Chairman Jeff Bingaman, D-New Mexico, Waxman said his provision "ensures that federal agencies are not spending taxpayer dollars on new fuel sources that will exacerbate global warming. It was included in the legislation in response to proposals under consideration by the Air Force to develop coal-to-liquids fuels. As you may know, coal-to-liquid fuels are estimated to produce almost double the greenhouse gas emissions of the comparable conventional fuel."

In their joint press release Thursday, Congressmen Jeb Hensarling and Mike Conaway, both R-Texas, said, "Though short, this section-which raises concerns over national security, economic security, and bureaucratic uncertainty-has powerful and harmful implications and needs to be repealed immediately."

'Section 526 was added to the 2007 Energy bill largely to stifle the Defense Department's plans to buy coal-based jet fuels, which radical environmentalists contend will ultimately produce more greenhouse gas emissions than would traditional petroleum-a contention that is uncertain at best and does not consider ongoing improvements in carbon-capture technologies," they asserted. "The Air Force is interested in procuring unconventional fuels over the long-term as a way to reduce its reliance on fuels from unfriendly or unstable countries and increasing its use of fuels from North America."

The congressmen noted that CTL, oil shale and tar sands are all abundant in the U.S. and Canada. Meanwhile, they also explained that the Air Force is seeking to spark the development of a domestic coal-based synthetic fuel industry through long-term fuel contracts with coal-based fuel producers.

The Air Force plans to fly half of all stateside missions on synth-fuel by 2016.

Canada is currently the largest U.S. oil supplier with about half of Canadian crude derived from oil sands, with sands production predicted to reach about 3 million barrels per day in 2015. As The Economist recently noted, "the 174 billion barrels of proven reserves in the oil sands of Alberta provide a powerful ace up their sleeves in any dealings with their energy-hungry neighbor. That belief has now been shaken by an American law that appears to prohibit American government agencies from buying crude produced in the oil sands of the western province."

The congressmen said that "Section 526 could choke this flow of fuel from one of our nation's most reliable allies and economic partners."

In a February 2008 letter to Robert Gates, U.S. Secretary of Defense, Michael Wilson, Canada's Ambassador to the U.S., explained that "U.S. firms are among the largest investors, producers, and new technology developers in the oil sands, to the benefit of both our countries. ...With announced investments, oil sands production is projected to grow from the present 1.4 mbd to 3 mbd by 2012. Most of this new production is destined for the U.S. markets."

Wilson noted that Canada does not consider the oil extracted from oil sands as alternative fuel. Oil stands petroleum represents roughly 5% of U.S. oil supply and is not segregated from other petroleum.

Applying Section 526 prohibitions to all commercially available fuel made in part of non-convention petroleum could exclude all commercially available fuel on the U.S. market from being eligible for purchase by the U.S. government, Wilson claimed. "The U.S. government would be seen as preferring offshore crude from other countries over fuel made in part from U.S. and Canadian sources. Further, the U.S. Government would be contradicting other state goals to encourage greater biofuel use and Canadian oil sands production."

"Not only could Section 526 result in increased fuel costs for our military, it severely restricts the Pentagon's ability to get fuels from our strongest allies, putting our national and economic security at risk by forcing increased petroleum at risk by forcing increased petroleum importation from unstable or even dangerous countries," Hensarling said. "At a time when American forces are combating terrorists abroad, it is especially necessary for the Pentagon to have the versatility to secure and develop alternative sources of fuel."



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