Sources deny coal loans are targeted

A federal loan guarantee included in the Senate energy bill would not necessarily benefit a company started by ex-Enron executives that a Public Citizen report identified as the beneficiary, Senate Energy and Natural Resources Committee spokeswoman Marnie Funk and other Senate sources said yesterday.

On Monday, the watchdog group reported that a loan guarantee to help develop a coal-gasification project in the West apparently would benefit a subsidiary of Houston-based DKRW, which is named after the initials of the Enron executives who founded it. The Hill reported Public Citizen’s finding yesterday.

The subsidiary is identified by Public Citizen as Medicine Bow Fuel & Power. The company has proposed a coal-gasification plant in Medicine Bow, Wyo.

The language in question, now part of the Senate energy bill, is based on a bill introduced by Sen. Ken Salazar (D-Colo.) to develop emissions-reduction technology for coal mined in the West, which has a different chemical composition than Eastern coal.

The language directs that the guarantee be given to a coal-gasification project that is located in a Western state and at an altitude above 4,000 feet. The project must also have a carbon-dioxide sequestration component, wherein emissions would be stored to prevent release into the atmosphere.

The bill does not specifically identify a project, and Funk and other Senate sources said several companies could end up competing to build the facility with the help of the loan guarantee.

“There are many companies that could qualify for this project,” said Cody Wertz, a spokesman for Salazar.

Tyson Slocum of Public Citizen said his research found that Medicine Bow was the only project currently proposed that would qualify for this particular loan guarantee under the terms in the Senate bill.

Medicine Bow is among a group of projects bidding for Energy Department grants directed at coal-gasification projects and is the only one that meets the specific conditions for the Western coal-gasification project in the Senate bill, Slocum said.  

But Wertz said Salazar’s bill was not written with the Medicine Bow project in mind.

The Senate energy bill as passed by the Senate Energy and Natural Resources Committee also identifies two other types of “clean coal” projects that could be eligible for federal loan guarantees. The guarantees are intended to help develop new technologies that other wise might not be financed.

Elsewhere, the Senate energy bill allows the Energy Department to help fund clean-coal demonstration projects. But Funk said any company that benefits from this funding could not also receive federal loan guarantees.

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