Energy bill slows over 2 key provisions

Coal gas, biofuels firing debate over clean power

House and Senate negotiators trying to reach agreement on comprehensive energy legislation are struggling over provisions to boost two alternative power sources, coal gas and biofuels, that critics say may do more environmental harm than good.

Slightly different versions of the legislation, which primarily aims to expand energy-efficiency programs and promote nonpolluting power sources such as wind and solar, were passed by the Massachusetts House and Senate this year. The fate of biofuels and coal gas are among the key issues in negotiations, which observers say could be completed within two weeks.

These provisions would guarantee markets for these fuels, essentially acting as subsidies. The biofuels proposal, included in a separate bill, would require diesel and heating oil to contain at least 2 percent biofuel by 2010 and 5 percent by 2013. The coal gas provision would require utilities to buy an unspecified amount of power from generators that use coal gasification and other alternative energy technologies.

Last year, Governor Deval Patrick, House Speaker Salvatore F. DiMasi, and Senate President Therese Murray supported legislation to support the state's biofuels industry, focusing on so-called advanced biofuels made from nonfood sources such as wood chips and grass. The bill also includes blending requirements for heating oil and diesel, mandates that could only be met with at least some fuels made from food crops.

Biofuels, however, have recently become controversial because they rely on corn, soybeans, and other crops, garnering blame for higher food costs. House and Senate negotiators are now considering whether to use the compromise energy bill as a vehicle to quickly enact biofuels legislation. If they go that route, said Senator Michael Morrissey, Senate chairman of the energy committee, the biofuels package would be reported separately as an addendum to the compromise energy bill.

Unlike regular legislation, this approach would prevent the package from being amended.

Jonathan Lewis, staff attorney at the Clean Air Task Force in Boston, said biofuels policy shouldn't be rushed because biofuel production can have profound effects. For example, as farmers devote more land to fuel crops, it forces food production to find other land, which has led to the destruction of rain forests in places like Brazil.

"Biofuels is something you can do right, or you can do wrong," said Seth Kaplan, senior attorney at Conservation Law Foundation, an advocacy group in Boston. "If there's no opportunity for amendments, the chances are you'll do it wrong."

Brooke Coleman, president of New Fuels Alliance, a coalition of companies and other groups, said the goal is to produce biofuels exclusively from nonfood materials. In the meantime, blending requirements are needed to help the industry build storage, transportation, and other infrastructure needed so as to reduce reliance on foreign oil. In addition, the biofuels proposal aims to ensure sustainable land use and reduce global warming.

Morrissey, a Democrat from Quincy, said biofuel issues have been studied and aired thoroughly, in committee hearings and by a special task force. Morrissey said the biofuels program has broad support, and he expects it will be enacted, whether as a part of the energy bill or as separate legislation.

In addition to supporting so-called renewable energy, such as wind and solar, by requiring utilities to purchase 20 percent of their power from these sources by 2025, the energy legislation includes similar provisions to help alternative technologies, including coal gasification. Such mandates act as subsidies because they guarantee markets for power, even if it costs more.

The alternative energy provisions could benefit companies such NRG Energy Inc. of Princeton, N.J., which wants to fuel its coal-fired plant in Somerset with coal gas, and GreatPoint Energy Inc., a Cambridge firm with technology to convert coal to clean-burning methane gas while preventing the release of carbon dioxide, a greenhouse gas.

At issue are emission standards. The Senate bill requires coal gas to produce no more greenhouse gas than the cleanest-burning natural gas plant, while the House version sets no specific standards, leaving it to regulators.

Negotiators are considering relaxing the Senate standard to bridge the gap, and satisfy industry concerns. Morrissey said he prefers the Senate version, but also wants to get a bill, which could mean compromise.

Andrew Perlman, chief executive of GreatPoint, said he supports tough standards, but believes they must be "clear, practical" and specific. In comparing coal gas to natural gas, should that apply to just emissions from the plant's stack, or also include greenhouse gases generated during drilling, production, and transportation, Perlman asked.

The goal of public policy, he added, should be to promote technologies to replace coal with cleaner alternatives. "We absolutely will be as clean as any natural gas power plant," Perlman said.

Environmentalists, however, say new technologies should be no worse than the cleanest natural gas plants if they are to receive special treatment that could cost ratepayers $50 million to $100 million a year.

"Customers shouldn't be expected to pay hundreds of millions of dollars for so-called clean coal that's dirtier than new natural gas plants," said Sam Krasnow, policy advocate at Environment Northeast, an advocacy group in Boston.

Robert Gavin can be reached at rgavin@globe.com.