The Federal government should provide loan guarantees for the construction of coal gasification projects. This has been done before. The federal government through the Department of Energy (DOE) has provided loan guarantees previously for the four major existing plants.

The U.S. is purchasing a greater percentage of it’s crude oil requirements from outside the country. T. Boone Pickens commercials have made that clear to everyone. The Air Force has publicly announced it’s objective to fuel it’s fleet of aircraft using Fischer-Tropsch jet fuel. America has the world’s largest proven coal reserves. The price of crude oil has been moving in all time high price ranges.

Coal gasification projects provide solutions for many of these issues. Developers have announced over 10 projects, but none have moved into the detail engineering and construction phase. The costs are high and lenders are reluctant to provide on terms that the engineering and construction companies can accept.

It’s time for the DOE to provide loan guarantees to jump start this industry. America will be well served if the DOE will provide loan guarantees for early-to-market coal gasification projects. After the new projects come on stream and the economci viability is proven the industry will be proven. Investmentors will not be skittish after the plants are proven.