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Bipartisan legislation introduced in the US House of Representatives last week would remove barriers for the production of alternative fuels from coal, biomass, algae and waste through loan guarantees and federal fuel contracts.

"In the 9th District of Virginia and around the nation, soaring gas prices are hitting our families and small businesses hard," Representative Morgan Griffith, a Virginia Republican and lead sponsor of the bill, said in a statement Tuesday. "Using these alternative fuels will help lower gas prices by reducing our dependence on foreign oil and increasing domestic fuel supplies. It will also create new demand for American coal."

The American Alternative Fuels Act of 2011, H.R. 2036, was introduced May 26 by Griffith along with Representatives Charles Gonzalez, a Texas Democrat, Denny Rehberg, a Montana Republican, Ed Whitfield, a Kentucky Republican and chairman of the Energy and Power Subcommittee, and John Shimkus, an Illinois Republican and chairman of the Energy and Environment Subcommittee.

A few weeks ago, Senators John Barrasso, a Wyoming Republican, and Joe Manchin, a West Virginia Democrat, introduced similar legislation (PCT 5/11). Griffith's bill is a companion to that legislation, spokesman Beth Breeding said. A hearing on the Senate bill is scheduled for June 7 in the Senate Energy and Natural Resources Committee.

The bill would repeal Section 526 of the Energy Independence and Security Act of 2007. The section prohibits federal agencies from procuring synthetic fuel unless its life cycle greenhouse gas emissions are less than those for conventional petroleum fuel, according to a summary from the Congressional Research Service.

As part of the legislation, the Department of Defense would be allowed to enter into long-term contracts for purchasing alternative fuels. DOD is currently limited to contracts of no more than five years of $500 million unless given Congressional approval. The restrictions on the Pentagon's contracting authority limits its "ability to provide incentives for private investment," according to a Rand Corporation study.

Loan-guarantee applications for domestic fuel projects would now have a reporting requirement and status updates would have to be submitted by the Department of Energy to Congress. The congressmen said this would bring more transparency to the process and also enable lawmakers to pinpoint where delays are happening. The bill also clarifies that synthetic gas production facilities are eligible for the loan guarantee program.

The bill provides incentives under the Renewable Fuel Standard for algae-based fuel that uses carbon capture and sequestration. Each year, the Environmental Protection Agency is required to specify the total amount of renewable fuels required to be introduced into the nation's transportation fuel supply under the Energy Independence and Security Act. Under the bill, when setting the standard each year, each gallon of algae-based fuel produced using CCS would count as three gallons of renewable fuel.

EPA would also be required to take into account electric vehicles' impact on electricity demand and emissions when setting performance standards for new electric generation facilities.

"As we approach the summer driving season, the high costs at the pumps are burdening American families and Congress should not stand idly by," Gonzalez said in a statement. "This legislation, which would tap into our alternative energy resources and diversity our country's energy portfolio, is a critical step to bring down the cost of gasoline."

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