US airline trade group the Air Transport Association is applauding new legislation that promotes the use of coal-to-liquids technology, saying alternative fuels have the potential to bring significant economic, operational and environmental benefits to airlines.

The bill, tabled by Congressman Rick Boucher, who chairs the House of Representatives' energy and air quality subcommittee, and Congressman John Shimkus, would enable the Department of Energy to enter agreements with up to six coal liquefaction projects for the purpose of establishing price parameters that will provide the projects with a federal price guarantee.

If the price of crude oil falls below an agreed price, roughly $40 a barrel, the government would make a payment to the facility owner, thereby establishing a price floor for the facility's product. Conversely, if the price of crude oil were to rise above a certain ceiling, upwards of today's market price per barrel, the facility operator would be required to make payments to the federal government.

"The novelty of coal liquefaction technologies to the USA means that obtaining the investment capital for facilities is still somewhat uncertain. Our legislation will resolve much of the uncertainty and speed the arrival of coal-to-liquids plants in the USA," says Boucher.

Commenting on the bill, ATA president and chief executive James May says: "The airlines strongly support the development of alternatives to traditional petroleum-based jet fuel and applaud the legislation introduced today by representatives Boucher and Shimkus, which promotes the development of coal-to-liquids technology."

Source: Flight International