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By Darren Samuelsohn, Alex Kaplun and Ben Geman

E&E News: A markup this week in the Senate Energy and Natural Resources Committee focuses on biofuel production, energy efficiency, and the capture and underground storage of heat-trapping carbon dioxide emissions, as lawmakers begin in earnest to piece together legislation for the floor.

At the markup, committee Chairman Jeff Bingaman (D-N.M.) plans to bundle the four separate bills together into one package. Senate Democratic leaders will then use the wide-ranging energy measure as the vehicle for floor consideration before the Memorial Day recess, committee aides said.

Carbon capture and sequestration

Bingaman will try to move two bills designed to bolster understanding of carbon capture and sequestration, also known as CCS. Many consider the technology critical if the United States wants to address global warming but still rely on its plentiful supply of coal.

One of the bills, S. 731, would require the Energy Department, U.S. EPA and U.S. Geologic Survey to conduct a sweeping assessment of the potential for underground CO2 storage in all corners of the country, including Alaska and Hawaii. DOE would be required to estimate potential volumes of oil and gas that could be recovered after the carbon injections, as well as the potential risks if the CO2 leaks back into the atmosphere.

Bingaman also hopes to pass S. 962, a proposal that would extend DOE’s authorization for seven regional CO2 sequestration partnerships that bring together the work of federal, state and local governments, as well as industry and academia. The programs now run through fiscal 2009; under the bill, it stretches through 2012.

S. 962 would expand the definition for the kinds of CO2 capture technologies DOE can fund and study besides permanent underground sequestration. For example, work at Sandia National Laboratory to convert captured CO2 into methanol would qualify for research dollars, a Bingaman aide explained.

A number of federal programs already exist to examine and prove the carbon sequestration technology, including an “atlas” of carbon sequestration spots DOE published in March for many specific regions of the country.

In testimony on Capitol Hill, Bush administration officials have said the two bills would complement their efforts, which include a series of 25 small-scale field tests around the country just starting to track CO2 once injected in a variety of different underground geologic formations.

The administration has also trumpeted FutureGen, a nearly $1 billion prototype project meant to produce electricity and hydrogen for transportation fuel. FutureGen also would capture and store its CO2 emissions underground.

Administration officials say FutureGen — to be located in either Illinois or Texas — will be in operation in 2012. They also envision more FutureGen-like plants widely available for commercial scale around 2025, with full-scale commercial deployment around 2045.

But critics say CCS needs to be ready sooner, especially given the nearly 150 proposals on the drawing board around the country to build new coal-fired power plants. Only a fraction are planned with integrated gasification combined cycle (IGCC) technology, widely seen as the best type of power plant to use CCS.

A Senate Democratic aide said the carbon sequestration legislation on the agenda this week would push the federal government to study all potential storage options. It also would show that congressional support for the technology will last beyond the end of the Bush administration.

Bill Fang, deputy general counsel at the Edison Electric Institute, said in an interview Friday that his organization supports the sequestration bills. “They’re all important and different aspects of trying to help carbon capture and sequestration move,” he said.

Key environmental groups, including the Natural Resources Defense Council, back carbon capture and sequestration but insist it should be installed on all new coal-fired power plants. Amendments during the markup are certainly possible, though few specifics have emerged.

Tax incentives are also on the table to address CCS, though details on specific legislation remain unclear. Bingaman held a hearing on the topic last week in his role as chairman of a Senate Finance subcommittee on energy. Sen. Max Baucus (D-Mont.), the chairman of the Senate Finance Committee, has said a broad energy tax package may not be ready in time for Memorial Day.

Coal-to-liquids battle awaits

The Senate Energy Committee will also move through a biofuels bill sponsored by both Bingaman and Domenici that roughly resembles the fuels target proposed by President Bush.

The Bingaman-Domenici bill would put in place a 36 billion gallon biofuels mandate by 2022 as well as provide a series of incentives for the industry’s development, such as loan guarantee for renewable fuel facilities and grants for creation of renewable fuel corridors and transport of biomass to refiners.

Additionally, the legislation sets specific targets for the use of cellulosic ethanol, which lawmakers and the administration view as the key to creating a biofuel that can displace significant amounts of petroleum.

One issue that could dominate this week’s markup is the bill’s exclusion of coal-to-liquids (CTL) technology. The Bingaman-Domenici bill applies only to biofuels, even though the administration has said it would like several other fuels to be part of any legislation. CTL in particular has piqued the interests of several committee members.

Sen. Craig Thomas (R-Wyo.) has already said he intends to offer amendments during the markup to include CTL technology under the Bingaman-Domenici legislation.

Bingaman has expressed reservations about CTL, but Domenici says there are likely enough votes on the panel to attach CTL language to the legislation. Environmental groups have generally opposed the development of CTL, arguing that the use of such a fuel would do virtually nothing to reduce greenhouse gas emissions.

Efficiency in the mix

The markup package also includes S. 1115, the broad electric power and vehicle efficiency bill Bingaman is cosponsoring with Domenici.

The “Energy Efficiency Promotion Act” addresses power conservation from several angles. They include codifying efficiency standards for several products, boosting programs that spur use of efficient lighting technologies, and increasing conservation in federal buildings.

On the transportation side, the bill sets an overall goal of reducing gasoline use by 45 percent by 2030. The bill provides loan guarantees for plants that make fuel efficient vehicles and their parts.

Other steps include grants to automakers to help retool current plants to make advanced technology vehicles, and funding authorizations for new research into batteries and lightweight vehicle materials.

One question is whether the bill will be amended to include a renewable portfolio standard for electric power generation. Bingaman wants to require utilities to provide 15 percent of their power from renewable sources by 2020. But it remains unclear whether this will be addressed with a standalone bill, an amendment in the markup, or on the Senate floor.

Schedule: The markup starts at 10 a.m. on Wednesday, May 2, in 366 Dirksen.

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