Bush Administration's Call for $9 Billion in Clean Energy Loan Guarantees is a Small Step
$9 billion on guarantees helps build only two or three projects
February 5, 2007
11:59 AM
Washington, D.C. – The Bush Administration’s call for Congress to guarantee an additional $9 billion in private loans for alternative energy projects is a step in the right direction, Senator Pete Domenici said today. But a much bigger step would be necessary to make a real difference in energy supply or in the environment.
Domenici’s statement:
“Add a zero to that $9 billion and we could really do something for clean energy and the environment. But guaranteeing only $9 billion in new projects means we can only guarantee loans for a couple of nuclear power plants or a couple of coal gasification plants. Congress envisioned so much more when we created this innovative program.”
The loan guarantee program created in Title XVII of the Energy Policy Act of 2005 provides loan guarantees for innovative, clean technologies that limit carbon emissions. Loan guarantees could be applied to projects using technologies such as coal gasification, coal to liquids and advanced nuclear power.
The innovative program does not require the appropriation of taxpayer funds to cover the risk of default assessed by OMB and CBO. Other federal loan guarantee programs require Congress to appropriate a sum equal to the assessed risk of default. The appropriated sum is then set aside, unspent, unless the borrowers default on their loan. The EPACT program creates a second option that allows companies seeking the loan guarantee to pay into the U.S. Treasury a sum equal to the assessed risk of default instead of seeking an appropriation.
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