Kevin Vranes summarizes the news nicely.
Upadte: I'm not suggesting that anything Vranes says supports the following. I think he provides important context. I don't know whether or not he agrees with me.
To the extent that we can't get by without liquid fuels, we have an out, but we have to pay for it.
Update: It appears likely that we won't pay for it, which would constitute a tragic missed opportunity. We can use this occasion to civilize the coal interests, and instead we seem to be encouraging their cynicism.
Gasoline-like fuel from coal would be a good thing in the short run. It would release us from the disastrous situation in the middle east that we, um, don't seem to be improving very much. We could dodge the peak oil crisis and have a little more time to work toward a rational long-term strategy. It's potentially the sort of lucky break we don't deserve but at this point need.
The only way to pay for it is to require sequestering any carbon that can be sequestered in the production process and mandate it for all coal plants as quickly as possible. It is perfectly sensible to subsidize the transition.
Failing to place such a requirement while directly subsidizing the process is government malfeasance of the highest order. The fact that both parties seem aligned to this is about as depressing a fact as I can imagine.
However, the idea of liquid fuels from coal, with source capture of the non-mobile CO2 sources, is perfectly reasonable. Any reasonably sensible carbon policy would make that step inevitable. I am perfectly OK with subsidizing the coal interests to become responsible players in the society, so long as the end user price stays high and gradually increasing, and as much of the CO2 as possible is sequestered.
So we have an opportunity to get the coal people to butter their bread on the same side the rest of us do, dodge the peak oil bullet, bail out of the middle east fiasco, and not make the climate problem worse. A big win.
By saying "coal is the enemy" we act against this outcome, though. We want the coal people to see sequestration as favorable to them.
Reagrdless, if a requirement for CO2 sequestration is dropped from the picture, it is congressional malfeasance of the highest order; we are essentially halving our vehicle efficiency as a gift to the people who have been causing a whole lot of the trouble, and we will make new enemies worldwide in the process.