"It appears the private sector is willing to move forward, but they have questions about how these loan guarantees work," Sen. Craig Thomas, R-Wyo., told a U.S. Department of Energy official. "So we must move forward as quickly as we can."

The Energy Policy Act of 2005 includes loan guarantees, tax credits and authorization for $1 billion over three years for technologies that can generate liquid and gaseous fuels from coal.

However, Thomas said the administration's budget cut the Clean Coal Power Initiative from $49.5 million this year to $5 million in 2007. He called the proposed cut shortsighted. Energy leaders said they believe Wyoming can become a focal point for both research and the development of technologies such as integrated gasification combined cycle, or IGCC, systems, which converts coal into electricity and other byproducts with very little pollution.

Norman Schilling, product line leader for GE Energy's IGCC Power division, said the company expects to seek energy partners in developing an IGCC design that will work with Wyoming's elevation and the water content of its coal by the end of the year.

"The future of Wyoming coal is bright, but we must work to address infrastructure and market challenges," said Steve Waddington, executive director of the Wyoming Infrastructure Authority.

"Our state's ability to engage in these kinds of value-added activities is limited only by our capacity to get those products to market," Thomas said. "This is true for raw coal, it is certainly true for electricity, and efforts to produce liquid fuels from coal will require infrastructure improvements as well."

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