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Both the New York Times and Washington Post report today that there is a move to include in the Senate energy bill $10 billion of federal loans for liquid coal fuel, raising concerns that the bill will set us back in the fight against global warming.

The Post characterizes the proposal as loans “to pay for capturing and storing greenhouse gases produced by plants that would turn coal into liquid transportation fuels or chemicals.”

That’s sounds green, but it’s misleading.

As the Natural Resources Defense Council found (PDF file) even if you sequester emissions from the plants, liquid coal will still produce more greenhouse gases than petroleum gas, largely because you’re not capturing anything once the liquid coal is burned in your car.

However there was another development yesterday, as Sen. Barack Obama, D-Ill., scaled back his prior support for liquid coal.

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