WASHINGTON — The Obama administration has decided to revive a controversial loan guarantee program at the Energy Department, administration officials said Thursday, even as the program remains under congressional scrutiny after losing hundreds of millions in taxpayer money on investments in failed green energy start-ups like the solar module maker Solyndra.
This time, though, the program would devote as much as $8 billion to helping industries like coal and oil make cleaner energy. Although the program, which does not require congressional approval, would support a wide range of technologies, it could help coal-fired power plants find a way to keep their emissions from escaping into the atmosphere, department officials said.
Officials say the federal subsidies are necessary to support the development of technologies that are too complex, unproven, or expensive for investors and private companies to pursue on their own, assertions that have already stirred criticism from opponents who see the program as too risky and a misuse of taxpayer money.
The program's renewal comes just as the administration is releasing stringent environmental rules that would severely restrict air pollution at new coal plants.
"We have a real problem, and that's, 'How do we get new technology to market?' " said Peter W. Davidson, executive director of the loan program office at the Energy Department. "We partner with industry developers and entrepreneurs to demonstrate a new technology at industrial scale or utility scale, and hopefully once that technology is proven by deployment at scale, we step out of the way," and let the private debt markets take over.
A spokeswoman for the House Committee on Energy and Commerce, which is controlled by Republicans, took a skeptical view of the program.
"The DOE loan guarantee program's history of mismanagement, bankruptcies, and failure to deliver the jobs promised raises significant concerns about risking billions in additional taxpayer dollars," Charlotte Baker said. "We are supportive of efforts to encourage the development of advanced fossil fuel technologies, but we are skeptical that federal loan guarantees are the best way" to bring this about.
Analysts and climate experts also questioned whether the program, which was originally established in 2005 and whose new guidelines will be completed this fall, could make the technologies economically viable on a mass scale.
The Energy Department's loan program was created in 2005 under President Bush to spur adoption of innovative technologies or those that avoided, reduced, or permanently stored pollutants. In 2008, Congress added another section, for more fuel-efficient cars, and a year later created a temporary program to encourage renewable energy and electrical transmission projects.
That temporary program, which was responsible for the Solyndra loan, has since expired, but the department still has about $50 billion left that could be lent, with a large chunk earmarked for nuclear projects.
The department points to several successful investments from the loan program. Ernest J. Moniz, the energy secretary, has pointed to Tesla Motors' early repayment of $465 million as an example. Davidson said that since his office financed the first six large-scale photovoltaic solar farms in 2010 and 2011, 10 big solar power plants had started or finished construction without any federal money.
But the loan office has attracted far more attention for failures like Solyndra, which defaulted on a $535 million loan and Fisker Automotive, the electric car company whose unpaid $168 million loan the Energy Department put up for auction this week.
The revived program is broader than its predecessor, which focused on capturing carbon emissions from coal plants and on turning coal into gas. Davidson said officials were looking for projects that reduced carbon and other gases along the various stages of energy production, like cutting methane emissions or water usage in the natural gas extraction process known as "fracking" as well as retrofitting existing coal-fired power plants.
There had been little interest in loan guarantees or private investment for limiting carbon emissions, said Daniel J. Weiss, a senior fellow and director of climate strategy at the Center for American Progress, a liberal policy group, because of a "lack of limits on carbon pollution from power plants and other industrial sources." He added: "President Obama's pending carbon pollution standards for power plants should spark more interest in this program."