Coal-to-Liquid Fuel Promotion Act of 2006 - Amends the Energy Policy Act of 2005 to add among the projects eligible for Department of Energy (DOE) loan guarantees large-scale coal-to-liquid facilities that use domestic coal resources to produce at least 10,000 barrels a day of liquid transportation fuel.
Sets forth: (1) loan guarantee limitations; and (2) a loan guarantee program for coal-to-liquid facilities.
Directs the Secretary of Energy to promulgate regulations to support the development of coal-to-liquid manufacturing facilities and associated infrastructure on DOE and other federal lands, military bases, and military installations closed or realigned under the defense base closure and realignment.
Amends the Internal Revenue Code to: (1) provide an investment tax credit for coal-to-liquid fuels projects; (2) permit taxpayer election to treat the cost of any qualified coal-to-liquid fuels process property as a deductible expense; and (3) extend the alternative fuel credit for fuel derived from coal through the Fischer-Tropsch process.
Amends the Energy Policy and Conservation Act to instruct the Secretaries of Energy and of Defense to study and report to certain congressional committees on the feasibility and suitability of maintaining coal-to-liquid products in the Strategic Petroleum Reserve.
Authorizes the Secretary Energy to construct storage facilities: (1) in the vicinity of pipeline infrastructure and at least one military base; but (2) outside the boundaries of any state on the coast of the Gulf of Mexico.
Authorizes appropriations for the Air Force Research Laboratory to continue support efforts to test, qualify, and procure synthetic fuels developed from coal for aviation jet use.
Amends federal law governing Armed Forces fuel procurement to authorize the Secretary of Defense to enter into agreements to develop and operate coal-to-liquid facilities on or near military installations.