Coal Fuels and Industrial Gasification Demonstration and Development Act of 2007 - Amends the Energy Policy Act of 1992 to instruct the Secretary of Energy to implement a grants program for obtaining or implementing services for the planning and permitting of certain eligible projects that produce liquid transportation fuels, industrial chemicals, or electricity.
Requires the Secretary to make direct loans to eligible individuals and entities to implement such projects.
Directs the Secretary to select eligible projects to receive loans through a reverse auction, giving priority to eligible projects with the greatest percentage reduction of lifecycle greenhouse gas emissions in comparison to facilities that use conventional feedstocks and do not use carbon capture and sequestration technologies.
Directs the Administrator of the Environmental Protection Agency (EPA) to: (1) establish a methodology for determining the lifecycle greenhouse gas emissions of coal-derived liquid transportation fuels; (2) implement a research and demonstration program to evaluate the emissions of the use of coal-to-liquid fuel for transportation, including gasoline, diesel, marine, and jet fuel; and (3) evaluate the effect of using coal-to-liquid transportation fuel on vehicle emissions, including motor vehicles, nonroad vehicles, and aircraft.
Directs the Secretary and the Secretary of Defense to study and report to specified congressional committees on the feasibility and suitability of maintaining coal-to-liquid products in the Strategic Petroleum Reserve (SPR).
Amends the Internal Revenue Code to provide: (1) a business credit for sequestration of carbon dioxide captured within the United States; (2) a seven-year applicable recovery period for depreciation of qualified carbon dioxide pipeline property; (3) treatment of certain income and gains relating to industrial source carbon dioxide as qualifying income for publicly traded partnerships; and (4) extend and modify the alternative fuel credit.