June 23, 2008
Monday

Later this year, a plant in China will begin churning out liquid fuel made from coal, a technology that -- if all breaks right for the coal industry -- is headed to American shores.

Coal-to-liquids is a popular topic, spurred by rising gasoline prices and this country's ever-present need to wean itself from oil imports.

Coal-to-liquid proponents insist that the technology would strengthen national security and be a cheaper alternative than current petroleum. Estimates vary widely, but Richard Bajura, director of the National Research Center for Coal and Energy at West Virginia University, said liquid coal could be produced for $60 to $70 a barrel. Last week, oil prices approached $140 a barrel.

Still, coal-to-liquid plants would cost several billion dollars to build, and if the whims of OPEC were to drive down oil prices, there would be little market for a more expensive domestic product. That's why the coal industry has taken its case to Washington.

Luke Popovich, spokesman for the National Mining Association, said the industry would push for government backing, as Wall Street has been timid to provide capital. Coal companies are seeking startup capital and government bailouts for investors if oil prices drop too far.

But a bigger hurdle than funding is the environmental lobby, which is vigorously attacking the technology for its greenhouse gas production. From the time it's hauled out of the mine until it leaves the tailpipe, coal-to-liquid produces about twice as much carbon dioxide as petroleum.

"It's just not an intelligent way to use coal," said Joseph Minot, director of the Philadelphia-based Clean Air Council. "It's environmentally a disaster, economically a disaster. It doesn't make any sense."

The Fischer-Tropsch process of coal liquefaction, named for the German researchers who invented it, was first used on a large scale when the Nazis were cut off from oil imports during World War II. South Africa also began coal-to-liquid production when isolated during apartheid, and still uses it today.

The United States has flirted with the idea in the past, most notably with the Synthetic Fuels Corp., a public-private partnership formed in 1980 during the last severe oil price spike. It was disbanded in 1985 as lower prices killed interest.

Now, soaring gas prices have once again given incentive to pursue the idea.

Plants are in development in coal-producing regions around the country. The Air Force, which consumes about half of all the fuel used by the federal government, says it will use liquid coal in its fleet, a vote of confidence that would be a major boon to the fledgling industry.

But environmental activists say it's foolish to pump resources into a technology that would emit greenhouse gases at a higher rate.

"We're trying to decrease our global warming. What if we went to a fuel that doubled carbon emissions?" said Elizabeth Martin Perera, climate policy specialist for the Natural Resources Defense Council.

"We're going in exactly the wrong direction, just digging the hole a lot deeper and making the problem a lot worse."

Perera and others insist that the best way to use less foreign oil is to work on efficiency, not seek a more polluting alternative.

Carnegie Mellon University post-doctorate researcher Paulina Jaramillo and doctoral student Constantine Samaras concluded in a paper last year that coal-to-liquid production would be far less efficient and more polluting than using plug-in hybrids that drew electricity from coal power. The greenhouse gas playing field could be leveled, the researchers said, if a coal-to-liquid plant could capture and sequester 90 percent of its carbon emissions.

Technologies now on the market will capture only 60 percent to 70 percent of carbon emissions from coal-to-liquid plants. Environmentalists would like to see those numbers get to between 90 percent and 95 percent before the projects move forward, yet the technology to reach such targets is 12 to 15 years away, according to Popovich.

"It is very frustrating to once again have the environmental community standing in the way of lowering energy prices," he said. "China's greenhouse gas emissions greatly surpass our own and will even more so in coming years, and they're not covered by any of this. To us, any way you look at it, it seems to be foolish for the United States to continue to rule off limits this enormously valuable energy resource for transportation fuel."

Coal-to-liquid does have some greenhouse advantages in that the diesel fuel it produces emits less sulfur than conventional diesel. Also, a study at a proposed plant in Wellsville, Ohio, along the Ohio River showed promising advances in emissions reduction. When a 70 percent to 30 percent coal-biomass blend is fed in to produce fuel, the plant releases 46 percent less carbon dioxide than conventional diesel production.

But the environmental lobby's concerns extend to the mining process as well. Coal-to-liquid plants would result in more strip mining and mountaintop removal, said Perera, devastating surrounding environments. If liquid coal were to account for a 10 percent displacement of current oil use, coal mining would have to increase by 43 percent, she said.

So far, Congress has sided with the environmentalists, rejecting an attempt to mandate liquid coal fuels last year. But coal-backing House members introduced legislation last month that would mandate production of liquid coal and provide incentives for its use.

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