SCDigest
Editorial Staff
The News: A
showdown is emerging in the U.S. Congress
over the future of “liquid coal,”
an energy source that could potentially
provide a compelling alternative to Mideast
oil across the globe, but environmental
questions have also created opposition.
SC Digest Says: |
While
there are potential economic and environmental
issues, the vast availability of coal
in the U.S.
would seem to make this an option worth
pursuing.
What do you say?
Send
us your comments here |
The Impact: Liquid
coal resources could have a huge impact
on U.S. and global energy markets. While
there are potential economic and environmental
issues, the vast availability of coal in
the U.S.
would seem to make this an option worth
pursuing, it seems to us.
The Story: The
US Congress is currently working on the
2007 energy bill. This year more than ever,
a big part of this debate surrounds “liquid
coal.” Liquid coal is a proven technology
that involves turning conventional coal
into a liquid diesel fuel that can be used
in both industrial applications as well
as conventional diesel engines.
It has been
around for a long time, used by Germany
in World War II, and more recently by South
Africa in the apartheid era – in both
cases due to the difficulty the countries
had importing regular oil.
Liquid coal,
in some sense similar to shale oil, requires
expensive conversion plants, and costs more
to produce a barrel of oil than liquid oil
sources. Most estimates put that cost at
about $45-50.00 per barrel. Hence, it has
not been economically feasible to develop
liquid coal as an energy source until the
past few years.
With
oil prices persistently over $60.00 per
barrel, however, and many predicting even
higher levels, combined with other negatives
about importing oil from the Middle
East
and other areas, the economics are starting
to look pretty good. Liquid oil could also
be distributed through current infrastructure
and channels.
The opposition
now is coming primarily from environmentalists
and sympathetic politicians, who say liquid
coal over the lifecycle of production to
combustion emits twice the carbon and greenhouse
gas emissions of diesel fuel (though there
are unproven ideas for reducing the total
greenhouse gas emissions levels for liquid
coal).
As a result,
for the energy bill currently being considered
in Congress, a group of Democrats is lined
up opposed to offering any incentives for
liquid coal, while showering them on many
other alternative fuels. But a group of
Republicans and Democrats from coal rich
states is alternatively proposing a variety
of attractive incentives to liquid coal
producers.
It’s
not clear which way the bill will go, but
one thing is clear: the U.S.
has a vast amount of coal to leverage. The
U.S.
is believed to have about 26% of the world’s
coal reserves. Next on the list are Russia
with 23% of the world’s reserves,
and China
with 12%. By some estimates, the U.S.
has enough coal to meet all of its liquid
fuel needs for 200 years at current consumption
rates.
China
has already decided liquid coal will be
a part of its future, making major investments
in the technology already, with a lot more
expected in the next few years.
What are
your thoughts around liquid coal? Should
environmental concerns trump the potential
economic and security benefits of the technology?
Let us know your thoughts at the Feedback
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