Coal to liquids in the US  

Keith Johnson at the WSJ reports that the US may soon get its first coal to liquids plant, noting that one unfortunate side effect of high oil prices is that it makes both dirty and clean energy alternatives more attractive - Coal Juice: High Energy Prices Prompt First U.S. Coal-to-Liquids Plant.

It’s far from clear that higher energy prices are environmentalists’ friend. Though they migh eventually spur clean energy, they’re doing a good bit of the opposite right now.

Today’s energy prices—and just as importantly, growing concern over energy security—are driving ever-dirtier energy solutions, from Canadian tar sands, to a rush to develop shale oil and gas in the U.S., to a dash away from natural gas and back toward coal. The latest unintended consequence? America’s first coal-to-liquids plant, to be built in West Virginia.

Consol Energy and Synthesis Energy Systems, or SES, announced today they will build a smallish plant right next to a Consol mine that can turn abundant West Virginia coal into gas. Eventually, and with the help of ExxonMobil, the pair hope to crank out 100 million gallons a year of gasoline from the coal. Technology permitting, Consol and SES hope to one day stick the plant’s carbon-dioxide emissions underground, making it a “clean coal” gasification plant.

The pilot project responds to the two dirtiest words in America’s energy lexicon—“foreign oil”—with a politically, if not environmentally, appealing alternative—“domestic coal.” Both West Virginia senators love the idea, praising it as an answer to the state’s economic development and America’s quest for energy security. Environmentalists hate it.

Coal-to-liquids technology isn’t new—the process was developed in Weimar Germany in the 1920s. Apartheid-era South Africa used the technology to escape sanctions. Today, coal-rich and oil-poor China is leading the world’s charge to turn coal into industrial gases and transport fuel, though other countries with oodles of coal reserves—from the U.S. to Australia—are increasingly turning to the black stuff as an answer to the oil crunch.

Despite the complicated processes involved, the economics aren’t bad. Oil prices are high, and coal is still relatively cheap (and companies like Consol’s new partner SES can use the really cheap grades of coal.) Worse are the environmental impacts—burning the coal once to make a gas, which is then turned into gasoline, which is then burned again in cars. That’s the same charge levied against tar sands development—even though pricey oil now makes so-called dg“unconventional reserves” an economically—attractive project for oil companies, it takes a lot more energy to get the stuff out of the ground, leading to a lot more emissions of greenhouse gases.