Coal To Oil

[Dr. Shane]

Energy fears spur quest for liquid fuels from gas, coal

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Prime Minister John Howard said yesterday he had asked Resources Minister Ian Macfarlane to bring to Cabinet a proposal for a dedicated fund "to position Australia as a leader in gas-to-liquids and coal-to-liquids".

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This is also being considered in the United States.

DKRW and SNC-Lavalin form alliance to build coal-to-liquid fuel projects

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A unit of Canadian construction giant SNC-Lavalin Inc. (TSX:SNC) and Houston-based DKRW Advanced Fuels LLC have formed a strategic alliance to develop, design and build coal-to-liquid fuel projects each worth more than $1 billion US.

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The companies announced Wednesday that DKRW Advanced Fuels and SNC-Lavalin GDS Inc. of Houston and SNC-Lavalin Constructors Inc. of Bothell, Wash. will develop the projects, beginning with the first proposed plant in Wyoming, a major U.S. coal-producing state.

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[Dr. Shane]

The technology to convert coal to oil has been around for decades. Hitler did it in Germany and South Africa did it during sanctions. BUT it has never been cost effective until now. From what I understand, it costs about $38/barrel to convert coal to oil. That is, if the price of oil was at $38/barrel, a company doing it would just break even.

Energy companies are hesitant to jump into it because in five or ten years the price of oil could drop down to below $38/barrel. Saudi Arabia has already stated they would like to see the price stablize around $34/barrel. [sidebar: why you ask? High oil prices mean companies search for more oil and Saudi Arabia gets more competition]

Since the US is the "Saudi Arabia" of coal, a coal to oil industry in the US would virtually guarantee it energy independance, drastically decrease its trade deficit and increase the value of the dollar.

It is claimed that the oil produced by coal actually contains less carbon than that of crude oil and would contribute less to global warming. Yet it still isn't the clean fuel the environment needs. However if the US could become more dependant on fuels like E85 for cars and light trucks, coal could produce more than enough fuel for diesel and aviation fuel.

[there buster]

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Since the US is the "Saudi Arabia" of coal, a coal to oil industry in the US would virtually guarantee it energy independance, drastically decrease its trade deficit and increase the value of the dollar.

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Yes, but how will we deal with the problem of taking coal out of the mouths of developing countries?

[Neil D]

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It is claimed that the oil produced by coal actually contains less carbon than that of crude oil and would contribute less to global warming. Yet it still isn't the clean fuel the environment needs. However if the US could become more dependant on fuels like E85 for cars and light trucks, coal could produce more than enough fuel for diesel and aviation fuel.

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Shane, do you know what pollutents are produced from this type of fuel? And what effects are produced upon the enviorments? Is there technology that can remove those pollutants from the fuels?

It is something to concider...

[Dr. Shane]

From what I understand, it is a little cleaner than the petroleum gasoline but cannot be called an environmental friendly fuel like ethonal.