The United States has a tremendous potential to offset oil imports with coal-to-liquid (CTL) plants.  China is deploying a government strategy to be energy independent by relying on its coal reserves for power, gasoline, diesel, jet fuel and chemicals feedstocks.  The U.S. can too.  The U.S. has 250 billion tons of proven coal reserves and probably has coal reserves much higher than 250 billion tons. These reserves are the equivalent of approximately 400 billion barrels of oil or more than the total oil reserves of Saudi Arabia.

With this amount of coal reserves and proven CTL process, the U.S. can reduce it’s dependence on foreign oil by 50% or more. This is the most practical path for the U.S. to achieve independence from reliance on foreign oil. China has been in the spot light since the Olympics have been on television. Many Americans may be surprised that this is exactly how China plans to provide power for it’s billions of people without relying on imported foreign oil. The Chinese have more than 30 coal gasification and CTL projects underway and will be producing by some estimates approximately 1 million barrels per day of ultra-clean diesel, gasoline and jet fuel from coal by the year within 10 years.

Ironically, China only has about 1/2 the coal reserves of the United States. The United States has literally right under it’s feet the answer to it’s power, fuel and chemical needs . . . and yet does not move forward with development. U.S. coal consumption has not increased significantly in the last 5 years.

There are issues associated with building CTL plants, but both have answers and viable solutions can be developed.

The first issue is the cost of the building a CTL. The cost is approximately $1 to $4 billion depending upon the process units involved and the scale of the plant. The Federal government needs to step up to the plate and provide loan guarantees. Let’s face it, this is more important than providing bailouts for home owners that purchased homes with adjustable rate mortgages (ARMs).

Second, CO2 is now considered by most people to be a green house gas (GHG) that contributes to the warming of the atmosphere so this cannot be ignored and there must be an environmental solution to rmitigate this effect. The general public must be informed about the differences between pulverized coal power plants and coal gasification plants. Both produce about the same amount of CO2, but it is much easier and cheaper to collect the CO2 stream with coal gasification. (And, of course, you can make liquid fuels with the gasification process.) The U.S. projects will be environmentally responsible as opposed to the Chinese projects that emit the CO2. There are solutions for CO2: food grade for use in carbonated drinks, enhanced oil recovery, and sequestration. There is more than enough sequestration capacity and enhanced oil recovery capacity for off take of the CO2 from U.S. CTL projects. Each project must consider these CO2 options individually.