A Viable Coal-to-Liquids Project?

This post is by Mark Brownstein, managing director of business partnerships and specialist on coal technology at Environmental Defense Fund.

On Monday, CONSOL Energy – one of America’s leading coal companies – announced they would build America’s first coal-to-liquid plant in West Virginia. The press release from coal country announces that a strategy for sequestering carbon dioxide pollution produced by liquefying coal will be part of the project. That’s important because an EPA study found that diesel fuel from coal could result in double the greenhouse gas emissions of diesel fuel from oil.

Many Americans are feeling real economic distress with gasoline above four dollars a gallon. Economic hardship and energy security play to coal’s strength as a traditionally low cost, domestic, and plentiful energy resource. Deploying the technology to convert it to gasoline and diesel fuel seems like a no-brainer. But it’s not so simple.

Perhaps yesterday’s announcement is a sign that coal-to-liquids has turned a corner. I don’t expect anyone in West Virginia to invite Al Gore over for barbeque and beers anytime soon, but it is a sign of how far we’ve come in the global warming debate that CONSOL is explicitly acknowledging that the future of coal-to-liquids is tied to reducing the global warming pollution the technology creates. This is an important first step if coal-to-liquids is ever to be a viable strategy for meeting America’s future energy needs.

As the debate over national energy policy bubbles along, the golden rule is that we should not create one mess in the process of cleaning up another. Attempting to solve economic or energy security problems at the expense of the environment is really no solution at all, particularly when you consider the warnings of our nation’s leading military commanders. A 2007 report by CNA Corporation stated that global warming effects destabilize societies and make the world a more dangerous place.

And so, in the spirit of the golden rule, here are four questions that I hope CONSOL can answer as they embark on their quest to develop coal-to-liquids at a commercial scale:

1. What is the plan for carbon dioxide? The press release talks about carbon capture and storage, which is a promising strategy for preventing carbon dioxide pollution in the atmosphere. But all too often, coal project proponents talk about building the power plant or coal-to-liquids facility today, and getting around to the carbon capture and storage part "tomorrow". Is CONSOL committed to making development of their coal-to-liquids facility contingent on capturing and storing the carbon dioxide it produces from Day One of operation? If so, then this is real progress.

2. How will the coal be mined? Blowing the tops off mountains and dumping the spoils into creek beds is not a happy thing, and a nation reluctant to allow additional offshore drilling, even with gas at four dollars a gallon, will not be enamored of technologies or companies that literally flatten everything in their path. Broad commercial acceptance of coal-to-liquids depends on finding a fundamentally different way to mine coal than some of the industry’s current practices. Perhaps it’s also time to admit that some seams are simply played out.

3. What about the water? Coal-to-liquids is a water-intensive process, and water scarcity is no longer an issue exclusively confined to the arid west. Proponents of coal-to-liquids as a viable alternative to foreign oil must be honest about the amount of water required to make the stuff (approximately 10 gallons of water for every gallon of fuel produced), and tell us where we will get the water and how much it will cost.

4. And speaking of cost, the final question is whether coal-to-liquids is really the best way to harness coal in meeting the energy needs of our cars and trucks. With innovations in plug-in hybrid technology, we may be just three to five years away from being able to use electricity to partially power our cars, minivans, pickup trucks, and SUVs. A Department of Energy study, issued by Pacific Northwest National Labs in November 2007, suggests we have the ability to displace up to 52 percent of current oil imports with hybrid electric vehicles recharged by our national electric grid.

   Given that 50 percent of our nation’s electricity comes from coal, and given the strides in making future coal plants capable of capturing and storing carbon dioxide, I wonder whether there is much future for coal-to-liquids at all. Maybe at best it’s a transition strategy, the way the 8-track tape player had a brief moment on the way to today’s iPods and MP3 files. It would be interesting to hear CONSOL’s views on this, and perhaps the views of American Electric Power, the nation’s largest coal-burning utility, as well.

The answers to these four questions will give us some idea whether coal-to-liquids will ever be a viable option for a national energy strategy.