Unconventional Fuels Creating Second
Industrial Revolution
A renewed interest in unconventional fuels such as coal-to-liquids
(CTL) is creating a second industrial revolution. The drivers
are sustained, high-energy prices and expanding populations
demanding a higher standard of living with access to electricity
and fuel.
Peak oil, energy security and environmental concerns also
drive the world to gasify lower-rank coals, petroleum coke,
natural gas, biomass, wastes, oil shale, tar sands and heavy
oil. The US has always relied on its abundant coal reserves
for power generation and now must turn to coal and other
strategic feedstocks for transportation fuels.
US Air Force demand for CTL-based aviation fuels and the
country's needs for baseload generation and transportation
fuels is driving the US to depend on coal for its energy
needs and are strengthening coal's political strength in
the US Congress.
The US Air Force is the major reason why coal-conversion
technology leaders believe that the US will soon have a
CTL industry. The USAF continues to lobby Congress about
CTL's importance to national security, and as often stated
in energy-legislative debates, the only thing that can really
bring down US military aircraft is lack of fuel.
US CTL production could be supplying half the military fuel
by 2015 and 70% by 2045, making the country a must safer
place. The civilian airlines industry is using 1.4 million
b/d of refined product and its fuel requirements are increasing
rapidly, and by 2030 will account for half of total US domestic-oil
production.
Civilian air is as much of a national security concern as
the USAF requirement for aviation fuels derived coal and
other unconventional feedstocks. Airlines such as Jet Blue,
Southwest and FedEx want CTL fuels because it its perfect
fit for aviation. The cost of carbon sequestration can also
be covered with today's economics for jet fuel and CTL.
More than 85% of US fossil fuels and over 50% of US electricity
generation depends on coal because the US can no longer
depend on LNG to fuel electricity generation. Conversion
of coal to liquids, power and substitute natural gas is
a much-needed backstop technology.
Coal-based CTL transportation fuels with the right framework
from US government can compete with any unconventional hydrocarbons
such as tar sands and oil shale and the US could meet global
demand for liquid fuels and natural gas with coal and other
feedstocks.
It is clear that China will use coal for power, fuels and
petrochemical feedstocks and the US is at risk of falling
behind China that will spend more than $25 billion on proposed
CTL production plants. China, India and South Africa are
building 80,000-b/d CTL plants, while US CTL plants will
likely produce 40,000 b/d using 8.5 million tpy of coal.
The US is already behind the curve when it comes to tapping
the vast liquid fuel potential that coal and other unconventional
feedstocks offer. The US Congress should take the necessary
steps to help cover the risk of new technologies and enable
Wall Street to finance the building of CTL plants as soon
as possible.
Significant energy security gains can be immediately gained
through the production of US coal-derived fuels. Domestic
CTL production could turn the tide against the $7 trillion
that the US has sent to producing countries to buy crude
oil over the past 30 years.
CTL fuels could greatly limit the impact of natural disasters
and potential terrorist attacks and is driving the US Dept.
of Defense to use CTL fuels. CTL fuels are also greatly
needed because biofuels such as ethanol offer small CO2-emissions
cuts, have enormous production costs and present serious
transmission-and-infrastructure problems.
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