Montana's Coal Cowboy(synfuel ping)

CBS ^ | Feb. 26, 2006 | Miguel Sancho

[isaiah55version11_0]

...While the president spent much of last week promoting energy alternatives of the future, like hybrid cars and fuels made from wood chips, the governor of Montana, Brian Schweitzer, says there's something we can have up and running in the next five years.

What he has in mind is using the coal, billions of tons of it, under the high plains of his home state. The governor tells correspondent Lesley Stahl he wants to use an existing process to turn that coal into a synthetic liquid fuel, or synfuel......

"We can produce this fuel for about $1 a gallon. We have gas taxes, depending on what state you're in, of 60, 70, 80 cents a gallon. So, do the math," he said.

"You know, it sounds almost too good to be true," Stahl said.

"Well, that's what got me excited," Schweitzer replied......

[PubliusMM]

Ping

[techcor]

I've been posting about this (coal gassification) for years. Thanks for this post.

[Blueflag]

IT works for Canada with shale oil, why not the US?

Also, those big holes would make nice lakes surrounded by golf courses. We could manufacture estuaries when done ;-)

[JoeFromSidney]

While the Sasol process works, and has been used both in South Africa and WWII Germany, it's very expensive. If it could compete with petroleum, it would be in use already. Both SA and Germany used it only because they were cut off from more conventional sources of oil.

Moreover, there's another problem with using it on American coal. The coal is carbon. To make a hydrocarbon out of it, you have to add hydrogen. The best source of hydrogen is water. Unfortunately, the coal is located in what amounts to a desert. Either water would have to be piped in, or coal hauled out. Either way that runs up the cost.

About 10 years ago I was a visiting scholar at a research institute in Brazil. My collegues there provided me with a lot of information on the use of ethanol as automotive fuel, to help "free" Brazil from importing petroleum. The Brazilian government's intention was that cost per kilometer should be the same no matter which fuel you used. What it came down to was that because of taxes and subsidies, the economics of both gasoline and ethanol were so confused that no one really knew whether ethanol was cheaper than gasoline or not. I'm really dubious about any claims that Brazilian ethanol is cheapaer than gasoline. I know American corn-based ethanol is more expensive than gasoline. No one would touch it if it weren't for subsidies.

[painter]

I don't think it can be done for $1/gallon.

I read coal can be converted for about $30 a barrel. Also coal to diesel burns as clean or cleaner than bio diesel. The gasoline is also higher quality and burns cleaner than oil based gas.

[antiRepublicrat]

Any relation to the $9 billion given to these companies in tax credits even though many don't really do a damn thing? Check it out. They even paid Congress to have the price of a barrel of oil rolled back so they could keep getting their subsidies.

[thackney]

some comparative info:

http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html

Market Developments (updated February 22, 2006)

Some coal prices recently seemed to be unaffected, or barely affected, by movements in other energy markets. Coal prices may appear to be in relative balance with natural gas or oil prices one week but be virtually unphased by their significant fluctuations the next. This primarily applies to spot prices. Except for PRB coal, few changes in spot coal prices have been reported since the New Year.

Compared with petroleum and natural gas markets, spot and futures coal prices generally react to world events more tentatively and, until late 2004, were relatively insulated from international markets. For oil, NYMEX futures that had previously dipped to a few dollars above $50.00 per barrel (during intraday trading) resurged recently on the troubling news of violence and well shut-ins in Nigeria. Settle prices that bottomed at $57.55 on February 15 closed at $61.10 on February 21. If changes of that sort affect coal markets, they do so indirectly, either in consideration of price changes for natural gas, which tends to be more sensitive to oil price changes, or through lagged changes in mining or coal transportation costs as oil price changes are eventually passed through via diesel prices, supplier costs, or coal transporters' fuel surcharges.

A stronger direct influence on coal prices would likely result if traded natural gas prices stay low for another week or two. Analyst Spencer Jakab noted that with natural gas prices in decline, "some of the least-efficient and most heavily polluting coal plants are nearly as expensive to run as the most-efficient gas plants" and such coal plants "may be taken off line." Meanwhile, SO2 emission allowance prices for 2006 and 2007 vintages have leveled off around $920 to $950 per ton (see below).

Oil prices and output levels will be on the agenda when the Organization of Oil Exporting Countries (OPEC) meets on March 8. Historically high oil prices in past months have raised costs for U.S. coal producers - for the diesel fuel used heavily at surface mines - and for their customers - paying fuel surcharges to transport the coal to their boilers and power stations

[thackney]

They even paid Congress to have the price of a barrel of oil rolled back so they could keep getting their subsidies.

Are you claiming congress controls the price of oil? Or have I misunderstood you?

[antiRepublicrat]

Are you claiming congress controls the price of oil? Or have I misunderstood you?

Read the article. Their subsidies go down as the price of oil goes up, so the law in this upcoming budget bill says that for purposes of the subsidy the price a barrel of oil is set at 2004 levels.

Some of these operations are basically doing nothing. They set up near coal-fired plants and do worthless stuff like spraying the coal with pine tar, then they ship the bricks next door to be burned with the rest of the regular coal. These operations lose hundreds of millions of dollars (of course, they add no value), but they can easily reap twice as much in tax breaks for the company.

[Eric in the Ozarks]

There was a lignite coal plant in North Dakota in the 1970s. It flopped.

[bert]

We have two plants running now in east Tennessee producing the syngas. The first is 20 years old.

They manipulate the chemistry to produce acedic molecules for plastics.

[isaiah55version11_0]

Do you know the cost for a gallon at those plants?

[Jim Verdolini]

The germans in WWII ran a good bit of their war effort with Synfuel.

[bert]

No I don't.

It is Eastman Chemical Co. Thery don't make fuel, but do produce some methanol. They mostly use the coal gas to make acetate plastics and synthetics. l

[John O]

Happy Anniversary!!

I heard on the radio today that on this day in 1991 (?) you became famous.

[Tokra]

"We can produce this fuel for about $1 a gallon. We have gas taxes, depending on what state you're in, of 60, 70, 80 cents a gallon. So, do the math," he said.

Somehow I doubt this statement. If it were true - then why did I pay $2.35 for gas this morning?

[Rodney King]

Thanks... But I don't remember it!

[Southack]

Coal (and thereby coal oil) is our reserve fuel.

It powered the German war machine during WW2. It powered South Africa when the world embargoed all oil there due to Apartheid.

It's a proven technology. It's cheap. It can run in your car with no modifications.

Different refining process, of course, but that's no deal breaker.

Most people, however, don't even know that we *have* a reserve fuel. We do; it's coal oil.

[Godzilla]

If this was a REPUBLICAN Governor they'd (MSM/Enviro-Wackos/etc.) be all over him for wanting to strip mine the entire eastern two thirds of Montana.

Right on the money. However, IF he tries to impliment this, the enviro-nazis will be all over him in a fraction of a second.

[Southack]

"It takes a huge amount of heat to turn coal into gasoline. 2.2 tons of coal were burned for every ton of syncrude produced when the Germans did it during WWII."

The Fischer-Tropsch process produces 4 barrels of coal oil for every 1 ton of coal.

1 ton of coal sells for $60. Compare that to $62 per barrel of oil.

Even if you have to burn 2.2 tons of coal ($132), plus convert the third ton of coal (another $60) in order to get 4 barrels of coal oil, that's still cheaper ($192) than sending your $248 off to Saudi Arabia for your 4 barrels of oil.

Moreover, it's far better economically to spend that $192 in the U.S. on U.S. coal and coal-to-oil-conversion than to send $248 off to a foreign economy.