Technology exists to turn coal into liquid diesel fuel, capable of powering trucks, planes and other vehicles. However, this technology represents the dirtiest and most expensive path Americans could take as we search for solutions to global warming and to reduce the harm caused by mining and burning coal.

The process, named Fischer-Tropsch (F-T), was commercialized by Germany during World War Two and South Africa during the Apartheid era, two military regimes that were isolated by the international community and blocked from access to foreign oil.

The process is extremely expensive and inefficient. One ton of coal produces just 2 barrels of fuel.  A recent M.I.T. study estimated that it would cost $70 billion to build enough coal-to-liquid plants to replace just 10% of American demand for gasoline. Construction costs for coal-to-liquid fuel plants were estimated in 2004 to be $7 billion each, almost 4 times higher than for petroleum refineries. (This estimate does not include the cost to capture and store carbon dioxide, a technological fix that does not yet exist on a commercial scale but is often promised by the coal industry.)

Over many decades, private investors have been unwilling to put money into the development of coal to liquid fuel plants in the US.  Now, however, the coal industry and its political backers are pushing a plan to develop coal-to-liquid fuel at the taxpayers’ expense. Federal legislation will be considered this summer to develop 10 new coal-to-liquid fuel plants in the US, subsidized by $25-100 billion of tax-payer dollars in the form of loan guarantees, tax credits, guaranteed market through long-term government contracts, and guaranteed prices for some producers. As one coal industry CEO told the New York Times this spring, “We are not asking for everything. All we are asking for is something.”

Fact Sheets suitable for printing:

Coal to Liquid fact sheet 1

Coal to Liquid fact sheet 2

Resources

• “Coal in your tank?” Louisville Courier Journal Watchdog Earth blog, May 29, 2007

• "Lawmakers look at coal to break oil dependence", Los Angeles Times, May 10, 2007

• "Coal-To-Liquid Fuel Plant Plan Advances", The Associated Press, May 31, 2007

• "Lawmakers promote coal as an 'alternative fuel'", The Austin American-Statesman, May 29, 2007

• "Billion-dollar boondoggle", The Roanoke Time, June 5, 2007

• "Why Liquid Coal Is Not a Viable Option to Move America Beyond Oil", Report by Natural Resources Defense Council, February, 2007

• "Liquid coal a new version of snake oil", The Lexington Herald-Leader, June 3, 2007