Apart from engendering economic turmoil and worries of many
kinds, the skyrocketing price of oil has also done something momentously
beneficial: It has created conditions for America’s
oil independence by making it economical to extract fuels from coal, our most
abundant energy resource.
A sedimentary rock, coal is primarily made up of carbon.
Carbon most commonly occurs in stable compounds but when combined with hydrogen
it forms volatile substances known as hydrocarbons. Of those, crude oil is the
most useful, because when refined it yields flammable fluids such as diesel and
gasoline which are used in combustion engines.
As demand for oil began to rise early in the 20th
century, scientists became intrigued with the possibility of converting
carbon-rich coal into hydrocarbon liquids as a potential replacement for
petroleum-derived fuels. Franz Fischer and Hans Tropsch, two German scientists,
accomplished the feat in the 1920s. Named after its inventors, the Fischer-Tropsch
method is a multistage process during which coal is transformed – through
gasification and liquefaction – into synthetic diesel and jet grade kerosene.
The method’s practical viability was first seriously tested
in the 1940s. Lacking adequate access to oilfields during World
War II, Germany
built twenty-five coal-to-liquid plants to boost its fuel supplies. The
enterprise proved a success and by 1944 the plants were discharging 144,000
barrels of synthetic fuels a day, enough to cover half of the country’s wartime
Some two decades later, South
Africa began using the same technology to
soften the hardships of its Apartheid isolation. It proved so successful that
the program was continued even after the embargo was no longer an issue. Today
almost all diesel engines on South Africa’s
roads are powered by synthetic coal fuel.
But even after Germany
and South Africa
demonstrated its efficiency and reliability, the coal-to-fuel technology failed
to find wider use. The reason was cost.
Historically the cost of producing a gallon of synthetic
fuel has been higher than what it could fetch on the market. Conversion only
becomes profitable when crude passes $55 a barrel, because at that price diesel
and kerosene begin to sell for more than what it costs to obtain them from
Since until quite recently the price of oil was below that
mark, coal-to-fuel conversion was not commercially viable. This is the reason
why it was only done in countries that – for one reason or another – lacked
adequate access to petroleum-based products.
The roof-shattering march of crude, however, has changed
this situation. At today’s prices, conversion would be not only economically
practical, but also decidedly profitable. The combination of current market
conditions and long-term outlook thus creates a powerful incentive for the
private sector to channel money, capital and entrepreneurial energy into the
coal liquefaction enterprise.
This should be great news for the United
States which with nearly 270 billion tons of recoverable coal leads the world in
reserves. To put it in perspective, U.S. coal deposits contain more energy than that of all the
planet’s oil reserves put together. So vast is their potential that at a
standard conversion rate of two barrels of liquids per one metric ton of coal,
America’s fuel needs would be taken care of for well over a century.
This in effect means that as long as the price of crude oil
remains above $55 a barrel – and there is every reason to believe it will –
America can enjoy fuel self-sufficiency for as long as the eye can see.
It is important to grasp the full import of this: Unlike all the other ideas and proposals for
achieving oil independence, coal conversion represents no false hope or wishful
thinking but an eminently feasible and realistic possibility.
No new inventions, no technological breakthroughs, no
extensive infrastructure modifications, no lengthy testing, no public
investment or government incentives are required to make it happen. Everything
is already in place to bring it about:
possesses abundant supplies of coal
technology exists to convert coal into fuel
conditions make conversion commercially practical
While the first two conditions have been true for a long
time, the third did not come into play until last year. With the rise in price,
however, all the necessary prerequisites for America’s
fuel self-sufficiency have been met. All that needs to be done is to remove any
artificially imposed impediments that may stand in the way. Most of them are in
the form of environmental rules and regulations which make energy production
such a difficult and problematic enterprise in this country.
As far as the environment is concerned, coal conversion and
its derivatives are cleaner than their crude oil counterparts. There is
technology to capture the CO2 released during the liquefaction process and the
resulting diesel and kerosene have lower sulfur content than those refined in
the conventional way. As a result, during the combustion process they release
fewer particulates and less nitrogen oxide then their petroleum cousins. Such,
in fact, is their purity that they are often referred to as ultra-clean fuels.
This should go a long way toward assuaging environmental concerns.
The rising energy prices have made it possible for America
to commercially utilize its enormous coal reserves and to become fuel
independent in the process. The only thing required at this point is for
government not to interfere with market forces which inexorably incline toward