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Coal Railroad Cars – Global Warming
Every time oil and gas prices rise significantly, the Malthusian “peak oil” crowd cries out, “we are running out of fossil fuels, we must find alternatives,” usually with those shouting the loudest promoting some big government investment in politically favored alternative fuels. National security hawks often support this call for government energy investments in an effort to make the U.S. “energy independent,” in order that the U.S. not be beholden to foreign powers whose commercial or geopolitical interests sometime conflict with or are inimical to U.S. interests.
I have never shared the peak oil concern and, and I believe history, technological change, and prices time and again have shown we have abundant fossil fuels, sufficient for decades if not centuries to come. Absent harmful government intervention in the markets skewing, directing or limiting energy innovation, long before these admittedly finite, non-renewable fuels become in short supply or endangered, technological innovation in response to market prices will deliver a new dominant energy source and fuel to power continued economic progress. Neither do I believe in “energy independence,” if by that one means the U.S. becoming completely independent from foreign supplies of energy regardless of the costs. Though I admit, energy, along with numerous other natural resources, are the foundation upon which the economy is built, I don’t see the need to “free” ourselves from trade in energy and more than I do in food, clothing, automobiles, steel, or other goods in common trade. As a critical input for industry, and the cornerstone for transportation, and modern conveniences like electric lights, refrigeration, etc, I think we should get our energy from the cheapest, most reliable source. As a result, keeping business costs down, and thus U.S. companies competitive internationally, and leaving more money in people’s pockets to spend on other necessities, or indeed, whatever goods or services they can afford and their hearts desire.
Having said that, energy is special in some respects. While it seems unlikely we are to come into serious conflict with geopolitical partners like Canada and to a lessor extent Mexico — two of our largest sources of imported oil — in the near future, reducing our dependence on foreign oil from unstable parts of the world or from countries or regions where our armed services are actively engaged in warfare to some degree, or from regimes to who might try to leverage the energy we buy from them to finance terrorism, geopolitical instability, or to influence U.S. domestic policy, may be sound as long as it does not come at to high a price.
With this in mind, in a recent paper, Clinton E. Crackel, co-founder and co-chairman of the Nuclear Fuels Reprocessing Coalition, argued it may be time to use long-existing, tried and true technologies, to transform America’s abundant coal resources into transportation fuel and possibly gas for power plants. As noted by Crackel, the Fischer-Tropsch process was developed in Germany in 1925 as means to convert coal into synthetic fuel for use in motorized vehicles because Germany had little oil and a lot of coal. It was critical to their war effort in World War II and the South Africans further developed the technology to lessen the bite of Apartheid era oil sanctions. Crackel notes while the South African company Susol has the only commercially operating Fischer-Tropsch plant today, China is now constructing several large coal-to-liquid (CTL) plants at present.
Two things have limited the broader use of CTL plants world wide, but especially in the U.S.:
- The high price of fuel produced by CTL relative to the price of oil on world markets;
- Environmental regulations and public resistance.
Crackel argues, the time may be ripe to consider CTL in the U.S. I recommend reading his article in full and making up your own mind.
For my part, I think CTL plants would be a better, morally defensible, way to reduce energy dependence than costly, environmentally harmful flights of fancy like government sponsored biofuel boondoggles that take food off the plates of the hungry to put it in our gas tanks. I’m not sure whether the economics makes sense to turn coal into the gas for electric production, but it might be competitive with highly subsidized wind and solar plants which, despite huge government support produce more expensive electric power than reliable fossil fuels and nuclear. At least coal gasification plants wouldn’t be a visual blight, destroying millions of acres of wildlife habitat.
Building and operating one or more CTL and coal gasification power plants would certainly help President Donald Trump bring the coal economy back as he promised — while reducing pollution.
Having said that, I’m unconvinced the economics are there yet. Even if the costs of CTL fuel falls to the equivalent of $70.00 per barrel, unless oil prices rise above that for the long-term — more than just a few months or years — investing in a CTL plant is a risky proposition. That perhaps, is why Crackel proposes a a public private partnership.
My libertarian impulses make me leery of such endeavors as they are almost always some form of patronage, corporate welfare, or a way for government to intervene in the market in a more subtle way than direct government control –market socialism if you will.
While CTL may be not be an energy or energy security panacea, the technology does have virtues that mean it should be be considered when the topic of alternative energy comes up.
