Coal industry all fired up about liquid fuels

CHARLESTON, W.Va. - While the energy industry has been focused on alternative fuels and new sources of oil, the coal industry is going ahead with plants to turn coal into liquid fuels such as diesel and gasoline.

Supporters say at least some plans are a certainty, even if Congress doesn't approve incentives sought by coal-to-liquids supporters. But they argue some form of subsidy is vital to build enough plants to dent the nation's reliance on foreign oil.

"You're going to have a coal-to-liquids industry in the United States," said John Ward, vice president for marketing and government relations for Headwaters Inc. "The question is, how fast will it happen?"

The National Mining Association's Coal-To-Liquids Coalition is holding a conference this week in Beckley, W.Va. The event's agenda includes speeches by Rep. John Murtha (D., Pa.), Sen. Jay Rockefeller (D., W.Va.) and other politicians, and updates on various coal-to-liquids projects by representatives of the U.S. Air Force and Rentech Inc., which is working to develop proposed plants around the country.

Headwaters, of South Jordan, Utah, is working on a coal-to-gasoline plant proposed for North Dakota and researching the feasibility of coal-to-liquid plants for Pittsburgh-based Consol Energy Inc.

The coal industry and coal-state politicians say the nation cannot afford to wait patiently for small developers to build plants on their own or in conjunction with coal companies.

But the notion has not gotten far in Washington.

"There's not a concerted effort to be truly energy independent," said West Virginia Gov. Joe Manchin. "How are you going to get us from A to B and still be a world superpower?"

Supporters argue that using domestic coal would reduce dependence on imported oil from unstable parts of the world.

Environmentalists contend conservation and energy efficiency would do the same thing. And they argue that coal-to-liquids plants generate double the greenhouse gases of oil refining, consume vast quantities of water, and increase coal production.

"Why in heaven's name would we be subsidizing anything that's giving double the greenhouse gases?" said Vivian Stockman of the Ohio Valley Environmental Coalition. "It's basically a way to prop up the coal industry and give them more subsidies and hold people economic hostage."

Rentech chief executive officer Hunt Ramsbottom and others contend they will be able to reduce overall carbon-dioxide emissions by capturing the gas and selling it to oil producers to extend the life of aging wells, among other things. If several plants get off the ground quickly, he said, they can actually cut down carbon emissions.