Coal-to-Liquid Is a Dead End
One final post on this week’s liquid coal hearing. Forbes wrote up the hearing and got my bluntest quote:
Well, I guess “liberal-leaning” is better than “liberal.”
Why is liquid coal a dead end? Because, as I explain in my testimony, even a relatively low price for carbon dioxide is fatal to liquid coal’s economics, as made clear in two recent report by the U.S. Energy Information Administration:
In its January 2007 report, “Energy Market and Economic Impacts of a Proposal to Reduce Greenhouse Gas Intensity with a Cap and Trade System,” EIA examined the impact of a draft version of Sen. Jeff Bingaman’s global warming bill. That bill has a safety valve, which limits the price of carbon dioxide permits. In the EIA analysis, the permit price starts around $4 a ton of carbon dioxide in 2012, rises to $7.15 in 2020 and reaches only $14.18 in 2030. This is a relatively low price for carbon dioxide. Indeed, this 2030 price is considerably lower than the current price for carbon dioxide in the European Union — and the first budget year for Kyoto isn’t even until next year. In this scenario, EIA finds:
[I]n 2020, CTL [coal-to-liquids] production is 0.2 million barrels per day (74 percent) lower than in the reference case. By 2030, the change is 0.6 million barrels per day (85 percent) lower than in the reference case.
In short, a relatively low price for carbon dioxide wipes out the vast majority of projected CTL.
In July 2007, EIA released “Energy Market and Economic Impacts of S. 280, the Climate Stewardship and Innovation Act of 2007,” an analysis of the global warming bill by Senators John McCain and Joe Lieberman. S. 280 sets considerably more stringent reduction targets than Sen. Bingaman’s draft bill–ultimately reaching 60 percent below 1990 emissions levels by 2050. This bill has no safety valve. As a result, the permit price reaches $22.20 in 2020 and hits $47.90 in 2030. The report finds:
None of the 15 coal-to-liquids plants built in the reference case are projected to come on line in the main S. 280 cases. In the reference case [business as usual], coal consumption at CTL plants reaches 109 million tons in 2030.
A moderate price for carbon dioxide wipes out all projected CTL.
Since it is all but inevitable that we will have a low-to-moderate price of carbon dioxide by 2020, and at least a moderate price by 2030, CTL will not achieve any significant market penetration. No amount of federal research and development investment or tax credits or loan guarantees are likely to change that equation.
September 8th, 2007 at 11:43 am
Great post. It makes the case against CTL idiot clear. And yet I have the sinking feeling that we will continue to sink $$$ into this rat hole. On one level, I wonder whether the CTL crowd knows it’s backing a dead-ender, but continues to do so because their real motive is to hold out hope that we can continue to rely on our existing fuel/infrastructure/vehicle framework, therebye forestalling the kind of massive investement we need in new vehicles and new fuels…
I never used to think in terms of a monolithic “they” with “real” reasons — I used to believe we’d just lurched our way into this untennable situation. But now, as we hold fast to this suicidal energy system based on fossil fuels in the face of all the evidence showing the economic, environmental, global warming and security threats it imposes, a little paranoia seems warranted.
September 8th, 2007 at 10:14 pm
Dear John,
Good comment. What you’re really hinting at is that there are always two reasons for what politicians do: 1) the real reason, and 2) the socially acceptable reason. Iraq is arguably the most recent “classic” example of this principle. First, the socially acceptable reason was WMDs; when that didn’t ‘pan out’, the fall back position became “connections to Al Queda”. With that thoroughly debunked (but still in desperate need of a socially acceptable reason behind which to hide the real reason) [don’t get me started on the second Bush Administration & hiding & what Jesus said about ‘no one lights a candle and hides it under a bushel basket…’], it’s not surprising that the third ’socially acceptable reason’, “democracy building”, finally reared its ugly head — not unlike the proverbial “elephant under the table”. I should hope it obvious that the things sorely missing from this list are the REAL reasons for Iraq, with which I won’t bore you (except to remind you that one has the initials O.I.L.). The things that make Iraq arguably the most classic example for all time are the facts detailed in the recent government report saying that NOW there is a most definite Al Queda-Iraq connection — courtesy of your friendly, neighborhood US intervention! I don’t know your definition of “self-fulfilling prophesy”, but this would fit mine if I didn’t know better, if I didn’t know that ‘Al Queda connection’ was really just a ’smoke screen’ — a socially acceptable reason behind which to keep the REAL REASONS for aggression & invasion safely skirted. So, you’re absolutely correct in speculating as to REAL motivations for continued funding of coal liquification; you’re probably not missing the mark by too far about existing infrastructure & what not (tax code, etc.).
This feeds directly into the second part of your prescient comment. Here, you strike at death’s absolute necessity — to get the proverbial “dinosaurs” out of the way so that they can act as “compost” fertilizing higher life forms. The thing that’s most ironic here is that it’s death of which we’re speaking with which to begin — coal being the ancient remains of by gone life — though toxic coal is most definitely NOT compost. (It’s arguably life’s greatest paradox that, in order to die, you have to have lived.) Jesus is attributed with having said, ‘Let the dead bury the dead’. I can’t help but wonder what His take would be on: ‘let the toxic dead dig up the toxic dead, subject them to liquification, and distribute their toxic remains as evenly as possible throughout the entire biosphere while remaining in darkness (oblivious) to any undesirable consequences’.
P.S. While I should hope it obvious that it’s about Enlightenment — that’s what Joe seems to be about: Enlightenment — obviously those so hopelessly lost in darkness can’t tell the difference between ‘the light’, ‘the shadows’, & ‘the darkness’. Yet, their ability seems uncanny to tell 1) that which needs to be hidden from the light from 2) that which ought to be seen in the light from 3) that which ought to be called light but which must remain forever hidden under bushel baskets called “Guantanamo” or whatever. I guess it’s for our own good because we can’t handle the light? But, I thought we were supposed to be about Enlightenment? OK. Now, I’m confused. I need a denialist to “pull a Jack Nicholson” right about now and tell me, “You can’t handle the light…”
October 28th, 2007 at 9:50 am
I love liberals!
You know, as much as you folks tout conservation, you have never acknowledged that science has failed. We can’t have more, like science promised, in your eyes. No nuclear power, no coal consumption, no oil - you’ve just gone and ruled out all the credible sources of energy.
So, thanks to you people, there will be no energy, and what you are really advocating is poverty. That’s right. Americans would all be better off if they were poor. God, keep it up. Despite having screwed up the war, we Republicans still have a shot at getting a permanent majority simply because we offer a better vision of a way to live.
More is better, not less.
June 10th, 2008 at 8:27 pm
Carbon sequestration will, indeed, make CTL unfavorable in the US. But, not a problem. CTL will be done in China, India, and south Africa. This will just become another industry strangled in its crib by the environmental lobby.
July 3rd, 2008 at 6:04 pm
The FT process used in CTL can also use biomass and trash. (Rentech does it). I see no problem building the CTL factories to get us out of the OPEC death grip and then arguing over wether to feed them coal or the trash mountains of America. http://www.rentechinc.com/rentech-projects.htm#5 has an interesting list of projects, about 1/2 of them “green”. At least one of them includes carbon sequestration.
We need to build the synthetic fuels plants so we can kiss OPEC, IRAN, IRAQ et.al. goodby. We can then feed them whatever we want to, be it coal, trees, trash, or switchgrass based on how we see AGWarming working out.