March 24, 2008

Coal to Liquids Option:

The Implications of the Hirsch Report become clearer

Jeff Berg

The Hirsch Report and the Bezdek follow-up report detailed the U.S. coal-to-liquids option. (CTL)

The following article outlines some of the implications of the U.S. CTL option presented in these reports.

To my mind the most important points are as follows:

1. Such a move has the overwhelming support of Congress.

2. Any move in this direction will depress prices in direct correlation to the output from this technology.

3. Not mentioned in the article, but something that you can bet the house on, is that coal sequestration will not be implemented in any meaningful way for decades if ever for this or any other of our energy producting industries.

The ultimate result of a major push towards CTL will be to hamper the rate at which we will develop our already too long delayed move towards genuine sustainability and long-term energy security.

It is generally thought that the U.S. has anywhere from 200 to 800 years worth of coal at current consumption rates. This is quite simply false. David Hughes' fact based analysis after 35 years on the job as a research scientist and resource geologist for the Canadian Geological Survey, National Resources Canada and the Canadian Gas Potential Committee, is that the majority of the easily extractable coal is already gone. Furthermore he points out that for a variety of reasons the U.S. is almost certainly already at its peak extraction rate in terms of coal.

This peak means that coal-to-liquids is a zero sum game. I.e. Any coal diverted to this endeavour will come from a sector that is already reliant on this supply. This guarantees that electricity prices will be driven higher by CTL, again in direct correlation to the size of the output of this seriously wrong-headed 'energy security' effort.

Conservation and mass transit are the only options that have any hope of reducing the social misery that North America's declining energy availability is going to occasion. They are also the only options that are the least bit defensible ecologically and ethically. That they are also the options that would make us healthier and wealthier generates a frustration that is "teeth-gnashing" to say the least.