Montana could supply the whole US with fuel!

As seen at Neocommons: Gov. Brian Schweitzer of Montana thinks his state's store of coal can fuel the US for the next 40 years! And without further contributing to global warming! (Reuters)
The governor estimated the cost of producing a barrel of oil through the Fischer-Tropsch method at $32, and said that with its 120 billion tons of coal -- a little less than a third of the U.S total -- Montana could supply the entire United States with its aviation, gas and diesel fuel for 40 years without creating environmental damage.
Why start now? Well, price, of course! (Billings Gazette)
And it is the cost that heretofore has kept the process in the experimental/pilot project stages. For F-T, the break even point comes when crude oil is more than $35 a barrel. Friday crude oil futures settled at $60.57 a barrel.
Of course, before Schweitzer can get started, he's only going to need a couple billion dollars. No prob.
Schweitzer said a 150,000 barrel per day unit would cost about $7.5 billion to build. However, F-T units can be built in modules, so a 22,000 barrel per day unit could cost $1.2 billion, he said.
Plus another several hundred million to get functional coal mines and a railroad to deliver the coal to the F-T plant.
(Mike Gustafson, president of Wesco Resources of Billings) estimates the railroad from Ashland to Miles City would cost about $200 million to build and another $80-$90 million to open a mine producing 12 million tons per year. He argued that any customer for the coal is going to want to know what the delivered price was going to be before signing a contract. The state must offer a sufficient amount of reserves in its first bid to sustain the infrastructure once it is committed, he said.

I don't mean to be so glib, really. But this comes under the "I'll believe it when I see it category." It does sound like a good idea, but is it really feasible?

More on Fischer-Tropsch at Wikipedia.

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You sort of have to believe in peak oil to want to invest in this, right? It makes total sense if there's really a near-term peak (within seven or eight years, say). It makes no sense if peak is several decades off (you'll lose your shirt long before then). Be very interesting to see whether they can raise the money.
That's one of the things the futures markets are supposed to be for. You can in effect lock in the future market price of about $60/bbl. This provides a certain amount of insurance against price drops.

Now this may not be enough for a business investment, where you not only want to break even but hopefully have a long term, highly profitable business. But at least it can take away the sting a little if the bottom drops out of the market.

Why should they send in the coal on a railroad?  They should truck it in!  Trucking is the way of the future!  Better yet, bring the coal in on SUVs manufactured by GM and Ford.
The danger is if they are in fact able to pull this off.  The problem is this wacky notion that we need to continue AS WE ARE, when continuing as we are is the source of all our problems of environmental degradation, climate change, overpopulation, soil depletion, fresh water shortages, etc.  How do you stop a runaway train except by running over the cliff of 'not enough energy to keep going'?  Let's hope this Montana thing doesn't fly.  
My feeling is that CTL is the nearest thing to gasoline post-peak, and so it will come into play. However, I also suspect that it cannot be ramped up nearly as fast as oil production is capable of depleting, so there will still be some net depletion over-all. CTL, oil sands, etc, are basically ways to lower the depletion rate (which is a good thing!)
The main reason that I believe in a "Bumpy Plateau" rather than a HL decline for TOTAL world oil & equivalents is because that coal to fuel and NG to fuel schemes will come on-line.

However, the time constraints are such that the unconvential sources will always be running behind (hence the bumps) declines in convential production.

Diesel is preferred for coal > fuel (C-H ratio, gasoline is more of a stretch).  Gasoline from NG (same reason).

Plans for more than small projects are still years away from a "Financial Decision Point".  Figure eight years from "FDP" to operations.

Water is a limitation out in MO.

A multistage plant using high sulfer Illinois coal (max buildout 200,000 b/day of diesel) is building Stage 1 (from memory).  No water problems there.

Carter wanted to build these plants 32 years ago.

TERRIBLE for GW :-((

Anonymous Oil Drum Reader on Fri Aug 26 at 4:01 PM EST said: "The danger is if they are in fact able to pull this off.  The problem is this wacky notion that we need to continue AS WE ARE."

So it seems like maybe you aren't so sure you believe in doom, you are just hoping for it.

It's doom either way, non?  --If we become able to keep going "as we are," we guarantee runaway earth warming, and environmental decimation not just of Montana but of the whole USA and the World in our consumer hunger.  --And if we aren't able to keep going "as we are," there will be a bottleneck time of ugly consequences for sure; what civilization has ever survived the collapse of its energy base?  I think there'll be big die-back, but not die-off (extinction of the human species), so --past the bottleneck-- there will be a new day (very different from, and perhaps saner than today because it will be less all-consuming than the current arrangement we have created).  
If this makes economic sense, it can clearly be funded entirely by th eoil industry--the costs are in the ballpark of other big oil projects.  So there's no need for a govt giveaway.  

It's clear oil prices will be in the range where this will be profitable (if production costs are really $32/bl).  So I glad to hear the Governor supports it and will help it along.  A project like this will take a decade to get up and running, and peak oil by or before 2015 is a forcast many oil experts would agree with.  

I wouldn't worry about a project this small allowing US oil use to remain at current levels--even with this and other future projects US oil use will, the only question is how far?

I seem to remember some of Bush's speeches talking about how we need to invest heavily in coal technology. One plant will do 150,000 a day, but how about some manhatten project-style spending to build 100-200 of these around the country. That will save us forever I'm sure.</sarcasm>

As if it wasn't bad enough that the administration is doing nothing, there's the problem that Bush had already run two oil companies into the ground. And he had advisors then too.

Actually there is a highly efficient technology for transporting coal which might be just the ticket for this grand new project.  It's not quite fully baked but if the good folks of Montana are going to be throwing money around, they ought to at least look into it.  It's called a coal log pipeline and it was developed by a researcher at the University of Missouri.
Well, I think that the Fischer-Tropsch method will be the most promissing and important way to create liquid energy in the future.
You can put virtually anything in the process; coal, wood, domestic garbage and even chemical waste!
In the Netherlands there is a small facility in wich there is being experimented with this. It is very succesfully and it shows it works.

Offcourse there are to downsides to this; there are still bad environmental sideeffect (but they can be overcome or minimilized).
The second is offcourse that it will never produce the same enourmous amounts of energy as the free flow of oil does.
But still, it can offset the doom-pictures most of us peak-oilers might have; there will be less energy to go around, but still enough to keep the western world fed for a couple of decades more...

How much will this project cost when a barrel of WTI is $95, $150, $200?  What's the EROI?  

Groan.  I suppose this is inevitable that people will try this.  Same as with the tar sands gunk in Alberta.

I suppose the bright side (if there is a bright side) is that the same equipment could be used for biomass-to-liquids - kind of like what Choren does, I suppose.

Why is it that I keep wanting to write "Fisher Price" instead of "Fischer Tropsch"?

Come on Ericy, get real. The Fischer Tropsch methode is real and it works.
This has been demonstrated for a long time. It was used to fuel the whole German war-machine during WOII. South Africa is using it for a long time.
But I agree that it would be preferable to use only Bio-mass.
But still, we're working on a clean methode now in the Netherlands.

Yes, I know it is real, and I know it works.  

The only thing I really hate is that they want to use coal as a feedstock.

Why do you hate coal?

It isn't that I hate coal - I just wish it would stay buried in the ground.

Coal is a non-renewable resource, and the consumption of coal leads to global warming.  The mining of coal leads to huge environmental problems too.

If we just replaced all of our oil-derived fuel with coal-derived fuel, what we have succeeded in doing is replacing peak oil with peak coal.  The dynamics are of course different, but you get the idea.

Coal is a non-renewable resource,

And how is oil shale/oil sands different than using coal?

Who said it was any different??  Tar sands are even worse than coal.  You consume a good deal of energy to extract the stuff.

My only point is that the same F-T equipment could be used for biomass-to-liquid.

I agree. Biomass-to-liquid makes more sense than anything else. The hemp plant can give us both ethanol from its cellulose and biodiesel from its oilseed. You can even do ok with the lesser plants -- just not maize. hahah maize.
How strange that hemp is always the answer to everything.  Too bad we can't smoke switchgrass or sugar cane...we'd have an instant special interest group lobbying for it if we could.  
Netherland has no coal production any more. Where do do they think they get the necessary coal?
There is enough coal left in our neighbouring country Germany. The only thing we have to do is to declare that a nasty dictator is ruling Germany and that we will "Libarate Germany" and "bring freedom" to that country. Then we can smart bomb their cities and grab the coal ;-)

Well... we could also buy it, or use biomass....

Here is a shortfall.

His mine will only generate 12 million tons of coal per year.
Is 12 million tons enough for all them barrels?

I don't know what the conversion from lump of coal to barrel of oil is.


Media In Trouble

From the Billings Gazette article:
Montana has 120 billion tons of state and federal coal reserves under its surface, mostly in Eastern Montana. Schweitzer said 115 billion tons of that coal is recoverable. He said using the Fischer-Tropsch method, one ton of coal would produce 1.5 barrels of diesel fuel. A barrel is 42 gallons.
^^^We hashed this out over on  The consensus is that it's in the neighborhood of 2-5 barrels of oil/ton of coal, depending dramatically on coal quality as well as other factors like plant specifications, etc.
So, yeah, it might produce about 40 mb/year.  Now do it another 100 times, and we're in business.

Doing a significant chunk of that may not be as completely impossible as it seems, given that the current US oil bill is something like $400 billion/yr and that whenever oil does peak there are going to be a lot of engineers, skilled laborers, etc. available to work on new projects in a closely related industry.

Sorry if I can't whip up much enthusiasm at more coal mining and more coal burning.

Definitely not a very "moving forward" solution.. It would just keep our society inefficient and wasteful until we get to a "peak coal" crisis, and nothing will have been solved.

It could be useful on the small scale to gain some time while we invest massively in clean technologies, maybe.

The most laughable/sad part of the article is "without creating environmental damage." Every step of almost everything humans do creates environmental damage. So, lets poison the planet and ourselves some more so we can poison ourselves and the planet further. I would rate this suggestion and those who support it as very dangerous.
I like the idea of liquidating Montana coal, into oil and I believe it will be done.

However, I think this statement by the Governor is overly optimistic and coal liquidation is only part of the answer.

First of all, their estimate of how long the coal will last are based on how long it will take to use every single ton of coal.  And as the readers here all know, any resource peaks in production half way through the total reserves.  Simply because it is far harder to mine the second half, then it was to mine the first half.  So 20 years into their estimate coal production will decline and become much more expensive.

Secondly, the estimate is based on U.S. consumption.  And unless they are going to bar the sale of this cheap new oil to foreign counties this is misleading.  The U.S. consumes 25% of all oil.  And if we sell this new oil source to the rest of the world, they have underestimated demand by 400%.  Therefore based on this new demand estimate the coal reserves will last 10 years of demand, NOT 40 years.

Lastly when you combine these two facts, 4 times under stated demand, and a production peak half way through the reserves.  The numbers come out that Montana Coal can be used for 10 years of production and on the 5th year of production, coal prices will rise because of declining returns.

5 years of $32 oil production sounds a lot different than 40 years of $32 production.

But if I stopped writing here, readers might think I have forgotten that there are larger reserves out side Montana.  They might dismiss my arguments because "we can always use the coal from another state."

So in an effort to put these arguments into the big picture context lets do the calculations for the entire U.S.A. coal reserves.  

The entire nation's coal reserves are estimated to last for the next two hundred years based on current consumption.  Now, we add the fact that we are liquidating coal to replace the decline of oil.  If oil production declines at 3 percent, then each year we must increase coal consumption by 3 percent just to keep production flat.  Now we add economic growth; if the economy grows at only 3 percent and our electrical consumption keeps pace with it, then every year we must increase our coal consumption by an additional 3 percent for electrical generation.  

This is another reason statements like "we have two hundred years of coal" are misleading.  These statements assume 0% growth in consumption!  If we take a more realistic estimate of 6% annual increase in coal consumption, instead of 200 years of coal reserves, we have 35 years of coal reserves.  Now we include the fact that half way through the reserves there is a peak in production.  

Instead of 35 years, we have 17.5 years of coal at $32 a barrel of oil for the entire nation's coal reserves!

17.5 years of "cheap" coal, is a lot different than 200 years of coal.        

My main point is that coal liquidation is NOT the silver bullet that will replace crude oil.

I don't believe there is a silver bullet that will replace crude oil, any time soon!

Instead of a silver bullet, I think there must be an effort to increase the use of many crude oil replacements.  Such as;  Biodiesel, Wind Power, Coal Liquidation, Solar Power, Tar Sands, and Ethanol.   Only by using all of these power systems can we hope to replace the large role crude oil has played in all our lives.

"Instead of a silver bullet, I think there must be an effort to increase the use of many crude oil replacements.  Such as;  Biodiesel, Wind Power, Coal Liquidation, Solar Power, Tar Sands, and Ethanol.   Only by using all of these power systems can we hope to replace the large role crude oil has played in all our lives."

Don't forget the easiest and best way to make gains: Efficiency and conservation.

PR: Excellent point in your last para., re: relying on multiple sources.

Matt Simmons has said that we will need to pull "all levers" to get through this, meaning conservation and every possible energy source.  I couldn't agree more.  We are headed for a future of greatly diversified and decentralized energy sources (what I call our "D and D future")--wind, solar, wave, ethanol, F-T CTL, nuclear, etc.

And the entire industrialized world, especially the US, needs to get religion about the notion that a gallon saved through conservation is no different than a gallon produced by a new-found source.

The mainstream has a long, difficult learning curve ahead.  We should do everything we can to get them started no, since it's in everyone's best interest.

One thing you missed:  A discovery will run out, but an efficiency works forever.
Let me bang the drum once more.

Moving intercity freight by electrified rail instead of 18 wheel trucks will take 1/8th the energy and a few drops of oil for lubrication.  More than 2 million b/day (i.e. 10% of US oil consumption) if this goes 100%.  Given efficiency gains, minimal new power plants needed (and new wind turbines could be > new rail demand for electricity).

Urban rail in DC saves a half billion gallons/year directly and more than that from changed developemnt patterns. "Rinse and Repeat" in Miami, Dallas, Houston, Phoenix, Seattle, St. Louis, New Orleans, Austin, Honolulu, San Antonio, Tampa, Las Vegas, Los Angeles, Nashville, Memphis, Salt Lake City, Minneapolis-St Paul, Detroit, Cincinatti, ... and expand systems in DC, NYC, SF, San Diego, Portland, etc.

DRAMATIC energy savings vs. current urban transportation modes (SOV SUV) & development patterns.  Again, wind turbines alone can handle the increased demand for elelctricity in most parts of the country.  

And replace heavy bus routes with trolley buses.

"Instead of a silver bullet, I think there must be an effort to increase the use of many crude oil replacements. Such as; Biodiesel, Wind Power, Coal Liquidation, Solar Power, Tar Sands, and Ethanol. Only by using all of these power systems can we hope to replace the large role crude oil has played in all our lives."

Right, coal liquefication is no silver bullet. But if we think of the total energy of oil used now, neither are these other alternatives, not even taken together. The net energy gain of biodiesel and ethanol is very low. And where do you take the extra acres you need for farming the biomass needed? People have to eat, too. And we should not forget that electric power production is already now under greater demand press. Solar power is needed there. And how many megawatts? There have been much discussion about tar sands. Some synthetic oil, yes. But not enough.

And one thing more. The growth is the problem. We are in trouble because of the growth of energy consumption. If the world had been able to keep the oil consumption flat for example at the 1960 level, there would not be any problems for a long time. Technology has advanced but it has mostly helped to consume more energy.

The renewables have a nasty property of not been able to grow. That's why they are renewables. They are in principle like a constant flow. You can take a bigger share of the flow but no more than 100%. The is no way to sustain the energy growth.  

Maybe we can also go back to manufactured gas (illuminating gas) once the natural gas peak hits.  I didn't realize it until I was doing some local history research, but 19th century cities used to have huge gas plants where they baked coal, with the resulting gas by-product used as the illuminating gas of the gas-light era.  Gradually, these disappeared as they were supplanted by natural gas or electricity.  (Not always a smooth transition:  in 1865, half of Pittsburgh burned down when the city decided to convert from coal gas to natural gas. But they didn't tell anybody. When the coal gas was shut off and gas lights went out all over town, people tried to re-light them -- just as the odorless natural gas was coming through the pipes.)

I guess everything old is new again.  (Though given the doubts over Saudi oil reserves, I get nervous when people proclaim that "we are the Saudi Arabia of coal".)

We should point out to the politicians that by the time the first 150,000 bbl/day plant and all its supporting infrastructure is ready, US domestic conventional production will be down by an amount far more than that amount.

The cumulative average for this year alone is off approx 170,000 bbl/day year over year compared to same period last year, or -1.4%.

Comparing the same period of time in each of the prior 8 year - 6438 - 5432 = 1006 M bbl/day domestic production loss over the past 8 reporting periods = 126,000 bbl/day loss on average per year, potentially accelerating over the past two years despite high motivation to produce all that can be done at these persistant high prices.

So the good Governor will need to get a move on, because by the time the first plant is ready to go (how long? 2, 3 years?) they'll need to have built 3 by then just to replace that which is lost.

Can't blame him for looking for an economic angle - if his role model is Alberta (not far away) he's probably tired of hearing about Alberta's balanced budget (no debt at all, not just no deficit) and multi-billion dollar annual surpluses. VP Cheney is heading to the alberta oil sands - perhaps he's coming back with notions of digging coal at home, who knows.

One of the concerns I'd have is if "traditional" economic remedies are the only things being considered, and if PO is nearby, simple, traditional, economics are not going to "work" and by that I mean allow most of us to escape without significant financial harm.

From EIA history data: rical.html

2005    2004    Chg
5,432   5,509    -1.4

2004    2003    Chg
5,525   5,720    -3.4

2003    2002    Chg
5,827   5,862   -0.6

2002    2001    Chg  
5,899   5,802   1.7

2001    2000    Chg
5,818   5,828   -0.2

2000    1999    Chg
5,825   5,868   -0.7

1999    1998    Chg
5,954   6,372   -6.6

1998    1997    Chg
6,417   6,438   -0.3

I guess that this was hashed out mentally by me as follows:

Oil has a Peak and depletion curve. Thus it is not sustainable long term. Coal has a similar peak, and thus falls into the same category. Uranium also does, although with radioactive isotopes this peak may be very long, provided we have adaptive breeder reactors.

The real issue is that this is a WORLD problem. We live in a GLOBAL economy. Everything is interrelated - so if we do not tackle this from a global perspective, then we will fail - globally. That means a return to a much different era - not?

But IMHO, the only long term solution is to reduce consumption and operate within the confines of renewable resources. And IMOHO, this means a reduction in world population through some mechanism, and an end to the belief in never-ending growth as an economic goal.

Population control is a dirty word in some circles, but ultimately neccessary. Once we try to live beyond the means of a land to support it, bad things happen.

Return to a simpler way of life, a different era? Might happen. In a rapid PO scenario, surely it would. All this just-in-time globalization would tend to fall apart at the seams, but surely not before we (the developed world) do our best to totally screw up the rest of the world. In some respects we are well on our way.

Yep,  that's right.  Can't grow forever.  People who think you can have an immortality complex.
Frankly, resource depletion will likely be one of the population controls. Liebig wasn't wrong, and we do live in a finite, "pond-like" environment. Long-term, population is self limiting in a closed ecosystem by means of resource depletion. We may be smarter than a lot of previous animals, but we are still subject to the same laws. Humans just seem to bend these laws for short term gain, i.e. profit, using our technology.

They still apply, despite our machinations to avoid them.

Re: "without creating environmental damage"

The governor of Montana is apparently a CTL pimp. And that's at least $40/barrel, not $32/barrel for synfuels. I've been hearing about this miracle technology all my life, so lets walk the walk, not just talk the talk. Everybody's got something to sell, don't they? It's sad and pathetic.

More importantly, without a CO2 sequestration program in place, the damage vis-a-vis global warming would be so enormous for this kind of ambitious CTL program that it boggles the mind to think of it.
IMHO Peak Oilers (myself included) are a bunch of arithmetic geeks.  Sometimes, however, we lose the message we are trying to communicate through our amazing grasp of mathematics.

Also IMHO, I agree with the people who write in and accuse us of being gleeful in the prediction of gloom and doom.  I personally hope we are completely wrong and Peak Oil is a fantasy.  I don't believe that, but humanity would be better off if that were true.  What are the potential solutions, even if partial and temporary, to this upcoming catastrophe?

Lastly, we need to separate the way we'd like the world and people to be from the way that humans really seem to be in reality.  All of my observations worldwide suggest that most of humanity lives by the following rules - bigger is better, more is better, I am more important than the next guy, I care about my family more than my neighbors, I care about my neighbors more than the people in the next town, I care about my region more than other regions etc. Don't expect the majority of humans to act in an altruistic manner.  It does not seem to be in our genes.

That rant aside, and discarding everything I wrote above, does this $32/bbl CTL price include: cost to purchase and transport the coal to the CTL site?  Does it also include the necessary markup to the end user that any CTL company would be requiring to get a satsifactory ROI?  If not, then the Fischer-Tropsch process applied on a large scale will only come into play when companies are convinced that the long term price of an equivalent oil will be greater than $50-60???/bbl or more.  We aren't there yet (even if the futures markets suggest we are).  Also, as writers above have pointed out, there is no way that this technology can replace 84 mmbopd or even 20 mmbopd.  I do think coal to liquids will become a technology utilized in the future, though.

"does this $32/bbl CTL price include: cost to purchase and transport the coal to the CTL site? Does it also include the necessary markup..."

Exactly right, Bubba. This is just the latest in another series of fantasies that have been reported here at TOD lately as the shit hits the fan on miracle cures to our energy problems.

Oil Sands? CTL? GTL? Oil Shales???? Increased production in Saudi Arabia? lots of poor quality heavy crude from Venezuela and the not-yet-assassinated Hugo Chavez? One miracle follows another in the media. Screw these pipedreams.

Here's what I'm looking for: Somebody show me that conventional oil production (whatever grade) is going to meet reasonable demand figures over the next 2 years. C'mon, anyone, show me that data. Take the PO challenge!
First, a picky point. FT synthesis works from CO and H2 to produce diesel and gasoline.  You need coal gasifiers to produce the syngas first.  There is a plant going in Qatar that will produce diesel from steam-reformed natural gas.

For what we spent on the Iraqi war you could have had 20 mmbpd of coal gasification and FT diesel production in 15 years.  We would have to ramp up our engineering and construction capability first because we've pretty much let it atrophy.  It would release less CO2 into the air than just outright burning the coal and would produce a slag instead of ash, so while it's not super environmantally friendly it very well could beat some of the alternates.

I would point out that China is moving ahead on coal gasification, wind power, pebble bed nukes, and direct coal liquefication technologies.  They seem to have reached the conclusion that it's going to take everything to stay ahead of the depletion curve.

Montana is not going to pull us out of the peak oil dilemma, but it is very hopeful that something may cushion our fall.  We'll have a bit of fuel to get around and keep things going.  I hope it doesn't go to keep jet skis and other nonsense going, but to keep some semblance of civilization going, like busses and trains.  
While coal to oil (CTL) has some environmental concerns, it is probably the only technology that can be ramped up in time to make a difference.  Even then it would be more than 5 years to get the first large plant going and then the real ramp up could get started. As others have said it is a fairly well proven technology. Major oil has much of the required technology and that may be a hold up.  Two independent companies have the technology and could supply the plants. A US company, Syntroleum, is pushing it fairly hard, I suspect they may have had some influence on Montana's interest.  They have a rather small module which is largely factory built and could be deployed fairly rapidly. Sassol of South Africa is selling the process and would be interested in any sizeable project.  It is a matter of will to get the ball rolling.

Although this is the only well proven technology and that can possibly offset the decline in oil production for the next 40-60 years, coals supply is finite and we will run out at some time, although the US has very very large reserves, which if we used it only for our own needs might last as long as 100 years. Bio based products are the green solution, but they are only starting to have the technology that could help and it would be longer before they could be an important factor.  Biorefineries producing ethanol from cellulose, rather than corn, are in the prototype stage and should be one of the long range solutions. The new energy bill provides loan guarantees for the first few plants.  They do not suffer from the same land use requirements (for growing the biomass) that corn based ethanol plants have. Choren in Europe (Shell just bought a 20% interest) has a gasifier that they claim works well on biomass - this is the step that is is holding up Fischer-Tropsch processes for biomass - coal gasifiers do not work well on biomass.  These processes are supposedly more expensive than biorefineries, but they supply a liquid that is more versatile, more oil like, and more feedstocks are possible than for biorefineries.

Back to coal. Because you are gasifying, rather than burning the coal, the pollution problems are more manageable. SOx, NOx, etc can be handled quite well and this has been demonstrated.  What has not been demonstrated is handling the CO2 which is reduced about 20% compared to plain burning.  However the CO2 is in a smaller, more pure stream than in current coal plants, meaning it can be sequestered more easily.  Terrestial sequestering is the most likely canidate.  It can be used as an EOR technique if located near oil fields or stored in abandoned and sealed coal seams (for how long is unknown).  A new startup has a process where it is used to grow algae and then biodiesel made from the algae.  There selling point is that it is a less expensive way of getting rid of CO2, not a better way of making biodiesel.  They require a lot of land for their algae growing, as they need to get sunlight to rather thin layers of algae. Another problem is the environmental damage caused by mining and this has not been addressed very well, although it could be by requiring backfiilling after mining is completed.  All of these environmental solutions cost money and you are no longer at $32 per barrel, although probably competitive with $65 oil.

A CTL plant is being built in Australia and DOE has a very small plant in the pipeline for PA.  A fairly recent DOE report concluded that if CTL was built as part of an IGCC power plant it had a lower electrical cost than a straight foreward IGCC plant. It appears they are taking note of this and putting greater emphasis on developing the process.  

It's just a guess without a cost estimate, but if you started the plants now and thru in remediation costs for the mining and CO2 sequestration, it would look good when oil is at $80/bbl.  Remember that you do not need a refinery and have no refinery costs; the FT process yields diesel.  I think a major cost adder would be the water supply, you'd probably have to go with sea water for mass production.

If you wait ten years and investment costs triple, then all bets are off.

Well gee whiz!  I guess all the angst I've been through over over-shoot, Peak Oil, global warming, the credit bubble and H5N1 is for naught.  However, possibly there remain a few niggling details in this assessment by an elected official of the world's greatest democracy...
A few minor questions-- Where is the capital going to come from to build the amount of infrastructure required for this effort?  American savings?  Oops!  There is none.  Foreign investment?  Well, of our primary financiers, Japan, just (maybe) coming out of a very long recession, is possibly going to be involved in a conflict over the natural gas reserves in the South China Sea.  China?  I guess they have the wherewithal, but we just headed them off at the pass over Unocal.  (Maybe if we said "Pretty please"?)
I don't know what problem I have but my name did not appear on the previous comment.  Jim from The Energy Blog
If you are interested in BtL, here are two relevant links:

Somebody should have noted that there is no real coal in Montana. There are mostly lignite and sub-bituminous coal ( That's different stuff than coal (bituminous coal). Its heat value is about half of bituminous coal. Synoil oil is made from bituminous coal.

And try to get the numbers right. A 3% decrease of oil energy can not be replaced by increasing coal production 3%. The share of coal in energy production is less than that of oil so coal production must be increased relatively more. If you have to replace conventional oil with synthetic oil made from coal the coal production must be increased a lot more.

The point is not the technology nor even the cost. It is the energy. All coal produced now is consumed for electricity and other uses. All coal that will be used to compensate loss of oil production must be from new production, new mines.

To replace all oil with coal as energy would mean producing 2.5 times as much coal as today. To replace all oil with synoil would require producing 4 times as much coal as today. We must see that the demand for electricity alone is growing too. More coal is needed for that, too. The technology to make synthetic oil from coal, natural gas or biomass is there. The problem is the needed volume.

Most people who like to forget this just want to see some kind of technological solution save us from the dire future of depleting oil. But let's do the numbers right here, too. What kind of problem do we really have? Look at the official ASPO oil & gas depletion profile 2004 base case (

We can see from the graph that the world primary energy from oil and gas (measured by barrels of oil equivalent) will be in 2030 (25 years from now) quite the same as now! And we can safely assume that the coal production will be somewhat higher then and rest (nuclear, hydro, biomass, wind etc.) will be the same or higher. So after 25 years the world will still have more energy to consume than now. In 2050 the world can still consume more oil and natural gas than in 1970. This is not a catastrophe. Oil will be depleting faster but in 25 years we will still be at the level of 1970 in oil consumption.

Nobody likes the real picture. We will not get a dramatic shock. No quick end of suburbia, no new green communalism, no new era of alternative fuels. Still some economic growth for 5 - 10 years (maybe 15). But the Peak Oil will come. The economic growth will not go on unlimited. We will have a long period of negative growth and decay. In the short run the world will not be very different from now but in the long run it will be.  

It is not important to get people believe in Peak Oil. It is not a matter of belief. Most important is to be able to do long range decisions based on the fact that we are really at a turning point.

There will be a shock against against demand.  The increased oil costs plus US debt overhang plus the iniital effects of global warming by cause some severe disturbances to a seriously unbalanced world economic system.
You may have right. The oil crisis can very well cause an economic recession or depression. But then the cause is not shortage of oil or the peaking of production but problems in the financial sphere. This may happen even before the peak. That's why the peak may be never really recognized as the recession/depression will mask it.
Hey guys, the original coal estimate is off. When they say 200 years of coal, that's 200 years of coal at todays's prices and today's technology. Assuming that consumption will go up the same way it's been going up, and that technology will not keep going up the same way it's going up, is not honest, either.
I know this guy is my competition and I do expect to beat him with my all-singing/all dancing amazing solar power technology, but I try to be honest with myself.