Feb 20 2008
The global environmental movement seems to be stuck in a pattern: two steps forward, one step back. Case in point is this week’s news that a Chinese energy company is ready to open a chemical plant that uses coal to make synthetic diesel fuel, which creates almost twice the carbon pollution as conventional diesel fuel.
The Chinese facility, operated by Shenhua Corporation, is in Inner Mongolia, and is only of several such plants that are in the works. But China is hardly alone in its plans to build coal-to-liquids (CTL) plants. With the high price of oil, just about every country with large coal reserves is pursuing more developments with the technology. Energy analysts say the CTL plants are feasible and competitive when oil prices are over US$25 per barrel. With today’s price at $100 a barrel, it doesn't take a mathematician to see that CTL plants represent one of the best bargains in the world energy market.
The plant developments couldn’t have come at a better time for the coal industry, as new emissions regulations are threatening the industry worldwide. In the U.S. there is a growing public discontent with coal-fired energy plants, and a leading environmental analyst recommended that the U.S. should invest more in renewable energy, and leave coal where it belongs -- in the ground.
In any case, similar CTL plants are planned or under way in the U.S., India, Japan, Australia, New Zealand, Botswana, Indonesia, and the Phillippines. Three plants were built in South Africa to beat the apartheid-era oil sanctions, and still produce almost a third of South Africa's energy needs.
The CTL technology was originally developed by Germany during the second world war, and is thus dubbed "Nazi fuel". Good thing these companies don’t have to worry about PR, huh.