Reprinted with permission from Environment & Energy Publishing, LLC.
Not for republication by Wyoming media.

Using “liquid coal” in U.S. military aircraft and vessels as an alternative to gasoline tied to world oil prices would come at an enormous cost and impact on carbon emissions, said a Navy official Friday.

Tom Hicks, deputy assistant Navy secretary for energy, said in testimony to Congress that the rising price of oil “dramatically impacts the military.” For every $1 a barrel increase in oil, the Navy and Marine Corps pay more than $30 million. “We don’t have that money to spare.”

Yet investment in technology to convert coal into liquid transportation fuel isn’t a clear alternative. Huge amounts of water and new coal resources would be needed, Hicks said, and capital costs could reach $10 billion per plant. That would result in a coal-to-liquids product that has more than double the carbon emissions of conventional petroleum.

The United States has the largest coal reserves in the world. Boosters of expanding coal’s role in meeting U.S. energy demand have long pushed the idea of converting coal to liquid fuels. As growth in domestic demand slows, coal-state members of Congress are considering policy options to bolster the domestic market.

Meanwhile, coal companies operating in the Powder River Basin in Montana and Wyoming are looking for ways to ship more coal to Asia. Producers in West Virginia and Kentucky are profiting from rising exports of their steel-making coal.

Efforts to repeal ban on high-carbon alternative fuels

The Republican resurgence in Congress has resulted in new efforts to bring the government on board as a major purchaser of alternative fuels tied to coal and oil. To do so, several proposals would repeal a congressional ban on the Pentagon’s using high-carbon alternative fuels.

The GOP-led House last month approved language embedded in the Defense Department’s spending bill that would lift the ban, and Republicans recently proposed a second stand-alone bill.

The language in the defense measure repeals Section 526 of the 2007 Energy Security and Independence Act. The Air Force is working to certify planes to run on synthetic fuels that can be made from coal, natural gas and biomass. But the 2007 law blocks the Air Force from using large amounts of coal-to-liquid fuels because the life-cycle greenhouse gas emissions would be much larger than those of conventional petroleum.

“The coal-to-liquids that I’m familiar with, as addressed in this bill, appears to me would go backward,” said Rep. Jay Inslee (D-Wash.).

Military considerations are twofold: first, the economic impact of rising oil prices, and second, the longer-term viability of investing in fuels with significant greenhouse gas footprints such as coal-to-liquids.

“From the Navy’s perspective, there is a better way,” Hicks said in his testimony. Biofuel is a better option, he added.

A 1-trillion-barrel U.S. shale oil reserve

The research group, Rand Corp., presented findings to the subcommittee on the potential for oil shale development. Rand estimates that recoverable oil shale resources concentrated in the West could be as high as 1.1 trillion barrels of oil.

Oil shale has a long, discordant history in the United States. In the 1980s, Exxon Corp. abandoned an expensive effort in western Colorado to extract oil shale. Towns and local economies that had been built up around the project took big hits. The retreat put thousands of people out of work. U.S. oil shale has since been considered uneconomical by multinational oil companies, as they steered capital spending toward securing foreign oil reserves that could be sold into the global oil market.

Shortly after taking office, President Obama put the kibosh on a lease sale for oil shale development authorized at the end of the Bush administration.

Extracting the oil shale is still technically complex, and there are significant environmental issues. Rand estimates for greenhouse gas emissions range from slightly lower than the life-cycle production of conventional oil to a 50 percent increase.

“Without legislation that would place a cost on emitting greenhouse gases, early oil shale production plants would likely fall in the upper half of this range,” said James Bartis, a senior policy researcher at Rand.

Bartis disagreed with assertions made in the Republican bill. He called claims of 2 trillion undiscovered technically recoverable barrels of oil “erroneous.” Further, he said, there’s little evidence to suggest oil shale is among the best resources for creating U.S. jobs. “I see no reason to promote oil shale as above other promising areas for advancing technology and creating jobs,” he said.

Oil shale has a long way to go, Bartis told the subcommittee. To move forward, he suggested that the Energy and Interior departments and U.S. EPA develop a federal plan for promoting the construction of a small number of pioneer commercial plants. Interior should also implement a 15-year schedule for offering small research and development lease tracts.

For both oil shale and coal-to-liquids, Bartis said the challenge is gaining commercial experience at a reasonable cost. He said there are roles for the government during the early stages of development, but discouraged government ownership when projects start commercial production.

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  1. Hick’s plan is ………biofuel? Seriously? If this is, indeed, an accurate statement then this Administration’s obsession with renewable and alternative energy sources is more deluded than I feared.

    The facts are these:
    – The U.S. has domestic supplies of coal vast enough to supply the military’s needs for the 50 years, i.e. coal-to-liquids.
    – The existing CTL technology CAPTURES THE CARBON which can be reinjected into older depleted Cretaceous oil fields in Wyoming, Montana and North Dakota, i.e. increasing reservoir energy and recapturing enormouse supplies of DOMESTIC OIL that cannot be produced under existing primary or secondary methods of recovery. Existing CTL technology not only (a) captures CO2, but (b) uses it to increase domestic oil production. A double-win for Americans……not to mention job creation and technology growth.
    – Q: Why haven’t companies invested in this already? A: The regulatory uncertainty this Administration has injected into capital markets via EPA and DOI gross overreach prevent sane men from investing. In other words, NOBODY TRUSTS THE FEDERAL GOVERNMENT TO ABIDE BY EXISTING POLICIES enough to risk the capital required to build a facility. EPA and Dept of Interior make up ridiculous, poorly thought out policies (to wit, DOI’s Sec. Salazar’s “Wildlands Policy”, recently rescinded. A dumb idea, at best). EPA’s gross overreach on regulating GHG as a “poison gas” is another example of this Administration and Departments overreach. Note to all Americans: stop breathing. You are emitting a poison gas. Ridiculous.

    The solution? I fear the energy that Americans take for granted will have to cease being delivered in metro areas on the East and West coast, i.e. brownouts leading to blackouts leading to… energy. The only way the average American will be MADE to understand the tradeoffs between cheap energy (not a birthright) and environmental obstructionism (an urban religion on the coasts where the majority of energy is consumed) is……to have the cost of energy accurately reflected.

    In Wyoming, we will be fine. We have Coleman stoves and lanterns. I worry for the densely populated regions of California, New York, etc. when the food starts spoiling in the electric refrigerator and folks start getting desperate for food. It will get ugly.

    Maybe Obama, Tom Hicks and Mr. Kirkland can enjoy a nice bowl of “bio-fuel” for dinner.

    Just 592 days until 2012 election.

  2. It just goes to show that the people running the country just go ahead and comment on things that they have no knowledge of.

    They are baffoons. Just take a look at and stop talking rubbish about oil shale.

    There is an environmentally friendly way to get the oil and it is also commercially viable.