NCPA - National Center for Policy Analysis


June 19, 2007

Now that food prices are jumping in part because so much of the nation's corn crop is being diverted to ethanol production, the latest bright idea in Washington is to turn coal into car fuels, says USA Today.

The idea has surface appeal. The United States has more than a quarter of the world's coal reserves, making it a tempting replacement for imported oil. Congress is pondering a range of coal-to-fuel subsidies, loan guarantees and mandates as an answer to the nation's energy woes.

The downsides of coal-to-fuel include:

  • High costs -- next week, a Senate subcommittee is scheduled to consider a 50-cent-per-gallon subsidy; also under consideration are $10 billion in loan guarantees and a mandate that 21 billion gallons of car fuel (about 15 percent of today's supply) be derived from coal by 2022.
  • Water consumption -- the conversion process requires vast amounts of water, at least 5 gallons for every gallon of fuel produced, according to the Energy Department; particularly in Western states, where much of the nation's coal can be found, fresh water is in short supply.
  • Global warming --  between the emissions from the conversion plants and the emissions from tailpipes, coal fuels produce more than twice the greenhouse gases as does refining oil into gasoline and burning it, according to the Environmental Protection Agency.

There's no question the United States needs to reduce its reliance on the imported oil that finances some of the world's worst regimes.  As for running cars on coal, thoughtful examination of all of the drawbacks leads to an inevitable conclusion: Liquefaction is an answer whose time has not come, and probably never will, says USA Today.

Source: Editorial, "Put brakes on pricey plans to convert coal to car fuel; Process costs a fortune, gulps water, worsens global warming," USA Today, June 19, 2007.


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