By Governor Brian Schweitzer
    Center for American Progress

    Thursday 03 November 2005

    Many things can be converted fuel, including crops, natural gas, waste, manure, and many other carbon-based substances. In Montana, we are encouraging the production of these kinds of alternative fuels in an effort to catalyze the energy future.

    One of these alternatives is gasoline, though not the gasoline we all know. This gasoline comes from coal.

    Though it sounds like alchemy, the means to turn coal into synthetic petroleum products such as gasoline, diesel and aviation fuel has been around since 1913 and was used in America as early as 1928. Germany used "synfuel" to power most of its vehicles in World War II, and South Africa used the technology to overcome apartheid sanctions starting in the 1950s.

    Today, South Africa still produces 150,000 barrels a day of gasoline and 50,000 of diesel each day without a drop of oil, the only mass production of liquid-coal fuels in the world. At the same time, facing the uncertain future of the world oil market, large nations such as China and India have begun investing seriously in synthetic fuel production.

    While only one of many proven alternatives to oil-based fuels, synfuels can help America solve many problems. First, with our abundant coal, synfuel holds the promise of an American energy source, produced on American soil by American workers. In combination with other oil alternatives, synfuel could help us break our bonds with price-fixing dictators and give us a push down the road of energy independence.

    This, in turn, would help us protect our soldiers and ourselves. The US military is keenly interested in synfuel, and last year even put forward a proposal to buy every drop of it that can be produced in America. As the largest single consumer of foreign oil in the country, the Department of Defense is desperate for a secure, domestically produced fuel source, obtainable by some means other than purchasing it from Middle Eastern dictators who then use the proceeds to fund terror.

    In addition, the military needs to comply with fast-approaching clean air and other environmental rules both here and abroad. Indeed, in the long term, the most attractive part of fuel made from coal is the environmental profile. Unlike conventional coal burning, the synfuel production process first turns coal into synthetic natural gas via a contained chemical reaction, rather than ignition. Sulfur, arsenic, ash, mercury and other environmental culprits in coal are removed from the gas, put into solid form, and can either be stored or sold off as commodities (rather than being spewed into the air, as they are from conventional coal-fired power plants). Meanwhile, greenhouse gases can also be extracted and stored underground.

    The resulting "syngas" is then distilled into a synthetic form of any petroleum fuel desired, which burn remarkably cleaner than conventional fuels. Alternatively, the syngas can be used to generate electric power (with almost no emissions at all) or even hydrogen for the fuel cells of the future.

    The environmental features of this technology have caused groups such as National Resources Defense Council (NRDC), usually (and justifiably) a staunch opponent of coal, to support coal-to-liquids technology.

    The main obstacle in synfuel production has always been the cost of production, about $35 for a barrel of finished product. But given the current price of oil-based fuels, and with long-term buyers like the military, the timing is right. New loan guarantees and other incentives in the Energy Bill give coal-to-liquids a big boost, but a real federal investment - far less than what the oil industry now receives in the form of subsidies and tax breaks - would go a long way in further bringing down the cost of production.

    Believe it or not, America once made these types of investments. The US government was seriously involved in trying to perfect the coal-to-liquids process well before the Germans raced ahead of us. In the 1920s, the US Bureau of Mines was making synfuel and studying ways to make it on a large scale. In the 1940s, with passage of the Synthetic Liquid Fuels Act and an appropriation of almost $80 million for research and development, synfuel had a bright future. By 1953 a test plant in the town of Louisiana, Missouri was churning out several thousand barrels per day of synthetic, unleaded gasoline.

    But when cheap oil was discovered in Arabia, the oil companies persuaded the government to abandon the research. During the 1970s oil crisis, the Carter administration flirted briefly with the synfuel concept, but it was again abandoned when the price of oil receded.

    It shouldn't be that difficult to avoid making the same mistake for a third time. We put a man on the moon 67 years after the Wright Brothers' first flight. More time than that has elapsed since man first made fuel from coal, corn, soybeans, even hydrogen. Yet Americans are being forced to empty their bank accounts to buy gasoline from Middle Eastern dictators, while nations such as Brazil, having made an investment in their future, can now run their cars on any combination of ethanol and gasoline, allowing pure competition at the pump.

    I think we can do better. Synfuel, ethanol, biodiesel, wind power, solar power, hydrogen, conservation ­ there is a range of energy alternatives that we can simply no longer afford to ignore. Washington needs to act on them. If we simply wait around for the price of oil to go down (if it ever does), the momentum for these alternatives will once again be lost. Let's not let that happen.

Governor Schweitzer is the 23rd Governor of Montana. He has been an outspoken leader on issues of energy independence, alternative fuels and energy conservation.