Oil from coal

Wednesday's WSJ front page had an interesting article on the conversion of coal to oil: "South Africa Has a Way to Get More Oil: Make It From Coal," by Patrick Barta (paid subscription required). The South African company Sasol developed its expertise during the apartheid era when sanctions against South Africa made it difficult to import oil. The company supplies 30 per cent of South Africa's fuel for transportation. Now other countries, specifically China and the U.S., are interested in developing similar facilities.

The article baldly states in years how much fuel energy the world has remaining:

Current estimates indicate the world has just 41 years of known oil reserves and 65 years of natural-gas supplies. It has enough coal reserves to last an estimated 155 years, with some of the largest reserves in the two biggest oil-consuming countries, the U.S. and China.

Two problems with converting coal to oil are cost and environmental impact, not only of mining the coal but of the carbon dioxide emitted by the processing plants.

The Natural Resources Defense Council, a U.S.-based environmental advocacy group, estimates that the production and use of gasoline, diesel fuel, jet fuel and other fuels from crude oil release about 27.5 pounds of carbon dioxide per gallon. The production and use of a gallon of liquid fuel originating in coal emit about 49.5 pounds of carbon dioxide, they estimate. Even some boosters of the coal-to-oil plants describe them as carbon-dioxide factories that produce energy on the side.

In the U.S., Montana, Illinois, and Kentucky, which have large deposits of coal, are very interested in building coal-to-oil facilities.