China bets big on coal-to-oil projects

http://www.atimes.com/atimes/China_Business/HE23Cb06.html

HONG KONG - To ease its increasing thirst for oil, China is throwing tens of billions of yuan into so-called coal-to-liquid (CTL) projects, which permit the conversion of coal into a liquid fuel that can substitute for crude-oil derivatives in many applications. If successful, this move has the potential to shake up the current energy markets greatly at home and abroad.

Analysts see China's investment in CTL projects as a big gamble. If successful, the projects could reap staggering profits, provided crude-oil prices remain at today's levels or higher (about US$70 per barrel) and coal prices remain low. However, if oil prices drop below $30, they will suffer losses.

Moreover, mass production of CTL fuel, on the assumption that China has really mastered the required know-how, may bring down oil prices but push up coal prices by boosting demand for coal.

For the purpose of scientific research, China began to study CTL in the 1980s, led by the Chinese Academy of Sciences' Institute of Coal Chemistry, which is based in Taiyuan, provincial capital of Shanxi - China's "coal capital".

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Also the the army and air force are strongly looking into "hydration" of coal.
Read an article a few days ago. Missing the link, sorry...

Coal can be chemically altered into an oily kind of stuff which in turn can be refined to fuel (the clear spirit kind of fuel).

The armies tanks and humvees and planes use up A LOT of fuel.


By the way, the idea is not new.
In WWII Germany operated about a dozen hydration plants and turned coal into fuel.
Germany didn't have access to major oil fields or was cut off towards the end of the war.

For countries without own oil reserves but vast coal reserves this is very interesting.
Even more interesting with soaring oil prices when the relatively expensive hydration process can compete with the high oil price.

Unless this is their (thorougly non-standard) terminology for the "water-gas" reaction.

When South Africa couldn't import oil, they made liquid fuels and chemicals from coal.

The process produces much more carbon dioxide for every gallon of fuel used than refining oil does. Coal mining also causes additional environmental destruction.

This is a terrible idea. The assumption is that this process will be necessary to maintain some sort of political and economic stability as oil supplies become more expensive. I suspect the environmental instabilities caused by this additional pollution will far surpass any possible benefits.

The best thing we can do with coal is to leave it in the ground.

Scientific American: Pumping Coal
Coming soon to the U.S.: Cleaner diesel from dirty coal

All kidding aside, Chinese exports to the good ol' USA (in part) fuel the growth in Chinese GHG emissions.

We *NEED* all that stuff.

:sarcasm:

What are we going to do?

Give it up???

Do without it????

How UN-american....

Today, it all feels like trying to put out a forest fire with a squirt-gun.
:-(