RAND study warns of liquid coal problems
By Ken Ward Jr., Staff writer, Charleston Gazette, November 5, 2008
CHARLESTON, W.Va. - Alternative sources of fossil fuels such as coal-to-liquids technologies have "significant economic promise," but also major environmental challenges, according to a recent study by the RAND Corp.
Turning coal into liquid fuel could significantly increase greenhouse gas emissions, and the costs of reducing those emissions might make the process too costly, according to the study by RAND's Environment, Energy and Economic Development Program.
"Because the potential environmental impacts are considerable, decision makers need to assess the economic and other benefits of alternative fuels relative to these environmental concerns," said Mike Toman, lead author of the report.
The report, issued last month, analyzes coal-to-liquids fuels along with Canadian oil sands technologies, considers possible impacts of fuel costs from carbon dioxide limits and compares the costs of these alternative fuels to projected conventional petroleum prices in 2025.
In West Virginia, Gov. Joe Manchin is pushing for coal-to-liquids plants.
Sen. Jay Rockefeller, D-W.Va., has been running campaign ads to say that the state's coal miners "will free us from foreign oil."
But many energy experts are worried that liquid coal creates perhaps twice as much carbon dioxide as traditional gasoline. Liquid coal would produce greenhouse gases when the fuel is made, and then again when it is burned.
Producing liquid fuel from oil sands poses similar problems, and - like coal mining - can harm local water quality and cause large-scale disturbances of land.
The RAND study found that liquid coal and oil sands "do not, in themselves, offer a path to greatly reduced [carbon dioxide] emissions, though there are additional possibilities for limiting emissions."
RAND found that even when carbon dioxide emissions from fuel production are captured and stored, "life-cycle emissions of [carbon dioxide] for these alternative fuels are comparable to those of conventional fuels."
"Large-scale production of these unconventional fuels does not reduce emissions of CO2," the RAND study said.
RAND said the future cost of liquid coals could "be reasonably competitive" with conventional petroleum, provided that: Oil prices do not fall back to pre-2006 levels; there are further improvements in coal-to-liquids technology as production volumes grow; and carbon dioxide limits do not impose "too large a cost burden on liquid fuels from coal relative to conventional fuels."
"Since major investments in coal-to-liquids become more likely if environmentally sound carbon capture and storage can be commercialized at relatively low cost, the future expansion of this fuel source will be strongly influenced by future private sector and government initiatives to support such commercialization," Toman said.
"However, even with carbon capture and storage deployed, neither alternative fuel offers a path toward large long-term reductions in total carbon dioxide emissions to limit climate change," Toman added. "There will still be a need to develop lower-carbon fuel options, such as fuel synthesized from a mixture of coal and sustainably grown biomass."
RAND is a nonprofit research organization "providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world."