By MIKE DENNISON of the Missoulian State Bureau
HELENA - If you watched �� Minutes” on CBS last Sunday, you saw Montana Gov. Brian Schweitzer making his pitch for development of coal-based synfuels in the state.
But you heard few real details on impacts of the coal-to-fuels process or the context of actual development plans.
Working off a transcript of the show, the Missoulian's State Bureau examined the reality behind the rhetoric:
1) Schweitzer and Princeton University scientist Robert Williams said the process doesn't burn coal, and therefore produces virtually no pollutants. True?
The process, known as Fischer-Tropsch, gasifies coal through a super-heating process before converting it to liquid diesel fuel. The process still creates potentially harmful byproducts like mercury, sulfur dioxide and nitrous oxide, but instead of going out a smokestack, they are stripped away and can be converted into other industrial uses, such as fertilizer.
2) Williams noted the process still creates large amounts of carbon dioxide, believed to be a major cause of global warming.
It's true that coal-to-fuels conversion creates substantial carbon dioxide, which scientists consider a greenhouse gas. The question becomes whether that CO2 is “captured” or just vented into the air.
And even if most of the carbon dioxide from a coal-to-fuels plant is captured, the entire process does nothing to reduce overall greenhouse gases, says Joseph Romm, a physicist with the Global Environment and Technology Foundation in Arlington, Va. It still produces diesel fuel, which is burned and creates carbon dioxide.
CBS News correspondent Lesley Stahl said Schweitzer has “promised” not to allow release of carbon dioxide, by selling it to oil companies for injection into the ground.
But Montana has no legal requirements that would force a coal-to-fuels plant owner to capture its carbon dioxide emissions. Carbon dioxide can be sold to oil companies for injection into oil fields. The CO2 is then trapped underground and creates pressure that forces out more oil.
4) Stahl says “the price tag to get (Schweitzer's) plan rolling, $1.5 billion, is a bargain, the governor says, now that crude is trading around $60 a barrel.”
The $1.5 billion might pay for a smaller coal-to-liquids plant, but estimates for a larger plant range from $5 billion to $8 billion. It depends on the location of the plant, the type of coal and other factors. Those estimates also generally don't include the cost of capturing the carbon dioxide, pipelines to transport the CO2 to oil fields, the coal mine needed to supply the plant or other infrastructure outside the plant.
The “bargain” has more to do with the cost of oil than the cost of building the plant. Schweitzer says industry officials have told him it costs about $42 a barrel to make fuel from coal gasification - the same cost as making fuel from crude oil priced at $30 a barrel.
Therefore, if crude oil is at its current price of $60 a barrel, the coal-made fuel is cheaper.
Some industry officials have said the coal-to-fuels technology is economic if crude oil is no less than $35 to $40 a barrel.
5) Schweitzer said “we can produce this fuel for about $1 a gallon.”
The $1-a-gallon price is equivalent to the $42-per-barrel price. After adding state and local taxes, transportation and other costs, its retail price for the consumer would still be lower than current retail prices for diesel fuel, the governor is saying.
6) “Brian Schweitzer says there's something we can have up and running in the next five years,” referring to a coal-to-fuels plant.
Five years may be pretty optimistic. Ken Roberts, senior vice president for business development at Syntroleum Corp., which is experimenting with the process, says it would take “four to five years” if a specific plant development started now. There currently is no commercially operating coal-to-fuels plant in the country.
7) Stahl asks Schweitzer how many coal mines or “pits” would have to be dug to produce “enough of what you're talking about to make it make sense,” and Schweitzer answers: “If we got to 20 of these kinds of pits, we could produce a serious amount of energy for the future of this country.”
Schweitzer says the �� pits” could be separate mines or a series of mines, but that he's not saying every one would be in Montana. Rather, they would be spread across the country in coal-mining states like Montana, Wyoming, West Virginia and Pennsylvania.
A coal-to-fuels production plant would be near the mine that supplies it with coal.
If 20 separate synfuel plants each produced 50,000 barrels of fuel a day - a good-sized plant - that would be 1 million barrels. That's still only about 4 percent of the country's fuel consumption, or 7.5 percent of the oil we import from overseas.
Schweitzer says he's “single-minded” about the project and will “continue to work on it until we get her done.” Has any company made any commitments?No. Schweitzer has had conversations with officials from Shell, General Electric, Southern Co. and Sasol, a South African firm that has coal-to-fuels plants in its native country.
Southern Co. spokeswoman Terri Cohilas in Atlanta says the energy/utility firm is beginning the design of a power plant in Orlando, Fla., that uses gasification technology, but it's the company's only project on the drawing board now. Syntroleum is running a demonstration project in Tulsa, Okla., converting natural gas to liquid fuels, at 70 barrels a day.
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