Governor Brian Schweitzer

Montana is actively pursuing development of ultra-clean coal technology in the areas of our major coal deposits in central and eastern Montana. The technology to convert coal into synthetic petroleum products or natural gas has existed for almost a century, and modern versions of this technology offers great promise for reducing American dependence on foreign oil and developing Montana's natural resources in a responsible manner. Below are answers to some basic questions about coal gasification and coal liquefaction.

What are synthetic fuels?

Synthetic fuel, also known as synfuel or Fischer-Tropsch liquids, is fuel such as diesel and jet fuel that is made from coal, natural gas or biomass, instead of oil. These are clean--burning, high-performing fuels that run in existing engines.

What is coal gasification? What is IGCC?

Unlike conventional coal burning plants that ignite the coal and send pollutants up a smokestack and into the air, synfuel plants gasify coal. This conversion takes place in a contained reaction and creates syngas, a mixture of gases which then can be made into liquid fuel. As an alternative to liquid fuel production, syngas can be upgraded to natural gas and sold on the market or can be used directly as fuel for a power plant. Plants using syngas are known as Integrated Gasification Combined Cycle (IGCC) plants and are among the cleanest types of electricity generators.

Why are synfuels cleaner than traditional fuels?

When coal is gasified, rather than burned as at conventional coal plants, impurities such as sulfur and mercury can be stripped out of the gas stream, instead of otherwise being emitted into the air. The resulting fuels burn virtually free of these pollutants. Sulfur-free fuel means less smog and acid rain, among many other benefits.

What is Carbon Sequestration?

In addition to removing pollutants such as mercury and sulfur, the gasification process allows carbon dioxide (CO2), the leading global warming agent, to be removed with little difficulty from the waste stream. Once separated, the CO2 can be stored permanently underground, buried deep in the earth and stored much like it was stored as coal. This is known as "carbon capture and sequestration" and is strongly supported by leading environmental scientists and global warming experts. In fact, there is a market for injecting carbon dioxide underground. Oil fields use CO2 to revive depleted oil wells, pumping the gas under pressure deep into oil-bearing formations, to force otherwise irretrievable oil to the wellhead. This process, known as enhanced oil recovery (EOR), causes the CO2 to remain deep in the ground and eventually react and stabilize with the rock and water in the formation.

Is carbon sequestration practiced anywhere today?

Yes. The closest location is Beulah, North Dakota, at the Dakota Gasification Plant the largest gasifier in America. This plant produces synthetic natural gas from lignite coal. CO2 from this process is piped several hundred miles to oil fields at Weyburn, Saskatchewan, where it is sequestered in the process of enhanced oil recovery.

Why is Montana suited for a clean coal industry?

With a demonstrated reserve base of 120 billion tons, Montana's coal is, in liquid terms, over one quarter the size of the entire Middle East oil reserve--enough fuel to power every American car for decades. In Montana and across the West, if even a fraction of our reserves were developed and converted to liquid fuel, we could greatly reduce the oil we now import from unfriendly and unstable countries. Or, if we moved toward a gasification program for generating electric power with IGCC plants, we could substantially reduce emissions from the utility industry.

Where is synthetic fuel made today?

South Africa is the leading producer. For decades, it has operated plants that produce an estimated 300,000 barrels of gasoline and diesel a day from coal. A number of other countries, including Qatar, Malaysia and China, are investing in either coal gasification or synfuel production. Increased global demand for oil and other energy has driven up prices and made synfuel production an economically viable alternative.

How would the military benefit from synfuel?

The Office of the Secretary of Defense recently issued a Clean Fuels Initiative proposal to run all battlefield engines on a synthetic fuel. Though its fulfillment may be many years away, this strategy would enable the military to 1) avoid buying oil from unstable regimes that are known sponsors of terror, 2) mitigate supply chain vulnerabilities to events like Gulf Coast hurricanes, 3) meet clean air requirements in European countries where we have airbases, and 4) simplify the fueling of battlefield equipment that presently run on multiple fuels.

Why haven't synfuels been pursued in America before?

They have. In fact, the U.S. government was exploring synfuel as early as 1925. In the 1940s, a Synthetic Liquid Fuels Act passed by Congress appropriated over $80 million for research and production. By the 1950s, America was producing thousands of gallons of synthetic gasoline a day at a test plant in Missouri. But the discovery of cheap oil, combined with a lobbying effort by the oil industry, caused the government to abandon its synfuel research. During the oil crisis in the late 1970s, the federal government briefly pursued synfuel production, but abandoned the idea when the price of oil receded.

Are there other applications of this technology?

In addition to making liquid fuels, coal gasification can be used to generate electricity with virtually no emissions. Looking to the future, it can be used to produce hydrogen for use in fuel cells. Gasification also can be used for industrial products such as naphtha, chemicals, waxes for cosmetics, fertilizers, and carbon dioxide for enhanced oil recovery.

Is synthetic fuel cost effective?

Yes. The cost of making a barrel of synthetic fuel is estimated to be around $55, including the sizeable infrastructure investments and the labor force necessary to operate the plant. At the current and projected price of oil, production should be a cost effective enterprise. Key economic incentives in the recently enacted federal Energy Bill, such as 80% loan guarantees for certain coal liquefaction projects, reduce the economic uncertainty of bringing this technology up to commercial scale.

How long will it take for America to produce enough synfuel to make a difference?

There are already a number of small plants being designed around America, but a large-scale national effort must involve the federal government and will take a number of years. Given South Africa's success in this field, we can assume that if the federal government became meaningfully invested in this concept, America could have a strong synfuel industry within the next decade.

Janice Elmore