After getting my nose bloodied on this Crooked Timber thread,^* I did a little reading on coal to liquid technology. Pretty neat stuff, it turns out, far neater than I would have (or had) imagined. (I let this post languish for a week or so, but in the interim someone else e-mailed me about it, so I thought it was sufficiently intriguing that it merited completion).

The essence of the technology is the Fischer-Tropsch process, invented in Germany in the 1920s. The Fischer-Tropsch reaction is, basically, to begin with a mixture of H₂ and CO and burn it along with a catalyst into the hydrocarbon of your choice (controlled by temperature/pressure conditions and the ratio of CO to H₂).

The mixture of CO and H₂, called "syngas", can be produced by a number of methods. The most popular rely on natural gas or coal gasification. The latter involves simply controlled heating of coal in a low-oxygen environment. Gases, of course, are much easier to separate than petroleum fractions, especially simple gases like the ones in question. The Fischer-Tropsch process thus produces fuels of impeccable quality - you can make almost perfectly pure hydrocarbons, which makes them some of the highest-grade fuels in the world. And the process can be controlled to produce pretty much whatever you like - waxes, oils, kerosene, etc. You can read more about the process from smart people here.)

Unfortunately for its proponents, the economic viability of coal-to-liquid projects rests somewhere around $40/barrel of oil, which means that to date there's only one large coal-to-liquid producer in the world, the South African company Sasol, which has produced in this manner for decades so that South Africa can retain energy independence, even at great economic cost. Fortunately for them, now that oil is at $65/barrel, coal-to-liquid is definitely profitable and likely to remain so. Sasol is now entertaing offers from around the world to build coal-to-liquid plants. (Now might be a good time to buy Sasol stock...)

The governor of Montana has proposed implementing this technology in the States (with his own state's copious coal stores) and thereby winning energy independence. Seems eminently plausible, in fact, in a world of expensive oil.

The downside to all this is, of course, ecological. Coal is simply disgusting technology, one of the most destructive things you can mine, and there is considerable CO₂ waste from coal gasification, which means a much higher GHG burden from coal-to-liquid than even from normal petroleum-based gas-guzzling. On the upside, it seems plausible to me that this technology could be adapted to employ waste biomass, which would one-up even these guys.

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^* In my defense, I had just woken up and thought shooting off my mouth would be easier than all that pesky fact-checking.<sup>†

†</sup> Shit, that's not much of a defense!