One of my crude measures of the long range energy picture has always been coal-to-liquids. At some price (the usual number I hear is somewhere at or above $60 or $70 a barrel) it becomes economical to make liquid fuels out of coal. Given Appell’s Theorem, it has seemed inevitable to me that, regardless of the climate consequences, people will end up doing this. The question has been why they aren’t pushing it now, with oil north of $120 a barrel? One possible answer is that the people who have skin in the game are not confident that oil will stay there.
Via Daniel Hall, I see that we’ve now got our first live CTL plant proposal. We’re not talking about a huge plant here. Daniel’s take:
It seems to me like CTL puts a backstop on how high oil prices can remain in the long run, at least if coal production is not constrained. Of course in a world with a price on carbon emissions the CTL fuel is going to have to be a good bit cheaper than oil on a production-cost basis, since CTL involves about 3 times the amount of greenhouse gas emissions as conventional oil.