News Release 1377

There is a way to create two million new jobs, reduce the debt and improve the environment. It should be the path forward for the U.S. The path is to replace all old coal-fired power plants in the U.S. with new coal-fired power plants. This would reduce the use of coal by 250 million tons per year. The extra coal would then be converted into oil and gasoline. This would decrease imports of foreign oil by over 10 percent.

Because the total amount of coal consumed is the same, there would be no increase in greenhouse gases. In fact, the new plants could be made ready for future carbon capture. The new coal plants would emit far less particulate, SO₂, NO_X, and mercury than existing coal plants. The net effect on the environment would be very positive. A detailed analysis by McIlvaine is displayed at:

The economic stimulus would be substantial. The cost of electricity and gasoline would go down and not up. The new coal-fired generators are much more efficient than the plants they replace. Therefore, electricity costs are reduced. Gasoline from coal can now be made at less than $80/barrel of equivalent imported oil. Therefore fuel prices would be reduced.

Acceptance by the environmental community will be achieved by prioritization of short-term and long-term goals. These new plants will only have a useful life of 25 to 30 years. This means that they will not impact any 2050 greenhouse gas targets.

The maximum job creation will be short-term. More than 500,000 construction workers will be needed to build the generation and coal-to-liquids plants. Six million man years will be required to build the process equipment, boilers, material handling, pollution control and other equipment. Indirect employment increases will also be substantial. Longer term job growth will be the result of a more competitive manufacturing industry in the U.S.

Coal can be viewed as a transitional fuel. A healthy U.S. economy will generate the capital for investment in nuclear, solar, wind and other renewable energies. It will fund the transition to electric fueled transportation. Natural gas will account for substantial amounts of new power generation. Since the new coal plants will only replace existing coal plants, the coal share of total electricity generation will shrink over time.

The McIlvaine Company provides ongoing analyses of nuclear, natural gas and coal-fired power generation as well as solar, wind, geothermal and other renewable energy options. It is clear that there is a need for coal-fired generation for the next several decades. Coal does not have the fuel price volatility of natural gas. It is a more economical generation source than other alternatives. All other sources are limited by infrastructure (transmission of gas and electricity) cost, skills or manufacturing resources.

The cost benefits of manufacturing gasoline from coal were made clear in a McIlvaine webinar last week. Sothern Research Institute compiled the following comparison for participants.

	Without CO₂ Price	With $50/tonne CO₂
CTL (coal-to-liquid)	65	120
CTL- plus CCS	70	90
Crude - $60/bbl - $100/bbl	75 115	95 135

Coal-to-liquids without a CO₂ tax would be only $65/bbl of gasoline equivalent vs. $75 dollars for imported crude at $60/barrel. A presentation by Headwaters showed that with direct liquefaction as opposed to indirect liquefaction the costs will be even lower. A project under design in the U.S. will include carbon sequestration and will result in very low cost fuels.

There is considerable CO₂ generated in the production and refining of crude. As the large shallow wells are depleted, more exploration takes place at great depths to find smaller quantities of oil. The lower quality crude in the new fields requires more CO₂ generation to make it into gasoline. But there are other environmental negatives as well. They include emissions of volatile organic compounds and other emissions to the air, oil spills and other contaminants released in waters, water depletion and contamination of underground aquifers due to water injection to enhance oil recovery.

The direct risks to life and health are very important. Coal mining causes has some risks. But consider that a Middle East nuclear war could result in hundreds of thousands of deaths. With energy security the U.S. and allies could be more effective in preventing such an event.

In order to move forward with the coal-to-liquids and coal generation replacement program there will have to be some agreement as to the relative importance of CO₂ emissions, air and water pollutants and the risks of nuclear warfare. In the past, agreement has been thwarted by the lack of a common metric to judge each of these risks. McIlvaine has created a metric which can be the foundation of consensus. It is explained at: http://www.mcilvainecompany.com/SURS/subscriber/Default.htm