It's A Gray Area: Could clean water come from coal?

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This column a few years ago discussed nuclear power and how our country was underutilizing it in generating electricity.

A man who works for a company called ConvertCoal, Inc., or CCI, recently contacted me because of that article. The company, founded in 2005, claims to have a process that will enable it to generate petroleum, clean water and cleaner-burning coal fuel from the low-rank coal that is readily available here in the U.S.

There are certainly many subjects about which I have no particular expertise, and the mining and processing of coal are among them. But what this man was saying intrigued me, so I decided to pass along his thoughts to you.

There are basically two types of coal in the world, high-rank coal and low-rank coal. High-rank coal is found deeper in the ground, which means it has been compressed by the weight of the mass of material above it and heated much more fully than low-rank coal. Thus there is less water in high-rank coal and that coal is also more concentrated, which in turn means that it takes less of it to run a power plant generator.

Since strip mining is not feasible because it is so deep, high-rank coal is also more expensive to bring to the surface, because the only practical way to mine high-rank coal is to use deep shafts and tunnels like those that trapped the miners in Chile. Unfortunately, that also makes the deadly "black lung disease" more prevalent due to the miners breathing more of the coal dust inside the mines.

About two-thirds of the Earth's known coal deposits are low-rank coal, and because it is cheaper and more plentiful, that is mostly what is used in the generation of electricity. In fact, about 35% of all the electricity generated in the United States is fueled by low-rank coal. But with the new process, according to CCI's brochures, that same low-rank coal can now be converted into a low-emission coal-char fuel, clean water and synthetic crude oil that can be refined into petroleum. CCI further says it can actually recover between a half to a full barrel of oil from every ton of coal that is run through its process.

That means that, since a standard coal conversion plant would convert about 10,000 tons of coal per day, that coal alone would produce about 500 gallons of clean water each minute, as well as 7,000 barrels of oil each day, along with sufficient upgraded clean-coal char fuel to run a 500 megawatt power plant — and all with fewer emissions! If this is true, and if it could be done economically, this process could spur an economic revolution.

In 2008, the recoverable oil reserves in the U.S. were estimated to be about 21 billion barrels, with an average production of 5.7 million barrels per day. (Since the cost of oil just recently passed $100 per barrel, we are talking about lots of money!) But according to CCI, the potential domestic production of oil from low-rank coal simply using existing power generating plants would be about 1.9 million barrels per day. So just based upon current capacity and using this new technology, we could reduce our oil imports significantly.

Although all of this certainly sounds attractive, I really have no idea whether this process works or not. But the thoughts I am left with are that if this process really does work as well as advertised, why haven't I heard of it before, and why aren't people already making millions of dollars putting it into operation?

When I asked my host these questions, he said the coal conversion process actually was successfully demonstrated in a project run in Gillette, Wyo., between 1992 and 1997. But the reason it was not put into operation at that time is that the process is not economically viable unless oil is priced at more than $60 per barrel. So now that it is priced well above that level, they are optimistically going forward.

Even more fundamentally, though, I am left scratching my head over the federal government's huge and continual subsidizing of corn-based ethanol as a gasoline additive at the rate of a 45-cent per gallon tax credit. The yield in energy from corn does not even approach the yield that could be obtained from the petroleum extracted from coal, if this process would work.

So why is the government doing this — particularly since the government's interference in the market has resulted in substantial increases in the worldwide prices of corn and corn products, such as tortillas, cereals and food for animals like pigs and chickens?

So all of this simply once again brings home the libertarian lesson that governments should put a quick and permanent end to their subsidy programs and leave the market alone! Fundamentally speaking, if there is value in this new coal conversion process, the market will support it, which means that the new technology will be implemented and society will be benefited.

And if there is no value in this process, it would and should fail, but along the way the markets for other products will not be upset, and society would be no worse off. In other words, politicians are not good at choosing what technologies will be successful in the marketplace, and they should leave those issues alone.

JAMES P. GRAY is a retired judge of the Orange County Superior Court, the author of "A Voter's Handbook: Effective Solutions to America's Problems" (The Forum Press, 2010), and can be contacted at JimPGray@sbcglobal.net or through his website at http://www.JudgeJimGray.com.

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