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"State projects aid DOD push to develop transport fuel from coal"
- Dawn Reeves

State efforts to develop facilities that convert coal to liquid fuel could bolster a Defense Department initiative to commercialize processes that turn domestic resources into less expensive, clean liquid fuels that can be used in military vehicles and aircraft.

DOD touted states' roles in its year-old initiative, which seeks to address energy security and the environment, at a recent energy summit in Montana, where Gov. Brian Schweitzer (D) is courting industry to build the nation's first large-scale, coal-to-liquid-fuel plant that backers say produces an environmentally friendly fuel that can be used in today's engines and costs far less than traditionally refined fuels. Pennsylvania Gov. Ed Rendell (D) is also supporting a plan to build a demonstration plant in his state, and DOD is backing both efforts.

"State and federal governments can be our bridge between the government [research and development] and private industry to develop the vast energy resources in the West. Coal, oil shale and petroleum coke are the near term source of clean fuels," Assistant Deputy Under Secretary of Defense for Advanced Systems and Concepts Theodore Barna said Oct. 21, according to his presentation at the Montana energy summit.

DOD says it is concerned about a lack of secure and reliable sources of energy that leave the United States dependent on foreign oil along with the possibility that the country would be dependent on foreign refined fuels in the future. It also worries about a supply chain that is vulnerable to terrorist threats and natural disasters.

"DOD intends to catalyze the commercial industry to produce clean fuels for the military from secure domestic resources using environmentally sensitive processes that create jobs and wealth in the United States," Barna's presentation says. Relevant documents are available on InsideEPA.com.

Additionally, DOD has identified a need for cleaner fuels that if not realized could limit military deployments, especially in European nations that may object to unabated use of traditional fuels, according to the presentation.

As the nation's largest fuel purchaser, DOD should lead the way, a DOD source familiar with the initiative says. "We have a big stake in keeping things green."

DOD has identified 1.9 trillion barrels available from domestic resources, including coal, shale, pet coke and oil, compared to 685.5 billion barrels from Arab nations. "Bottom line: We could be the new Middle East," the presentation says.

The Office of the Secretary of Defense (OSD)-led initiative seeks to form partnerships with other government agencies including EPA and the Department of Energy, along with industry and academia. The two-pronged strategy includes catalyzing industry development and investment through a program called Total Energy Development along with a program called Battlefield Use Fuel of the Future, which would evaluate, demonstrate, certify and implement turbine fuels for use in tactical vehicles, aircraft and ships by 2015.

But the creation of coal-to-liquid fuels is not without controversy. Many environmentalist and traditional industry are wary of the technology -- known as Fischer Tropsch, which was developed by Germany during World War II -- and the claims supporters make about it. The technology gasifies the coal and then uses the gas to produce nearly pollution-free fuel. But environmentalists say that the pollution removed from the coal will end up in other types of waste that will have to be addressed.

A source with Gov. Scwheitzer's office says the governor is actively pursuing talks with the military as well as companies interested in building a $7 billion coal-to-fuel plant on state-owned land that has abundant coal resources.

The source adds that while DOD has expressed interest, talks so far have not yielded any firm obligations from DOD to buy the fuel. "The military is quite a ways from committing to a floor price over the long term," the source says.

In Pennsylvania, Waste Management & Processors Inc. (WMPI) is seeking to secure funding to build a waste-coal-to-diesel plant after having won support from Rendell, who Sept. 29 announced the formation of a state-backed consortium to purchase nearly all of the fuel produced. A senior DOD Clean Fuel Initiative adviser joined Rendell to show the military's support for the project, according to a Pennsylvania press release. Additionally both of the state's senators, Rick Santorum (R) and Arlen Specter (R), helped secure language in the new energy law that authorizes federal loan guarantees for the plant.

However, environmentalists in both states are opposing the plans. In Montana, the Northern Plains Resources Council issued a report this month, which says that air emissions from the only such plants in operation today -- in South Africa -- are high and that the company that runs the plants, Sasol Ltd., is converting operations to produce fuels from natural gas rather than coal in order to reduce environmental impacts.

The resource council's report adds that emissions from a plant the size that Schweitzer wants to build would include up to 90,000 tons per year of sulfur dioxide, 30 million tons per year of carbon dioxide and 240,000 tons per year of volatile organic compounds. Additionally, the facility would annually produce 120 billion gallons of wastewater, 360,000 tons of hazardous waste and 1.8 billion tons of solid waste.

"Production of diesel from coal would produce extremely large volumes of slag, other solid waste and hazardous waste," the report says. "Absent huge additional construction and operating costs [for sequestration], carbon dioxide emissions . . . would contribute more to global warming than production and use of the diesel it would replace."

In Pennsylvania, environmentalists note that the plan calls for using as much as 86 million gallons of water per day and would create more than 2,000 tons of solid waste a year. "Where is that going to go?" one source asks. Additionally, the source says the state-issued air permit has a host of problems, including no limit on mercury emissions, and the source cites research that coal-to-oil uses two units of energy for every one produced.

A WMPI source defends the technology and the product, saying that it is environmentally sound and notes that the challenge has been to win financial support for the project, which the company expects to complete by the end of the year and be open for business sometime in 2008.

But a source with the American Petroleum Institute also questions why a technology that is so wonderful is not already widely in use. "This technology has been around forever. . . . I am inherently skeptical of a magical solution that has not been implemented before."

Barna says he launched what led to the Clean Fuel Initiative in 2003 at the request of Senate environment committee chairman James Inhofe (R-OK) and broadened it last year, according to his April 12 testimony before the Senate Energy & Natural Resources Committee.

"In 2003, I was asked to manage a program originated by Senator Inhofe from Oklahoma to research fuels produced via the Fischer Tropsch process from natural gas. I initiated a joint program led by the Army National Automotive Center in Detroit, to investigate the military utility of these fuels and to evaluate the potential of producing and using a new generation of clean fuels for the military," his testimony says. "The research team provided me with exciting results. . . . In 2004 I expanded [these] initial efforts into a wider variety of resources for the production of clean fuels . . . by looking at the broader picture of alternative fuels and established the Clean Fuel Initiative."