Which is really what this whole hydrogen/biofuels dance is all about.

"BioFuels and Hydrogen won't be here soon enough, so we need to do Coal-to-Liquids right now!!"

"Oh yeah, and electric transportation is icky."

http://thefraserdomain.typepad.com/energy/2007/09/ccs-technology-.html

According to a year-long Idaho National Laboratory study of the Ohio River Clean Fuels project-modeling, Baard Energy’s FT fuels will emit 46% less carbon dioxide and other greenhouse gases than conventional diesel transportation fuels on a full lifecycle basis.

A step in the right direction, certainly.

It's not that EVs are "icky". It's that EVs just don't work economically for most applications. Smith Electric and Tesla may change that in the future. But until then, we depend on liquid fuels.

Which of course implies that CTL is economical.

Which is largely just an issue of uneven subsidies and unpaid externalities.

Judging from the recent MIT, BP involvement, and now this information from Shell, it appears the oil companies are hedging their bets with ethanol and now coal oil. No doubt, many ICEs will be running on coal oil in the future. I wonder what the net energy is on burning coal oil in diesel ICEs. And, didn't I just read where some learned professor declared the GHG problem would be fixed if we quit using coal? But, on the bright side, we have lots of coal and that should help defer our foreign oil usage; what to do? what to do?

This is the first time that a very large production facility is built for FT-Fuel. It is perfectly possible to produce 100% biofuel in this facility. The only thing that needs to be done is provide enough biomass. taxes may help for this, but there are no technical burdens any more. Once the economics of scale are in effect for biofuel, they may become realy cost-competitive.
Also, it is very simple to increase the (carbon) efficiency of transforming biomass to fuel by adding H2 to the syngas. If nuclear or solar hydrogen is added, much more biofuell an be produced. A very big advantage of FT-biofuell is that any carbon-source can be used and even mixed (also toxic waste or any other waste).
There is actually no single technical reason any more why we can not completely quit petroleum.
At the moment, it is understandably that no firm will make an investment of 5B$ if they havy no guarantee for enough biomass input at a guaranteed price. (for coal they have that guarantee). Once the installation is built and enough biomass is provided, they will probably have no objection to use more biomass and less coal. If they still do carbon sequestration, there will be a net removal of CO2 out of the atmosphere by using their fuel.