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National Coal Council Sets an Aggressive Transportation Fuel and Energy Agenda

In April 2005, Energy Secretary Samuel Bodman asked the National Coal Council (NCC) to conduct a study and prepare a report identifying the challenges and opportunities for more fully exploiting US domestic coal resources. The first volume of the report is now in, and proposes an eight-point aggressive expansion of the use of coal via “BTU conversion” for transportation and energy needs.

The chair of the report Study Group is Gregory Boyce, CEO of Peabody Energy—the world’s largest private-sector coal company, with 2005 sales of 240 million tons of coal and $4.6 billion in revenues. Its coal products fuel approximately 10% of all US and 3% of worldwide electricity.

Boyce has begun promoting the NCC eight primary recommendations, outlining them in a 12 April speech to the Industrial Energy Consumers of America (IECA). The eight primary recommendations are:

  1. A massive expansion of Coal-to-Liquids Processing to produce 2.6 million barrels of coal liquids (fuels and chemicals) per day. Production at that level would meet approximately 10% of US petroleum demand and consume an additional 475 million tons of coal per year.

    To achieve that level of production would, according to Peabody, require the construction of 33 large coal-to-liquids plants. Each plant—with an estimated cost of $6.4 billion—would consume 14.4 million tons of coal per year to produce 80,000 barrels per day of liquid fuel.

    Delivering that amount of coal would required expanding coal mining 43% above today’s level. The CTL proposal represents largest single use of expanded coal production of any of the proposals.

  2. Coal for ethanol production. Currently, natural gas, diesel fuel and electricity are used to produce ethanol. The NCC proposes increasing the use of coal for heat and electricity in the production of ethanol to reduce costs and displace oil and natural gas by significant amounts. This would consume an additional 40 million tons of coal per year.

  3. Coal-To-Hydrogen. Development of a fleet of coal-to-hydrogen plants would mean that coal could satisfy at least 10% of the nation’s transportation needs with FreedomCAR efficiencies, according to the NCC study. This application would use an additional 70 million tons of coal per year.

  4. Coal-To-Natural Gas. With conventional natural gas production in decline, gasifying coal to produce methane could displace about 15% of US annual natural gas consumption—the equivalent of 4 trillion cubic feet (Tcf) per year—according to the NCC.

  5. Coal-To-Clean Electricity. Construction of 100 GW of coal-to-clean electricity plants by 2025 would mean that coal would satisfy more than 60% of the expected increase in electricity-generating capacity by using an additional 375 million tons of coal per year.

  6. Expand the mining industry and US transportation infrastructure to accommodate growth in coal production by over 1.3 billion tons per year by 2025.

  7. Invest the required $515 billion by 2025 (present value of $350 billion) to develop an additional 1.3 billion tons of coal per year

  8. Enhanced Oil and Gas (Coalbed Methane) Recovery via Carbon Capture. The NCC proposes accelerating work on the capture and storage of carbon dioxide thrown off by the various coal processing schemes and its use for enhanced oil recovery and for the production of methane from coalbeds.

US Indirect (Fischer-Tropsch) CTL Projects Under Consideration in the US
State Developers Coal type Capacity (bpd)
AZ Hopi Tribe, Headwaters Bituminous 10,000–50,000
MT State of Montana Sub-bit./Lignite 10,000–50,000
ND GRE, NACC, Falkirk, Headwaters Lignite 10,000–50,000
WY DKRW Energy Bituminous 33,000
WY Rentech Sub-biutminous 10,000–50,000
IL Rentech Bituminous 2,000
PA WMPI Anthracite 5,000
WV Mingo County Bituminous 10,000



Max Reid

This is very much expected. In 2005 Oil consumption increased only 1.5 % (versus 3.5 % in 2004) and the Coal use must have surged, since may power plants, heaters, pumpsets which were oil fired could have been converted to Coal.

Now if Coal comes to Vehicles, expect Coal to overtake Oil soon.

gerald earl

this will please the energy independence crowd and give a stroke to the green crowd.When you see the gigawatts anticipated we are going to need to pursue all technologies.Coal and nuclear in the short term are absolutely necessary.They will provide a mass amount of jobs to replace the loss of manufacturing jobs.Breathe life into depressed areas.Cut down on the trade deficit.Finding the cleanest ways to use the massive amounts of coal we have could prove to be a lifeline while we prove and introduce true green tech.Even with conservation the massive amount of energy consumed means that the greenest power supply is something we can only achieve in stages over the next couple of decades.Providing security and prosperity may assure that the journey continues.Insecurity and economic disruption will cause the wider public to throw green out the window in a heartbeat.


We can provide a massive amount of employment by investing in wind, solar, nuclear, etc. etc. etc. From an employment perspective, coal isn't needed at all. Establish nuclear as the base load generating capacity and use wind, hydro, solar, biofuels, etc. as a supplement.

We can't start in a few decades. We must start now.


I couldn't keep up with all the numbers, but it looks to me like if we have 100 years worth of coal at current usage rates, with all these increases, we will be out long before 2025.

gerald earl

The next nuclear plant would go online in ten years at best.Wind and solar are growing by leaps and bounds but are still a small percentage{It now appears they will approach up to twenty percent of needs in the next ten to fifteen years.}.If eestore or someone else achieves a battery breakthrough Im certainly willing to leapfrog over fossil fuel tech.Off peak charging would allow us to use idle generating capacity.With our growing population however{darned people keep living longer}there still remains a power gap.I do want to start now but when I add up the watts from the tech coming online they dont fill the gap.I am optimistic and Im willing to listen to a good sales pitch.Im just cautious of my optimism in supertech becoming blind faith.As for coal not being needed,the coal state reps are going to do their damndest to make it necessary.Their constituents will insist that they do so.Finding the cleanest way to use it may be the best and only compromise we will obtain.If we are intransigent between the ideal and the doable we may not start for decades.I was talking about starting now with the doable and transitioning to the ideal within two decades.I think ten out of ten "experts" would tell me I was wildy optomistic with even that prognostication.

Max Reid

It will take only around 5 years to put a Nuclear plant with 1 GW. And 1 GW nuclear plant can provide as much energy as 3 GW of wind farms, since nuclear plants operate at 90 % efficiency.

Wind farms and solar plants should also be used as supplement to other sources.

Only way to beat coal is for some way to nuclear & wind lobby to join hands and oppose each other and end up losing.


The twin issues in electricity generation are capacity and timing. Broadly speaking, we need to have a certain amount of installed capacity, but equally importantly, we need to be able to vary output to match varied demand.

We can divide conventional generating technologies into two groups: Low cost baseline generation, and higher cost peak power generation. Coal and nuclear produce each marginal kwh pretty cheaply, but cannot be easily ramped up or down. Oil and especially natural gas cost more per kwh, but can be ramped up and down pretty quickly. Hydro is both low cost and easily variable, but there is a limited supply of it; i.e., we have already dammed all the rivers we could easily dam. Certain hydro installations support backpumping, where excess off-peak power can be stored by pumping water to an uphill impound, which is then released downstream during higher-demand moments. Again, there is a limited number of places where such installations can be built, and local environmental protests usually prevent new ones from leaving the drawing boards. See:

Electricity demand varies throughout the day, and its graph can be imagined to have the form of a wave.

If you build enough low-marginal-cost capacity to satisfy peak demand, the cost of running those plants full time, even when there is much lower demand, (remember, they cannot be ramped up or down too easily) will outweight the benefits of having that peak hour demand met from a "low cost" source. If you build too little low-cost capacity, then you will be turning to higher-marginal cost generation for too many hours of the day. The trick in the current marketplace is to find the medium.

Alternative energy sources and advancing technologies fit into the picture in the following ways: Variable power sources can be most easily used in conjunction with, or to partially displace, high-cost demand responsive sources. On a windy day, fewer if any natual gas fired plants will need to be ramped up during peak hours if wind turbines are putting out juice. On a non-windy day, gas turbines are there to pick up the slack. Solar is nice in concept, because periods of high output will often correlate with periods of high demand (i.e. hot sunny days when people want a/c). If you are in a generally high-wind area, you might try replacing all your baseline capacity with wind, and having a good deal of responsive-generation capacity on hand for a bad day. If wind turbines become cheap enough, that may be an economically efficient plan.

The other way in which advancing technology changes the electricity market is the possibility of energy storage. Currently, pumped storage is one of the few ways to store bulk electricity. Long-term, battery or fuel-cell farms could be another way. The advantage to storage is that off-peak power, either generated by fixed-output low cost plants like coal and nuclear, or generated by variable output plants like wind and not used at the time it is generated (and at present simply lost), could be put aside to supply our needs during moments of peak demand. That would displace many gas turbines.

Battery and fuel-cell powered EVs fit right into picture. By charging them up during off-peak hours, we could better use power which is currently going to waste, and displace petroleum consumption while we are at it. Longer term, by flattening the demand curve, we could make it sensible to move more of our generating mix to low-unit-cost sources. By making them capable of pushing power back up the grid during the highest-demand moments, we could turn them into mobile storage farms, reducing the need for dedicated construction of such facilities.

Such is the case for EVs. As such, I would imagine that big electrical utilities would be pushing them more vigorously, and provide a counterweight to the traditional pro-auto lobbies.



There is new and fast growing factor in electricity equation. Distributed electricity generation and co-generation become more common and efficient. It is predominantly NG powered diesel generators (usually around 7 MW each, with high thermal efficiency of about 55%) and compact and extremely powerful combustion turbines (aeroderived). Use of exhaust to space heating (especially important for turbines due to their small thermal efficiency) pushes overall thermal efficiency of installation up to 90%. Both are fairly maneuverable.


Please don't forget that mining coal destroys the local environment (not to mention co2 added to global environment). When the cost of this destruction is factored in renewables get very competitive.
Of course the fossil fuel industries never want you to include this in the calculations.


Even if a more holistic accounting shows coal to cost more than we currently say it costs, the timing issue remains.

We could not switch our grid over to solar and wind alone, because what would we then do on dark and windless nights? Or worse, a cloudy and windless midday, with commercial and industrial demand peaking?

An electricity grid needs a day-to-day predictable source of energy. That can be in the form of a demand responsive gas turbine setup, conventional or pumped-storage demand responsive hydro, or a demand-responsive exotic storage solution (batteries/fuel cells) which stores power from either off-peak fixed generation (nuke/coal) or off-peak excess green generation (wind turbines turning at night).

An attractive solution from a power-provider's point of view may be to have a good deal of fixed generation (coal/nuke), with peak capacity provided by wind/solar which usually picks up at the right moments. A few gas turbines for the odd bad day, and finally, a real-time market with its biggest industrial customers through which it can curb demand during those peak moments where the green power is just not coming through. The extent to which you can cut down fixed level generation capacity in favor of variable green capacity in this case depends on how easily you can get certain big peak consumers to temporarily suspend consumption, possibly putting it off for later in the day.

Max Reid

Currently Solar & Wind provides < 0.5 % of the World's energy needs, we cannot project these 2 sources to give 100 % of the World's energy needs.

Currently fossil fuels provides more than 85 % of the World's energy and pollution release from these sources is the biggest cause of concern.

So lets start on Oil which is the most expensive source and a cause for trouble in many parts of the World.

Paul Dietz

Coal and nuclear produce each marginal kwh pretty cheaply, but cannot be easily ramped up or down.

A coal-based synfuel plant using Fischer-Tropsch technology will produce a side stream of naphtha. This side stream isn't terribly useful for transportation fuels -- but it is just fine for powering combustion turbines. You could have some mediocre efficiency, but cheap, combustion turbines that would be fired with naphtha during peak periods, and in that way vary the electrical output of the plant.

perry hawkins

i hope that people in the green engergy learn to keep connecting dots as max reed has!

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