Is The Energy Department Still Looking To A Give Coal-To-Liquid Plant A Loan Guarantee?


According to the Casper Star-Tribune, the Department of Energy (DOE) is reconsidering the loan guarantee application for a stalled coal to liquids (CTL) project in Wyoming.

Worst. Idea. Ever. By. Far. Seriously.

Or, as one senior administration official told me, “we may be carrying this ‘all of the above’ strategy a bit too far.”


The CTL process is a very old (and expensive) one used by the Germans in World War II and subsequently by the South Africans.

Coal is the most carbon-intensive fuel. The more you burn, the worse for the climate — and making petrol out of coal generates almost twice as much total greenhouse gases as simply making diesel out of crude oil — unless you can find some way of capturing all of the carbon dioxide and storing it forever, in which case it’s only a little worse (see figure above from the NY Times).

For this particular project, however, the DOE is requiring only that “the facility would capture at least 50 percent of the CO2.” So the resulting fuel will have more than 50 percent higher carbon pollution than normal petrol production. Also, “the CO2 stream” will be used for “enhanced oil recovery operations and geologic storage at a location to be determined.” In short, whatever CO2 is captured can be used to squeeze more uneconomic oil out of the ground — oil whose combustion will result in as much if not more CO2 being released into the atmosphere than was stored in the first place. Woo-hoo!

On February 14, Politico reported:

Today is the first of six rolling deadlines for DOE’s call for greenhouse gas-reducing fossil energy projects. DOE has made $8 billion in federal loan guarantees available to all sorts of natural gas, oil, coal projects — so long as they cut emissions relative to conventional fossil operations — as part of the president’s climate action plan.

Memo to DOE and White House: There is no scenario whatsoever under which coal-to-liquids cuts emissions relative to conventional fossil operations.

So why is CTL back on the table? The Casper Star-Tribune reports:

Talks between the company and the Energy Department resumed shortly after Ernest Moniz was named secretary of energy last spring, said DKRW Executive Vice President Wade Cline.

“It was not moving forward,” Cline said…. “Once Secretary Moniz hired Peter Davidson to be the new head of the loan program, they have taken a fresh look at it and are moving forward.”

Let’s hope not. Backing this project would be wholly incompatible with the president’s climate action plan.

UPDATE: In March 20, 2013 “DKRW was out of compliance with its Industrial Siting Council permit. They now appear to be in compliance again.