More on oil dependency -- confession about a possible zinger

Buried deep in my proposed bill, in the bottom paragraph of www.werbos.com/energy.htm, is a proposal
for a $75 per barrel support price for "crude oil" made from coal, so long as the CO2 emissions during the making
of the fuel do not exceed 20% of those embedded in the fuel itself.

As with many sentences in the proposal, there is a whole lot of thought behind it (unlike some other bills
where the pages per thought are greater).

One key thought -- there is a company in Pennsylvania, CoalStar, which has developed a very credible breakthrough technology,
to produce four barrels of crude oil per ton of coal (about twice its best OECD competitor, and much better than China's
best). Having studied the matter in some detail, I believe their claim that they would most likely be able to
produce oil at break-even at $50 per barrel, in their first large-scale commercial plant funded by normal private venture capital,
after an initial $10 million demo plant to test it out.

What would happen if the US reserves of coal instantly became fungible to crude oil at $50 per barrel?

The truth is, I felt a moral duty here to tell the one engineer I know at Exxon federal relations about this,
because it's a HUGE investment opportunity, and it could have huge benefits in helping us survive the next few very difficult decades.
It would be a huge help, in parallel with natural gas busses and trucks, plug-in hybrid cars and biofuels, in minimizing the delay time
between now and the time when we simply do not need to import oil any more.

I was disappointed that the engineer could not get anywhere within his company. Probably it was hard to argue for "coal to liquids,' when many
people without an engineering background think "been there, done that" -- when it was a case decades ago of inflated claims for
technologies producing less than half the amount of oil from the same coal! It requires some understanding of (or respect for) engineering
and technology to detect when things change, AS THEY DO OFTEN ENOUGH, even though most claims of breakthrough do turn out to be bogus.
I did do due diligence on this one. If they can risk hundreds of millions of dollars on a 50-50 drilling exercise that
would only offer hope of six months worth of US oil demand... why not $10 million on years and years worth of crude oil supply, right
here in the US, where we don't need to send the money to madresas or apparatchiks?

But $75 is in the bill.

Most likely, oil will be getting up to $75 ANYWAY by the time a new big plant could be built. But that may not be obvious to the financial people,
and the elimination of that risk could be a huge boost to getting this technology started.

It is GOOD to get this started?

In the first place, regarding CO2, it would be about the same as the OPEC oil it wuold displace on the world market. No gain
on CO2, but no loss either, at least not until we get to zero world use of fossil oil. That isn't exactly tomorrow.

In the second place, if this were PART of a larger energy independence bill, that ALSO accelerated the longer-term sustainable alternatives and strengthened the US economy in general (to make it more capable of the many tasks it is called on for), the net long-term value would still be very positive.

If it allows the oil companies more time to make a more successful transition to being sustainable energy companies...
that would be great.

Quakers worry about slavery, but they also try to find win-win solutions or Pareto optima whenever there is any hope
at all of doing so. If progress can be made without the world falling into war, that is much the preferred way.
It is a strong commitment to find that kind of solution, when at all possible.

I wonder whether CoalStar will end up in Poland? Or in Dubai? It's a shame that Exxon did not recognize a huge possible lifeline when
it was up for grabs...

Best of luck,

Paul

P.S. Again, of course, this does not represent the views of any of the organizations I have been working with.
I am TRYING to follow through on Quaker values as best I can...