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Liquid Coal: A Pipe Dream Turned Nightmare for Our Environment

Brian Siu

Posted December 13, 2010

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Recent signs of economic recovery suggest that we will soon increase energy consumption and perhaps the price of commodities such as petroleum. Usually, upward price movements stimulate spirited discussion over new energy technology and that can be a healthy thing.  In the past we have addressed cost increases through beneficial technologies that not only foster energy security, but also climate security. But sometimes, high energy prices induce very bad ideas.  Liquid coal, for instance, has been touted as a way to replace gasoline, diesel, or jet fuel.  There is nothing new about this idea. It is simply another variant of the coal energy that has been polluting the planet for decades.  And even this liquid form of coal was used by Germany in World War II and later by South Africa.   So if this technology has been around for decades, why aren’t we fueling our vehicles with it?

Partially, it's because liquid coal has infamous environmental risks. Like other forms of coal energy, the greenhouse gas penalties are enormous. It is widely acknowledged that without permanent carbon capture and storage (CCS), producing and burning liquid coal emits roughly twice the global warming pollution as producing and burning the same amount of petroleum-based “conventional” diesel.  The largest fraction of these emissions belongs to the carbon intensive production process. By our estimates, producing a gallon of liquid coal emits well over six times as much carbon dioxide as producing a gallon of conventional fuel.

While liquid coal’s carbon footprint is a big problem, it is not the only one. It would also accelerate coal mining’s well documented disadvantages.  According to RAND Corporation, it requires about a half ton of coal to produce one barrel of liquid coal fuel.[i] That means that producing millions of barrels per day, as proponents would like, risks significantly exacerbating the severe impacts that already typify coal extraction. These include mountaintop removal, groundwater contamination, and biodiversity loss.   Simply, an additional domestic coal industry would hasten the decimation of our nation’s rich outdoor heritage that is already underway.

Additionally, producing liquid coal consumes significantly more water than producing conventional diesel or gasoline. Some estimates suggest that liquid coal’s lifecycle water consumption can be up to ten times that of conventional diesel.[ii]  Thus, large liquid coal facilities do not make sense in today’s arid regions and pose a threat for other areas where water will become an increasingly valuable resource for meeting human, agriculture and livestock needs. And as the industry expands, the water supply impacts will grow proportionally. 

Given all of these risks, it’s difficult to explain how liquid coal is consistent with prudent energy policy.  Certainly, some argue that carbon capture and storage will help to reduce the carbon profile. But this is ultimately unpersuasive. While CCS may capture some of the facility emissions, it will not capture emissions that vehicles produce when burning the fuel. This limits liquid coal's ability to reduce transportation sector emissions because carbon released at the tailpipe is similar to that of gasoline and diesel.  And because this sector accounts for approximately one third of U.S. greenhouse gas emissions, we must avoid long term investments into fuels that are worse or the same as today's.   Instead of helping, public investments into liquid coal would divert increasingly scarce financial resources from better technologies that provide energy security and environmental benefits. 

All of this calls into question the wisdom of investing time and resources into liquid coal. Instead, we should evaluate investments with fewer political and environmental obstacles.  Ignoring these factors could waste billions on technologies that must be abandoned once the environmental liabilities mature.  It’s true; we need to diversify our energy supply. But we should not invest in dirty fuels while clean technologies are not fully deployed. Instead, we should use our limited financial resources to foster technologies that provide the most for our dollar. This means low impact options that are politically and environmentally viable over the long term.


[i] James Bartis, et al. Producing Liquid Fuels from Coal, RAND Corporation, 2008.

[ii] Carey W King and Michael E Webber Water Intensity of Transportation, American Chemical Society 2008.

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