The Coal Liquification Initiative

Dave Neeleman claims a very appealing energy intiative: Coal liquification.  At a time when ethanol initiatives have driven up the price of corn so much that it threatens our domestic food supply, technologies and infrastructure to exploit our continent’s massive coal reserves seem like an increasingly obvious solution to foreign energy supply problems.

Mr. Neeleman in recent months started drafting a bill that would authorize the government to provide economic underpinning for private efforts to build coal-to-transportation fuel plants. The legislation, introduced in late September by Reps. John Shimkus and Rick Boucher, would enable the Energy Dept. to guarantee viable prices — paying the plant owner if crude oil fell below $40 a barrel and collecting a fee if crude rose above a certain, to-be-negotiated price. The bill calls for support for six plants, each producing 80,000 barrels a day, each costing about $5 billion. “I envisioned 70 of these plants,” Mr. Neeleman volunteers, ebulliently revealing his ambition. …

The whole idea is a no-brainer to him: Even if government pays out money, the cost would be small compared to the economic benefit of lower oil prices. “Each one would create 3,000 jobs to build it, and 1,500 jobs to run,” he predicts. The plants, built near mine-mouths, would be unlikely to incur Nimby objections. “It would turn Montana into Dubai,” he says.

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