Complete Energy Independence - 2011

As the middle east dominos fall and the region further unravels, it’s inevitable that energy costs will continue to climb for US consumers. Whether it’s home heating fuel or filling one’s tank for the to commute to work, once either reach $5.00 a gallon, there will be huge repercussions. The ability of those in DC to remedy the situation (by the usual means) is very limited in that, with a mere 24 days supply of fuel in our National Strategic Reserves, releasing a few gallons to artificially bring down the cost of oil will only have a temporary and short-term effect at the pumps.

We all know there are a number of ‘alternative’ solutions to energy generation out there. This piece is by no means an in-depth or definitive analysis, rather, it’s merely proposing a simple question. Why the hell aren’t we moving forward with some of the technology we KNOW works? I’ll only focus on one technology which has been with us for a very long time and is ‘proven’. The process of converting coal to fuel (diesel, gas or jet fuel) was developed at the Kaiser Wilhelm Institute by Franz Fischer and Hans Tropsch in the 1920s and became known as the Fischer-Tropsch process. Both Germany and Japan utilized it to run their war machines and economies during WW2. After the war, employing seven Operation Paperclip synthetic fuel scientists (captured nazis), the United States Bureau of Mines, in a program initiated by the Synthetic Liquid Fuels Act, further developed the process in a Fischer-Tropsch plant in Missouri in 1946. While we’ve had this technology since ‘46, it’s never been ‘economically feasible’ during the post war years because the cost to process was a whopping $40 per barrel – far more (then) than the cost of oil being pumped out of the ground. Well, we’re way past that now aren’t we?

A proven technology since WW2, South Africa’s been operating three Fischer-Tropsch plants since the 80’s and by 1985 supplied a third of their country’s fuel needs. In the United States a number of companies have been using and tweaking this technology. In the US, Syntroleum (Nasdaq: SYNM) has been producing diesel and jet fuel from the Fischer–Tropsch process in a plant near Tulsa, Oklahoma. The process makes the ultra-clean, low sulfur fuel and has been tested extensively by the U.S. Department of Energy and the U.S. Department of Transportation. DKRW Advanced Fuels in Montana who’s CTL facility in Medicine Bow will utilize General Electric Company’s coal gasification technology to produce synthetic gas. When operating, the facility will produce 20,000 gallons of gas/day and employ 450 workers. Transgas Development System’s Adams Fork Energy project in Mingo County, at Roanoke, West Virginia will convert regional coal into premium grade ultra clean gasoline, producing 18,000 barrels per day. These are just a few.

Last year scientists in Texas (University of Texas at Arlington) began converting coal to gas with zero release of pollutants for under $30 a barrel. The Texas researchers, who worked on the project for about 18 months, expect the cost to drop further. “We’re improving the cost every day. Today, we’re at ... $28.84 abarrel,” Doing the math where lignite coal sells for $18 a ton and the coal conversion technology uses one ton of coal to produce 1.5 barrels of crude oil and one barrel of crude produces 42 U.S. gallons of gasoline it works out to $18 worth of coal yielding 63 gallons of gasoline, or 0.28 cents a gallon. We haven’t seen those prices since the 1950s.

Were a competent individual appointed to a mythical position of Stimulus Spending ‘Czar’ (or Tsar as it’s properly spelled), they might have as goals ‘long term benefit’ to spending, ‘permanent’ job creation, tax and investment ‘revenue stream’ as well as energy independence (national security) as criteria. With these criteria, stimulus spending might be directed through offering loan guarantees for the immediate crash program of construction of these facilities.

Subsidizing these CTL (coal-to-liquid) facilities, having an output of 50,000 barrels of refined fuel per day, costs about as much as a standard refinery which equates to between 2 to 4 billion dollars to bring such an installation on-line. Estimates are that around 2,300 people would be needed to build such a plant (real jobs) and, upon completion, it would employ up to 450 people (real jobs). Each installation/facility would also provide trickle down business opportunities to a plethora of other supporting manufacturing firms creating yet more permanent jobs and lasting value to the local community tax base. Fifty of these plants (costing 250 billion in loan guarantees) would supply the United States’ fuel requirements without further reliance on foreign oil thereby reducing the national debt by the annual 700 billion we spend on offshore oil.

Where would the funds come from? Well, clearly our government has no problem running up endless tabs to fund important economic sector boondoggles such as the trillion in TARP money (not to mention the 14 trillion in subsequent loan guarantees) to the banking sector since 2008 such that bankers can continue to get their bonuses while their institutions remain, essentially insolvent. There’s Fredie Mac losing 19.8 billion in 2010 alone where the taxpayer had to pick up the tab and there’s no problem covering the Postal Service’s 2010 ‘shortfall’ of 8.5 billion such that they might continue to stuff our mailboxes full of junk mail that goes directly to the landfills, keeping the landfill operators profitable. On a much smaller and ridiculous scale there’s the hundreds of millions in utterly retarded spending highlighted here: ( as well as $2 BILLION, 218 MILLION in foreign ‘grants’ that are so unimportant that we don’t even list the recipient but rather log the expense under “other” & “unspecified” here: ( There are more than enough funds available to continue funding such important esoteric studies as the one costing taxpayers 1.2 MILLION to determine the breeding preferences of the American woodchuck which, (surprise !) it turns out they prefer to breed with other woodchucks, not to mention the 2 BILLION per week on our military to insure oil flows from the middle east. Somehow, I think the funding of loan guarantees for a national security priority such as this might be found if one looked around for a day or so.

So let’s think about this for a bit. First off, things are ‘unstable’ (to say the least) in the middle east. Prices are on the move upwards even if you don’t buy into the peak oil story. If/when another war front opens up (say Iran) the price of oil will skyrocket and availability of mid-east oil could dry up all together for an extended period of time were the Gulf shut down. Were that to happen, the least you might have to worry about is $10 per gallon gas – the worst might be no food on the grocery shelves for “an extended period of time”. With, as mentioned above, about a month of ‘strategic reserves’ to draw on or any viable fall back position, this country would face chaos and starvation almost immediately. ‘Then’ would not be the time to explore and act on options to foreign supplies.

If something is ‘important’ enough, the government can get things done extremely fast. A case in point is the Manhattan Project. From 1939 when Einstein pushed the idea on Roosevelt to ‘42 they fooled around with feasibility studies. In 1942 the project was given the highest ‘wartime priority’ and in December of ‘44 they had their successful bomb ’test’. The reader should note they took all this time to figure out the process. In the current circumstances, there’s nothing to figure out since they’ve had the technology since the 30s & 40s.; we need only build the processing facilities.

As I mentioned above, the break even point for this technology (economically) was when oil passed $40. per barrel and as I said, we’re way past that now and we’re never going back. China emerging as a ‘consumer society’ will mean more and more oil being chased by more consumers having a currency a whole lot more stable (and attractive) than Benanke’s Weimar dollars. Using the figures provided by University of Texas’ conversion rate of 63 gallons of gas from one ton of coal multiplied by the US’ stockpile of coal (270 billion tons), provides the US with 17,010 billion gallons of fuel! Certainly enough to last until we come up with another bright idea.

To Washington, I would remind them that ‘leadership’ is a process whereby an individual influences a group of individuals to achieve a common goal. Do we continue to study the breeding habits of woodchucks and chipmunks, give away billions to foreign countries, cover the tens of billions in losses of private corporations, provide trillions in loans to private (insolvent) banks with your tax dollars while the big oil companies post record profits in the billions and pay less in taxes to the government than the local pizza shop in town, while our senior Citizens freeze and/or we can no longer afford the gas to get to work, or do we get off our ass, establish a “goal” and build these plants and thereby insure our national security? What are your thoughts?



Christopher T. Sununu

District 1

Joseph D Kenney

District 2

Andru Volinsky

District 3

Russell E Prescott

District 4

Christopher C. Pappas

District 5

David K. Wheeler

Click on the above photos to read about each of our council members.


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