Is the process of turning coal into liquid fuel more efficient than gasoline?

Coal is a major player in the U.S. power sector, generating almost half of the nation's electricity. Now, industry experts are advocating for its use in other energy domains, especially as a liquid fuel for transportation. Supporters claim this could enhance America's energy independence by decreasing the reliance on imported oil used for gasoline production. Environmental groups, however, warn that coal-to-liquid technology could spell disaster for the climate.

But just how efficient is the process?

How Coal-to-Liquid Technology Functions

Coal can be transformed into liquid fuel through either direct or indirect liquefaction. Direct liquefaction is not used in the U.S. because it becomes economically unfeasible due to the need to meet U.S. standards.

The U.S. uses indirect liquefaction, which has two stages: first, coal is converted into syngas, a mixture of hydrogen and carbon monoxide. Next, the syngas is refined into liquid fuel, typically using the Fischer-Tropsch process. This process removes impurities like sulfur and nitrogen, resulting in a fuel that is cleaner than gasoline, as it contains no sulfur.

When it comes to greenhouse gas emissions, coal-to-liquid technology is highly inefficient, especially if coal is the only feedstock and emissions are not captured. Without carbon capture, coal-to-liquid fuel generates double the emissions of gasoline from conventional crude oil, emitting about 50 pounds of CO2 per gallon compared to 27 pounds for gasoline. Additionally, coal-to-liquid is water-intensive, requiring about ten gallons of water for every gallon of fuel produced. In contrast, gasoline production from crude oil uses only three to seven gallons of water per gallon of gasoline.

Coal contains almost twice the carbon per energy unit as natural gas and about 20% more than petroleum. Moreover, converting coal into liquid fuel results in two emissions of carbon dioxide: once at the plant and again when the fuel is consumed by a vehicle.

There is ongoing debate about the technology's efficiency when Carbon Capture and Storage (CCS) is applied. Most reports, including one from the EPA, suggest that even if 90% of emissions are captured, liquid coal still results in higher emissions than gasoline when considering total well-to-wheel emissions (from extraction to consumption).

A study by the National Energy Technology Laboratory (NETL), however, concluded that when carbon capture is used in coal-to-liquid plants, lifecycle emissions can be reduced by 5 to 10 percent compared to conventional petroleum.

The issue becomes more complicated because unless carbon capture is mandated or carbon emissions are legally restricted, there’s no guarantee that plants will actually capture their emissions, a technology that could increase costs by about $5 per barrel.

The situation changes when biomass is introduced into the feedstock. The same NETL study found that "Co-gasifying 30%, by weight, non-food source biomass with coal to produce diesel fuel further lowers the lifecycle GHG emissions to 4230% below the 2005 petroleum baseline," based on calculations done in that year.

However, using biomass is not inexpensive. According to the American Association for the Advancement of Science, the coal-to-liquid refining process is three to four times more costly than refining an equivalent amount of petroleum. The addition of biomass further drives up the cost.

Coal Gasification

Another process shows promise for enhancing the efficiency of energy extraction from coal. According to the Department of Energy, coal gasification plants are much more efficient than traditional coal-fired power plants. This is because they utilize a "combined cycle" that burns coal gases to generate electricity while simultaneously producing steam for use in a steam turbine-generator.

Researchers are exploring various applications for coal gasification. Current possibilities include cleaner power plants that extract more energy from each pound of coal, the production of clean hydrogen fuel, potentially for use in fuel cell technologies, the creation of specific chemicals, or combinations of these applications.