The time may be right for coal to make inroads into the transportation energy market, say industry experts who attended the annual meeting of the Consortium for Fossil Fuel Science (CFFS) held this week in Roanoke, W.Va.. The CFFS , which brings together scientists to research improved methods for converting coal to liquid fuels and hydrogen, is made up of five universities: West Virginia University, University of Kentucky, Auburn University, University of Pittsburgh and University of Utah.

A strong case for gasoline and diesel fuels from coal was presented at the meeting, said consortium director Gerald Huffman of the University of Kentucky. He said providing a forum where academia meets industry enhances insight for solving our nations growing reliance on foreign oil.

Coal currently accounts for 23 percent of all energy used in the U.S. while oil accounts for nearly 40 percent according to Energy department statistics. When oil prices exceed $25 per barrel and natural gas are higher than $4 per MMBtu (million British thermal units), using coal instead of oil makes economic sense according to an analysis presented by Bill Piel of TIER Associates, Inc. He used recent studies by Bechtel on coal Integrated Gasification Combined Cycle (IGCC) for his analysis. Bechtel is one of the worlds leading engineering firms.

NYMEX lists oil prices at above $25 per barrel for the past 12 months, reaching $44 per barrel this week. Also, for the past 12 months natural gas prices at Henry Hub have ranged from $4.45 to $7.25 per MMBtu.

The most likely route to liquid fuels from coal is through gasification, a process in which coal is reacted with steam and oxygen to produce a synthetic gas. The syngas, consisting primarily of carbon monoxide and hydrogen gases, is subjected to an additional chemical reaction called Fischer-Tropsch that yields a cleaner burning diesel fuel than diesel made from petroleum.

In fact, coal gasification is the cleanest coal technology, inherently lower in the air pollutants sulfur dioxide, nitrogen oxides, and particulate matter, said Craig Schmidt of Eastman Gasification Services Company. He added that greater than 90 percent of the mercury in the syngas can easily be removed in Eastmans process. This is of interest because of EPA proposals for tighter mercury regulations for the power industry.

Schmidt said that more than 1,200 tons per day of coal is fed into Eastman’s gasification plant in Kingsport, Tenn. The raw coal leads to a variety of chemicals used in products ranging from photographic film to popular, over-the-counter pain relievers. The syngas made from coal can also be used to replace natural gas to produce electricity and fertilizer. Eastman has run the gasification plant for 21 years with an OSHA recordable incident rate, a standard measure of safety, historically in the 1.0 to 2.0 range and with no lost-time injuries in the last 12 years. The entire Eastman integrated site at Kingsport employs approximately 7,500 employees and 2,000 onsite contractors, said Schmidt.

Piel compared costs of Fischer-Tropsch diesel to other transportation options, siting a January 2004 well-to-wheels study jointly conducted by the European oil industry

(CONCAWE) and the European auto industry (EUCAR). The costs include deriving the energy to using it in a vehicle. According to the analysis, Fischer-Tropsch diesel would cost $10 per barrel more than simply using oil at $30 per barrel in standard automobiles. (Unlike in the U.S., European air regulations allow Europeans to drive more energy efficient diesel-powered cars.) Hybrid electric vehicles would essentially add the equivalent of $179 per barrel to the overall cost. Biomass such as ethanol from wood adds $137 per barrel and hydrogen for fuel cell vehicles derived from the electrolysis of water using wind energy carries a $343 premium.

Piel added that Bechtel estimated that capturing the greenhouse gas carbon dioxide from new coal gasification plants would cost $35 per metric ton. He said that the estimated cost of avoiding carbon dioxide by using fuel cell vehicles would amount to $850 to $1,840 per metric ton.

Schmidt said that Eastman is exploring its options worldwide for participating in the gasification-based coal-to-chemicals and fuels business. The technology opens new markets for coal and is the only economical route for making hydrogen from coal, he said.

Such options for adding value to coal will be increasingly important for West Virginia, said Richard Bajura, director of the National Research Center for Coal and Energy at WVU . He noted that at the NRCCE s most recent Energy Roadmap Workshop on Coal, WVU economist Tom Witt reported that experts predict coal production in West Virginia to decline slightly while coal production is expected to increase in the U.S.