Coal to Oil, the Chinese Way

By April 2, 2007Energy

Catching up on our reading of the official Chinese press (because of recent trade news, that’s why), we spotted a story about China making full use of its abundant coal resources:

China’s first coal liquefaction project, which will go into operation in 2008, will be able to produce more than one million tons of oil a year, significantly reducing the country’s dependence on oil imports.

Shenhua Group Corporation Limited, one of China’s largest coal producers, launched the coal liquefaction project in 2004 in Erdos, a city in the Inner Mongolia Autonomous Region.

When the second phase is completed in 2010, the plant will produce six million tons of oil products each year, reducing China’s reliance on foreign oil, officials say.

Smart move, one that Congressman Nick Rahall, D-WV, acknowledges in his release announcing formation of the National Coal To Liquids (CTL) Coalition. Rahall notes that the U.S. Air Force is taking the lead in studying coal liquefaction for the purposes of aviation fuel; tests are under way at Minot AFB in North Dakota. (Stories here and here.)

It’s a promising technology that should play a major role in ensuring America’s future energy security, especially as abundant coal reserves represent one of this country’s great competitive advantages. Sure hope politicians do not sacrifice that economic edge in the rush to curry favor with environmental absolutists.

Join the discussion One Comment

  • Michael Winkler says:

    I think whom every wrote this article should brush the dust off their high school Physics book with careful attention to the chapter on the fundamentals of Thermodynamics. It is true that both China and the US have massive coal reserves but you should look at the amount of energy necessary to produce liquids from coal. In principle this is the energy net profit ratio and basically describes amount of energy you need to put into a system and the amount of energy returned. If you look at how much energy has to go into coal liquifaction it is enormous. I would not start champing such ideas as energy independence or security with such a plan as it will only represent a fraction of the total contribution to the energy mix for transportation fuels. Same goes for the idiotic biofuels energy plan here in the US using corn to ethanol production. Probably a net energy loss when you factor in the amount of natural gas used in the conversion process. Both of these energy conversion processes represent a “robbing peter to pay paul” scenario as coal is used as a primary energy source for electrical power generation. Once you start adding yet another user to the mix then the commonly cited claims of coal reserves “at current rates of consumption” really go out the window.