Signposts

There are some things that should tell you that you're going the wrong way.

Via Green Car Congress comes news that Ohio may get a $4 billion coal-to-liquids plant.  This plant will take 7 million tons/year of coal and produce 35 million barrels/year of product.

People touting CTL as the solution to our petroleum ills shouldn't take this as cause for optimism.  The US consumed almost 7.5 billion barrels of petroleum products in 2005 (20,656,000 barrels/day); this plant can produce only 0.47% of that.  It would take 214 of them to replace our petroleum usage... if we could get the coal to feed them.  The US uses roughly 1 billion tons of coal per year (mostly to make electricity), but that much CTL would require mining another 1.5 billion tons/year.  And shipping it, and disposing of the ash....

Cost is another factor.  Unless those plants get much cheaper with experience, a nation-full of them would cost somewhere north of $800 billion.  That cost has to be paid off, the coal has to be paid for (1.5 billion tons/year @ maybe $35/ton is $52.5 billion/year or $1.05 trillion over 20 years), and we'll need rail lines to transport it and landfills for the ash.  Already we're looking at a couple trillion dollars, ignoring pollution and climate impacts.  And all of that is just to feed vehicles.

The claim of coal consumption is probably low.  7 million tons/year at 25 million BTU/ton is 175 trillion BTU, but 1.47 billion gallons of fuel at 131,000 BTU/gallon (half gasoline, half diesel) is 193 trillion BTU.  Either that plant can make something for nothing, or it is going to turn more coal into less product.

That road looks bad.  Isn't there a better way to go?

Suppose we took the incentives aimed at fossil fuels and instead directed them to... batteries.

Lithium-ion batteries currently retail for about $.69/Wh.  Putting an average of 2 kWh of battery storage on new vehicles would, at US sales of ~13 million/year, require about 26 GWh of batteries per year and cost a hair over $18 billion/year; this figure could be expected to drop rapidly.  If these batteries allowed us to replace 50% of motor-fuel demand with electricity @ 300 Wh/mile, over 10 years we'd spend less than $180 billion on batteries (and much less over the next 10).  Savings would be immense; if the average new vehicle travels 15,000 miles/year and average mileage doubles from 22 to 44 MPG, after 10 years those 130 million new vehicles would be using 44 billion gallons/year less fuel.  At prices northward of $5/gallon, that would save at least $220 billion/year.  Of course, we'd need electricity to make up for it.  That would take roughly 290 billion kWh/year (about 7.5% of current US consumption), but if we got it half from wind at 4¢/kWh, 20% from nuclear at 5¢/kWh and 30% from coal at 10¢/kWh (with carbon taxes) we'd only be spending $17.6 billion/year for power.

Coal consumption would be way down.  Producing 87.8 billion kWh/year from coal in IGCC plants achieving 8400 BTU/kWH would require 737 trillion BTU, less than 30 million tons of coal per year at 25 million BTU/ton.  Compare to 1.5 BILLION tons!  The cost for coal (included in the price of power above) would be maybe $1 billion/year.  And the cost of batteries would probably fall by half within 5 years (allowing even more fuel savings for the same price), and by another 50% within the next ten.

This is how the accounting looks to me just over 10 years and assuming NO battery improvements over that time:

CTL	PHEV
$400 billion in CTL plants	$180 billion in batteries
750 million tons/year coal	30 million tons/year coal
$26 billion/year for coal	$1.05 billion/year for coal
No savings in liquid fuel	Roughly 1/3 savings in liquid fuel
Roughly today's noise and pollution	Radically reduced noise and pollution

If we are looking for good investments in America's future, batteries look like our best bet.  The sign for Fischer-Tropsch is pointing down the road to ruin.

And on that note, I'm off until Friday night.  Don't have too much fun without me.

¶ 8/21/2006 11:43:00 PM