Montana's governor wants to solve America's rising energy costs using a technology discovered in Germany 80 years ago that converts coal into gasoline, diesel and aviation fuel.
The Fischer-Tropsch technology, discovered by German researchers in 1923 and later used by the Nazis to convert coal into wartime fuels, was not economical as long as oil cost less than $30 a barrel.
But with U.S. crude oil now hitting more than double that price, Gov. Brian Schweitzer's plan is getting more attention across the country and some analysts are taking him very seriously.
Sounds great, except there's something a bit odd about waiting until the cost of a barrel of oil is more than double what the supposed cost-benefit point is. Especially when you consider that extraction industries, because of the sheer volume of the commodities they produce, typically think in fractions of a cent when it comes to cost-benefit analysis.
In other words, if it "costs" $30 per barrel to produce using the Fischer-Tropsch technology, you can bet somebody would have been ready to hop on it soon as oil hit $30.01 and stayed. Economy of scale would have guaranteed a profit. So there's something more to the story, I can almost guarantee you.
Montana is "sitting on more energy than they have in the Middle East," Schweitzer told Reuters in an interview this week.
"I am leading this country in this desire and demand to convert coal into gasoline, diesel and aviation fuel. We can do it in Montana for $1 per gallon," he said.
"We can do it cheaper than importing oil from the sheiks, dictators, rats and crooks that we're bringing it from right now."
The governor estimated the cost of producing a barrel of oil through the Fischer-Tropsch method at $32, and said that with its 120 billion tons of coal -- a little less than a third of the U.S total -- Montana could supply the entire United States with its aviation, gas and diesel fuel for 40 years without creating environmental damage.
An entry level Fischer-Tropsch plant producing 22,000 barrels a day would cost about $1.5 billion, he said.
I hope this is true, I really do. But even if so, a couple things. One is that we still need to start really paying attention to our consumption habits. This wouldn't absolve us from that, it would merely give us some breathing room. Montana's a huge state, but there are also some enormous national parks therein. How much of this coal is in Glacier or the part of Yellowstone in eastern Montana? How much of it should we trash to feed our thirsty gas-guzzlers, or can we start re-defining our "needs", versus merely our "wants"?
The other thing is that while Schweitzer may feel that this is an opportunity for Montana to contribute its natural resources to help alleviate the gas price crunch, the fact is that oil companies will probably see to it that at best, this technology merely enables them to ensure whatever profit cushion they desire. So instead of being beholden to decadent sheiks presiding over populaces of fundamentalist wingnuts, we'd be beholden to Chevron and Shell. Good times.
We definitely do need to find ways to extricate ourselves from the Middle East, once and for all. Let them find out for themselves what life is like without all those decadent western petrodollars propping up the strongmen; let them decide amongst themselves whether they really want a return to the caliphate. Hopefully Schweitzer's coal-oil tech idea comes as advertised.
But that's an exceptionally rare circumstance in life. Chances are one or more of the oil companies sees an opportunity to have taxpayers pay more the procurement technology to produce more domestic oil for them to find lame excuses to justify $3 per gallon pump prices. Pretty much standard procedure for these guys.
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