Title: Coal-to-Liquids and the Path to Independence
1Coal-to-Liquids and thePath to Independence
- Jim Roberts
- Chairman, President CEO
- Foundation Coal Corporation
2U.S. Import Dependency
65
26
3U.S. Import Dependency
2030
2006
75
4Were Right to Be Concerned
- U.S. energy challenge its real
-
- requires an immediate response, but a long-term
strategy - need to address environmental concerns and energy
needs simultaneously
5The Specter of Energy Dependency
- despite good intentions strong rhetoric
- . our dependency grows
- U.S. imports rising to 75 by 2030
- we use 25 of worlds oil hold only 3
- dangers of dependency are growing
6Dangers of Energy Dependency
- reliance on imports rises
- as reliability of supply falls
- geopolitical turmoil
- unfriendly or hostile regimes
- competition for energy from growing economies
- peaking world oil supply?
- rising global demand for a dwindling supply
7The Coal Boom
- Coal is a resurgent industry
- coal fuels over half of U.S. electric generation
today - U.S. electricity demand up 50 by 2030
- domestic coal production will continue to grow
- from a record 1.1 billion tons in 2005
- to a new record in 2006 and coming years
8Behind Coals Resurgence
Its Affordable
Natural Gas
Oil
Coal
9Behind Coals Resurgence
- Its abundant
- U.S. has the worlds largest reserves
- 240-year domestic supply
- highly diversified reserves in 26 states
10The Energy of Coal States
- Top 10 coal states have energy reserves totaling
4,577 quads - On an energy equivalent basis, this compares to
- U.S. oil reserves 131 quads
- Saudi Arabias oil reserves 1,566 quads
- Middle East oil reserves 4,104 quads
-
11Behind Coals Resurgence Secure Within Our
Borders
12Secure Within Our Borders
- U.S. coal reserves
- are known no need to explore or search
- arent subject to foreign disruption
- cant be nationalized by foreign governments
- dont have oceans to cross
13Southern States Energy BoardAmerican Energy
Security
- Coal to the Rescue
- study by 16 governors and state legislatures
- bold plan for U.S. energy independence
- coal-to-liquids (CTL) is biggest single
- component of overall plan
14Coal-to-Liquids (CTL)
- producing premium transportation fuels from coal
using existing technology - the path to independence key to reducing U.S.
energy imports 5 per year over 20 years - a proven track record meeting 30 of South
Africa total fuel needs today - diversify fuel production away from the Gulf
Coast
15Behind Coals Resurgence Secure Within Our
Borders
16Growing Interest in CTL
- U.S. Department of Defense
- commercial airline industry
- trucking and railroad industries
- China 10 billion CTL commitment
17Advantages of CTL Development
- To states and the nation
- high-wage jobs
- ultra-clean fuels
- greater energy security
18Challenges to CTL Development
- biggest impediment
- volatility of global energy prices
- price uncertainty makes lenders skittish
- on multi-billion-dollar CTL investments.
19Oil Price Volatility
- Energy independence will remain elusive if our
commitment waxes and wanes with the rise and fall
of global oil prices.
20What States Can Do
- States can advantage themselves
- and attract CTL investment by offering
- long-term purchase agreements
- tax incentives
- non-recourse loans on matching basis
- streamlined regulatory process
21Coal A Necessary Ingredient
- without more coal production
- CTL incentives are meaningless
- 10,000 bbl/day plant 2 million tons of coal
- increased coal production will require
- faster, more certain permit process
- better inter-modal transportation system
- new generation of young miners
22An Effective Energy Policy
- what we have
- piecemeal, short-term policies
- energy supply issues environmental concerns
considered in isolation - policy driven by news cycle
- What we need
- long-term, comprehensive policies
- Integrated energy environmental policies
- policy driven by strategic needs and to match
23The Integration of Energy Environmental Policy
- Climate Change an example of whats broken
- Enhance domestic supply or ration coal use?
- Use more coal but not mine it?
- Limit U.S. coal use but ignore China?
24The China Syndrome
- Unilateral action in the U.S. will not
appreciably improve global environment not
while China - builds a new coal-fired power plant every 5
days - in 20 years, will add twice the amount of GHG
- emissions as would be reduced by Kyoto
Protocol - in 20 years, will emit more GHGs than the U.S.
25Technology The Path Forward
- Carbon Sequestration
- the technological path to
- using our most abundant domestic fuel
- capturing and storing CO2
- addressing climate change in rapidly growing
- economies through export of technology
- while minimizing the impact on U.S. economy
26Asia-Pacific Partnership
- AP6 a model technology program
- multi-lateral agreement to develop and share GHG
reduction technologies - participating nations are Australia, China,
India, Japan, Korea, and the U.S. among the
worlds leading coal producers and consumers - Caterpillar-China agreement on methane-capture
technology producing GHG emission reductions
equal to 1 of total Kyoto reductions
27Technology A Better Approach
skeptics overlook the power of technological
solutions around us
- 10 years ago, no one would have thought
- Yahoo would have 380 million users daily
- China would be on track to produce 10 of its
energy needs from CTL
28Benefits of Better Energy Policy
- coals potential is unrivalled
- can help free us from our dangerous dependence on
foreign energy - states can benefit from coals new growth and the
development of CTL