The largest single element of the USA's trade deficit is the importation of oil. 27.996 million barrels a day as of last November. @$50 / barrel, 1399.8 million, $1.3998 Billion / day or 511.3 billion / yr goes out of the country to buy foreign oil.
The USA has ¼ of the world’s coal supply and known domestic reserves equal to that of 4 times the Saudi oil reserves or equivalent to the entire earth’s oil supply.
The total energy consumption in the United States for 1990 was 86 x 1015 kJ. Of this total, 41% came from oil, 24% from natural gas, and 23% from coal. Coal is unique as a source of energy in the United States; none of the 2118 billion pounds used in 1990 was imported. Furthermore, the proven reserves are so large we can continue using coal at this level of consumption for at least 2000 years.
China and South Africa have signed a deal that could affect the rest of the planet. The two will work to establish a couple of so-called coal liquefaction facilities that take coal and turn it into fuel oil. Not only is the technology one tool to fight the high cost of oil but it also helps purify the energy combustion process.
The major obstacle is economics. If the technology is to be financially feasible, the price of oil must remain at least above $32 a barrel. While the current price is $50 a barrel, debate is now fierce among analysts as to whether it will stay that high or fall back to traditional levels, oftentimes around $20 a barrel. The good news for those who are making investments in coal-to-liquid technologies is that the NYMEX futures index for oil is above the break-even point for 60 months into the future.
“Certainly, this is something that will have to happen,” says Randy Harris, an ex-official with the National Energy Technology Laboratory in Pittsburgh. “If oil was not so unstable, it would have happened by now. We have not been able to make the economics work because oil prices are so often below $32 a barrel. So, we can't get the investment needed to build plants. It's not that the technology isn't there. It is. It's just been that the economics have not worked.”
$32 a barrel won’t be seen anytime soon.
The number of oil refineries is about 200 as of 1989 (the latest data I could come across.)
If we built coal liquefaction plants to augment oil-refining capacity in 10 years we could be largely weaned of foreign oil. The world price for oil would drop to the production cost of liquid fuel from coal.
Our trade deficit would plummet, jobs would be made in West Virginia, Wyoming, Pennsylvania and 35 other coal producing states.
Just thinking...
