No to CTL

In Kentucky's energy plan Strategy 4 is "Develop a Coal-to-Liquids Industry in Kentucky to Replace Petroleum-Based Liquids".

The reasoning behind this is:

1) Demand for coal will be reduced as a result of climate change regulation causing a collapse of the Kentucky coal industry. There is no indication that this will occur in the near future. The spot prices for Central Applachchia coal (CAP) went from $40 per short Ton in early 2007 to $140 before the economic collapse of 2008. Asia and India continue import coal from the region during the collapse.

2) It will be economically viable if oil is $50 or $60 a barrel. However, those estimates are based on less than $40 per short ton coal which does not, has not, and will not exist.

3) We need to get away from foreign oil. This is true however efforts should be focused on other alternatives such as biomass and electric.

They did recognize in the report that any CTL facility needs to have total carbon sequestration or move Kentucky in the wrong direction for emission.

The present temporary situation with coal having only fell to $110 and oil below $40 shows how out of line CTL profits could go.

This is not to say research should not be done on CTL however state support of new CTL facilities should not occur until it is clear that the world is using less of our coal. And even then it must be done with some guarantee of the input price of the coal and the output price of the fuel along with total carbon sequestering.

With a report as detailed as this one it would be impossible not to say something negative about it. I am not against the plan just the CTL part of it. I am also not totally against CTL, it is just an option who's time has not come and may not come. We need to refocus onto other things in and out of the plan.