I was pleased to welcome U.S. Department of Energy Secretary Samuel Bodman and Assistant Secretary of Fossil Energy Jeffrey Jarrett to Ashland last week for an important forum on coal liquefaction. As our nation seeks to lessen its dependence on foreign oil, implementing technologies such as coal liquefaction will help produce reliable, clean and affordable energy as well as help create jobs across the Commonwealth.
Coal-to-liquids fuel presents an exciting opportunity for American energy independence and economic development here in Kentucky. Using the Fischer-Tropsch process coal can be converted into an ultra-clean, high-grade liquid fuel. In the 1940s Germany used coal-to-liquids technology to produce nearly ninety percent of its energy needs. Today, South Africa uses this technology to produce a quarter of its transportation fuels. China has invested $2 billion to build a coal-to-liquids plant that will begin production in the fall of 2007 and has plans to build many more.
Coal deposits throughout the U.S. contain more energy than all of the world’s oil, equal to about one trillion barrels of oil. It is projected that once coal-to-liquids technology is implemented it could produce 2.6 million barrels of oil per day by 2025. This would meet 10% of our nation’s current oil demand. I believe that Kentucky’s coal industry can lead the way to America’s energy independence.
The process of turning coal into liquid fuel is an environmentally sound solution to our nation’s energy needs. Liquid fuel derived from coal is virtually sulfur-free and burns cleaner than traditional fuels. In addition, as it is being produced, it allows carbon dioxide, the leading cause of global warming, to be removed.
At the forum, Secretary Bodman announced over $450 million in grants for the advancement of carbon sequestration. After the carbon dioxide is removed from the liquid fuel, it can be pumped and sequestered underground. Sequestered carbon dioxide can be useful to enhanced oil recovery efforts on oilfields. Over $134 million of these grants will go to organizations partnering with Kentucky businesses. The Midwest Geological Sequestration Consortium and the Midwest Regional Carbon Sequestration Partnership will each receive $67 million over the next ten years. Between the two, Duke Energy, the Kentucky Oil and Gas Association, and Kentucky Geological Services, Louisville Gas & Electric, and Peabody Coal are partners.
Recently, the Department of Defense announced a program that would require all battlefield vehicles to run on synthetic fuel. From a national security perspective, this is an important initiative. We can no longer rely on unstable political regimes and regions to provide for our energy needs. For the sake of our national security and our economy, we must work to increase domestic production and to develop alternative fuels.
The aftermath of Hurricane Katrina on our nation’s oil supply and the instability of foreign political regimes highlight the need for a diversified supply of American-made energy. I believe the implementation of coal-to-liquids technology could have enormous benefits for Kentucky as a source of thousands of jobs and for our nation as a source of clean, stable and affordable fuel. I will continue to work to make coal-to-liquids technology a reality.