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Running our cars on coal: it seemed like a good idea at the time

Dirty, dirty coalConcerned that your car isn’t spewing enough heat-trapping carbon dioxide into the atmosphere? Here’s an idea: power your commute with coal.

The coal in the ground in Illinois alone has more energy than all the oil in Saudi Arabia. The technology to turn that coal into fuel for cars, homes and factories is proven. And at current prices, that process could be at the vanguard of a big, new industry.

Such promise has attracted entrepreneurs and government officials, including the Secretary of Energy, who want domestic substitutes for foreign oil.

But there is a big catch. Producing fuels from coal generates far more carbon dioxide, which contributes to global warming, than producing vehicle fuel from oil or using ordinary natural gas. And the projects now moving forward have no incentive to capture carbon dioxide beyond the limited amount that they can sell for industrial use.

This is the dark side to the silver lining of high oil prices. Theoretically, high prices will decrease demand for oil and spur the search for substitutes. But as petroleum gets ever more expensive, the alternative technologies that become economically viable are not by necessity better for the environment. In some cases, they’re far worse.

Unless, of course, the carbon content of the alternative fuels is priced into the cost. Last week we discussed the merits of carbon trading for ethanol, which can vary widely in carbon content. Perhaps far more important will be setting up a carbon trading scheme for fossil fuels. Because, as it turns out, there are worse things for the environment than oil.

(As an aside, the quoted article highlights why I don’t put much stock in either the peak oil Armageddon crowd, or the peak oil utopians. The Armageddon crowd foresees widespread chaos, mass starvation, etc. when oil becomes dear and our economic and transportation infrastructure collapses. The utopians see a future in which we all eat locally-produced organic foods as the world’s supply chain reorganizes around the reality of expensive oil. What we’ll probably see, in actual fact, is some price shocks, a drop in demand for oil, and — unfortunately — a big shift to coal.)

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