The New York Times has a story on new techniques for converting coal into energy. Although we wonder how coal, which has been used for centuries, became an alternative energy source all of a sudden the search for new uses for coal benefits two of our Watch List companies – Sasol (SSL) is mentioned in the article as having been converting coal into fuel oil for decades and Headwaters (HW) develops catalyst technologies to convert coal and heavy oil into liquid fuels.

The article points out that coal reserves in the US are far greater (in terms of potential energy) than the oil reserves in Saudi Arabia. Given the enormous global demand for energy as China and India rapidly move into the developed world, in the short term any available energy sources are likely to be sought just to keep the lights on. However, the article notes coal’s dark side:

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….

Unless the factory captures the carbon dioxide created during the process of turning coal into diesel fuel, the global warming impact of driving a mile would double.  More »