The Gang-of-20 bill severely limits offshore drilling to a handful of Southeastern states that must opt in to allow increased drilling, and moves the drilling boundary to 100 miles offshore (from its current 200 miles) “with states given the option to set it at 50 miles.”

Some oil industry representatives question the effect of the proposals, citing federal studies that show that more than 80% of known oil reserves are inside the 50-mile limit and therefore unavailable. Very little is known about oil reserves beyond 100 miles. Waters off almost the entire Pacific coast — where all three governors oppose drilling at the 50-mile barrier — is considered too deep for drilling 100 miles offshore.

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According to Aviation Week, DARPA has issued a broad agency announcement (BAA) soliciting research proposals and plans to award 12-month contracts totaling $4.56 million to demonstrate the feasibility of alternative CTL technologies. Already investigating bio-fuels, the agency says its CTL program is intended to demonstrate processes that could meet Defense Department demand for JP-8 jet fuel from U.S. coal reserves at a cost-competitive price compared with petroleum-based fuels.

DARPA says existing direct and indirect coal liquefaction processes are “extremely expensive to implement, consume large amounts of water and produce unacceptable amounts of atmospheric carbon dioxide (CO2) and other pollutants.”

DARPA is aiming for a $1.5 billion plant that will make 100,000 barrels of fuel per day where each kilogram of coal converted uses only 0.5 kg. of water. Currently, each kilogram of coal converted uses about a kilogram of water and produces 1.3 kg of CO2 and 0.27 kg of oil, says DARPA. In fact, fuels from coal produce 80 percent more CO2 than petroleum-based fuel, but DARPA believes CTL concepts may exist that avoid the production of CO2. The need for water as a source of hydrogen is also an issue with existing methods.

It seems like flying less might also be a good option - 100,000 barrels a day!

Image source: James Gordon on Flickr

Last night I had the opportunity to talk with Bonne Posma, a serial entrepreneur whose most recent company is called Liquid Coal, Inc. He sees a great opportunity for making the world a safer and cleaner place by developing a process that will use heat from high temperature nuclear reactors as part of a process of converting coal into a liquid hydrocarbon.

Bonne is standing on the shoulders of many other engineers and scientists in his efforts. The chemistry required to convert coal, which is mostly carbon and hydrogen, into a liquid hydrocarbon was developed in the 1920s by a German team of Franz Fischer and Hans Tropsch. The Fisher-Tropsch process has a rather uncomfortable history - it’s most prominent use has been by Germany during WWII and by South Africa during the apartheid era.

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An Atlanta-based company is betting on a sustainable, unending supply of raw material as feed stock, to create a renewable energy source. Human and industrial wastes will soon be processed into a solid, called “E-Fuel”, a replacement for coal or other fossil fuels.

The company, EnerTech Environmental, says it has received $42 million in funding to continue engineering and completion of a commercial-size plant in Rialto, CA, shown in the picture. Four more plants are in the planning stage as funding for the projects is received. The company says it now has $57 million in venture capital.

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The Vancouver, BC firm claims their initial production costs will come in at $15 per barrel, on an oil equivalent energy basis. Not bad, they say, considering oil is hanging in there at $90 plus a barrel.

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