Response to article: Clean Coal Developers Eye Oil Imports

Response to article: Clean Coal Developers Eye Oil Imports (8/10/05)

by Amory Lovins

Clean Coal Developers Eye Oil Imports - 8/10/05 - id=11 In July, I heard a leading proponent of massive subsidies for coal gasification explain that the proposed program could produce somewhat less than 2 Tcf/y of gas for $4/Mcf wholesale. This happens to be 8-10 times less than could be saved by targeted electric and gas efficiency and electric demand response, which would cost 4-5 times less per delivered Mcf than the undelivered syngas. Shouldn't we do the cheaper things first -- rendering both the coal gasification and LNG expansion unnecessary and uneconomic?

The biggest obstacle to using U.S. natural gas in a way that saves money is that 48 states reward electricity and gas distributors for selling more energy and penalize them for cutting customers' bills. Shouldn't we fix that perverse incentive first? And why exactly does coal gasification merit public subsidy and LNG need federal siting preemption? Only, I daresay, because policymakers either are responding to hogs-at-the-trough constituency pressures or have forgotten, at industry's and investors' peril, all the lessons of the early- and mid-1980s.

Amory Lovins
CEO
Rocky Mountain Institute

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