"I don't think many people realize that a train wreck is on the way," says Thomas Casten, CEO of Primary Energy, an Illinois-based firm specializing in recycled energy who spoke at a conference in Charleston, West Virginia, sponsored by Industries of the Future.

It's no surprise to anyone that natural gas is a finite resource in the United States, which at the current rate of production and consumption would last about 60 more years. It's also no revelation that developing nations will expand and demand more of the world's oil and natural gas to fuel their growth. To put the matter in perspective, this country comprises about five percent of the world population but uses about 30 percent of the energy.

Clearly, China and India will be bidding on the same resources as the United States. Prices will invariably rise. In fact, The U.S. Energy Information Administration projects oil consumption to increase by a third through 2030 while electricity demand will rise by 50 percent over the next decade. The result: oil will cost as much as $100 a barrel while natural gas might run as high as $8 per million BTUs, all in 2030.

According to Ron Groenke, author of a book called Cash for Life, oil is the primary commodity that moves world markets. If oil prices go up by 100 units, natural gas costs would rise by 60 units while coal prices would go up by 40 units. A rise in oil prices provides the opportunity for all other commodities to demand more money. Coal is then left in the driver's seat because it is the cheapest and most abundant alternative. And the Energy Information Administration projects its use to climb over the next two decades.

Solutions exist, and many involve coal. There is coal-to-liquids, which is a technology that takes coal and breaks it down to form a fuel oil. While a lot cheaper per barrel than oil, it is an expensive undertaking -- one that necessitates oil prices stay high to motivate investors to risk their capital. And some of the most highly publicized undertakings are coal gasification plants, which are power facilities that are expected to cleanse all the impurities from coal before it is burned and sent out the smokestack.

"In our industry, we're going to start building coal plants," says Charles Bayless, president of West Virginia University Institute of Technology and former CEO of Tucson Electric Power Company, at the Industries of the Future conference. The Energy Information Administration, meantime, does not expect nuclear or renewable energy to defray coal's market share in the coming decades.

Synergistic Opportunities

When coal is burned, it produces sulfur dioxide and nitrogen oxide -- the stuff that produces acid rain and smog -- as well as particulate matter and mercury. Under the Clean Air Act, those pollutants must be removed from exhaust gases that come out of the smoke stack. The combustion of coal also produces substantial quantities of carbon dioxide, which is not currently regulated but the pressure to do so is increasing.

By contrast, coal gasification removes the sulfur dioxide, mercury and carbon dioxide from the "syngas" before it is combusted, say experts. And because the "syngas" is cleaner than raw coal, lower quantities of nitrogen oxide and particulate matter are produced during the combustion process, they say. The carbon dioxide is more concentrated, which makes it easier to capture.

Four such plants are now operating: two in the United States and two in Europe. American Electric Power expects to have engineering studies completed next month on two possible coal gasification plants in Ohio and West Virginia. It would like to have one or both facilities operational by decade's end. The multi-million dollar project would be a public-private endeavor.

Coal gasification is "important for the future of coal and is the next best technology to use," says Gary Spitznogle, manager of generation development for AEP, who spoke at the Industries of the Future event. "AEP feels it should take the lead."

At the same time, coal might also become more relevant to the industrial sector that overwhelmingly relies on natural gas to fuel its processes. Consider a fertilizer plant in Alaska: High natural gas prices were making it nearly impossible to maintain its operations. With the help of the government, the plant invested $1.6 billion to convert its processes to coal -- something that generated an 11 percent return.

Such successes may lead to other projects, says Mike Eastman, technical analyst for the National Energy Technology Laboratory in Pittsburgh. He says that coal and biomass -- fuels produced from organic matter -- could be combined to create a low-cost alternative to burning natural gas.

"Once we get past the choosing of one fuel form over another, there are a lot of synergistic opportunities," says Eastman. "We can require more coal. We can still improve the environment and we can still have a powerful economy."

Without a doubt, many viable options exist to help wean the global dependence on oil and natural gas. Employing more energy efficient technologies is a good start as well as turning waste energy into power and heat.

If the global economy is to stay on course, then creative solutions involving all different fuel forms are necessary. It is abundantly clear that coal will continue to play an integral role. But, its image is one of being "cheap and dirty." To shed that label, coal-dependent utilities must commit to controlling their emissions and their carbon footprints. Regulatory and market pressures are giving coal a chance to reinvent itself.

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