Washington (Platts)--21May2007

A coal-to-liquids plant producing more than 50,000 b/d could realize a
20% return on investment if oil prices exceed $60/barrel, the US Department of
Energy's National Energy Technology Laboratory says in a report released
Monday. 

     The lab said such a plant, using Fischer-Tropsch technology, could
realize a 30% return if it also were to receive federal loan guarantees.

     "The price of coal-derived liquid fuels has traditionally been unable to
compete with the price of fuels derived from crude oil," the report said. "As
oil prices continue to rise, however, domestic sources of transportation fuels
are becoming more affordable."

     The report provides a conceptual design study of a plant that on a daily
basis would use 24,500 tons of high-sulfur bituminous coal to produce 27,800
barrels of diesel fuel and 22,200 barrels of liquid naptha products. The
latter would be shipped to a refinery for a further upgrade to commercial
products or to be sold as chemical feedstock. The plant also would generate
124 MW of electricity that could be sold to the grid.

     NETL said the design assumes an "environmentally friendly" plant that
would use the "best available control technology" for sulfur, nitrous oxides,
particulate matter and mercury. In addition, it would capture and compress
carbon dioxide for injection into a pipeline.

     The report is the first of a series of plant-design studies for
facilities using Fischer-Tropsch technology.

		--Bill Loveless, bill_loveless@platts.com