Montana Governor Brian Schweitzer...
Montana Governor Brian Schweitzer during a recent fact-finding visit to Kuwait.
Like many leaders, Montana Governor Brian Schweitzer has seen enough of the United States of America's dependence on foreign oil. Unlike many leaders, the Montana governor has a plan, one he's not afraid to discuss publicly. The plan: Reduce the dependence on foreign oil by turning the coal underneath Montana into diesel fuel. It's a technology Schweitzer said has been around for years and the time for the technology to take center stage nationally is now. Recently, Diesel Power caught up with Schweitzer to discuss the plan.
Diesel Power: Why This Cause? And Why Now?
Brian Schweitzer: The cause, if you will, is energy independence. We're importing four billion barrels of oil a year, and most of it is from dictators who would like to destroy our way of life. I'm a businessman, and our business plan doesn't make sense. Our business plan puts us out of business. We're financing people who would like to destroy us. That's like Coca-Cola giving all of their profits to Pepsi. How does that end? Not good. These are the facts: we don't have a lot of oil, but we do have a lot of coal. This technology has been around for 80 years. The reason it hasn't been employed in the past is that the cost of drilling oil and shipping oil has always stayed a little below what it costs to convert coal to fuels. Now, the Germans and the South Africans went ahead with it. The cost didn't matter. They wanted domestic security. Now, we need domestic security, and the cost works.
DP: And You've Met With The Companies That Do This?
BS: Representatives from the company Lurgi were here a few weeks ago. We'd given them specs on some of our coals. They're the German company that built these plants during World War II and then transferred the technology to South Africa. They said, "Here's the deal. We can make diesel and aviation fuel for less than $1.20 a gallon with your coal in Montana." Now, what was your first question? Why diesel? Why now? Because I'm a businessman and we can make it for less than half the cost of what it costs to import oil from dictators.
DP: And that's not the only benefit to diesel fuel
BS: It's cleaner. This is "ultra-clean" diesel fuel. No aromatics. No sulfur. Zero sulfur.
DP: There are critics who say it sounds too good to be true. What's your answer to those people?
BS: Everybody take a deep breath. Number one, I didn't develop this technology. I've never made this fuel. I'm not a company that owns this technology. I don't own any coal reserves. Too good to be true? Don't take my word for it. Go talk to the people that do this. General Electric has coal gasification. The Southern Company has coal gasification. Exxon, coal gasification. Shell Oil Company? Coal gasification. Too good to be true? I don't know. South Africa's been doing it for 50 years. Instead of driving around in some Crown Victoria, I have a Dodge four-door pickup with a Cummins diesel engine in it. I run it 100 percent on this "ultra-clean" diesel fuel. My car? I drive a Volkswagen Jetta that runs on 100 percent biodiesel.
Too good to be true? I'm not the technologist that runs these studies, but we've had a half-dozen companies from around the world come to Montana, and they all come to the same conclusion: We can make this for a buck, buck-twenty a gallon. Too good to be true? I don't know. So is it cleaner than oil? Yes. Zero sulfur. No aromatics. In this process, you're able to separate the carbon dioxide from the coal. In Montana, we've got oil companies that are standing and waiting to buy that carbon dioxide to pump it back into the earth, which sequesters the carbon dioxide and increases their oil production. These aren't my numbers. These are private companies.
DP: So what's the biggest thing standing in the way of the idea?
BS: Until about 2004, most of the market believed that this oil price thing was just kind of a blip up. The average price of oil for the 10 years preceding 9/11 was about $2 a barrel. You need about $35 a barrel to break even on this thing. It's a recent innovation, and every month that goes by there are a larger number of people in the fuel and financial business who believe fuel won't drop below $30 a barrel again.
DP: Now It Makes Financial Sense?
Coal shipments from coal-producing...
Coal shipments from coal-producing regions to synfuel plants in 2005. (Million short tons, percent of U.S. total, and number of plants.)
BS: Absolutely right.
DP: Do you sense that Americans are having a tough time getting their minds around the concept, for whatever reason?
BS: I can't speak for America. Montana? I bet you Montanans know more about coal gasification and liquefaction than any population in America. I'm not on the East or West Coast and I'm not on the national programs, but I have a conversation in my own state, with the people of Montana and through the media, and personally. They understand this very well and they're ready, willing, and able to start doing these things.
DP: Do you think it's just a case of needing to get the word out? Will you just keep banging on this issue until it makes sense to more people?
BS: The market's going to decide whether they're going to do this. You can bang around all you want, but if Wall Street agrees with the technology companies that this is a worthwhile investment, then it will get built. That's what we're doing right now. We've got some announcements that have already been made, and we'll have some more announcements as time goes on. Let me be very clear: I am not optimistic that Washington, D.C., will do a damned thing. They never have. This is not something that arrived yesterday. This dependence on foreign oils goes back. We tipped in 1948. That was the first year we imported more oil than we exported. It has grown since that time. From time to time, congress would say something about it, but they haven't done a damned thing and they won't. It is going to take states working with private industry, and we'll just go build these things. One of these days Washington, D.C., will wake up and realize we're making a lot of our fuel in America. That's always how it has to work.
DP: You've been quoted as saying your plan will save the world. Is that extreme, or do you really feel that way?