So why aren't you putting SFC oil into your SUV right now? Well, it turns out that members of the Organization of Petroleum Exporting Countries didn't appreciate the competition so they started bringing down the price of oil. From 1980, when SFC launched, to 1986, when it was shut down, oil went from more than $39 a barrel to less than $8 a barrel. Suddenly, synthetic oil didn't seem so important anymore.
In announcing the SFC's closure, then-Energy Secretary John Herrington said that oil prices had simply dropped too low to make it a viable business.
But the good news is that those economics don't work anymore. The state of Montana, which is leading the synthetic fuel charge, says we can now make it forsomewhere around $55 a barrel. That's more than a 50 percent discount from what it costs to buy the real stuff.
Oil isn't the only resource going up in price, though. The highest price affecting CTL synthetic fuel creation is the price of coal.
There is an abundance of coal in the United States, but like many other commodities its price is increasingly dependent on events elsewhere in the world. Snowstorms this winter cut coal production in China and heavy rain flooded mines in Australia — the world's largest coal exporter. Meanwhile, demand for coal to generate electricity and make steel is rising almost everywhere, especially in fast-growing China and India.
Congress doesn't seem to keen about helping to boost synthetic fuel from coal. The new farm bill concentrates it's investment of renewable energy exclusively towards providing grants and loans to help advance the development of cellulosic biofuels.
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