China takes refuge in coal-fed process to secure oil

With oil prices at historic highs, China is moving full steam ahead with a controversial process to turn its vast coal reserves into barrels of oil.

Known as coal-to-liquid (CTL), the process is reviled by environmentalists who say it causes excessive greenhouse gases. Yet the possibility of obtaining oil from coal and being fuel self-sufficient is enticing to coal-rich countries seeking to secure their energy supply in an age of increased debate about how long the world’s oil reserves will be able to meet demand.
The US, Australia and India are looking at CTL technology but are constrained by environmental concerns linked to the process, which releases excessive amounts of carbon gases into the air and consumes huge amounts of water.

But China, lacking the powerful environmental lobbyists that might stymie any wide-scale initiative elsewhere, is building a major CTL processing complex on the grasslands of Inner Mongolia.

Yuichiro Shimura of Mitsubishi Research Institute (MRI) in Tokyo, said: “Those countries with large coal reserves, like South Africa, China or the US, are very keen on CTL as it helps ensure energy security.

“However, the problem is that it creates a lot of carbon dioxide (CO