Back to Black Sea Energy and Economic Forum Page
Black Sea Energy and Economic Forum 2009
Speakers:
- Boyko Nitzov, Director, Eurasia Energy Center, Atlantic Council; Dinu Patriciu Fellow for Transatlantic Energy Security, Atlantic Council
- German Aynbinder, Business Development Director, Donbass Fuel Energy Company
- W.A. Fitzhugh Lee, CEO, Green Source Energy
- Nicolae Nemirschi, Minister of Environment, Romania
- Botir Teshabayev, Chairman, Uzbekenergo
October 1, 2009
BOYKO NITZOV: I am Boyko Nitzov. I head the newly established Eurasia Center of the Atlantic Council. And I see here with us today Gen. Chuck Wald who is on the board of the Atlantic Council and who knows a little bit more, I guess, than me about some of the issues that we are going to discuss today. So I encourage Gen. Wald to ask as many questions as possible because my task will be much easier this way.
I have been quite often accused at conferences and other places that I am the lobby of the oil and gas industry. Today I am heading a panel on coal. Specifically one of the things which is of interest probably is, of course, whether coal could at all compete with oil. Our panel will certainly be one of the best sources of knowledge in this respect.
To my right I have Mr. Teshabayev. Mr. Teshabayev is the chairman of the board of Uzbekenergo. Uzbekenergo is the integrated power production, transmission and distribution company of Uzbekistan. And so as far as I know, the installed capacity is sufficient to run probably a couple of states in the United States.
To my left, I have Fitzhugh Lee, who has the unique perspective of having to deal with technologies related to coal, exaction of hydrocarbons from coal. This is something which is really, really a top-notch performance, top-notch technology, which we will probably be happy to learn more about.
So my first question to the panel today would be, well, coal is history, some say. Coal is the future, some say, if there were to be some kind of technology, which would make it clean. So the first question to the panel today, which I have if you would have any comments on that would be do you believe that there is such a thing as clean coal? I don’t know whether it would be Mr. Teshabayev or Fitz, maybe you would prefer to start the discussion?
W.A. FITZHUGH LEE: The whole concept of clean coal is somewhat of a misnomer just like any clean energy. Any hydrocarbon gives off CO2 because that is combustion out of its root form. The interesting thing about coal in itself is it, you know, is it going to be something that actually survives down the road? And actually, I am quite optimistic probably contrarian. I feel that anybody in this room who is listening about coal, it is the stepsister to the industry and no one likes to bring it up. Though without it, you know, we would not have electricity in this room. And without it, we would not have the ability to put electric into those electric cars, which everybody wants to do.
So what has been interesting to me today is to see the disconnect in political agendas with the economic reality of coal. And their issue is coal is quote, unquote, “dirty.” But all hydrocarbons are dirty. But what we have to understand about coal is coal is radiative heat, which means it burns T to the fourth power. And if you think about the other fuels, the other hydrocarbons, they are conductive. They burn T to the fourth power – sorry, T to the first power.
So the purpose of raising that is coal is an incredibly efficient fuel. It is highly abundant. It is in politically places where the developing nations like China, India and the U.S. have money and will develop this technology forward. And the challenge here is to develop clean coal – cleaner coal since I don’t believe there is such clean coal – cleaner coal. And they have the technology to actually pull out the sulfur nitrogen right now. The question is about, you know, CCS about capturing the CO2.
And that is something that, you know, will have to be addressed down the road. But unfortunately, you know, renewables are 1 to 2 percent, so people need a solution to actually get us to the next level. And that is kind of what I was hoping we would pick up today. But if you are here, somebody needs coal, so that is good.
MR. NITZOV: Thank you. Would you like to make a comment? Do you think technology would actually be what will save the future of coal? Or it will be a continuation of the trends that we have been seeing for the last 50 years?
BOTIR TESHABAYEV: Thank you, Mr. Boyko.
(Note: Mr. Teshabayev’s remarks are delivered via translator.)
During our sessions, we heard that the first goal of our – is to diversify our fuel strategy and the industrial production of fuel. So anyway, Uzbekistan announced in 1997 about its energy security. And the issue of the energy diversification of gas is a main issue of Uzbekistan also.
So the main task of Uzbekistan is the decreasing of the consuming of gas – of natural gas by the increasing of another fuel like coal. So this should consist of the total consumption about of 12 or 14 percent of the consumption by the coal.
So nowadays, we are working hardly on increasing using the coal. By attracting the investments from the international funds and institutes and at all we should come to the using of coal in our country in the power energy sector.
So also, we should consider the cooperation by the international members. So as you know, China and America is also going to use coal in the future. So Uzbekistan also wants to increase this using.
So our Chinese partners also give us some – the Chinese partners will start with Uzbekistan next year the program of the modernization of the technology of energy technologies for the future using of the coal as a main – not main – as one of the resources for the power energy sector.
So and as a conclusion, after this work, we can come to the new technologies, which will allow the power energy of Uzbekistan to use coal as a clean energy after the modernization.
MR. NITZOV: Frankly speaking, I am a little bit baffled. A little bit baffled because it seems to me that so there is a little bit of contradiction between the declared goal of using coal. Why coal? For example, we heard in one of the opinions that coal is used or planned to be used because this means diversification. Now, coal historically has been king coal. And diversification in the past has occurred the other way around away from coal.
Another justification of the greater use of coal we just heard is the support of energy independence. It is a local resource. So the greater use of local resources is justified – well, is justified by the claim that this contributes to the energy independence of the country.
So there seems a little bit of uncertainty, what kind of policy goals or justifications have been used or are used in different parts of the world to continue using coal. And on the other hand, it seems that well, there is a great uncertainty to assume that clean coal exists in the first instance because to my knowledge, nowhere around the world to this day has clean coal in the sense of carbon capture and storage being proven on a commercial scale.
In the union, the framework program number seven, FP-7, includes a number of demo projects. But these are demo projects, yet to come to fruition and yet to demonstrate that this is a viable technology. In the United States, there is also talk about demonstrating the technology. There are some quite exotic options in this sense like storing geologically CO2 in basalt formations in the Juan de Fuca Plate of the coast of California or Washington State.
What do you think about the kind of diversity of justification of continuing using coal when you do have other options, cleaner options in the sense of CO2, proven options, not CCS, such as nuclear, greater use of natural gas, which are generally also abundant all over the world? Do you think it is justifiable from the point of view of policy of simple economics? Would you like to comment?
MR. LEE: Sure. I think one thing to put into perspective is the coal industry. If you look back 70 years, the coal industry is much like the rocket industry; not much has actually occurred in this industry from the perspective of technology. The way they have been mining coal, if you go back to 1300, we are pretty much doing it the same way, but slightly more efficient.
The mining benefit of coal is certainly an advantage over other hydrocarbons. It is one to $2 per million BTU versus six to 12 times that for gas or oil. So it is very, very inexpensive to actually mine and extract coal.
I think he raises a very good point about, you know, are we socially irresponsible to burn coal? I think two things on that. One is we should look at coal from a perspective as it is a necessity and we have no choice about burning it. What we need to develop in policies is not to treat it as a stepchild, but to treat – to invest technology so you can do better jobs of, you know, CCS and also for forcing some of these older factories or plants to actually have better technologies for scrubbing.
If you think about the industry as a whole, what is interesting about the coal industry is that unlike the other hard carbon industries, it totally missed out on the whole downstream revolution with plastics and refineries. Coal totally missed out for the past 70 years. It hasn’t evolved. And what people don’t seem to understand about coal is coal is – inside of a coal, the composition matrix of a coal, up to a third of a lump of coal is actually volatiles. And that is what they used to actually collect the gas off to burn in the lights. Up to a third of the mass of coal is actually volatiles. And I say volatiles – it is equivalent to medium crude is basically what it is.
So coal is made up of two components. And I won’t go into the lesson here, but I think it is important that people understand the two components of coal. Coal has the carbon component, which is incredibly effective. It burns T to the fourth power and there is no other hydrocarbon that burns remotely close to that. So it is incredibly efficient, well-burning fuel. And if you get the anthracite, then you have removed the sulfur nitrogen, so really you have the CO2 issue only.
The other part of coal is the volatiles. And that is what people have been trying to figure out how to extract the volatiles. And there is technology being developed out there. So if one-third of the piece of a lump of coal has – up to one-third has volatiles, you can get out one to two barrels of medium crude out of it. The question is can you do it economically and can you do it without creating a large carbon footprint?
Now, the Chinese tried this to be, you know, more economical and try to be socially responsible environmentally with their Szechuan plant. But they failed miserably on it because it is a Fischer-Tropsch process. It is basically gasification. You are heating – it is not different than what they were doing 150 years ago, fancier equipment and they spent, you know, over a billion dollars developing it. But the truth at the end of the matter is if you have to heat coal up to extract the volatiles, it is just not going to be an economic solution. And it is not going to be allowed to be used by the DOD or anybody else in the world because you cannot create a bigger carbon footprint to extract fuel.
And that is what Fischer-Tropsch processes have been going on for a long time. What development needs to come back to developing a non-Fischer-Tropsch process for direct liquefaction? And when I say direct liquefaction, what I mean is if you can take – if you can turn the volatiles pre-combustion into liquid without having to heat them up, you can also pull out the sulfur and nitrogen into the liquid form and send those to a refinery to be properly disposed of. This will save a fortune in the actual plant facility because the majority of the cost for a power-gen plant is two, $300 million for the scrubbers, for the sulfur – the SOx and NOx.
So what we need to do is we need to use this period of until technology comes out that is clean and I don’t believe anything is clean, maybe hydrogen, but again, hydrogen is much less efficient than coal and even less than other hydrocarbons. We need to use this time to actually create a whole new product of refined coal. So in essence, you are taking coal and you are pulling out the impurities pre-combustion and you are taking the volatiles out.
And the last point I will say in this is just another kind of quick lesson about coal. If you have a lump of coal and it has 10,000 BTU, British thermal units, over 90 percent of that is related to the carbon burning itself because remember it burns T to the fourth power. Less than 10 percent of that is related to the volatiles getting burned in there. They burnt T to the first power.
So currently when you are burning coal with the volatiles in there, you are burning more mass than you need to burn. You are producing CO2 and you are basically making a very inefficient process and you are wasting fuel. You need to develop technologies and get them out there commercially that have the refined coal, meaning pulling just the carbon and then pulling out the volatiles and sending them to a refinery. And I will leave it at that.
I think the social responsible way of doing this is developing coal. And again, there is a hydrocarbon march here. First, they are going after coal first. Next will be oil. And third is going to be gas. And it is just a march. And I take no position on this because my job is technology. But they are attacking coal first because it is an easy target because of the sulfur nitrogen and also because certain people haven’t upgraded the facilities. They have been able to get around the legislation. And the developing countries have no choice but to use it to bring people out of poverty.
So I say develop economic alternatives in the political spectrum that encourage people to develop better use of coal or cleaner use of coal. But the truth is once – you know, coal is no different than oil and everybody else. It just happens to be the first on a march to reduce hydrocarbons because of the CO2 emission.
MR. TESHABAYEV: As an example, I can say that now with the republic, we don’t have a single solution for the energy sector in development. So we have – the republic has uranium sources, but until the 2020, we cannot afford to use the uranium in power plants.
So the republic of Uzbekistan is in a highly seismic region, so that is why they are using all the power plants using the uranium is not affordable for the republic. So having a chance to produce the energy by the hydropower, which will consist of 30 percent from the total production, we cannot afford to use this hydropower also in this capacity. Because we can do some damage for the countries, which is like getting the downhill or the water system like Turkmenistan and Kazakhstan.
So that is why the reason of using the coal is a political decision to diversify the energy sector to the coal-using sector because, as I said before, using all hydropower is not affordable. And the second question, which was asked by Mr. Boyko, this is economic potential using the coal.
MR. NITZOV: Thank you. One more question on my side and then I will open up the floor for questions from the audience. And the question is basically, I have a feeling – on my left, I have somebody who says, well, you know, we have to stop using Fischer-Tropsch because it is very inefficient. It is something, which just wastes the resource. You lose the most valuable components and so on, et cetera.
On my right, I have somebody who lives in a country that actually plans to build a gas-to-liquids plant.
MR. TESHABAYEV: Yes.
MR. NITZOV: It is gas to liquids; it is not coal to liquids? But the contract for the joint venture for the plant was signed, so that would be recently. With Sasol of South Africa and there are, I believe, the only ones who actually run a Fischer-Tropsch plant to produce liquids from coal. And with PETRONAS of Malaysia. So it seems again that there is a wide variety of solutions proposed to coal because the problem of coal is not seen as being a single problem. There are multiple problems with coal.
One problem of emissions. Two, the problem of using this resource as a tool of diversification. Three, the possibility to use it to supplement liquid fuel supply and so on. What do you think about this apparent divergence of opinions? And what, in your opinion, would be the prevailing solution?
MR. LEE: I think it is interesting with Sasol. The Germans did it at the end of World War II because they had no choice. And South Africa did it because they had no choice because of the embargo. You do not see a lot of the coal-to-liquid technology going out there because it is very much on the edge of economic reality. Does it make sense?
The reason you see these technologies develop – and I am not familiar exactly with the circumstances there. But I would suspect that they are politically driven. They are national security driven. And they probably are also driven with the hope that maybe some technology will come out to make it more affordable, that technology.
In regards to, you know, what would I like to see, you know, I am certainly not against CTL technology in that sense, in the indirect sense of technology that uses Fischer-Tropsch process. I think there is certainly, there is reasons to use it. What I am proposing is that we go with a non-Fischer-Tropsch direction, a direct-call approach, where you use – if you think about what they are doing right now is they are using a mechanical extraction because as I mentioned earlier, if you think of the molecule of coal, it basically is held together by sulfur. And sulfur acts as the glue. And it holds all the volatiles tied up with the other fixed carbons. And they are the elemental carbon, which depending on where you want to look at it from, what angle.
It is so resistant to break it up. The only way to break it up is to use extreme heat and pressure. And that is exactly what they did in the gasification plant in China. And the reason they had a problem with that is that I can understand why the Chinese would want to have that technology. But the problem is you have got to truck a lot of coal a long way distance over a lot of infrastructure that you just built and you are going to destroy it. It is not a very environmentally sustaining process. The solution is to come up with a non-Fischer Tropsch process, which is not a physical or a mechanical extraction. You need to come up with a chemical extraction.
And when I say chemical extraction, that is using a chemical to actually extract the volatiles from the coal.
MR. NITZOV: But that would be to produce liquid fuels?
MR. LEE: That would be to produce liquid fuels.
MR. NITZOV: That is the main objective. That is the future of coal, in your opinion.
MR. LEE: In my opinion, the future of coal – because whatever solution you come up with here has to be economically – it would have to make economic sense because China and India, 80 percent of their power is coming from – their electricity is coming from coal. So it is very easy to sit here and make a political – and this is why I like the Atlantic Council because they take political policy-setters and put them with business folks.
If you can’t make an economic argument, then you might as well forget the technology. And the only way you are going to actually be able to have a self-sustaining and environmentally improved process for coal is to take it through a non-Fischer-Tropsch process because you will be able to do that without creating a larger footprint. If you also think about the efficiency of taking out the volatiles – if you take the volatiles out, you are going to reduce the mass of the coal 60 to 70 percent. And you will improve the hydrogen-to-carbon ratios, which makes the fuel more efficient and burn better. So you will burn less mass, which means you have less of a carbon footprint.
So refined coal is the way to go, not just because of the liquid part, because when you use a chemical-extraction process to pull out the volatiles, the byproduct is the solid. And the solid is a cleaner coal. Right now the only way to get out sulfur and nitrogen is to do it by post-combustion. And that is a horrible way to get it out because the problem has already occurred. Because once it goes into the furnace and it gets burned, that is when it binds and it becomes CO2 and other things happen. And then you have the issue of the SOx and NOx. And then you have the issues of the particulates.
The trick here is to get the sulfur and nitrogen and migrate the other heavy metals and other types of things like that into a liquid phase so they can be disposed of properly by refineries. And that is where I think the technology needs to go.
MR. NITZOV: And you do keep the traditional market for coal in power generation and everything else?
MR. LEE: I think you have no choice but to keep it going. But what I would propose is that you would be burning a cleaner coal in the sense that it would already have the sulfur and nitrogen migrated into the liquid fraction, which goes and gets deposited, you know, extracted nicely because refineries are already designed to take out those types of things, so taking out, you know, sulfur and nitrogen, they have a sweetening process for that.
What I would propose is getting coal – using a non-Fischer-Tropsch process, so you can turn coal into two products – one, a cleaner solid, which has a better ratio for burn and is cleaner, by definition, and two, you take the volatiles out because right now you are burning the volatiles in the coal in the furnace. There is absolutely no reason. You are losing that energy. There is absolutely no reason to burn it in the furnace because you don’t really care. If you look at 90 – if you said a 10,000 BTU coal, over 90 percent of that come from the carbon element, which is – and then less than 10 percent of it comes from the volatiles. So really extracting that, you just create another product.
MR. NITZOV: All right. Well, that is a pretty convincing opinion to drop Fischer-Tropsch. But on the other side of the table, we do have a country that has just adopted Fischer-Tropsch. It is gas to liquids. It is not coal to liquids. Mr. Teshabayev, your opinion?
MR. TESHABAYEV: So I want to point out that the diversification is not reached by contracting the additional power plants, but maybe using efficiently the energy resources.
So the first step of our diversification is the modernization of the old technologies to the new technology by increasing the efficiency of the power plants. And also in the coal power stations using coal. And the process of the coal technology, which will be transmitted as a liquid, is existing in Uzbekistan from the 1960s.
So the volume of these technologies is not so high. But we are working on the increasing this sector nowadays. And I think that the using of this technology will be the main technology in producing the clean coal technologies, so gasification of the coal.
So we have partners and we have a cooperation with international companies, which is using the liquid coal technologies and we have some projects in this way.
MR. NITZOV: Well, that was a convincing opinion again. Please, any questions from the audience?
Q: Yes, I am Paul London. I was in the Energy Department before it was the Energy Department. At the end of the ’70s, it was called the Federal Energy Administration. And I was in the part that was supposed to be conservation and renewables at the time. And they were talking about a lot of these clean coal technology in much the terms that you use. And what I am not clear about from the discussion is whether there are chemical ways to do this, to extract the carbon and separate it from what I take to be the liquids. And whether there has been any progress in that. I mean, I think since the 1970s, the United States has spent billions of dollars on this. And I just have no idea where that technology stands at the present time.
MR. LEE: Thank you. It is a good question. And actually, I have to be careful not to take this hat off as a panelist and talk about the company I work for. But you are absolutely right. There was a lot of money spent in that period to develop initially non-Fischer-Tropsch processes. The Department of Energy gave up on that in the ’80s and ’90s and took it off as a funding project. DARPA has brought it back again because they realize that a lot of time has passed and there are other options.
One of the options that – my background is – although I have been in the oil family for three generations, I was an investment banker at Goldman Sachs. And I left in 2001 to move into the intellectual property business. And in 2007, I was approached by a gentleman who had allegedly invented a non-Fischer-Tropsch process to extract hydrocarbons. If you were curious, I could tell you afterwards exactly what they did. But in short, they figured out a chemical process. When I say chemical process – if you look at the bitumen coal, the bitumen sands, the oil sands in Canada and other places, mostly Canada, they take a ton of oil sands to get .6 of a barrel of bitumen out. And what they actually get out of the bitumen is not even usable in the sense – it has to be hydronated.
So they have been able to take very a very inefficient process and make it profitable, not to mention the environmental cost associated with it. They have to use five barrels of water per barrel of semi-crude that comes out. And if you see the National Geographic, you see those horrible pictures of the giant tailing ponds.
Well, the point of this is there is – they use a process of simply heat and pressure. They use a lot of water to heat up. And they basically are breaking down the sulfur bonds, the sulfur-oxygen, sulfur-carbon bonds. And once they break them away, then they skim it off with froth and that gets into the bitumen, so it is a very similar process.
The chemical process, if you think of soybeans, it is the easiest way to think about this. Soybeans, the most effective extraction process is chemical. In soybeans, they use xylene, which is not a good thing. But it is very effective. And they can get up close to 100 percent because they use xylene on the soybean and it pulls out all the soy oil. And then they separate it and they can use the xylene again.
And so that is a chemical process. It is more effective. It is more efficient. It happens on – it is a reactive extractive process. The scientific occurrences of reactive extractive technology, it is very rare. And that is why they couldn’t find it. They couldn’t find something. What a gentleman named Dr. L.T. Fan figured out who was at Kansas State University, he figured out through an accident for working on devulcanization actually a way to separate sulfur and pull the sulfur actually out of the rubber and actually bring it back to be a natural rubber again without heat and pressure and torque. And what he realized subsequently a few years later – that was in 2001 – he realized actually the molecular structure of rubber is very similar to coal. And he then applied for his patents. And then in 2007, we were brought on to actually commercialize this for him.
But processes exist. Other people are developing non-Fischer-Tropsch processes. But chemical extraction is very feasible. And I am happy to talk to you afterwards and tell you more.
Q: Back to your discussion on the kind of specifics of it, you said it breaks down to T-1 then at the end is what you mentioned. So it is basically equal as far as the volatile content. And just aside, the Fischer-Tropsch – part of the problem it wasn’t really great during World War II is it didn’t have the octane, so you just didn’t get the performance in the airplane, so there is an issue there. But the real question I had – and I am fascinated with this – is unless you can make it as clean or cleaner, you are not going to be able to do this. It is just not going to happen.
Now, Uzbekistan can do whatever they want. There is a difference here. And so this is not a matter of – technically, I think you can do it. It is whether policy and law will let you do that. And I hope it does because I would like to see it cleaner because the one thing I disagree just a hair with you is the march towards decarbonization. I think everybody would like – or climatologists would like that for sure. But I think the reality is there is going to be fossil fuel burnt for our lifetime. It is a matter of how much. So if you can get it down to a level that is reasonable, then they will probably allow.
So even in the United States, we are not going to get off oil for a long time unless some great breakthrough comes. And then it is still going to take time to transfer over. So my point is, can you make this process at least as clean or cleaner than, say, the gas is today?
MR. LEE: Interesting. My account from the march of hydrocarbons, it is just where I think it is going to actually go. It doesn’t mean if it is right or wrong. I don’t really take a view on that. It is not really my position. But I understand what you mean. And obviously, CO2, you know, comes from all the hydrocarbons. That was the point I was trying to emphasize on that.
In regards to a chemical extraction, if it is not economic, then there is no benefit. And the trick here is to find an economic solution that has an environmental angle because if you don’t have – you can come up with all these great things in the lab for environmental and you can come up with all the things you want in Capitol Hill and other political systems to say what is going to be. But at the end of the day, it is going to be an economic national interest, security interest. And that is what is going to make the decision.
So if you want the big companies, the coal companies and the oil sands companies and the other hydrocarbon manufacturers to actually make this, you know, to make it work, you have got to propose something that makes economic sense. And just to give you some simple statistics so you can – the process is not an improvement of 10 or 20 percent. If we were on the edges of improvements of 10 or 20 percent, I wouldn’t be interested in the technology. It is an order of magnitude improvement.
And just to put it in perspective just for 8800 BTU coal out of the Powder River Basin in Wyoming, which became a huge hit after the EPA passed in 1970 low sulfur. All of a sudden, a new industry was born and Wyoming was rich in this coal. They sell that for four to $7 a ton. Now, the railroads get 20 bucks a ton to take it East. The handlers get another 10 bucks a ton to move it around. And then the power gen earns money on it. So it is 40 to 50 bucks a ton by the time it actually starts generating power.
But if you can go to a mine mouth to somebody who sells it for four to $7 a ton – and the Powder River Basin just for case in point has in the high 20s to low 30s as a percentage of volatiles in their coal – you can get out 1.25 barrels of crude out of that. At 70 bucks a barrel, that is 95 bucks extraction. Plus you get 60 percent of the original mass of the coal back, which is cleaner and it will have a higher value.
In essence, if you do a chemical extraction, you are almost pre-coking the coal is what you have done because you are actually pulling out impurities. Mother Nature did it, you know, by slamming continents together 300 million years ago. But this has to be an economic solution for anyone to stand up and listen. And I think that the economics – if I am a mine operator and I can sell it for four to $7 and someone has a technology that can promote – sorry, that can make me rich as a mine owner and they can get 90 bucks out of there. And if the technology costs 10 to $20 a barrel – and let’s just say 20 to be safe. At 30 all in, there is arbitrage there. And I think that that will push the industry to go.
MR. NITZOV: That is one thing which strikes me and one thing which reminds me. I will start with the reminder. And the reminder is well, I hate that 5:00 train that comes down from Gillette and passes through Norman, Oklahoma, going down to Houston to export coal to, guess what, to Spain out of Houston because it is cheaper to produce power in Spain from coal that comes from Wyoming.
The other one which strikes me – Gen. Wald, you will be next certainly – I am not going to ask a question; I am just making an observation – is that we should have been talking coal around here, right? But 70 percent of the time, we are talking liquids. And it seems to me that the actual problem is probably not so much coal, but concerns about the liquids. Gen. Wald?
Q: You can probably succeed by having coal be a viable economic alternative. My concern is that, I mean, we all spend time in Washington. Other places have similar issues. Some places don’t. But Washington is definitely going toward a penalty for carbon. And I would love to see this work where it is clean enough where you don’t get penalized for carbon.
My concern is from an economic standpoint. They will penalize it. If it is dirtier, you will get penalized even if it is a clever way to do this from an economic standpoint. So the economy will actually be multiplied by the penalty stroke you get. And so if you can’t make it at least neutral – not neutral, but equal to what gasoline is, I think you are going to have some trouble with it.
MR. LEE: That is a very valid point. And again, it sort of boils down to a turf battle as well with the other industries. I mean, what people need to realize is that people should promote all these energies together instead of fighting with each other, which as Gen. Lawson said last week, you know, we would like to see that happen again. It hasn’t happened for 20 or 30 years.
MR. NITZOV: I will open the floor for one last question and then I have a short announcement. We are finished with the discussions. Any last question from the audience? All right. I will go straight to the announcement. The buses for the dinner tonight – the dinner will be at the historical CEC Bank. And the buses will leave here from 6:45 until 7:00 p.m. I strongly advise everybody to be on the first bus, 6:45 leaving to CEC Bank tonight for the dinner. The bus is in front of the hotel. Thank you. (Applause.)
Transcript by Federal News Service, Washington, D.C.
Back to Black Sea Energy and Economic Forum Page