A new report today released by the RAND Corporation addresses the costs, benefits and risks associated with commercial development of coal-to-liquid technologies. The report emphasizes the “technology for converting coal to liquid fuel already exists” but also notes that many significant uncertainties remain. These uncertainties include the capital costs, operating costs and the technology and cost associated with carbon sequestration. While the report discusses many benefits associated with CTL development and suggests a limited or “insurance” approach for the federal government in promoting coal-to-liquid technologies, TCS would caution that even a smaller-scale investment is likely to be a losing prospect for taxpayers.

Even with record oil prices over the last three years, private firms were reluctant to invest in coal-to-liquid technologies. Taxpayers should take a cue from private investors. With oil prices extremely volatile and so many huge unknowns with coal-to-liquid production, this is a path the federal government cannot afford to go down.

Read More: Coal to Liquids: A Costly Gamble