Is liquefied coal the answer? It depends upon the question being asked. Here's Brad Plumer:
How Energy Independence Threatens the Environment, by Bradford Plumer, TNR: ...When environmentalists talk about energy policy, they usually focus ... on global warming. Many Democrats, however, prefer to frame the discussion in terms of "energy security." And who can blame them? Even people who shrug at the thought of rising temperatures agree that the country should wean itself off foreign oil. It's a hugely popular idea. And, since many of the policies that would free the United States from ... Opec would also curb carbon emissions, who would begrudge the Democrats this bit of clever framing?
But the strategy comes with a downside: ...Big Coal is teaming up with an array of Republicans and Democrats to tout liquefied coal as a substitute for gasoline... The country is sitting on vast coal reserves, they reason, so why not use those instead of tossing money at the House of Saud? There's just one catch: Liquefied coal would do little to reduce carbon emissions and, in all likelihood, would make things worse. Nevertheless, the idea continues to gain currency in Congress, in part because "energy security" is a sales pitch few politicians can resist.
The ... coal industry ... has fallen on hard times. .... Moreover, ... if Congress passes a strong emissions-reduction bill to deal with climate change, coal production could decline sharply... As a result, investors have been increasingly wary of financing new coal-related projects.
Liquefied coal could be just the life raft Big Coal needs. ... Unfortunately..., the Energy Department found that coal-to-liquid fuel could generate roughly twice the carbon emissions that regular gasoline does. Coal backers counter that, if the carbon released during liquefication could be captured and permanently stored underground, the fuel would be comparable in carbon impact to gasoline--that is, the status quo. But the technology for storing carbon underground remains unproved, and, even if it works, cost pressures may prevent it from being adopted on a large scale...
Yet, despite these problems with liquid coal, Democrats are hopping aboard. ... For their part, Republicans seem to have few qualms about coal. ...
Ironically, for all the hype, liquefied coal is hardly the cheapest or easiest way to achieve energy security. According to the National Coal Council, ... a tremendous coal-to-liquid push--involving $211 billion in investments over the next 20 years and a 40 percent increase in mining--would allow the United States to replace just 10 percent of its oil supply. By contrast, using that coal to generate electricity for plug-in hybrids would displace twice the oil and emit a fraction of the carbon.
Still, the Coal-to-Liquids Coalition insists that liquid coal is "among the most practical, promising answers to greater energy security." And, so long as official Washington continues to treat this dubious assertion as fact, Democrats who prefer to talk about energy independence first and global warming second will be playing right into Big Coal's hands.
See also Lawmakers Push for Big Subsidies for Coal Process for an example of the push to liquefy coal and more discussion of these issues.