After years of being derided for hurting the environment, could new uses for coal help revive its reputation?
Energy watchers have begun touting the virtues of coal gasification, a process that converts the carbon-based fuel into a synthetic called "syngas." This can be used as an alternative for both crude and natural gas, the latter of which is quickly becoming instrumental to producing power and manufacturing chemicals.
Recently, Nomura cited coal gasification and creating liquid fuels from natural gas – a technique known as gas-to-liquid (GTL) – as a way to sate global crude oil demand. The firm tied the process to the shale revolution sweeping the U.S., saying it could eventually rival natgas and conventional crude, which could in turn help pioneer a coal resurgence.
"Supply/demand and prices in the global oil market would probably see a huge impact if coal gasification and GTL were to replace oil on a large scale in China and the U.S., the world's two largest consumers of energy," Nomura said.
"We think that syngas made from coal and natural gas could replace as much as 30-40 percent of the expected increase in global crude oil demand between 2011 and 2020," the bank added.