Peabody Energy and Rentech, Inc. announced today that they have entered into a joint development agreement to evaluate sites in the Midwest and Montana for coal-to-liquid projects that would transform coal into diesel and jet fuel. Projects would be located where Peabody has large reserves and would be designed using Rentech’s proprietary Fischer-Tropsch coal-to-liquids process.
“We’re seeing an overwhelming need for coal-to-liquid developments in the U.S. to offset reliance on expensive imported oil, and projects like these represent a major part of our energy solutions,” said Peabody President and Chief Executive Officer Gregory H. Boyce.
The U.S. Energy Information Administration projects that global energy consumption will increase by more than 70% by 2030, and the U.S. will import 62% of its oil. At the same time, the U.S. Department of Defense has recently issued a request for proposals for significant quantities of Fischer-Tropsch fuels.
The plants could range in size from producing 10,000 to 30,000 barrels of fuel per day (bpd). A 10,000bpd plant would use 2 to 3 million tons of coal annually, based on the quality of coal. With more than 9.8 billion tons of reserves, Peabody has dozens of sites in the U.S, that it is evaluating.
