Government-backed coal-to-liquids projects date back to the 1940s. They have all failed to create a commercial market for synthetic fuel. The biggest obstacle is cost. The soaring cost of a barrel of crude may take care of that. I've heard estimates that coal-to-liquid synthetic fuel is cost-competitive once oil reaches from $50 to $75 a barrel. The other obstacle is the environmental impact. To minimize the environmental cost of coal-to-liquid, plants must be able to capture the carbon emissions. People involved in the industry say the technology is available to do this. The captured carbon can be either stored or used to enhance oil recovery. But there are doubts carbon can be safely stored, and the capture technology has yet to be proven on a commercial scale.

Supporters of coal-to-liquid say it makes sense to use our abundance of coal to reduce our dependence on foreign oil. Opponents say the U.S. should focus on renewable energy sources and not waste time, money, and energy on these types of coal projects.