Oil China and the US

I saw on 60 minutes where the governor of Montana ( A real maverick )
wants to turn Montana coal into deisel fuel using the Fischer-Tropsch
process (developed by the Germany during WWII). Evidently Montana is
the Saudi Arabia of coal. According to the Governer, it costs about $1
to produce a gallon of fuel. I've heard the real price for a gallon of
gasoline ranges from $5 to $15 per gal if you factor in Oil company
subsidies for R&D and the military cost to defend the oil supply.
Also, the coal diesel burns more efficiently than petroleum deisel and
will improve engine performance.

A couple of observations I thought were interesting:

1) The Chinese (with the help of Shell Oil) were already building
Fischer-Tropsch process refineries.

2) The Governor is having trouble finding investors. To get started,
he needs $1.5 billion. He said everyone wants to be the first one to
open the second refinery.

I also heard of a refinery in Missouri that uses rendered animal
byproducts from the slaughterhouse to make deisel as well. And if you
look at the success of Brazil with ethanol fueled cars, I wonder what
impact alternative fuels will have on oil imports. From a business
perspective, I think OPEC and the oil companies are short sighted and
are going to screw themselves with these high prices. The higher the
price, the more the door opens for alternatives.

Anthony

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