A couple of articles I’ve found in reading about coal as an alternative to oil:

Mine tragedy a reminder of coal’s role

More than half this country’s electricity is supplied by coal. About 130 new coal-fired power plants are on the drawing boards for the next few years, and that could be just the beginning.

With the price of power sharply higher, the U.S. - long known as the Saudi Arabia of coal - is likely to be relying on it for generations to come.

Ultra-clean fuels from coal liquefaction: China about to launch big projects - Brief Article

Pending final government approvals, Shenhua Group — China’s largest coal producer — just announced it aims to build a 50,000 barrels/day refinery to make ultra-low sulfur diesel and gasoline from direct coal liquefaction.

The $2 billion plant, to be built adjacent to coal mines at Majata, Inner Mongolia, will use coal liquefaction technology developed by U.S.-based Hydrocarbon Technologies Inc., (HTI) a division of coal-synfuels developer, Headwaters.

HTI developed the process in part with U.S. Department of Energy “clean-coal” liquefaction research in recent years, HTI president L.K. Lee told us in an interview. Shenhua spent the last five years evaluating technology options from vendors and conducting feasibility studies, before signing technology licenses with HTI last week.

Assuming that the Chinese government grants final approval, construction of Shenhua’s first reactor train would start in early 2003, followed by plant start-up in 2005. A total of three licensed reactor trains would process about 12,800 tons/day of the local coal.

Petroleum and Coal

At the time this text was written, coal was the most cost-efficient fuel for heating. The cost of coal delivered to the Purdue University physical plant was $1.41 per million kJ of heating energy. The equivalent cost for natural gas would have been $5.22 and #2 fuel oil would have cost $7.34. Although coal is cheaper than natural gas and oil, it is more difficult to handle. As a result, there has been a long history of efforts to turn coal into either a gaseous or a liquid fuel.

[…]

The first step toward making liquid fuels from coal involves the manufacture of synthesis gas (CO and H2) from coal. In 1925, Franz Fischer and Hans Tropsch developed a catalyst that converted CO and H2 at 1 atm and 250 to 300C into liquid hydrocarbons. By 1941, Fischer-Tropsch plants produced 740,000 tons of petroleum products per year in Germany.

Fischer-Tropsch technology is based on a complex series of reactions that use H2 to reduce CO to CH2 groups linked to form long-chain hydrocarbons.

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