The Return Of Nazi Oil

Once upon a time, Hitler’s Nazis found themselves in a jam: how to fight a world war with meager oil reserves--especially after the debacle of the Russian Front and the loss of those former Soviet oil fields. The answer was to convert German coal into liquid fuel for the Luftwaffe and those Panzer tanks. (No, this plot line is not courtesy of Mel Brooks. In fact, General George Patton siphoned off some of this fuel from captured German vehicles and used it to race toward Germany in 1944.)

This expensive coal-to-liquid process was later used by South Africa to meet its energy needs during its isolation under apartheid.

Now what some people refer to as “Nazi fuel” is back—-thanks in part to high oil prices and lobbying by groups that stand to profit by its use in the United States. Former Republican congressman Bob Livingston was paid more than $200,000 last year to lobby for federal loan guarantees for the North American branch of the South Africa-based Sasol corporation, which is trying to peddle this process. 

Using this coal-to-liquid fuel is also an integral recommendation of a new report by the Southern States Energy Board, a collection of governors, state lawmakers and big polluters. They are trying to argue that their parochial interests-—including promoting more coal mining-—are synonymous with the national interest on energy issues. 

But the fact is their interests are not the same as the American public’s interests-—which is anxious for sustainable solutions to our dependence on oil.

In its relatively uncritical coverage, the New York Times described the SSEB report as “a crash program to meet fuel needs without imports… a strategy [that] could create more than one million new jobs, reduce the trade deficit by more than $600 billion, and end oil price shocks that hurt the economy.”

Whoa. Sounds good, but policymakers ought to be wary of being seduced by such hyperbole about groups like SSEB. 

It’s not that everything the energy board has recommended is bad. In fact, some of their ideas—-such as using more biomass and pumping carbon dioxide deep into oil fields to squeeze out more oil—-do have merit.

But frankly it would make better public policy if Congress paid less attention to such self-interested private groups like SSEB. The energy board’s “associate members” include a rogue’s gallery of some of the nation’s most odious polluters including American Electric Power, the Southern Company, and the TXU Corporation. Instead, lawmakers should listen to independent groups like NRDC and 20/20 Vision that are looking not just to reduce our dependence on foreign oil, but the bigger problem of our addiction to oil altogether. 

For example, the energy board report left out perhaps the most effective way to cut down on oil use-—better fuel economy standards. Then again, that wouldn’t bring in any cash for American Electric Power and the other heavy hitters. 

These choices do matter, because going down the wrong path opens the door for unintended consequences.

As my friends at NRDC have pointed out, unless the resulting carbon dioxide is stored underground, coal-based synthetic fuels can produce about double the greenhouse gas emissions of normal gasoline because it takes so much energy to convert the coal. (Pennsylvania is struggling to get one coal-to-liquid project off the ground. This one might have some merit-—if they can capture and store the carbon—-because it would eliminate some coal wastes that pollute the state’s waters.)

Or consider another recommendation of the energy board: to try extracting more oil from shale in such states as Wyoming, Colorado and Utah.