"Air Force officials have laid out an ambitious plan to develop a privately financed coal-to-diesel plant at Malmstrom air base within the next four years at a cost of $1 billion to $4 billion."
"The plant, which would be among the first of its kind in the nation, would use a technology perfected in Nazi Germany to turn coal into synthetic fuels, including jet fuel for use by the Air Force."
The process in question is one that Germany resorted to when it was unable to access enough oil during WWII -- the Fischer-Tropsch process: http://en.wikipedia.org/wiki/Fischer-Tropsch_process
Of course there are two big problems with this, one being that it's going to ensure that after all the easy to access oil and gas have been burnt that huge quantities of coal will also be burnt and of course the carbon won't be captured, from the same article:
"By 2016, the Air Force wants to use a synthetic jet fuel blend for up to 50 percent of the fuel used by its domestic fleet. That would require roughly 400 million gallons of coal-based fuel annually."
"Chuck Magraw with the Natural Resources Defense Council said capturing the carbon dioxide from that much fuel production could prove impossible."
""I don't think it's achievable," he said."
In addition peak coal isn't that far away, as David Strahan reported in the New Scientist:
"UK and Germany have cut their reserves by more than 90 per cent and Poland by 50 per cent. Declared global reserves of high-quality “hard coal” have fallen by 25 per cent since 1990, from almost 640 billion tonnes to less than 480 billion – again more than could be accounted for by consumption."
"At the same time, however, many countries including China and Vietnam have left their official reserves suspiciously unchanged for decades even though they have mined billions of tonnes of coal over that period."
"Taken together, dramatic falls in some countries’ reserves coupled with the stubborn refusal of others to revise their figures down in the face of massive production suggest that figures for global coal reserves figures are not to be relied on. Is it possible that the sturdy pit prop of unlimited coal is actually a flimsy stick?"
"That is certainly the conclusion of Energy Watch, a group of scientists led by the German renewable energy consultancy Ludwig Bölkow Systemtechnik (LBST). In a report published in 2007, the group argues that official coal reserves are likely to be biased on the high side. “As scientists we were surprised to find that so-called proven reserves were anything but proven,” says lead author Werner Zittel. “It is a clear sign that something is seriously wrong.”"
"Since it is widely accepted that major new discoveries of coal are unlikely, Energy Watch forecast that global coal output will peak as early as 2025 and then fall into terminal decline."
Of course this has dire climate change consequences, see for example Pushker A Kharecha and James E Hansen's "Implications of “peak oil” for atmospheric CO2 and climate" paper:
"The amounts of fossil fuel ‘proven’ and potential reserves are uncertain and debated. Regardless
of the true values, society has flexibility in the degree to which it chooses to exploit these
reserves, especially unconventional fossil fuels and those located in extreme or pristine
environments. If conventional oil production peaks within the next few decades, it may have a
large effect on future atmospheric CO2 and climate change, depending upon subsequent energy
choices. Assuming that proven oil and gas reserves do not greatly exceed estimates of the
Energy Information Administration, and recent trends are toward lower estimates, we show that
it is feasible to keep atmospheric CO2 from exceeding about 450 ppm by 2100, provided that
emissions from coal and unconventional fossil fuels are constrained. Coal-fired power plants
without sequestration must be phased out before mid-century to achieve this CO2 limit. It is also
important to ‘stretch’ conventional oil reserves via energy conservation and efficiency, thus
averting strong pressures to extract liquid fuels from coal or unconventional fossil fuels while
clean technologies are being developed for the era ‘beyond fossil fuels’. We argue that a rising
price on carbon emissions is needed to discourage conversion of the vast fossil resources into
usable reserves, and to keep CO2 beneath the 450 ppm ceiling."