China to Turn Coal into Oil, Raising Serious Environmental Concerns

China is building a huge plant in Inner Mongolia that will begin converting the country’s vast coal reserves into oil, a process that consumes large amounts of energy and produces significant greenhouse gases.

The plant, operated by the state-run company Shenhua Group, which runs China’s largest coal mine, is being built by 10,000 workers and should be finished by the end of the year. The government’s plan is to use the so-called CTL — coal-to-liquid — technology to turn half of Mongolia’s coal output into fuel or chemicals by 2010. Few coal-to-liquid plants have been built around the world, as the conversion process requires large amounts of energy and water and emits twice as many greenhouse gases as simply burning coal itself. But with oil prices now above $130 per barrel, China is looking for ways to produce more oil internally.