boone pickens likes ucg, page-10

Best of luck to the remaining few hopefuls stuck with this mini minor tiddler, hope you have a long term hold in mind. (providing they are still around that is)
Here's a few snippets--

Last week Alan Greenspan, the nation's financial elder statesman,
acknowledged that the Iraq war "is largely about oil." Big Coal is
hoping instability in the Middle East will spook Congress into a $10
billion subsidy for 10 or more coal-to-liquid (CTL) plants, to make
diesel fuel from coal instead of from oil. Coal-to-liquid (CTL) is Big
Coal's best hope for remaining viable, but the chances of success
grow dimmer each passing day.


** The Washington Post reported September 4 that, "In July,
Citigroup coal analysts downgraded the stocks of coal companies across
the board." "Prophesies of a new wave of coal-fired generation have
vaporized, while clean coal technologies... remain a decade away, or
more," Citigroup said.

** Coal can readily be turned into diesel fuel or jet fuel (though not
into gasoline). Reliable coal-to-liquid (CTL) technology was developed
in 1925 by German chemists and it provided half of Nazi German's
military fuel during World War II. Unfortunately, the German process
uses 5 to 7 gallons of water for each gallon of fuel it produces --
and in the U.S. much of the nation's coal lies beneath semi-arid lands
in Montana and Wyoming where water is particularly precious.

Worse yet, the German process (known as Fischer-Tropsch) produces
twice as much carbon dioxide per unit of energy, compared to diesel
made from petroleum. From a global warming perspective, investing in
coal-to-liquid plants could be a serious mistake, and Wall Street
knows it. CTL plants are having trouble finding financing.

CTL plants are expensive. The industry estimates that building an
80,000-barrel-per-day coal-to-liquids refinery would cost $7 to $9
billion, compared with less than $2 billion to build a similar-size
petroleum refinery. Despite endless lip service to "free markets,"
Wall Street investors are not going to gamble such large sums without
a substantial return guaranteed by the government. Long-term contracts
to sell expensive fuel to the Air Force is what the CTL industry has
in mind. Presently the Air Force is prohibited from making contracts
longer than 5 years -- so Congress would have to extend that to at
least 20 years (and then come up with additional subsidies, loan
guarantees, and price supports) to kick-start the CTL industry. In
Congress, it is Democrats who are most keen to subsidize the CTL
industry, the New York Times reports.

It is apparent that, for the first time in years, Big Coal finds
itself on the defensive. At this point, their only hope is a massive
federal bailout to jump-start a new industry -- coal-to-liquids, or
CTL. CTL is a dirty, expensive, -- and above all, unnecessary
-- solution to the nation's need for liquid fuels. This seems like a
political fight we can win -- if we can just keep the Democrats in
Congress from making a pact with the devil.