some unpleasant facts about coal to liquids, page-6

Coal to liquids is very inefficient. You would save coal, energy, water and CO2 by burning the coal properly in a proper power station and then running things of electricity.

As for the water, I usually ignore claims about water consumption because they are nearly always bogus. Does the process actually consume water ? Usually not. Does the water actually get lost or can it be recycled ? Does the water get polluted ? Without further details most water consumption figures need to be regarded with suspicion.

The only place which has done coal to oil on a large scale was South Africa in the 1980's. So it does actually work. But I believe they have given up on it , even at todays oil prices. SOuth Africa is not exactly abundant in water so the water requirement is obviously not too prohibitive.