"Transport Fuel: Oil vs Coal" An Economic Look

COAL BECOMES MORE ATTRACTIVE, GIVEN HIDDEN COSTS OF IMPORTED OIL

FOR IMMEDIATE RELEASE: CONTACT: Leo Turcotte, Ph.D., The Center Forensic Studies 800-966-6099. John W. Rich, Jr., WMPI Pty., LLC 570-874-1602 www.ultracleanfuels.com

January 31, 2008

PHILADELPHIA, January 31, 2008 -- Coal, which the United State has in abundance, can lead the United States out of its dependence on foreign oil and act as a stimulant to the economy. It is especially attractive given the hidden costs of foreign oil.

An analysis commissioned by WMPI Pty., LLC , Gilberton, PA, and performed by the Center for Forensic Economic Studies, a Philadelphia based consulting firm, shows that when the true cost of imported oil is considered, domestically produced waste coal-to-liquid fuel (CTL) offers a compelling alternative to imported crude.

The US sits atop 270.7 billion tons of coal reserves. In terms of potential usable energy this is equivalent to at least twice the reserves of Saudi Arabia. Currently, analysts say, CTL would sell at about $18/barrel less than crude oil based liquids.

Oil reached $100 a barrel recently, but this market price does not include the societal costs of imported oil. These costs, not reflected in the price consumers pay at the pump, are borne by the economy at large in the form of higher taxes, higher unemployment and a weaker economy.

What economists call the "import premium" on imported oil includes inefficiencies due to the noncompetitive nature of the oil market. Prices set by the OPEC cartel lead to disruptive "price shocks," which unsettle the economy and interfere with national productivity. The US also pays a military cost to insure steady access to foreign oil. The Center for Forensic Economic Studies analysis places this "import premium" at $24 per barrel of imported oil, over and above market price.

In addition to the import premium, the analysis also considered the "import multiplier" -- the loss to the US economy when dollars are spent overseas. Just as every dollar spent in the US causes a beneficial ripple effect in the economy, every dollar lost to the economy by being spent overseas causes a negative ripple effect. In its analysis, the Center for Forensic Economic Studies put this negative multiplier at 1.55, or 155% of the cost of a barrel of oil. For each $80 barrel of foreign crude oil purchased, this negative import multiplier removes $124 from the U.S. economy. With the import premium and the cost to refine the imported foreign crude oil, the actual cost-per barrel of $80-per-barrel imported crude oil is $238, or $5.67 per finished gallon.

Actual cost of foreign oil:

Market Price (per barrel) of Imported Crude Oil	Import Premium (per barrel)	Import Multiplier (per barrel)	Refining & Markup (per barrel)	Total Barrel Price of Imported Oil	Actual Price per Gallon of Imported Oil
80.00	24.00	124.00	10.00	238.00	5.67
90.00	24.00	139.50	10.00	263.50	6.27
100.00	24.00	155.00	10.00	289.00	6.88

For every dollar spent on foreign crude oil an additional $1.55 is removed from the U.S. economy. However, spending a dollar on domestic CTL stimulates the U.S. economy to the tune of six dollars by generating jobs in America for Americans. By replacing the 12 million barrels of oil imported daily with domestically produced CTL, the U.S. economy would reap a net benefit of $4.8 billion per day.