HELENA, Montana (Reuters) - Montana's governor wants to solve America's rising energy costs using a technology discovered in Germany 80 years ago that converts coal into gasoline, diesel and aviation fuel.
The Fischer-Tropsch technology, discovered by German researchers in 1923 and later used by the Nazis to convert coal into wartime fuels, was not economical as long as oil cost less than $30 a barrel.
But with U.S. crude oil now hitting more than double that price, Gov. Brian Schweitzer's plan is getting more attention across the country and some analysts are taking him very seriously.
Montana is "sitting on more energy than they have in the Middle East," Schweitzer told Reuters in an interview this week.
"I am leading this country in this desire and demand to convert coal into gasoline, diesel and aviation fuel. We can do it in Montana for $1 per gallon," he said.
"We can do it cheaper than importing oil from the sheiks, dictators, rats and crooks that we're bringing it from right now."
The governor estimated the cost of producing a barrel of oil through the Fischer-Tropsch method at $32, and said that with its 120 billion tons of coal -- a little less than a third of the U.S total -- Montana could supply the entire United States with its aviation, gas and diesel fuel for 40 years without creating environmental damage.
An entry level Fischer-Tropsch plant producing 22,000 barrels a day would cost about $1.5 billion, he said.
The Democratic governor of this Republican state said he had met with Shell president John Hofmeister, General Electric's CEO Jeff Immelt, as well as officials from the Department of Defense, and the Burlington Northern Santa Fe Railroad to discuss his proposals.
Schweitzer added that the recently passed federal energy bill includes an 80 percent loan guarantee for a Fischer- Tropsch plant.
A former cattle rancher who lived for seven years in Saudi Arabia working on irrigation projects, Schweitzer is also seeking energy deals with other states, especially California.
California "says they need 25,000 megawatts of electricity during the next ten years," he said. "We'll give you a delivered price and we'll forward contract that for the next 20 years.
"Transmission companies from England, from Canada, from all over America are coming to my office and saying 'we'll build these transmission lines as soon as you have the contracts to build the generation."'