SANTA BARBARA, Calif. -- China's appetite for coal is growing rapidly and moving quickly into the transportation sector despite central government directives aimed at curbing emissions of heat-trapping greenhouse gases. The rise of China's coal-to-liquids industry is not good news for California or the western United States, whose inhabitants will have to deal with the air pollution drifting across the Pacific from Beijing's coal-fired energy push.

HOUSTON -- High oil prices are making coal-to-liquid technology competitive with conventional gasoline even without big federal subsidies, the developer of a planned Wyoming CTL plant said today.

"We think we have moved into a new era in terms of oil pricing, which is suitable for putting coal-to-liquids facilities in place," said Robert Kelly, a partner in DKRW Advanced Fuels, at an energy conference here.

The company's plant could return profits in the 15 percent range when oil is roughly $60 per barrel, he said. Crude oil was trading this morning at $93.60 per barrel on the New York Mercantile Exchange.

There's plenty of political muscle behind one Pennsylvania company's drive to build a coal-to-liquids plant, but financial backing is another matter. Waste Management & Processors Inc. (WMPI) has cleared a Schuylkill County mountaintop to build a refinery that would be the nation's first commercial coal-to-liquids (CTL) project. But before workers can start putting steel in the ground, the company must obtain several state and local permits and persuade investors to commit to a project whose capital cost has ballooned from about $600 million to $1 billion in the past five years.

A Kentucky Republican has crafted a provision for an upcoming Senate defense bill that would let the military enter 25-year contracts for fuels derived from coal and other non-oil feedstocks.