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Why does the commercial use of coal gasification depend on petroleum and natural gas prices?

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coal utilization Cross-regenerative coke oven. (A) Cross section, showing the alternating arrangement of flue walls and ovens; (B) longitudinal section, showing (left) a series of combustion flues in a single flue wall and (right) part of a long, slotlike oven.

The commercial viability of coal gasification and related processes, such as coal liquefaction, is heavily dependent on the market prices of petroleum and natural gas because these fossil fuels are direct competitors in the energy and chemical markets.12

Historically, coal gasification and liquefaction technologies have faced challenges because the cost of producing gas or liquid fuels from coal is significantly higher than extracting and refining them from petroleum or natural gas. When the prices of oil and natural gas are low, coal-derived products are generally not cost-competitive, leading to a decline in the use of coal gasification methods.21

Conversely, periods of rising oil and natural gas prices—such as those experienced in the 1970s and 1980s—have historically stimulated interest in coal gasification. During these times, the economic incentive to develop alternative energy sources increases, making the conversion of coal into gas or liquid hydrocarbons a more attractive strategy for countries with extensive coal reserves seeking to reduce their dependence on imported petroleum.12