The Iran crisis is teaching the world that energy security means turning domestic resources into fuel, chemicals and resilience. America should compete, not leave the field to China.
The Iran war has made the Strait of Hormuz a daily worry for Wall Street, Washington and Main Street alike as the ongoing conflict threatens traffic through the world’s most important oil and liquefied natural gas chokepoint. The U.S. Energy Information Administration calls Hormuz the world’s most important oil transit chokepoint, and separately reports that roughly one-fifth of global LNG trade moved through the strait in 2024.
And while that story is well covered, the downstream effects are less publicized. When oil and gas supplies become hostage to Tehran’s threats, countries that import petroleum products start looking to make more essentials at home. Coal gasification, a technology already quietly gaining ground before the conflict, is one answer. The Department of Energy describes gasification as a process for converting domestic coal, biomass and waste into synthesis gas, or syngas, that can be used to produce chemicals, hydrogen, transportation fuels and other products. Across Asia, coal has evolved from simply a power-plant fuel into a building block of national resilience.
China recognized this years ago. Despite a slowdown in the construction of coal-fired power plants, Chinese coal companies are expanding coal-to-chemicals production as Middle East instability constrains oil supply. Reuters reported in March that China’s coal-to-chemicals sector benefits from its ability to turn domestic coal into petroleum products and chemicals without relying on shipments through the Strait of Hormuz. Bloomberg reported in April that Chinese coal companies are turning to chemicals manufacturing for growth as war in the Persian Gulf constrains supplies of liquid fossil fuels used by the industry. China’s advantage isn’t only its coal reserves, but an industrial strategy that packages technology, financing and construction through state-owned enterprises and exports the whole system to countries that want less exposure to imported oil and gas.
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Meanwhile, New Delhi has made coal gasification a government priority. India’s Press Information Bureau says the government has prepared a national mission document to achieve 100 million tons of coal gasification by 2030. Major Indian firms are now studying or building projects to produce ammonia, methanol and synthetic gas. This is not nostalgia for smokestacks, but a pragmatic calculation that a country with coal reserves, population growth and industrial ambition should not be wholly dependent on imported hydrocarbons.
Gasification also enables key Indonesian policy priorities. The world’s fourth most populous nation consumes far more liquefied petroleum gas than it produces, leaving household cooking fuel exposed to global price shocks. Jakarta is pursuing coal-to-DME as part of its forward-looking downstreaming policy, with projects designed to replace LPG imports and add value to domestic coal. The Jakarta Globe reported this year that Indonesia is pushing coal-based DME to replace LPG for cooking fuel and that coal downstreaming projects were moving toward groundbreaking. ANTARA, Indonesia’s state news agency, has also reported that Indonesia is developing a coal-based DME plant in East Kalimantan to reduce reliance on imported LPG.
Americans who hear “coal” and reflexively grimace overlook the real issue. When given a choice between using an abundant domestic natural resource to enable food security, energy security and domestic growth, or satisfying Western feedstock preferences, rapidly developing countries will choose security and growth.
And if Washington refuses to compete, Beijing will.
China’s offer of a turnkey coal-to-chemicals industrial strategy is not abstract. Some of the companies most active in this space are the same state-backed engineering and chemical firms now courting foreign governments. China National Chemical Engineering Group, one of the world’s largest contractors for chemical and coal-conversion infrastructure, appears on the Pentagon’s 2025 list of “Chinese military companies” operating in the United States. That should draw Washington’s attention, because while policymakers target feedstocks in the name of the orthodoxy du jour, these companies work to build, finance and operate the industrial systems on which rapidly growing economies will depend for decades.
Meanwhile, U.S. self-imposed restrictions have treated overseas coal-to-chemicals projects as radioactive. The result has not been fewer projects, only fewer American ones. With that has come diminished American influence and increased Chinese control. For decades, Washington invested both financial and political capital in domestic gasification capabilities. Beginning with the synthetic fuels programs that followed the 1970s oil shocks and continuing through the Clean Coal Technology Program and its successors, the federal government, in collaboration with private partners, invested significantly in a generation of demonstration projects to advance American coal and gasification technologies. DOE materials describe the Clean Coal Technology Program as a government-and-industry cofunded technology-development effort and describe current gasification programs as focused on converting coal, biomass, municipal solid waste and waste plastics into syngas for chemicals, hydrogen, fuels and power.
Many of these technologies were politically orphaned, kept under lock and key even as Beijing embraced coal-to-chemicals as a strategic prize, sometimes going so far as to purchase the rights to and deploy Western technologies.
Now it’s time to act. Rapidly developing economies are looking to coal-to-chemicals projects because they need fertilizer, cooking fuel, industrial feedstocks and insulation from oil and gas shocks. Their choice is not between those projects and no projects, but between American technology deployed under American standards and Chinese projects financed by Chinese capital, built with Chinese equipment and operated inside Beijing’s political orbit. America helped invent a better answer; it should put it to work.
The Iran crisis will pass, or at least change form, but the lesson will remain. Asia will pragmatically transform domestic resources into the fuels and chemicals modern life requires. What remains to be determined is whether the standards, equipment and relationships enabling projects will be American or Chinese. If the U.S. wants influence in the industrial future, it must show up for those industries today.
Jacob Thomas is president and CEO of Latitude Energy Holdings Inc. He works on American energy and industrial technologies, including coal gasification applications for fuels, chemicals and energy security. Latitude Energy is pursuing U.S. deployment and licensing pathways for advanced gasification technology.
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