Sweden probably has the strictest enviromental laws concerned with the extraction of Coal, I believe that it is virtually a closed to the atmosphere system and they produce the end product as liquid.
The burning of any Fossil fuel means that contaminents are released into the atmosphere, that will not change unless and until we are all running around in either electric or Hydrogen powered vehicles.
Whether Liquid coal produces more or less or even the same amount of enviromental contaminents is something neither I nor any one else has answered, for myself, I do not have the answer.
Whether Liquid Coal; will be able to free us from dependance on ME oil, short term like 5-10 years, NO, after that, perhaps.
Whether Oil from oil based shale will do the same, same time scale as Liquid Coal.
Drilling North Slope in Alaska, perhaps a shorter time scale.
Deepwater drilling in Gulf of Mexico, 5 - 10 years, but new technology is required as Oil is at depths of 30,000' +, deeper than anyone has ever extracted oil previously.
The World is not running out of Oil, there is more Oil still in the ground and under the seas than mankind has up till now ever used.
With regard to the enviromental damage caused by Fossil fuelled vehicles, this is enormous especially in our and indeed any Metro area anywhere in the entire world.
If you really need or want to see the effects, if any of you travel anywhere by air, during daylight hours, look out the window of the aircraft as it is nearing any airport, what you will see is a brownish haze surrounding the Metro area as you approach it. This is pollution, I have seen it for the last 30 years, almost everywhere from Russia, to UK, USA, Australia, ME, North Africa etc etc.
Air travel in itself is one of the largest methods of polluting the planet, it causes almost as much if not more than land vehicles.
This is not to say that vehicles do not produce pollution, they do.
There are also many other reasons for pollution, some are natural, over which mankind has no control, others where we do have direct control.
So long as mankind has this insatiable need or desire to travel, pollution will be caused, even to the extent if animal transport were used instead of mechanical transport, the only difference beiing that the levels of pollution would be spread out over a longer time period.
At the moment is is PC to suggest that we are running out of oil, that we are causing irreversible damage to the enviroment.
We are and have done far more damage through dumping Plastics, Toxic Metals and Liquids into our oceans than we have ever done with Fossil based fuel contaminants.