In the competitive spirit of college basketball's annual championship tournament, The Motley Fool brings you Stock Madness 2007! Our writers are making head-to-head arguments for their chosen stocks (but not necessarily investment recommendations -- this is, after all, a game), and you'll pick the winners with your article recommendations and Motley Fool CAPS ratings. Who will win the right to cut down the net? Let's tip things off and find out!

In the past month, gasoline prices have leapt nearly 15%, a result of high demand, extraordinarily tight refining capacity, international insecurity, and declining production at Mexico's Cantarell oil field. Clearly, our dependence on foreign oil is dangerous. As much as Washington touts ethanol as a way to reduce our dependence, ethanol will provide only the thinnest margin of help, and it's expensive. We need something cheap, plentiful and clean. We need ... coal. COAL?!?

That's right. South African energy company Sasol (NYSE:SSL) offers an answer. After all, it currently produces more than 160,000 barrels per day of jet fuel, diesel fuel, and other distilled fuels -- about a quarter of South Africa's fuel needs in total -- without using so much as a drop of petroleum. The process it uses isn't pie-in-the-sky; it's been in existence since the Depression. And, oh yeah, it's patented.

Thing is, if Sasol were only about a coal-to-liquids technology, I'd be pretty nervous. There's too much in the way of political headwinds. Coal battles nuclear as the most hated, politically incorrect source of power. But Sasol has several other chemical and energy businesses, and it generated $10 billion in revenues in 2006 and turned in profits of more than $2 billion.

Sasol is an integrated oil, gas, and petrochemical company with facilities in 30 countries. It also has commissioned a gas-to-liquid (GTL) fuel plant in Qatar this year in conjunction with Qatar Petroleum, with another coming online in Nigeria, with Chevron, in 2009.

But coal-to-liquid (CTL) technologies such as the one being used in South Africa are what offer investors home-run potential. Sasol has potential projects in China, and the governors of coal-rich Montana and Pennsylvania have proposed developing plants using Sasol's technology. Those who lament expensive gasoline prices often overlook the degree to which tight refinery capacity exacerbates the problem. One of the most promising things about Sasol's synfuels is that they are a refined-petroleum equivalent -- no further refining is necessary. While production for coal-based fuels is somewhat dirtier than refining, over the entire cycle, from mining to end-use, CTL for transport is cleaner than conventional petroleum-derived products.

While Sasol's CTL and GTL technologies have some hurdles to overcome before they're readily available in the United States, I believe that self-interest will prevail. Look for more states with large stores of coal to approach Sasol to deploy its technology for fuel-conversion applications. What's fortunate is that this isn't a company with a gee-whiz technology and no existing revenues -- it is highly profitable; it has diverse, varied revenue streams; and it's able to fund all of its growth from generated cash.

Does this stock deserve to move on to the next round? If you think so, simply follow this link and rank the stock "outperform" in Motley Fool CAPS. If not, vote it "underperform." Later this week, we'll tally your votes to determine which stocks will advance one step closer to the title.

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Sasol is a Motley Fool Global Gains selection.

Bill Mann, lead analyst for Global Gains, does not own shares in any of the companies named in this article. The Motley Fool has a disclosure policy.