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Coal Liquefaction Offers Cost Savings, and Environmental and Security Benefits
by Barbara Drazga 02-16-2007 |
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Article:
Wondering what to do with that lump of coal you got in your Christmas
stocking?
Put it in your gas tank.
Through liquefaction, or coal-to-liquids technology (CTL) - the process of
converting solid coal into liquid fuels - coal can be made into liquid fuel such
as gasoline or diesel and used as a substitute for petroleum products. According
to a new report on CTL technology from Energy Business Reports, coal-based fuels
can be used directly in today's vehicles, with no need for modification.
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What's more, road trials of coal-based fuels have shown that significant air
quality improvements can be achieved through the reduction of tailpipe
emissions. Some studies suggest particulate emissions may be up to 75% less than
with traditional diesel, and oxides of nitrogen may be reduced by up to 60%. The
optimization of new engines for CTL fuel will provide even greater reductions,
particularly of nitrogen oxides. Improved engine designs, such as direct
injection, will offer yet greater efficiencies.
Although coal itself is a low efficiency fuel and a notorious polluter,
advanced gasification technologies can convert over 95 percent of coal fuel into
a combustible gas, commonly called syngas. Syngas consists mainly of carbon
monoxide and hydrogen and can be used like natural gas to efficiently generate
electricity through an integrated gas turbine/steam turbine combined cycle.
Syngas is also a basic feedstock for manufacturing a range of chemicals and
synthetic fuels, such as hydrogen, ammonia, methanol, dimethyl ether, and
Fischer-Tropsch gasoline and diesel, which can substitute for oil.
Coal liquefaction is a well-developed technology, and given the large coal
reserves in the U.S., coal-based fuels could rapidly replace other sources of
transportation fuel to meet future needs. Coal typically contains about 5%
hydrogen, while distillable liquid fuels typically contain 14% hydrogen. The
hydrogen deficit can be made up in two different ways. In the direct route,
hydrogen is forced into the coal under high pressure and temperature often in
the presence of a catalyst. In the indirect route, coal is gasified with oxygen
and steam to produce a synthesis gas containing hydrogen and carbon monoxide
that is then passed over a catalyst to form hydrocarbons.
One of the biggest differences between the two coal liquefaction technologies
is that direct coal liquefaction makes high-octane gasoline and low-cetane
diesel, while indirect coal liquefaction produces high-cetane diesel and
low-octane gasoline. One other difference is that direct coal liquefaction
products are denser and therefore tend to have more BTUs per gallon than
indirect coal liquefaction products.
With approximately 20% of global coal reserves, the U.S. has more than a
250-year supply at current consumption levels and more coal then any other
country in the world.
This share of world coal reserves stands in sharp contrast to America's share
of world oil and natural gas reserves, which are estimated to be less than three
percent. Despite the fact that coal is abundant and affordable in the U.S.,
public policies have discouraged its use because of concern about emissions from
burning coal that contribute to localized air pollution problems as well as
global warming.
Emissions from coal-fired power plants represent the largest known source of
carbon dioxide emissions, a primary cause of global warming. However, the
process of coal liquefaction is a clean and efficient one, and there are no
harmful gases released into the atmosphere. While the coal to liquids process is
more CO2 intensive than conventional oil refining, there are options for
preventing or mitigating emissions. Due to t he broad global distribution of
coal reserves, emissions may be avoided through shorter fuel transport
distances. For coal to liquids plants, carbon capture and storage (CCS) can be a
low cost method of addressing CO2 concerns and may result in greenhouse gas
emissions being some 20% lower over the full lifecycle than fuels derived from
crude oil.
Other positive impacts of using coal-based liquid fuels include long-term
environmental advantages ranging from the reclamation of decades-old coal waste
piles and the mining of secondary coal sources, to possible ways to reduce
hazardous emissions in coal combustion. In addition to mitigating climate change
and air pollution, CTL technology may also positively influence America's
dependence on foreign energy sources, energy security, and high petroleum
prices.
Coal liquefaction increases energy efficiency by diversifying the power
systems of a country and giving rise to more renewable sources for energy, thus
decreasing a country's dependency on large power plants and reliance on a
vulnerable infrastructure in case of natural disasters or terrorist acts.
Opportunities for cost savings through CTL exist through an alternative
approach to sculpture management. In a traditional plant, sulfur is removed from
the syngas to prevent poisoning of the reaction catalyst. If this sulfur is
separated with the CO2 and stored in the same geological formations, overall
costs can be reduced still further by removing the need for a separate sulfur
removal system. This in turn reduces the capital cost of the plant
significantly, providing a low-cost sulfur/carbon management system that can be
cost effective even without a price on carbon.
Following the petroleum price and supply disruptions in 1973, the U.S.
government began to fund the development of alternative fuels such as coal
liquefaction. More recently, tightening oil markets and record high prices have
brought U.S. oil vulnerability back into focus, and hurricane Katrina
demonstrated how qui ckly oil supply disruptions could impact the country. Coal
liquefaction has emerged as the perfect solution as it would reduce the
dependence on energy imports and also cuts down the reliance of countries on
oil, thus reducing vulnerabilities in national security.
The Global Picture
China - China is the world's second largest consumer of oil after the U.S.
Over 50% of its oil is imported, and this has led China to develop domestic
capacity in oil substitutes.
In 2005, Shenhua, one of China's largest energy companies, started construction
of a large CTL plant in China. This project will have an ultimate capacity of
50,000bbl/d and will be located in North China's Inner Mongolia Autonomous
Region. The first stage of this plant is expected to begin production in late
2007 with gasoline, jet fuel, and diesel fuels being the primary products.
Shenhua hopes to boost its production to 30 million tons by 2020, equal to about
16% of China's present crude oil output of 180 million tons.
Several other CTL projects are on the drawing board in China and some of them
have attracted international development financing.
South Africa - South Africa has been producing coal-derived fuels since 1955
and today around 30% of the country's gasoline and diesel is derived from
indigenous coal. The former state-owned company Sasol expanded its
coal-to-liquids capacity in the late 1970s with the construction of the Sasol II
and III facilities, now known as the Sasol Secunda Complex. The total capacity
of South Africa's coal-to-liquids operations is in excess of 160,000bbl/d. Sasol
has produced more than 1.5 billion barrels of synthetic fuel and chemical
products since it commenced its coal-to-liquids operation, and its products are
currently sold in over 90 countries around the world. The Sasol operation
provides a secure and reliable supply of oil to the domestic market, and it also
makes a significant contribution to the South African economy. Sasol directly
contributes $3 billion or 2% to national GDP and saves the country more than $4
billion a year in foreign exchange. It also contributes more than $1 billion
annually in taxes and levies.
Australia - Australia has the fifth largest proven coal reserves on the
planet and is the world's largest coal exporter. However, it still relies on
imports to meet its oil needs, and current market conditions have prompted
interest in the development of a domestic CTL industry. Monash Energy has
established a project to produce 62,000bbl/day of coal-derived diesel and other
liquids, and aims to have a demonstration plant in operation by 2010. The plant
will be located in SE Australia and will use the local, low-grade brown coal; it
will also produce 220MW of electricity to power the process and supply the
national electricity grid. CO2 emissions are to be captured from the process and
transported 200km for geological storage in the oil and gas fields of the Bass
Strait. Ample coal reserves and storage capacity in Australia may prove
attractive to further CTL developments.
Germany - Germany is the fourth largest oil importer in the world and the
ninth largest coal producer. The indirect CTL 'Fischer-Tropsch' process was
invented in Germany during the 1920s, and has now re-emerged as a promising
technology. A pre-feasibility study was undertaken for a 3000bbl/d facility at
the Schwarze Pumpe industrial facility at Spreetal, the first phase of a larger
20,000bbl/d project. The Spreetal Project will also incorporate an expansion of
the existing methanol production and power plant at the site, which currently
use syngas derived from coal, waste oils, biomass, and municipal wastes.
Japan - Development of coal liquefaction technology in Japan was promoted
under the Sunshine Project mainly by the New Energy and Industrial Technology
Development Organization (NEDO). Despite being a decade or so behind Germany and
the U.S., slow but steady development led to the successful completion of a
150t/d-scale pilot plant for the liquefaction of bituminous coal in 1998.
India - India imports over 70% of its oil, yet it has 92 billion tons of
proven coal reserves. At current production and consumption rates, India has
well over 200 years of coal available. Although no CTL projects have been
formally proposed to date, South Africa's Sasol has had discussions with both
government and industry. The Government of India's Investment Commission envisages investments of around $6
billion, and a feasibility study has been ordered by the Minister of Coal.
India's high ash, low-grade coals would be well suited to conversion, and rapid
development could ensue.
The Energy Business report on coal-to-liquids technology looks in detail at
the various technologies and methodologies for liquefying coal, the economics of
CTL development, key players in the global market, the advantages and
disadvantages of liquid coal, and the market outlook for CTL as a fuel source.
The report also details 14 case studies of CTL implementations in the U.S.
(Mississippi, Alaska, Montana, Pennsylvania, Oklahoma, Iowa, Texas, California,
and Ohio) as well as in countries such as Australia, China, and Germany.
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