WV Coal Member Meeting 2024 1240x200 1 1

Coal Liquefaction is Profitable

Energy Citations Database (ECD) - - Document #1001343

The document we submit herein, as accessible via the above link, and, which we've downloaded and saved should the link mysteriously somehow later fail to function properly, makes report of the results of one segment of what seems to be a larger, and ongoing, current research project being funded by our USDOE.

We are attempting to track down other reports related to the project and will bring them to you as circumstances allow.

This one is, though, we think, key.

It concludes, based on economic conditions current at the time the report was made and actual results demonstrated by the Chinese Coal liquefaction industry, that:

The production of liquid hydrocarbon fuels by the direct liquefaction of Coal is profitable - quite profitable, in fact, in light of more recent actual developments.

There is no real nor valid economic reason for not converting Coal into substitutes for the liquid products now derived from natural petroleum.

There are, in fact, clear and demonstrated economic reasons for doing so.

It echoes, in more objective and academic terms, facts we earlier reported via:

China Makes "Huge Profits" from Coal Liquefaction | Research & Development; wherein it's succinctly, and enthusiastically, stated, that: "'China Coal Producer Reaps Huge Profits From CTL Project'; Shenhua Group, China's largest coal producer, has made huge profits from its pilot coal-to-liquid (CTL) project in north China in the first three months of this year, a company executive said".

We note that the above article and our subject herein deal only with "Direct Coal Liquefaction" technology, as might be most recently explained and exemplified in our report of:

China Awarded 2010 US Liquefaction Patent | Research & Development; concerning the recent: "United States Patent 7,763,167 - Process for Direct Coal Liquefaction; 2010; Shenua Coal Liquefaction Corporation, Beijing; Abstract: Process for direct coal liquefaction of coal, including: ... fractionating hydrogenation products into oil products and a hydrogen donor recycling solvent. The process can operate long periods, with higher reactor efficiency and utilization factor, increased liquid oil yield and can supply high-quality feedstock for further processing. A direct coal liquefaction process".

It should long ago have been obvious to anyone who troubled themselves to look at and report honestly on the facts, that, since, as seen for one example in our report:

West Virginia Coal Association | South Africa Improves Coal to Gasoline Conversion Efficiencies | Research & Development;

they have been profitably converting Coal into liquid hydrocarbon substitutes for petroleum-based fuels, on a broad-based industrial basis, in South Africa for better than half a century, it should be perfectly feasible for anyone, anywhere, who had large Coal reserves to do so.

However, South Africa Synthetic Oil Limited, SASOL, in the above-cited report, have historically utilized an indirect Coal conversion process, based in general terms on the original Fischer-Tropsch synthesis, wherein Coal is first converted into a synthesis gas blend of Carbon Monoxide and Hydrogen, which "syngas" is then catalytically condensed into liquid hydrocarbons.

See, for general information:

Fischer–Tropsch process - Wikipedia, the free encyclopedia; "The Fischer–Tropsch process ... converts a mixture of carbon monoxide and hydrogen into liquid hydrocarbons".

On the other hand, direct Coal liquefaction was developed almost contemporaneously with Fischer-Tropsch indirect Coal conversion technology:

Bergius process - Wikipedia, the free encyclopedia; "The Bergius Process is a method of production of liquid hydrocarbons for use as synthetic fuel by hydrogenation of high-volatile bituminous coal at high temperature and pressure".

The Bergius  process can, in fact, be seen as something of a progenitor of WVU's "West Virginia Process" for the direct liquefaction of Coal, as briefly outlined in:

WVU Hydrogenates Coal Tar | Research & Development; "Hydrogenation of Naphthalene and Coal Tar Distillate over Ni/Mo/Al2O3 Catalyst; Abhijit Bhagavatula; Thesis submitted to the College of Engineering and Mineral Resources at West Virginia University; 2009; Abstract: The hydrogenation of naphthalene and coal-tar distillates has been carried out in a Trickle Bed Reactor, in which the liquid is allowed to flow through the catalyst bed in the presence of hydrogen. (The) direct reaction between coal and hydrogen, involves the conversion of coal to refinable crude hydrocarbons, from which liquid fuels such as gasoline, diesel, kerosene, etc., can be produced."

And, the Bergius direct Coal liquefaction process has led to more commercial developments, as well, as indicated in:

Exxon 1982 CoalTL Uses WVU CoalTL Hydrogen Donor Solvent | Research & Development; concerning: "United States Patent 4,345,989 - Catalytic Hydrogen-donor Liquefaction Process; 1982; Assignee: Exxon Research and Engineering Company; Coal ... is converted into lower molecular weight liquid hydrocarbons by contacting the feed material with a hydrogen-donor solvent".

In any case, herein, as seen in excerpts from the initial link in this dispatch, the University of North Dakota confirms, for the United States Department of Energy, as represented by their Pittsburgh, PA, National Energy Technology Laboratory, that the direct conversion of Coal into liquid hydrocarbon fuels, as reduced to commercial practice in China, is, indeed, profitable:

"'Subtask 3.3 - Feasibility of Direct Coal Liquefaction in the Modern Economic Climate'
Final Report for the period June 25, 2008, through June 30, 2009

Prepared for: U.S. Department of Energy; National Energy Technology Laboratory; Pittsburgh, PA

Cooperative Agreement N. DE-FC26-08NT43291

Prepared by: Benjamin G. Oster, et. al.; University of North Dakota

Abstract: Coal liquefaction provides an alternative to petroleum for the production of liquid hydrocarbon-based fuels. There are two main processes to liquefy coal: direct coal liquefaction (DCL) and indirect coal liquefaction (ICL). Because ICL has been demonstrated to a greater extent than DCL, ICL may be viewed as the lower-risk option when it comes to building a coal liquefaction facility. However, a closer look, based on conversion efficiencies and economics, is necessary to determine the optimal technology. This report summarizes historical DCL efforts in the United States, describes the technical challenges facing DCL, overviews Shenhua’s current DCL project in China, provides a DCL conceptual cost estimate based on a literature review, and compares the carbon dioxide emissions from a DCL facility to those from an ICL facility.

Executive Summary: The United States has been conducting direct coal liquefaction (DCL) research for
decades. This research was spurred by the petroleum price disruptions of the early 1970s. Large scale
DCL demonstrations and bench-scale research efforts resulted in an increased knowledge of DCL process operations and led to a better understanding of DCL process chemistry. The largest challenge that currently faces the construction of a DCL facility is capital cost. This literature study found that the major areas where DCL research is still needed are reducing capital costs with improved catalysts, optimizing processes and catalysts for lignite, effectively separating ash from other heavy products, and optimizing refinery processes for coal-derived liquids.

(All of which, as we have documented in many reports, has, from our point of view and in our assessment, been definitively resolved; and, the foregoing just seems more of the academic butt-covering, disclaiming gibberish we've by now gotten so used to seeing.)

Shenhua of China is currently bringing a commercial DCL facility online.

That facility has estimated a break-even cost of $35–$40 per barrel of oil.

Conceptual cost data obtained from the literature showed that DCL products from various technologies ranged from $25.54 per barrel of crude oil equivalent up to $140 per barrel of crude oil equivalent.

For comparison, the average cost of petroleum crude oil in 2008 was $93.05, and the average selling price of West Texas Intermediate (WTI) crude oil in 2009 is projected as $42.

(By the way, as can be learned via:

Crude Oil (petroleum); West Texas Intermediate - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi;

as of May 1 of 2011, the actual price of  West Texas Intermediate, in US$, per barrel, was $106.17.

Sounds better and better, don't it?)

These cost data support the hypothesis that a Direct Coal Liquefaction facility could be competitive with petroleum and profitable."

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And, we will close our excerpts right there, since the University of North Dakota then needlessly, and now suspiciously from our point of view, goes into great, fretful lengths about the hazards and costs of Carbon Dioxide emissions, which Carbon Dioxide emissions, they posit, will arise from the processes used to generate the elemental Hydrogen needed to hydrogenate the Coal liquids, since very, very little CO2 is emitted from the direct Coal hydrogenation processes themselves.

Seriously: We presume them to have been fearful of petrodollar backlash had they been any more positive about Direct Coal Liquefaction, and felt obliged to attempt to bury the economic good news under a pile of Carbon Dioxide Baloney Sandwiches.

First, as documented in our reports of:

Hydrogen from Wind Power | Research & Development;

USDOE Algae Make Hydrogen for Coal and CO2 Hydrogenation | Research & Development;

NASA Hydrogen from Water and Sunlight | Research & Development; and:

West Virginia Coal Association | Germany & Pennsylvania Hydrogen from Hydropower | Research & Development;

we can make plenty of Hydrogen using CO2-free, or even CO2-consuming, resources.

Second, even if the total combined process of Hydrogen generation and Direct Coal Liquefaction using that CO2-free Hydrogen, were, somewhere and somehow along the way, to generate a little insignificant Carbon Dioxide that someone wanted to attempt to use to block progress and herd us all back into a shack on the shores of Walden Pond, then, all we need to do is go ahead and collect that CO2, and, as seen for just one example in:

Utah 2011 CO2 + H2O = Hydrocarbon Syngas | Research & Development; concerning: "United States Patent 8,075,746 - Electrochemical Cell for Production of Synthesis Gas Using Atmospheric Air and Water; 2011; Assignee: Ceramatec, Inc.; A method is provided for synthesizing synthesis gas from carbon dioxide obtained from atmospheric air or other available carbon dioxide source and water using a sodium-conducting electrochemical cell. Synthesis gas is also produced by the coelectrolysis of carbon dioxide and steam in a solid oxide fuel cell or solid oxide electrolytic cell. The synthesis gas produced may then be further processed and eventually converted into a liquid fuel suitable for transportation or other applications";

using maybe a little additional hydro, wind or solar-derived electricity to drive the process, convert that Carbon Dioxide, and some H2O, into, ultimately, "liquid fuel suitable for transportation".

That, all while we are directly converting our abundant Coal, like they are in China, into "$40 per barrel" oil.