WV Coal Member Meeting 2024 1240x200 1 1

WVU and China Coal to $24 per Barrel Oil

http://www.nrcce.wvu.edu/conferences/2004/China/presentations/Fletcher_Sun.pdf

We've made several reports over the years concerning the intriguing partnership that has evolved between West Virginia University and China, relative to China's plans for the development of an industry founded on the conversion of Coal into liquid hydrocarbon fuels.

One, for example, from two and a half years ago, can be accessed on the West Virginia Coal Association's web site via:

West Virginia Coal Association | WVU Hosts China at Coal Liquefaction Workshop | Research & Development;

"China, U.S. Collaborate on Coal Conversion at WVU Workshops; Morgantown: China and the U.S. are the two largest energy producers and consumers in the world, and much of that energy comes from coal. Thursday, a workshop explored the industry's future in both countries. It represents a partnership between the two countries, but also with the public and private sectors. They're working toward reducing carbon emissions while keeping the lights on. The partnership has been in the works for several years in government and business. "As we look at what's going on into the future, we are seriously challenged by the way of using coal in a way that is environmentally sound and politically acceptable, socially acceptable," said Jerry Fletcher, the director of the U.S. - China Energy Center. Presentations showed how energy companies in both countries are pushing the boundaries of coal technology, from coal to liquids, gasification, and even using excess carbon dioxide to farm algae for liquid fuels. There is also a lot of work going on in the United States, thanks to support from the government. In a statement by Sen. Robert C. Byrd read at the workshop, he said: "Together, our nations can tackle the problems of global climate change while making use of our abundant and secure domestic energy resources. However, if we do not adequately invest in the research and development needed to address these challenges in the coming decade; the environmental and financial costs will be enormous." "We think it's possible," Fletcher said. "We know the technology is there, but it's going to take a great deal of time and a great deal of investment to bring it to fruition.""

We've also documented that China's Coal liquefaction endeavors, with US help, which help, as we will document in reports to follow, includes US taxpayer-funded assistance from the United States Department of Energy, have resulted in Coal-to-Liquid Fuel operations that actually make a lot of money, as was indicated in general terms in our report of:

China Makes "Huge Profits" from Coal Liquefaction | Research & Development; "Shenhua Group, China's largest coal producer, has made huge profits from its pilot coal-to-liquid (CTL) project in north China".

Herein, we submit to you indication of just how "huge" those Coal liquefaction "profits" might be, as recorded by the above-noted "Jerry Fletcher", WVU's "director of the U.S. - China Energy Center".

As seen in excerpts from the initial link in this dispatch to:

"Coal to Clean Fuel; The Shenhua Investment in Direct Coal Liquefaction

Jerald J. Fletcher, Director and Professor, (and) Qingyun Sun, Research Assistant Professor

Natural Resource Analysis Center; West Virginia University

3rd US-China Clean Energy Workshop; Morgantown, WV USA; October 18-19, 2004

China National Energy Security Concerns:

- Increasingly dependent on oil imports

- Oil price and supply are important determinants of economic growth and stability

Goals:

- Establish a national strategic oil reserve

- Develop coal liquefaction capabilities: DCL: Direct coal liquefaction (and) ICL: Indirect coal liquefaction

China’s National Coal Liquefaction Plan; Research:

- Coal liquefaction unit in the China Coal Research Institute

- Shenhua coal liquefaction pilot plant in Shanghai

- Taiyuan indirect liquefaction pilot plant

China’s National Coal Liquefaction Plan; Industrial development:

- Shenhua DCL plant in Inner Mongolia

- Two ICL plants in planning stage in Shaanxi by Shenhua (and) in Ningxia by Ningmei Group Co.

- Development of additional ICL and DCL plants based on the Shenhua and Ningmei experience

Shenhua Coal Liquefaction Plan:

- Shenhua DCL pilot plant in Shanghai start-up procedures initiated in September 2004

- Direct Coal Liquefaction plant in Inner Mongolia

- Construction of 1st train (production line) initiated in 2002

- Oil equivalent products of 845,300 Mt/y by 2007

- Phases I & II consist of 10 production lines with projected oil equivalent products of 10 MMt/y by 2010

- Indirect Coal Liquefaction: Feasibility study of Shenhua ICL plant initiated in August 2004

First production line of phase I:

Plant cost estimate $800 million USD

Coal input estimate 2.1 million Mt/y

Yield of oil products 845,300 Mt/y

Estimated production cost $24/bbl".

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Please forgive the rather awkward format of our submission; and, keep in mind that it was extracted and compiled from slides in a graphics presentation; which is accessible in it's entirety via the initial link in this dispatch.

And, we note that, perhaps due to the abbreviated nature of information that can be graphically expressed in what is, essentially, a slide "show", there appear to be some "inequities", our term, in the amount of Coal fed to the Shenua conversion facility and the amount of "oil products" thereby generated; that observation based in part on our understanding, from our background studies, of the Coal conversion rates that are achievable.

Some of the inequity could be due to other factors, such as Carbon loss through Carbon Dioxide emission, which ain't, as it happens, necessarily a bad thing; as we will address and explain in some future reports.

The point to be taken away from this dispatch, however, is, that:

A West Virginia University expert herein documents that Coal can be, and is being, converted into Oil, or, actually, as the full presentation informs, a range of various hydrocarbon liquids, at an aggregate cost of $24 per Barrel.

And, we note that might be an "effective" cost for the oil produced, since a range of byproducts, or, more accurately, co-products, also seems to be generated.

We address our reports directly not only to the West Virginia Coal Association, but, to some others, as well, including a handful of West Virginia and other Coal Country journalists.

Ain't it danged past time one or two of them put down their coffee, got off their cans, and either got on their phones or in their cars, and made an effort to get the whole story, so that everyone who deserves to be fully informed, that is, everyone who lives in US Coal Country - - indeed, since the US Department of Energy, as we will more fully document in following reports, is itself involved in China's Coal liquefaction developments, every single United States citizen - - can be so fully informed; informed about how, at a time when we have to buy Oil from OPEC at better that $80 a barrel, we could be making that same Oil, instead, out of our domestic Coal, right here at home, at a cost of $24 a barrel?