Finding Petroleum - Diesel from CTL with carbon capture at a cost of $53 / barrel
We've made a few reports documenting the development of a nascent Coal liquefaction industry in the nation of Australia, as, for one instance, seen in:
West Virginia Coal Association | Australia Coal to Jet Fuel | Research & Development; concerning: "United States Patent 4,645,585 - Production of Fuels, Particularly Jet and Diesel Fuels; 1987; Assignee: Broken Hill Proprietary Company, Melbourne (Australia); The present invention is related to novel fuel blends and particularly jet or diesel fuel blends, and to a method of producing a range of components of such blends from heavy aromatic compounds ... such as those derived from coal pyrolysis and coal hydrogenation".
In fact, as we reported in:
West Virginia Coal Association | WVU & Canada Cement from Coal Liquefaction Residues | Research & Development; concerning, in part, the fact, that: "West Virginia University researchers have developed a way to convert coal into synthetic oil in a carbon dioxide-free economical process and, through a licensing agreement, two international firms are planning to demonstrate its viability. Quantex Energy Inc. of Canada and New Hope Corporation Ltd of Australia announced an agreement in September to commercialize the technology acquired under license from WVU";
one Australian Coal mining company might be making ready, with Canadian partners, to implement West Virginia University's "West Virginia Process" for the direct liquefaction of Coal.
And, herein, we see that another Australian Coal miner, with headquarters in the United Kingdom, is planning, with help from China, to implement their own process for making Diesel fuel from Coal - - at a very competitive cost.
As seen in excerpts, with additional links and excerpts inserted and appended, from the initial link in this dispatch to:
"Diesel from CTL with Carbon Capture at a Cost of $53 per Barrel
Tuesday, August 16, 2011
UK company Altona Energy believes it can supply vehicle ready diesel at $53 a barrel (33¢ a litre), with a coal to liquids plant, incorporating carbon capture for underground carbon storage, with financial support from China. It has a site for a coal mine 800km North of Adelaide where the conversion of coal to liquids plant will also be located.
Altona Energy of the UK has plans to develop a coal mine, coal to liquids plant, carbon storage and electricity generating plant on a site 800km North of Adelaide, Australia.
With financial support from China National Offshore Oil Corporation (CNOOC), it believes it can provide road ready diesel at $0.33 a litre.
(We have many times documented China's burgeoning Coal conversion industry; as, for example, in:
West Virginia Coal Association | WVU and China Coal to $24 per Barrel Oil | Research & Development; concerning the presentation: "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"; and:
West Virginia Coal Association | China Makes "Huge Profits" from Coal Liquefaction | Research & Development; "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 Saturday".)
The coal to liquids process is often considered a dirty way to create vehicle fuels, because carbon dioxide is emitted into the atmosphere both in the coal processing plant and from the vehicle.
But if the carbon dioxide from the coal processing plant is sequestered (buried underground), then the overall carbon emissions are just the same as for traditional motor fuels, but with the added benefit of much lower emissions of other pollutants (SOX, NOX, particulates), because they are removed in the processing plant, rather than coming out of the vehicle's exhaust.
(As we've noted many times, burying Carbon Dioxide is a ridiculous waste of a valuable raw material resource. And, as seen, for just one example, in our report of:
West Virginia Coal Association | Israel and Australia Convert CO2 into Fuel | Research & Development; concerning: "Greenearth Energy Limited is a diversified Australian renewable energy company that has interests in ... energy efficiency and CO2 to fuel conversion markets. NewCO2Fuels Pty Ltd is a subsidiary of Greenearth Energy that aims to utilise its technology to deliver low cost clean fuel. It does this through a highly efficient process of converting solar radiation to chemical potential in the form of fuel. Our primary source of CO2 will be existing and new coal-fired power stations. We aim to substantially reduce CO2 emissions while at the same time producing commercially viable fuels in the form of Syngas and Transportation fuels";
they know that to be true in Australia, as well. Further, as seen in:
West Virginia Coal Association | US EPA Recommends Coal Liquefaction as a Clean Alternative | Research & Development; concerning; "Clean Alternative Fuels: Fischer-Tropsch; United States Environmental Protection Agency; Transportation and Air Quality Transportation and Regional Programs Division; EPA420-F-00-036; March 2002; A Success Story (!) For the past 50 years, Fischer-Tropsch fuels have powered all of South Africa’s vehicles, from buses to trucks to taxicabs. The fuel is primarily supplied by Sasol, a world leader in Fischer-Tropsch technologies. Sasol’s South African facility produces more than 150,000 barrels of high quality fuel from domestic low-grade coal daily. Fischer-Tropsch technology converts coal ... into a high-value, clean-burning fuel. The resultant fuel is colorless, odorless, and low in toxicity. In addition, it is virtually interchangeable with conventional diesel fuels and can be blended with diesel at any ratio with little to no modification. Fischer-Tropsch fuels offer important emissions benefits compared with diesel, reducing nitrogen oxide, carbon monoxide, and particulate matter";
even the United States Environmental Protection Agency agrees that Coal-derived liquid hydrocarbon fuels are cleaner than their conventional, petroleum-derived counterparts.)
So far, Altona has conducted an initial, or 'pre-feasibility' study, by engineering giant Jacobs Engineering. Now, at CNOOC's expense, it has embarked on a far more comprehensive study, known as a 'bankable feasibility study', or in other words a study so thorough a bank can lend money on the results.
(The above "Jacobs Engineering", though you might not have ever heard of them, although we have made note of them once or twice over the long course of our reportage, is a very major engineering design firm headquartered in California, but with an extensive international presence. They do have some special expertise in the design of chemical process plants, especially those plants processing hydrocarbons, including those operating Coal gasification technologies, as evidenced, for just one example, by:
Jacobs Engineering - Investor Relations - Press Release; "Jacobs Receives Two Sulfur Recovery Project Contracts in China (including one at a) 830,000 ton per year coal dimethyl-ether facility in ... Ningxia Province (and, one at a) coal-to-synthetic-ammonia plant in Tengzhou City, Shandong Province".)
Coal to liquids: In the coal gasification process, coal is reacted with oxygen and steam. The carbon in the coal is oxidised, ending up with a mixture of carbon dioxide, carbon monoxide, water vapour and hydrogen.
The hydrogen and carbon monoxide are sent to the Fischer Tropsch plant, where they are processed to form a liquid hydrocarbon which is then refined to produce diesel naptha.
If carbon storage is incorporated, running vehicles from synthetic fuels is arguably more environmentally friendly than conventional transport fuels. The carbon emissions from the vehicle itself are the same, but all of the impurities (for example sulphur) can be removed in the processing plant, not through the vehicle's exhaust. There are lower particulates in the emissions (small particles of unburnt carbon / soot), and less NOX emissions and also zero aromatics such as benzene.
Synthetic fuels are also 10 per cent lighter (in mass per kilojoule) than conventional fuels for the same energy content. This makes a big difference when putting them in aeroplanes - because it means that the plane can go 10 per cent further distance for the same mass of fuel.
The process (for) converting coal to liquid fuels on an industrial scale was first done in Germany, to provide liquid fuels for German equipment in World War 2. It was then further developed by SASOL in South Africa to provide liquid fuels during the apartheid era, when sanctions prevented delivery of oil tankers.
Currently coal-to-liquids is enjoying a resurgence due to high oil prices, the need to create a diversity of supply, and reduce risk of supply concerns. There are coal gasification projects underway in the US, UK, China, South Africa and South Korea.
Jet fuels produced by the coal-to-liquids process have been provided to airlines refuelling at Johannesburg and Cape Town since 1998, in a 50:50 mix (synthetic and kerosene).
In 2008, 100 per cent synthetic fuel was approved for aviation, and has been used since 2009 by Qatar Airways on its London to Doha route, sourced from Shell's Pearl gas to liquids project in Qatar, for the production of synfuels using Sasol technology.
(Concerning the above, see our report of:
West Virginia Coal Association | Sasol's Synthetic Jet Fuel to Gain Worldwide Approval by August | Research & Development; "Sasol's Synthetic Jet Fuel to Gain Worldwide Approval by August (2003); The world will soon be flying on coal .... groundbreaking work done by petrochemical giant Sasol on the production of synthetic jet fuel from coal, is expected to gain worldwide approval from aviation authorities (which) paves the way for Sasol to supply aviation fuel produced fully from coal".)
In 2010, total worldwide synthetic fuels plants in operation exceeded 330,000 barrels per day, with an extra 270,000 barrels of oil per day plants expected to be operational in 2011, with US Air Force expected to complete 100 per cent certification of its whole fleet to use synthetic fuels blend, Altona says.
It is ... possible that coal to liquids could create a more viable financial pathway for carbon capture, or 'clean coal', than just using coal to make electricity.
If coal is used to make electricity, then investors and the public are faced with a simple charge for the carbon capture - do they want to pay around 20% more for electricity or not? Since many people care far more about their bank balances than they do about their carbon emissions, this could be a tough sell. (However the risk of price escalation of LNG, which is used in thermal power stations, as a lower carbon alternative to coal, is eliminated).
But if the coal is used to make a liquid fuel, then the public gets the option of liquid fuels for their vehicles which are cleaner and cheaper than conventional fuels. If the carbon dioxide from the coal processing is sequestered, then there are no objections about use of synfuels produced from coal.
(Again, the above "carbon dioxide from the coal processing is sequestered" is ridiculous. As seen, for only one example, in:
West Virginia Coal Association | Iceland Recycles Even More CO2 | Research & Development; concerning: "Carbon Recycling International (CRI) captures carbon dioxide from industrial emissions and converts carbon dioxide into Renewable Methanol (RM). RM is a clean fuel and can be blended at different levels with gasoline to meet renewable energy directives. The capture of carbon dioxide minimizes emissions from energy intensive industries. It is compatible to the existing energy and fuel infrastructure";
industrial effluent Carbon Dioxide is, right now, being captured and, on a commercial basis, being converted into liquid transportation fuel. And, as further explained by Altona below, their concept of "sequestration" does include the conversion of CO2 into, as above, Methanol.)
Altona's project in the state of South Australia is known as the 'Arckaringa' project, because Arckaringa is the name of the coal basin.
The amount of mine-able coal in the basin has been estimated at 7.8bn tonnes, and this has already been verified as part of a detailed AU$440m study of the project, currently being conducted by CNOOC ... .
(Note that China, via "CNOOC", is intimately involved in Australia's Coal conversion industry.)
The coal basin has been studied by geologists for decades, although previously there has not been any mine on the site due to techno-economics. Altona Energy has acquired rights to build an open cast mine on the site.
A railway line has been built in the past few years which passes through the basin, connecting Adelaide with Darwin, which could be used to transport coal or liquid fuels from the region.
Altona plans to mine 15m tonnes of coal a year. If the total resource is 7.8bn tonnes, this means the mine can operate for 520 years.
It will build a coal to liquids plant which will convert this coal to 10m barrels of diesel a year (equivalent to a 27,000 barrels of oil per day well).
It will also build a power station to provide the power necessary to operate the facilities as well as being able to export 560 MW into the grid.
The power supply will come in handy - South Australia currently has 2 power stations with total output of 750mW, and the region actually uses 3.5 gigawatts. There is an estimated electricity deficit of 1 GW for the region being forecast, says Altona's finance director Anthony Samaha. Being able to supply baseload power has helped get the Australian government's support for the project, he says.
Once the plant is built, the syngas production (hydrogen and carbon monoxide mixture) can be varied to the electricity generating plant, or the coal to liquids plant, according to the demands (and pricing) of the day.
(The concept of co-generating both electricity and liquid fuels in a single Coal processing facility is one we have touched on a few times previously, as in:
West Virginia Coal Association | Germany Coal to Electricity, Methanol and Vinyl Acetate | Research & Development; concerning: "United States Patent 4,663,931 - Power Generating Station with and Integrated Coal Gasification Plant; 1987; Assignee: Kraftwerk Union, AG, Mulheim (Germany); Abstract: Power generating plant with an integrated coal gasification plant, with a heat exchanger and gas purification plant connected to the coal gasifier, with a gas turbine and steam power generating plant part connected to the heat exchanger and gas purification plant, and with a methanol synthesis plant".
The USDOE has some advanced concepts related to such co-generation, which we have previously noted only in passing; but, which we will treat more fully in future reports.)
Altona also plans to build a plant which will react carbon dioxide with hydrogen to form fuel grade methanol, which can be added to the local gasoline pool.
(As we noted in earlier comments, any co-product Carbon Dioxide will also be consumed and utilized in the production of liquid fuel. In other words, "the carbon dioxide from the coal processing is sequestered" in the form of Methanol.)
The gasification technology can be used to gasify biomass (for example, wood) as well as coal. This means that you could build a system which can actually take carbon dioxide out of the atmosphere and make electricity or liquid fuels at the same time. You grow trees to absorb the carbon dioxide, gasifying the biomass, and separating the resulting hydrogen and carbon dioxide, sequestering the carbon dioxide and using the hydrogen to make electricity or liquid fuels.
(The above is overly-simplistic, but, again as we have earlier documented, as in:
West Virginia Coal Association | Texaco Coal Conversion Recycles Carbon & Disposes of Waste | Research & Development; and:
West Virginia Coal Association | Standard Oil Co-Gasifies Coal & Carbon-Recycling Biomass | Research & Development; concerning: "United States Patent 2,633,416 - Gasification of Carbonaceous Solids; 1953; Assignee: Standard Oil Development Company; Abstract: The present invention relates to the production of gases from non-gaseous carbonaceous materials and, more particularly, to the production of gas mixtures containing carbon monoxide and hydrogen ... from such solid carbonaceous materials as ... various coals (and) cellulosic materials";
it has long been known that CO2-recycling biomass of all sorts can be gasified along with Coal in the production of hydrocarbon synthesis gas, a practice which results both in indirect CO2 recycling and a certain measure of sustainability.)
It can also gasify black liquor, a by-product from the paper and pulp industry - as well as sewage and municipal waste.
(See, for only one example:
West Virginia Coal Association | Texaco Makes Methane from Coal & "Stuff" | Research & Development; concerning: "United States Patent 3,888,043 - Production of Methane; 1975; Assignee: Texaco Incorporated; Abstract: Continuous process for the production of a gaseous stream comprising at least 90 mole % of methane (dry basis) from a sulfur containing hydrocarbonaceous fuel without polluting the environment ... . The product gas ... may be used as a substitute for natural gas or as a feedstock for organic chemical synthesis (and) wherein said hydrocarbonaceous fuel is ... coal, ... concentrated sewer sludge in a vaporizable carrier such as water, ... and mixtures thereof".)
The gasification processing technology can make a range of plastics as well as liquid fuels, by the conversion of syngas into methanol, which can then be converted into olefins and finally polypropylene.
So far a 2008 'pre-feasibility' study of the project has been made by US engineering giant Jacobs Engineering, which developed the design of the coal to liquids plant, which is estimated to have a refinery gate cost of $0.33¢ per litre (or $53/barrel) for diesel.
The $53 per barrel includes the cost of capital expenditure. Operating costs only are $38 per barrel.
-----------------------
We'll leave our overlong excerpts at that, but, if you are interested in more information, have a look at Altona's brochure on their Coal conversion plans and capabilities, via:
http://www.altonaenergy.com/pdfs/Altona%20Newsletter%20280812.pdf: "Altona Energy, plc: The Future of Australia's Clean Energy; “The Arckaringa coal asset in South Australia alone could sustain fuel production of some 330,000 Barrels per Day (BPD) for 70 years ... . Gasified coal can be converted into diesel, naptha, jetfuel, methanol, gasoline, fertilisers, petrochemicals and electricity. The by-products are CO2, water and sulphur dioxide (SO2), which can be processed into commercial products. The only effluent is an inert vitrified ash, which is used in construction and for road fill.”
Make no mistake: On a profitable basis, "coal can be converted into diesel, naptha, jetfuel, methanol, gasoline, fertilisers, petrochemicals and electricity", with nothing being emitted from such an integrated Coal conversion facility excepting relatively inert minerals, which, as we've documented many times, can be used in the making of cement and concrete, and in other construction applications.
There is quite a lot more to the Altona-Australia-China Coal conversion "story" which we will address to some extent in future reports.
But, they aren't setting out to do anything in Australia that isn't already being done, again as we've many times documented, in China and, by Sasol, in South Africa.
Coal can be converted into liquid hydrocarbon fuels, petrochemicals and electricity, concurrently and in the same facility, with no emissions of anything but solid mineral matter that has commercial value of it's own.
Why aren't we US citizens, especially those of us resident in US Coal Country, being told the truth about these developments? Why isn't news of them being shouted, as it were, from the rooftops?
More importantly, why aren't we, in US Coal Country, being afforded the opportunity to do what they're doing in Australia, and, in a process that can be designed to emit no CO2, begin converting our abundant American Coal into things like "diesel" at "$53 per barrel", "naptha, jetfuel, methanol, gasoline, fertilisers, petrochemicals and electricity"?
