Shenhua shows the way to make gas from coal
Anyone in Coal Country who was ever entertained by the old TV series "Kung Fu", or who got into the old Bruce Lee "Dragon" movies, might have been exposed to, and vaguely remember, squeezed in between all the fancy, flashy butt-kicking those video exercises were really all about, the occasional mention of, and earnest genuflection to, the over-arching spiritual credo all those head-knocking, bone-busting oriental warrior monks and priests supposedly ascribed to:
The Tao.
And, in English, that is best translated as, simply, "The Way".
We've documented for you previously that the nation of China has embarked on an ambitious development program to more completely utilize, in a wiser and more strategically advantageous "way", her own vast reserves of Coal.
China is, in essence, replacing petroleum with Coal in the manufacture of liquid fuels - - including Gasoline, Diesel and Alcohol - - and in the manufacture of plastics and polymers, and, even, in the synthesis of substitute natural gas.
Her Coal-based manufacturing industry is, in fact, so broad and so complex that we won't, in the context of a "blog" report intended for posting on the West Virginia Coal Association's web site, be able to encapsulate it herein for you. It will, though, be hinted at and referred to in excerpts from the several links we bring to you herein, documenting how, over the course of several years, China has followed the "Tao" of Coal conversion, blazing a trail perhaps, or showing the rest us oil-poor but Coal-rich souls "The Way".
First up, from early in 2009, we have:
"Shenhua Shows The Way To Make Gas From Coal
(http://www.chinadaily.com.cn/
China Daily; January 22, 2009
In the middle of the Ordos Desert that borders North China's Inner Mongolia autonomous region and Shaanxi province, a huge factory was recently built to perform the kind of tricks that most people believe only magicians are capable of doing - turning black solid coal into clean liquid fuels.
(The articles we're bringing to you herein are accompanied by photos. Opening the links up for a look at them, and for a full read, is recommended.)
The factory, owned by China's biggest coal producer, the Shenhua Group, is surrounded by dozens and dozens of coal mines and sits on top of an enormous coal deposit renowned for its quality. It is also home to many top scientists who are undertaking research and development of direct coal liquefaction technology.
(Actually, "the Shenhua Group" is both China's and the world's "biggest coal producer".)
Although relatively unfamiliar in most people's vocabulary, the technology dates back to World War II when German scientists developed a technology to convert coal into liquid fuels like gasoline and diesel.
(And, "German scientists" actually developed two different ways to go about converting "coal into liquid fuels like gasoline and diesel", Indirect and Direct Coal Liquefaction; introductions to which can be seen in our reports, respectively, of:
West Virginia Coal Association | Fischer & Tropsch Awarded 1930 US CoalTL Patent | Research & Development; concerning: "United States Patent 1,746,464 - Process for the Production of Paraffin-Hydrocarbons; 1930; Franz Fischer and Hans Tropsch, Germany"; and:
West Virginia Coal Association | CoalTL Wins Nobel Prize - in 1931 | Research & Development; concerning the original direct Coal liquefaction technology, the Bergius process, which won the Nobel Prize for Chemistry in 1931.)
With oil prices falling since 1985, the interest in coal liquefaction also slowly declined across the globe. China, a net oil importer with rich coal reserves, however decided to pursue the efforts and teamed up with the US, Japan and Germany for feasibility studies in Inner Mongolia autonomous region, Heilongjiang province and Yunnan province, respectively.
(If the passage: "China ... teamed up with the US" for the development of Coal liquefaction technology and industry surprises you, we've documented several times that United States interests were participating in China's Coal conversion revolution. See, for one example that should stand out:
West Virginia Coal Association | WVU and USDOE Sponsor China Coal Liquefaction | Research & Development; concerning: "'Shenhua Coal to Liquids Plant, China'; Construction Started: 2003; Project Type: New Coal to Liquids Plant; Location: China, Inner Mongolia; - Estimated Investment: > $10 bn; - Sponsors: Shenhua Group Corporation Ltd., ... US DOE, University of West Virginia".)Shehhua's proposal of building a direct coal liquefaction plant in Ordos in Inner Mongolia was granted State approval in 2002, and after seven years of efforts, this world's largest direct coal liquefaction facility rose from paper, adopting a cutting-edge technology tested only on some small demonstration programs before.
The first trial operation of this 10-billion-yuan facility was launched on Dec 30, 2008 and the quality end products, namely diesel, naphtha and liquefied natural gas, came out on the second day. The trial was stopped after it ran successfully for more than 300 hours.
"We are happy to see the trials going on for over 24 hours. So far the results have far exceeded our expectations," said Zhang Jiming, manager, Shenhua direct coal-to-liquids (CTL) project in Ordos.
"With the success of the trials, China officially becomes the first country in the world to have the core competence to build and run a direct coal-to-liquids project capable of producing 1 million tons of fuels annually," he said.
"If the second trial operation, to be launched in summer, turns out to be a success, its production will be normalized and we will begin to expand this project to three times its current size," Zhang said.
By then, the entire coal liquefaction facility would be able to contribute 3 million tons of clean fuels annually. China imported 178 million tons of crude last year, and its oil import dependency was around 50 percent. "Coal liquefaction could greatly reduce the country's dependence on foreign oil when it is widely adopted, but mastering the technology is our priority for now," he added.
The end products are composed of 70 percent clean diesel, and the rest are liquefied natural gas and naphtha, which could be used as chemical feedstocks.
(The "napththa", actually, as can be learned via:
Naphtha - Wikipedia, the free encyclopedia; "Naphtha is used primarily as feedstock for producing high octane gasoline";
has one "chemical feedstocks" application that we bet is of most interest to our readers.)
"This technology certainly produces clean fuels with low sulfur, nitrogen and metal content. We minimize the pollutants and could achieve almost zero-emission during the production process," Zhang said, adding that the diesel produced with his CTL process is even cleaner than fuels of Euro V emission standards.
However, the cost of converting coal into liquid fuel is higher than the cost of refining crude. What still makes the technology attractive to pursue is the relative price of coal and oil (and) experts believe that a CTL plant in China needs an oil price of $40 or more to be free from financial risks."
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There's a bit more to this interesting 2009 article, but we'll close it there to remind you, relative to the concluding statement, that, as can be learned via:
Historical Crude Oil Prices and Price Chart - InvestmentMine;
the current price for crude oil is between 95 and 107 dollars per barrel, and blew it's last kiss at the needed 40 bucks back in 2008.
And, the expectations of profitability for Coal liquefaction raised by China in that 2009 article were confirmed to have been met a few years later, as seen in:
China Shenhua coal-to-liquids project profitable -exec | Reuters
"China Shenhua Coal-to-Liquids Project Profitable
http://www.reuters.com/
Tianjin, China; September, 2011
State-owned China Shenhua Group made a profit from its pioneering direct coal-to-liquids (CTL) project in the first half of this year, raising hopes that the world's second largest oil consuming nation may expand forays into alternative fuel production. China has rich coal reserves but limited oil deposits. After backing CTL as a way of improving energy security and easing its growing dependence on overseas crude oil, China went cold on the technology in 2008, cancelling dozens of projects amid concerns about high production costs and the impact it would have on scarce water supplies.The parent of China Shenhua Energy Co , the country's biggest coal producer, produced 470,000 tonnes of oil products from coal in the first half and costs of the fuel were equivalent to crude oil prices of less than $60 a barrel, according to Shenhua Group's General Manager Zhang Yuzhuo. He said Shenhua reaped 800 million yuan ($125.1 million) in earnings before taxes on the direct CTL project in Erdos, Inner Mongolia, in the first six months. Zhang said Shenhua planned to raise fuel production capacity in Erdos to 3 million tonnes a year by adding another direct CTL line in the first phase and to 5 million tonnes a year after a second phase is completed. He did not specify a timeframe or the investments involved. Shenhua also plans to start constructing a 56.5 billion yuan, 3 million tonne per year direct CTL project in northwestern Xinjiang later this year. In March, China granted initial environmental approval to an $8.8 billion indirect CTL project in northern Ningxia region by South African petrochemical firm Sasol and Shenhua Group to make 3.16 million tonnes of diesel and 655,500 tonnes of naphtha a year".
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We've many times reported on the above South African indirect, or Fischer-Tropsch, Coal liquefaction experts, Sasol, of course, as in our report of:
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. The popular fuel is cost-competitive with crude oil-based petroleum products".
And, as in our report of:
West Virginia Coal Association | China Makes "Huge Profits" from Coal Liquefaction | Research & Development; concerning: "'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";
Shenhua's Coal liquefaction project isn't just "Profitable", but, hugely so.
Finally, we'll wrap up our presentation herein with a recent summation of China's Coal conversion industry made by the Shenhua Group itself, in:
(About Us | CORNERSTONE MAG; CORNERSTONE (print ISSN 2327-1043, online ISSN 2327-1051) is published four times a year on behalf of the World Coal Association by Wiley Periodicals Inc., a Wiley Company, 111 River Street, Hoboken, NJ 07030-5774. Copyright 2013 World Coal Association.)
"'Clean Coal Conversion: Road to Clean and Efficient Utilization of Coal Resources in China';
By Zhang Yuzhuo, President, Shenhua Group
In 2012 global coal consumption increased by 2.5%, far less than the average growth rate of 4.4% over the past decade, although it remained the fossil energy source undergoing the most rapid growth in consumption. In addition, in 2012 coal accounted for 29.9% of global primary energy consumption, the highest percentage since 1970. For the foreseeable future, the role of coal as an important global energy source, especially in non-OECD countries, will remain unchanged. The coal conversion industry emerged in the 1950s, and chemicals production from coal at the commercial scale commenced during the 1990s. Since 2000, a continuous rise in the international price of crude oil and an ongoing increase in environmental global awareness have once again drawn significant attention to coal conversion, with a particularly strong emphasis on clean coal conversion. This has facilitated a fervor of coal conversion activity in China. Homegrown technologies have emerged based on research and development (R&D). Examples include packaged technologies such as Shenhua’s direct coal liquefaction technology (and) a coal-to-methanol-to-olefin technology (Dalian Institute of Chemical Physics of the Chinese Academy of Sciences), ... as well as unit technologies such as methanation, coal-to-chemicals catalysts, and large-scale methanol synthesis.
Plants that have been completed include the Shenhua Ordos direct coal liquefaction plant, three indirect coal liquefaction plants, three large coal-to-olefin plants, one coal-to-monoethylene glycol (MEG) plant, and several large coal-to-methanol and methanol-to-methyl ether plants with advanced gasification technologies.
Four new coal-to-gas projects have been constructed.
This progress has led to the formation of a commercial clean coal conversion industry enabled by coal gasification and based on C1 chemical technology to synthesize various low-carbon chemical products and clean petroleum substitutes (i.e., synthetic fuels); the industry is based on the philosophy of low-carbon, clean, and highly efficient energy utilization.
Coal liquefaction falls into two categories: direct and indirect liquefaction, both of which have been developed and commercialized in China.
For direct coal liquefaction, industrial-scale production was realized in Germany during World War II. After the first oil crisis, countries such as the U.S. and Japan successively developed many direct coal liquefaction technologies, with the largest pilot plant having a capacity of 600 t/d (tonnes per day). With an eye on its own industrial development needs, Shenhua Group in China independently developed the Shenhua Direct Coal Liquefaction Process and established the only 1080-ktpa direct coal liquefaction facility in the world. This facility was formally placed into commercial operation in January 2011; as of the end of June 2013 it had produced more than two million tonnes of synthetic fuel products, while achieving operational excellence. To build upon the commercial operation, further research and development are needed, such as reducing water consumption, improving product yield, reducing emissions, effluents, and wastes, and enhancing the development of premium and high-performance coal-based fuels.The core technology of commercial-scale indirect coal liquefaction was first mastered in South Africa. Over the last decade, China has made breakthroughs in commercial indirect coal liquefaction through independent R&D.
Three indirect liquefaction projects have been placed in operation.
Now efforts are being made to speed up the implementation of a large demonstration project, which is focused on solving key technical issues such as the design and manufacturing of large-scale Fischer–Tropsch (F-T) synthesis slurry bed reactors, catalytic oxidation of alcohol byproducts, methane conversion and utilization of synthesis tail gas, production and application of new F-T synthesis catalysts, process optimization and integration of a heat recovery system, and engineering design for major project deployment. Progress is also being made to improve process integration and optimization, further reduce the required unit investment, reduce water and coal consumption per unit product, establish a high-temperature F-T synthesis demonstration plant, and achieve safe and stable long-term operation of large plants.
Currently, there are two commercial coal-to-olefin technologies: the coal-to-methanol-to-olefin (MTO) process and the coal-to-methanol-to-propylene (MTP) process. ... Based on the existing technologies, China has established and put into commercial operation four coal-to-olefin projects ... . Shenhua Group has independently developed a next-generation methanol-to-olefin (SHMTO) technology, and the Dalian Institute of Chemical Physics of the Chinese Academy of Sciences has completed the R&D leading to the second generation of methanol-to-olefin (DMTO-II) technology.
Coal-to-Gas: Methanation, a key coal-to-gas process, is a mature, proprietary technology currently deployed commercially in China. (and) there are plans in China to further develop, through R&D, the key aspects of the methanation technology, such as improvements in fixed bed gasification pressure, efficient wastewater treatment and reuse, and a portfolio of coal gasification technologies, to demonstrate integrated gas, electricity, and chemical polygeneration and comprehensive peaking-shaving regulation technology and to improve energy efficiency and overall financial return.
The development of unconventional energy and renewable energy can change not only the coal-dominated energy mix. It can also bring about multiple possibilities for coal conversion pathways to realize the combined utilization of various energy resources and to establish a new coal-based polyproduction system with more efficient utilization and conversion of energy resources.
Shenhua Group, the world’s largest coal-based energy supplier and the leading coal conversion technology developer, will, via independent innovation and industrial upgrading, remain committed to R&D and the implementation of clean coal conversion."
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There is more to the article "Clean Coal Conversion", and our too-brief excerpts do a disservice to Zhang Yuzhuo and the Shenhua Group. But, our presentation herein is already overlong, and more information is becoming available on China's Coal conversion industry which we'll be covering in future dispatches.
Note, again, in the above, that China is employing both indirect, via initial Coal gasification, and direct Coal liquefaction, to convert Coal into a full range of what we currently think of as "petro" industry products, which include not just Gasoline and Diesel fuel, but, substitute natural gas, alcohol and plastics/polymers.
Our current malignant fascinations with securing OPEC sea lanes and fighting foreign wars to maintain alien supplies of oil, and with other, what will prove to be disappointingly small and ephemeral, fossil carbon resources like shale gas, do us all a grave disservice.
Now, one of us here is, in fact, an old West Virginia coal miner; once a proud member of the UMWA; so, we don't want to get too flaky or anything on you, but, maybe it's time we all indulged in, or began to practice, a little inward reflection, a little navel-gazing.
There is a better Way now open to us, a Way that lies, as almost all ancient philosophies teach, within us, within the US, within the United States of America. Maybe it's time we learned from the sages of the East and looked inward, and began to follow that Way which lies abundantly within our own borders:
The Tao of Coal Conversion.