We'll keep this dispatch as brief as possible. Although there are some additional considerations to establish, the facts should be self-evident.
As we reported in:
Coal-Based Oil Makes 20% Profit at $65 per Barrel | Research & Development | News; which concerned the United States Department of Energy's partial report of study:
"Baseline Technical and Economic Assessment of a Commercial Scale Fischer-Tropsch Liquids Facility; DOE/NETL - 2007/1260; Final Report for Subtask 41817.401.08.001; April 9, 2007".
the National Energy Technology Laboratories of the USDOE studied "the technical and economic feasibility of a commercial 50,000 barrel per day (bbl/day) coal-to-liquids (CTL) facility in the Illinois coal basin".
That plant would also have generated "electric power, both for internal use and for export to the grid".
Even further, and impacting the costs of the synthetic petroleum liquids made from Coal: The plant design included "equipment to separate and compress carbon dioxide to 2200 psia for injection into a pipeline", but, did not consider subsequent use of any co-product CO2; even though, as seen for just one example in our report of:
USDOE 2013 Solar CO2 + H2O = Methanol + Methane | Research & Development | News; concerning: "United States Patent Application 20130256147 - Solar Fuels Generator; 2013; Inventors: Nathan S. Lewis and Joshua Spurgeon, CA; Government Interests: This invention was made with government support under DE-SC000493/T-105066 awarded by the Department of Energy. The government has certain rights in the invention. Claims: A solar fuels generator (and, a) method of generating solar fuels ... such as methane. ... (In some embodiments) CO2 serves as the reactant that is delivered to the (solar fuels generator, and example) of the fuels that can be produced using this reaction in combination with the disclosed solar fuels generator include ... methanol, methane, ethanol";
the USDOE has, at least since then, established the fact that there are, indeed, profitable "subsequent use"s to which any such byproduct Carbon Dioxide can be put, profitable subsequent uses which would likely reduce the effective cost of the liquid fuels produced from Coal in such a facility to the point where the USDOE's projected profits from synthetic petroleum made from Coal would exceed the 10% to 20% they determined to be the case, and which estimated profits even so led the DOE to conclude, that:
Commercial-scale CTL plants using Midwestern bituminous coal represent promising economic opportunities" with "a payback period of 5 years".
In any case, the link to the USDOE's "Subtask" report we included in that dispatch no longer functions, perhaps because they have since published a somewhat fuller report, which, as accessible via the initial link in this dispatch, and, via:
is what we're bringing to you herein. Further, we will be forwarding a file of the report to the West Virginia Coal Association so that they can, if they wish, make it, as well, available.
In any case, there are other considerations to be made about the already profitable Coal-to-Petroleum factory conjectured by the USDOE in this report, considerations which, we will see in at least one future dispatch, have been made by another branch of our government who became involved in the analysis, and which considerations make such Coal liquefaction projects appear even more attractive.
That said, some comment follows and is inserted within relatively brief excerpts to:
"'Baseline Technical and Economic Assessment of a Commercial Scale Fischer-Tropsch Liquids Facility'; DOE/NETL-2007/1260; Final Report for Subtask 41817.401.01.08.001; April 9, 2007
NETL Contact: Michael Reed; Senior Systems Analyst, Office of Systems Analyses and Planning; National Energy Technology Laboratory
Economic and national security concerns related to liquid fuels have revived national interest in alternative liquid fuel sources.
Coal to Fischer-Tropsch fuels production has emerged as a major technology option for many states and the Department of Energy. This report summarizes the preliminary results of an NETL study to assess the feasibility of commercial scale, coal-to-liquids production using a high Btu Midwestern Coal.
(Several things right off the bat must be pointed out. The technology studied was "indirect" Coal conversion, wherein Coal is first gasified, or partially combusted, to produce a blend of Carbon Monoxide and Hydrogen "synthesis gas", or "syngas", and which syngas is then catalytically, chemically condensed into various liquid and gaseous hydrocarbons. The technology is not like the "direct" Coal liquefaction processes disclosed, for one example, by West Virginia University scientists in:
WVU Coal Liquefaction System | Research & Development | News; concerning: "United States Patent 8,597,503 - Coal Liquefaction System; 2013; Inventors: Alfred H. Stiller and Elliot B. Kennel, Morgantown, WV; Assignee: West Virginia University; Abstract: The present disclosure relates to a coal liquefaction system for utilizing a hydrogenated vegetable oil to liquefy coal. ... The present invention relates to coal-to-liquid technology, and specifically to a system and method for liquefying coal using solvents that hydrogenate under mild conditions. Coal-to-liquid technology refers to chemical processes that convert solid coal into liquid fuels and chemicals. The hydrogen to carbon ratio (H/C, molar) of coal is about 0.8 while that of liquid fuels is about 2.0. The main functions of the coal-to-liquid processes are breakage of the coal's molecular size and addition of hydrogen into coal, or in other words, destructive hydrogenation of coal. These processes are generally termed as coal liquefaction. Coal liquefaction may occur by two different pathways: indirect liquefaction and direct liquefaction. The indirect method converts coal to hydrogen and carbon monoxide, and syngas by reacting coal with steam at high temperatures in an oxygen-starved combustion process. Direct liquefaction includes reaction of coal with hydrogen in a manner that coal becomes liquid";
which might enable the more efficient conversion of Coal and a blend of renewable, carbon-recycling wastes into a synthetic crude petroleum, but, which do not as easily allow for the generation of some amount of electricity as a co-product.
Further, indirect "Fischer-Tropsch" Coal conversion processes do require a significant supply of water. And, the USDOE, in it's wisdom, as can be seen in the full report, chose to consider siting this facility along relatively small midwestern streams, where the economic and environmental implications of water use were important considerations to be made. That, as opposed to siting such a Coal liquefaction facility along the Ohio River spine of West Virginia, where both Coal and water are available in abundance.)
Conclusions:
The conceptual design evaluated is technically feasible using equipment that has been demonstrated at commercial scale, although no commercial CTL plants are currently operating in the U.S.
The conceptual design uses high sulfur bituminous coal to produce distillate and naphtha liquid pools via indirect coal liquefaction (F-T process). With the addition of additives, the distillate can be converted to a saleable diesel fuel.
The naphtha liquids can be shipped to a refinery for upgrading into gasoline ... .
This plant produces 22,173 bbls/day of liquid naphtha that is shipped to a refinery for further upgrading to commercial grade products or for use as a chemical feedstock. The plant also produces 27,819 bbls/day of diesel product. The total coal input requirements are 24,533 tons/day of Illinois #6 coal. All production figures are calculated at 100% of design capacity.
The plant produces a net power output of 124 MWe which can be exported to the grid.
Total sulfur production is 612 tons per day and total carbon dioxide capture is 32,481 tons per day.
(Concerning the above statement, as seen in:
Georgia Tech By-Product Sulfur from Coal Syngas | Research & Development | News; concerning: "Electrochemical Polishing of Hydrogen Sulfide from Coal Synthesis Gas; Advanced coal-fired power systems `95 review meeting, Morgantown, WV; June,1995; Published: November, 1995; System Entry Date: November, 2009; OSTI ID: 125377; Report Number: DOE/PC/94207--96/C0547; USDOE Contract: FG22-94PC94207; Authors: E.F. Gleason and J. Winnick; Research Organization: Georgia Tech Research Institute, Atlanta; Abstract: An advanced process has been developed for the separation of H2S from coal gasification product streams through an electrochemical membrane. H2S is removed from the syngas by reduction to the sulfide ion and Hydrogen at the cathode. The sulfide ion migrates to the anode through a molten salt electrolyte suspended in an inert ceramic matrix. Once at the anode it is oxidized to elemental sulfur and swept away for condensation in an inert gas stream. The syngas is enriched with the H2. Conclusions: Selective removal of H2S has been demonstrated for polishing application to a coal
synthesis gas (100 ppm H2S) and for a purification application to coal synthesis gas (10 ppm H2S). The economic study ... shows that the proposed technology is economically favorable as a method
of coal gas sweetening"; and:
USDOE 2009 CO2 to Gasoline | Research & Development | News; concerning: "United States Patent 7,592,291 - Method of Fabricating a Catalytic Structure; 2009; Inventors: Harry Rollins, et. al., Idaho; Assignee: Battelle Energy Alliance, LLC, Idaho Falls, ID (USDOE Idaho National Laboratory); Abstract: A precursor to a catalytic structure comprising zinc oxide and copper oxide. ... A method of hydrogenating a carbon oxide using the catalytic structure is also disclosed, as is a system that includes the catalytic structure. Government Interests: The United States Government has certain rights in this invention pursuant to Contract No. DE-AC07-05ID14517 between the United States Department of Energy and Battelle Energy Alliance, LLC. Carbon dioxide gas (CO2) may be converted into liquid fuels such as, for example, hydrocarbon molecules of between about 5 and about 12 carbon atoms per molecule (e.g., gasoline) through multi-step reactions";
both the sulfur and the CO2 can be recovered as commercially valuable products, with the Carbon Dioxide even adding to the output of "gasoline" from this proposed Coal-to-Gasoline and Diesel factory.)
The total plant cost is $3.65 billion. ... Adding allowances for financing costs results in a total project cost of $4.53 billion.
Commercial-scale CTL plants using Midwestern bituminous coal represent promising economic opportunities.
Based on the specific plant configuration evaluated, the financial analysis projects a nearly 20% return on investment, a net present value of more than $1.5 billion, and a payback period of 5 years.
Plant capacity factor and EPC costs have a strong impact on the financial analysis but even with major changes to these inputs, positive financial returns are still possible. For example, a capacity factor reduction of 25% would lower ROI from 20% to 15%, and a 25% increase in EPC would reduce the ROI to 17%.
Project viability depends heavily on crude oil price scenarios. The base case, tied to a crude oil price of $61/bbl, provides a 19.8% ROI. At crude oil prices greater than $37/bbl, the project would achieve ROIs greater than 10%, and a 15% ROI can be achieved at crude oil prices greater than $47/bbl.
(As can be learned from our United States Government's Energy Information Administration via:
http://www.eia.gov/forecasts/steo/report/prices.cfm; "crude oil prices" are expected, in 2016, to run between $71 and $76 per barrel. What would that do to the expected "19.8% ROI" projected for a "crude oil price of" just "$61/bbl"?)
Policy actions impact expected ROIs. Federal loan guarantees have the largest ROI impact, increasing the ROI by more than 11 percentage points from the base case".
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The above represent the key conclusions. As far as generating electricity as one co-product of an indirect Coal-to-Petroleum process, see, for one explanation of how that can be done, our report of:
South Africa Co-produces Power and Hydrocarbons from Coal | Research & Development | News; concerning: "United States Patent 8,247,462 - Co-production of Power and Hydrocarbons; 2012; Assignee: Sasol Technology Limited, South Africa; Abstract: A process for co-producing power and hydrocarbons includes in a wet gasification stage, gasifying coal to produce a combustion gas at elevated pressure comprising at least H2 and CO; enriching a first portion of the combustion gas with H2 to produce an H2-enriched gas; and generating power from a second portion of the combustion gas. In a dry gasification stage, coal is gasified to produce a synthesis gas precursor at elevated pressure comprising at least H2 and CO. At least a portion of the H2-enriched gas is mixed with the synthesis gas precursor to provide a synthesis gas for hydrocarbon synthesis, with hydrocarbons being synthesized from the synthesis gas".
There are other technologies, as we've documented in separate reports, for recovering byproduct electricity in an indirect Coal conversion process like the one discussed by the USDOE herein. The above "Sasol" has been indirectly, through initial gasification, converting Coal into liquid hydrocarbon fuels on a large scale industrial basis for more than half a century, and are no doubt who the USDOE were referring to in the above excerpted statement: "The conceptual design evaluated is technically feasible using equipment that has been demonstrated at commercial scale".
And, finally, to return to the issue of the captured Carbon Dioxide, we remind you, that, as seen for one example in our report of:
USDOE Reforms Coal Syngas CO2 for Hydrocarbon Synthesis | Research & Development | News; concerning: "United States Patent 8,366,902 - Methods and Systems for Producing Syngas; 2013; Inventors: Grant Hawkes, et. al., Idaho; Assignee: Battelle Energy Alliance, LLC, Idaho Falls (United States Department of Energy Idaho National Laboratory); Abstract: Methods and systems are provided for producing syngas utilizing heat from thermochemical conversion of a carbonaceous fuel to support decomposition of at least one of water and carbon dioxide using one or more solid-oxide electrolysis cells. Simultaneous decomposition of carbon dioxide and water or steam by one or more solid-oxide electrolysis cells may be employed to produce hydrogen and carbon monoxide. A portion of oxygen produced from at least one of water and carbon dioxide using one or more solid-oxide electrolysis cells is fed at a controlled flow rate in a gasifier or combustor to oxidize the carbonaceous fuel to control the carbon dioxide to carbon monoxide ratio produced. Government Interests: This invention was made with government support under Contract Number DE-AC07-05ID14517 awarded by the United States Department of Energy. The government has certain rights in the invention";
the United States Department of Energy has now developed technology whereby the Carbon Dioxide and the Water co-generated during the gasification, or partial combustion, of the Coal, wherein the synthesis gas for Fischer-Tropsch type hydrocarbon production is formed, can, as well, be electrolyzed into even more Carbon Monoxide and Hydrogen synthesis gas, which can be added to the syngas product of the Coal gasification, along with byproduct Oxygen which can be used to support that Coal gasification.
And, all of it can be done with a straight profit that is currently in the range of twenty percent, but which is likely to get even better.
Moreover: The production of "synthetic" liquid hydrocarbon fuels, direct replacements for imported OPEC natural petroleum-based fuels, would have a multitude of economic benefits for the Coal Country locales where such liquid fuel production took place, as well as for the United States of America as a whole.
We've documented some of those potential benefits in prior reports, and will address them again in the near future since, as it happens, other departments and agencies of the United States Government have taken notice of this work performed by the United States Department of Energy, and realized that the economic benefits of converting our abundant United States Coal efficiently and profitably into liquid hydrocarbon substitutes for imported OPEC petroleum reach well beyond the straightforward rapid repayment of investment money and the making of an ongoing 20% profit.
In sum:
The United States Government itself has confirmed that we can convert our abundant United States Coal profitably into direct substitutes for anything and everything we now import from OPEC.
Why isn't that public news in United States Coal Country? And, why haven't we started acting on that information?