Coal-to-Liquids - An Alternative Oil Supply?

Transcription

INTERNATIONAL ENERGY AGENCY
COAL INDUSTRY ADVISORY BOARD
COAL–TO–LIQUIDS
an alternative oil supply?
WORKSHOP REPORT
IEA Coal Industry Advisory Board workshop
IEA Headquarters in Paris, 2 November 2006
IEA – 9, rue de la Fédération – 75739 Paris Cedex 15
WORKSHOP PROGRAMME – Thursday, 2 November 2006
Opening Session
Mr Claude Mandil, Executive Director, International Energy Agency
Mr Preston Chiaro, Chief Executive – Energy, Rio Tinto & CIAB Chairman
SESSION 1: Experience with Coal-to-Liquids Technologies in South Africa and Japan
Chaired by Dr John Topper, Managing Director, IEA Clean Coal Centre
A Primer on the Technologies of Coal-to-Liquids
Mr Daniel C Cicero, Technology Manager – Hydrogen & Syngas, Office of Coal and Power R&D,
US Department of Energy National Energy Technology Laboratory
Coal Liquefaction Development in NEDO
Dr Sadao Wasaka, Director General, Environment Technology Development Department,
New Energy and Industrial Technology Development Organization, Japan
Commercial Experience in South Africa with Coal-to-Liquids and Coal-to-Chemicals
Mr André Steynberg, Technology Manager for Coal-to-Liquids Technologies, Sasol Technology (Pty) Ltd
Discussion
SESSION 2: Policy Drivers for CTL in the USA, Industry’s Response and the Environmental Implications
Chaired by Mr Steven F Leer, Chairman and Chief Executive Officer, Arch Coal Inc
Policy Implications for CTL in the USA
Dr Roger H Bezdek, President, Management Information Services Inc and lead consultant to
Southern States Energy Board’s report The American Energy Security Study
CTL Projects – key issues and economics
Mr Robert C Kelly, Executive Officer, DKRW Energy LLC
Sequestration of CO2 from CTL Processes
Mr I Merrick Kerr, Chief Financial Officer, Rentech Inc.
Discussion
SESSION 3: CTL Projects in China and the Developing World
Chaired by Mr Eric Ford, Chief Executive Officer, Anglo Coal Australia Pty Ltd
China’s Development Strategy for Coal-to-Liquids Industry
Dr ZHANG Yuzhuo, Chairman, China Shenhua Coal Liquefaction Corp & Vice President, Shenhua Group Corporation Limited
CTL Technology in China and Polygeneration Opportunities
Prof LI Zheng, Director, Tsinghua-BP Clean Energy Research and Education Centre, Tsinghua University
The Shell Perspective on Coal-to-Liquids
Mr Nicolás Ximénez Bruidegom, General Manager: Clean Coal Energy Europe, Shell Gas & Power International
Discussion
SESSION 4: Prospects for CTL in Europe, Australasia and Globally
Chaired by Dr Don Elder, Chief Executive Officer, Solid Energy New Zealand Ltd
Prospects for Coal-to-Liquids in Australasia
Mr Jeff Cochrane, Chief Executive Officer, Monash Energy
From Mine to Wheel – the role of lignite-to-liquids in tomorrow’s energy supply
Mr Matthias Hartung, Executive Vice President, RWE Power AG
The Context for Coal-to-Liquids – an oil industry view
Dr Atul Arya, Vice President – Group Strategy, BP plc
Discussion
SESSION 5: Coal Market and Policy Implications of a Growing CTL Demand
Chaired by Preston Chiaro, Chief Executive – Energy, Rio Tinto & CIAB Chairman
Panel discussion with:
Dr Victor K Der, Director – Office of Clean Energy Systems, US Department of Energy
Dr Roger H Bezdek, President, Management Information Services Inc.
Mr Jeff Cochrane, Chief Executive Officer, Monash Energy
Mr André Steynberg, Technology Manager for Coal-to-Liquids Technologies, Sasol Technology (Pty) Ltd
Dr ZHANG Yuzhuo, Chairman, China Shenhua Coal Liquefaction Corp & Vice President, Shenhua Group Corporation Limited
Mr Bill Senior, Senior Advisor – Technology, BP Alternative Energy
Panellists offered their own, short commentary in response to the key questions and issues emerging from the workshop. CIAB
Members and other participants were then invited to join an open discussion, followed by concluding remarks from the Chair.
11 Apr 07
2
Background
Summary
Oil supply security and price concerns have led to a renewed
interest in coal as an alternative feedstock for the production
of transport fuels and chemicals. By using coal conversion
technologies, such as coal-to-liquids (CTL), the world’s vast
coal resources could become an important alternative to
crude oil.
CTL describes both coal gasification, combined with FischerTropsch (F-T) synthesis to produce liquid fuels, and the less
developed, direct coal liquefaction technologies.
Coal
gasification is applied widely in the production of chemicals
and fertilisers, notably in China where 8 000 coal gasifiers
are operating. Fischer-Tropsch synthesis, first developed in
Germany during the early decades of the 20th century, has
been further developed and improved in South Africa by
Sasol.
In the past, CTL has substituted for imported oil: during the
1930s and 1940s, when coal-rich Germany needed a secure
source of transport fuels; and, since the 1950s in South
Africa, where 40 million tonnes of coal per year are still
converted into 160 000 barrels per day (b/d) of crude oil
equivalent. Following the oil price shocks of the 1970s,
significant coal liquefaction R&D was undertaken in the USA,
Europe, Japan and Australia, although much of this
development work was subsequently put on hold as oil prices
stabilised from the mid-1980s and through the 1990s.
Today, with the return of high oil prices, China is constructing
a 60 000 b/d CTL plant and, with plans for further projects,
aims to produce one million barrels per day (mb/d) by 2020.
In the USA, new incentives have been introduced for coalbased transport fuels and coal companies are now assessing
the commercial viability of new projects as one component of
a wider vision to make greater use of the country’s vast coal
1
resource .
This workshop, “Coal-to-Liquids – an alternative oil supply?”,
was held in conjunction with the annual Plenary meeting of the
IEA Coal Industry Advisory Board. Coal industry leaders from
IEA member countries joined their counterparts from South
Africa, China, Russia and Poland to debate developments in a
field that has attracted renewed attention because of recent high
oil prices and concerns over the security of energy supplies.
Coal-to-liquids (CTL) has a long history in South Africa and
Sasol now converts 40 million tonnes of raw coal per year to
produce 160 000 barrels per day (b/d) of crude oil equivalent
using the commercially-proven indirect liquefaction process. In
the USA, companies are moving ahead with projects that seek
to reduce the country’s dependence on imported oil,
encouraged by a variety of Federal and state government
incentives. However, it is in China where new projects are
being developed in earnest, with a major construction project
underway in Inner Mongolia. This plant, using newly-developed
direct liquefaction technology and scheduled for commissioning
in 2008, will produce one million tonnes of oil products each
year (20 000 b/d) with a planned expansion to 100 000 b/d.
Dr ZHANG Yuzhuo, Chairman of China Shenhua Coal
Liquefaction Corporation, explained that this project formed one
component of a strategy that would limit oil imports to below
50% of China’s demand by 2020 when direct and indirect coal
liquefaction plants are expected to meet 10-15% of the forecast
450 million tonnes (9 million b/d) annual oil demand. The global
abundance of coal means that CTL could play an important
future role, especially if greater experience leads to improved
economics. However, as in other energy sectors, the scarcity of
capital and skills was considered to be a major hurdle. NGOs,
industrialists and policy advisors were all agreed that using coal
as an alternative to oil for producing transport fuels will require
carbon dioxide capture and storage (CCS), if significant
increases in carbon dioxide (CO2) emissions are to be avoided.
In OECD countries, the need for CCS was taken as a given by
project developers. In China, it is not a priority, but participants
at the workshop heard a clear willingness to apply the
technology if some way could be found to cover the economic
cost. The CIAB will consider this challenge over the coming
year within the broader context of how clean coal technologies
can be more widely deployed.
Technical Background2
Coal may be used to produce liquid fuels suitable for
transportation applications by the removal of carbon or
addition of hydrogen, either directly or indirectly. The first
approach is usually known as carbonisation or pyrolysis
and has low yields; the second is called liquefaction. As the
cost of converting coal into useful liquid fuels is higher than
the cost of refining crude oil, it is the relatively low price of the
raw coal feedstock that provides the main incentive to pursue
the technology.
Direct liquefaction is potentially the most efficient route
currently available, yielding in excess of 70% by weight of the
dry, ash-free (daf) coal feed, under favourable conditions.
Although many different direct processes exist, common
features are the dissolution of a high proportion of the coal in
a solvent at elevated temperature and pressure followed by
catalysed hydrocracking of the dissolved coal with hydrogen
gas. The overall energy efficiencies of the very best modern
processes are generally in the range 60-70% and the
technology has been demonstrated at large pilot plants.
Although no commercial plants yet exist, Shenhua Group’s
first CTL facility is under construction in China using direct
liquefaction technology.
The less efficient, but commercially proven, indirect
liquefaction process relies on the gasification of coal to
produce synthesis gas (a mixture of carbon monoxide and
hydrogen) which is then reacted over a catalyst at
temperature and pressure to produce the desired liquid
products. It is this indirect process, using well-established
Fischer-Tropsch synthesis, that has been commercialised by
Sasol in South Africa and will be used in several new projects
proposed in China.
For modern plant, overall energy
efficiency is typically >40%.
Opening Session
Mr Claude MANDIL, Executive Director of the International
Energy Agency, welcomed delegates from around the world.
He saw CTL as an important topic, framing his comments in
terms of the “3 E’s” of good energy policy: security of energy
supply, economic development and environmental protection.
In explaining why alternatives to oil were desirable for energy
security reasons, he referred to President Bush’s 2006 State of
the Union Address in which the President stated, “America is
addicted to oil”. MANDIL agreed that the transport sector was
too dependent upon oil, so the IEA needed to understand the
potential for alternatives, including biofuels, coal-to-liquids, gasto-liquids and biomass-to-liquids, not to replace oil, but as part
of a diverse mix. However, he queried if CTL would be cost
effective enough to contribute to economic growth; he looked
forward to the workshop’s findings on this point and cautioned
against government subsidies. MANDIL noted with concern
that CTL may add to pollution and CO2 emissions, unless
abatement measures were taken (e.g. CO2 capture and
storage). With the coal industry enjoying stronger demand
growth than previously expected, he briefly mentioned that
World Energy Outlook 2006 would raise serious questions about
the sustainability of this growth. To conclude, MANDIL said that
bold steps were needed to achieve the “3 E’s”, because the
world was not on a pathway to sustainable energy supplies.
Mr Preston CHIARO, Chief Executive – Energy at Rio Tinto
and CIAB Chairman also welcomed delegates and oversaw the
day’s proceedings.
3
many aspects of CTL were covered under its Hydrogen-fromCoal R&D programme.
Discussion Issues
Concerns over the cost and security of oil supplies may be
driving the interest in CTL, but would a shift to coal bring new
concerns over the security and price of coal supplies? CTL
raises many other issues, not least its potentially high CO2
intensity and process water demand. With CO2 capture and
storage (CCS) at the coal liquefaction plant, the net CO2
emissions from coal-based transport fuels are similar to oilbased fuels. Without CCS, emissions would be significantly
above those from the oil-based alternatives – roughly double
current well-to-wheel emissions.
In the more efficient, direct process (>3 bbl per tonne of coal),
a refining step is needed to convert the liquid product into
saleable gasoline and diesel fuel. A recent development is to
put the ash residue and carbon, from recycled solvent, through
a gasifier to produce hydrogen and power.
Direct Coal Conversion to Liquid Fuels
H2S, NH3, COx
Make-up
H2
Aims of the Workshop
• Provide a CTL technology status review and update on
current projects.
• Disseminate knowledge of CTL process economics, both
with and without CO2 capture and storage.
Recycled H2
Coal +
Catalyst
Methane
& Ethane
Gas Recovery
Treatment
Coal
conversion
LPG
Hydrotreating
Unit
Refining
H-Donor
Slurry
• Understand the environmental issues associated with CTL.
Slurry
Heavy Vacuum
Gas Oil
Fractionation
• Reach conclusions on the role of CTL as an alternative
source of transport fuels.
• Bring CIAB advice on the subject of CTL to the attention of
the IEA.
Gasoline
Diesel Fuel
Solvent
Deashing
Deashed Oil
Ash Reject
Gasifier
Unconverted Coal
Daniel Cicero, International Energy Agency, CIAB Workshop Nov 2, 2006
SESSION 1: Experience with Coal-to-Liquids
Technologies in South Africa and Japan
CTL technologies are not widely used and are unfamiliar to
many in the coal mining and power generation sectors. This
session set the scene by introducing the chemical
engineering behind CTL and illustrating how this has been
used at pilot and commercial plants – Sasol operates CTL
plants in South Africa with a combined capacity of
160 000 b/d of crude oil equivalent. Participants received a
3
new brochure on CTL prepared by the World Coal Institute
and, during 2007, the IEA Clean Coal Centre will publish a
new report on the subject.
Between 1975 and 2000, the USA invested $3.6 billion in direct
liquefaction technologies; some are now licensed to China
where production from a commercial demonstration CTL plant
will start in Inner Mongolia (see below).
Maturing Direct Coal Conversion
• Originally developed in Germany in early 1900s
• Used to produce military fuel in WWII
• US spent $3.6 billion on DCL from 1975-2000
• Technologies licensed to China in 2002
Dr John TOPPER, Managing Director of the IEA Clean Coal
Centre and IEA Greenhouse Gas R&D Programme, chaired this
opening session. He remarked on the renewed interest in CTL,
confirmed not only by the large number of participants at the
workshop, but also among Clean Coal Centre members who
had given priority to a forthcoming report on CTL.
A Primer on the Technologies of Coal-to-Liquids
Mr Daniel CICERO, Technology Manager – Hydrogen &
Syngas at the US DOE National Energy Technology
Laboratory’s Office of Coal and Power R&D at Morgantown, WV
described the three routes from coal to liquids: direct and
indirect liquefaction, plus a hybrid concept. Although DOE had
no specific CTL programme running, CICERO explained that
Coal to Liquids Technologies
− Direct Liquefaction
− Indirect (Gasification + Fischer-Tropsch) Liquefaction
− Hybrid Concept
Indirect Liquefaction
• Based on gasification
• Converts syngas (H2 and
CO) into clean methanol or
hydrocarbon liquids
• Can also produce ultraclean diesel or jet fuel
• CO2 can be captured for
sequestration
• Can co-produce electric
power or hydrogen
Direct Liquefaction
• Based on high-pressure
dissolution and
hydrogenation of coal
• More energy efficient than
indirect liquefaction
• Produces high energy
density fuels
− Diesel with Low Cetane #
− High aromatics
• Used by Germany in WW 2,
improved by U.S., now
being deployed in China
4
Lawrenceville, NJ
3 TPD
Inner Mongolia, China
4,200 TPD
Catlettsburg, KY
250 – 600 TPD
Direct Conversion
Advantages
• Conceptually simple
process
• Produces high-octane
gasoline
• More energy efficient
than indirect conversion
(i.e. more fuel / BTUs
produced per ton of coal)
• Products have higher
energy density
(BTU/gallon) than
indirect conversion
Disadvantages
• High aromatic content
• Low-cetane number
diesel
• Potential water and air
emissions issues
• Fuels produced are not a
good environmental fit
for the U.S. market
• May have higher
operating expenses than
indirect conversion
CICERO went on to describe the indirect process that benefits
from being able to use a range of fuels, including coal and
natural gas.
CICERO quoted costs 5-7% above a stand-alone, direct
4
conversion plant, based on an earlier economic study .
Indirect Coal Conversion
Coal
Petcoke
Biomass
etc
Oxygen/
Steam
Catalyst
Hybrid Coal Conversion Concept
H2 + CO
Syngas
Gasification &
Gas Cleaning
CxHy
Liquids
& Wax
Fischer-Tropsch
Synthesis
Steam
Sulfur,
CO2
and Ash
FT Product
Separation &
Upgrading
(Fischer-Tropsch)
CO2
Tail Gas
Water
&
Oxygenates
FT Tail Gas
Ultra-Clean
Liquid Fuels
& Chemical
Feedstocks
Water/gas Shift
Hydrogen
Recovery
Electric Power
Generation
Steam
Raw ICL Products
Indirect
conversion
Coal
Gasification
Product
Refining &
Blending
H2
Final
Products
H2
Electricity
GE, ConocoPhillips, KBR, Shell and Siemens have each
developed suitable gasifiers. Syngas from these is passed over
iron or cobalt catalysts to produce clean diesel and naphtha
products by F-T synthesis; syngas can be used also to
co-produce electricity and hydrogen.
Direct Coal
conversion
Coal
He concluded with these challenges. At a first-of-a-kind (FOAK)
CTL plant, an oil price of $55-60/bbl would ensure profitability,
but capital investment remained huge.
Indirect Coal Conversion
Coal
Natural Gas
Pet Coke
Biomass
Waste
O2
Air
Tail
Gas
Catalyst
ConocoPhillips
Shell
Siemens
the deployment of CTL facilities.
− No recent CTL plants:
• Profits at $55-60/bbl (FAOK) and $45-$50/bbl (Nth plant)
• Capital investments huge: $70k-$80k/DB = $1.8 - $3.7 Billion
Power
Generation
Product
Recovery
Liquids
Synthesis
Syngas
Slurry / Fixed
/ Fluid Bed
Oxygen
Plant
KBR
GE
Challenges
• Market -- World oil price volatility poses a significant market risk to
CO2
Removal
Synthesis Gas
Production
• Gasification
• Reforming
- Steam
- POX
- ATR
H2 + CO
Raw DCL Products
Hydrogen
Recovery
• Technical -- Integration of advanced coal gasification technologies
and advanced F-T synthesis technologies has never been
attempted
• Infrastructure -- Significant deployment of CTL would require use
of large quantities of coal, meaning a significant expansion of coal
mining industry
• Readiness – If multiple CTL plants are built concurrently
worldwide, competition for steel, critical process equipment and
engineering and labor skills would emerge.
• Environmental – As a carbon-rich fossil fuel, coal releases large
quantities of CO2 when converted into fuels and power.
Additionally need to address criteria pollutants, water, permitting
issues
Wax
Wax
Hydrocracking
Liquids
Liquids
Naphtha
Diesel Fuel
Chemicals
CO2 capture is relatively easy from the indirect process.
However, CICERO noted the complexity of integrating coal
gasification with F-T synthesis and, compared with the direct
process, it is less efficient (2-2.5 bbl per tonne of coal) and
products have lower calorific values.
Indirect Conversion
Advantages
• Ultra-clean products
• Well suited for CO2
capture
• Well suited for electric
power co-production
• May have lower
operating expenses than
direct conversion
Disadvantages
• Conceptually more
complex than direct
conversion
• Less efficient fuel
production than direct
• Produces low-octane
gasoline
• Fewer BTUs per gallon
than direct conversion
products
A hybrid concept combines the advantages and limits the
disadvantages of both technologies by making use of the F-T
tail gas from the indirect process to convert further coal using
the direct process. It is potentially more efficient and offers a
more flexible product slate whilst minimising refining, but
Looking ahead, CICERO calculated that to replace US oil
imports would require US coal production to be doubled and,
without CCS, specific CO2 emissions from CTL plants
would be 5-7 times greater than conventional crude oil
refining. Employing CO2 capture and storage technologies is
expected to reduce emissions from CTL plants to essentially
equivalent levels as those from oil refineries. Much more R&D
is necessary to improve this picture.
Coal Liquefaction Development in NEDO
Dr
Sadao
WASAKA,
Director
General,
Environment
Principle of Direct Coal Liquefaction
New Energy and Industrial Technology Development Organization
Catalyst
H2
Liquefaction
Temperature
Pressure
Separation
&
Fractionation
Products
Gasoline
Coal
Diesel
Recycle
Solvent
Heavy Oil
5
Technology Development Department at the New Energy and
Industrial Technology Development Organization (NEDO), drew
on his 25 years experience in coal liquefaction to present
Japanese developments in direct liquefaction for lignite and
hard coal.
Simplistically, coal is dissolved with recycled hydrogenation
solvent and mixed with a catalyst prior to being heated and
pressurised in a reactor to produce an oil that is then
hydrocracked to yield products.
Using results from a BCL pilot plant in Australia, obtained over a
three-year operating period, WASAKA showed that a high oil
yield was achieved and an efficient lignite de-watering process
was developed to deal with the very wet fuel (c.50% moisture).
WASAKA then described the NEDOL process which uses an
iron-based, fine powder catalyst and can convert coals ranging
from lignite through to bituminous. A 1 t/d process support unit
(PSU) was built in 1988.
NEDOL Process Flow
Liquefaction Development in NEDO
NEDO developed two liquefaction processes.
BCL process for brown coal
NEDOL process for sub-bituminous coal
1980
Fundamental Research
1985
1990
Process,
1995
Equipment,
2000
Coal
Liquefaction
Separators
Catalyst
Improvement
NEDOL
process
Gas Oil
Reactors
Letdown
Valve
Vacuum Tower
40bbl/d
Naphtha
Hydrogen
Stripper
Operation
Reactor
F/S
Collaboration Research at 0.1t/d BSU
F/S
The NEDOL process was further developed at a 150 t/d pilot
plant at Kashima City, Ibaraki which achieved almost
2 000 hours continuous operation.
NEDOL Process
150 t/d Pilot Plant Project in Japan
Achievement
•
Improved BCL process
•
•
H2 S Rich Gas
Recycle Gas
H2
H2
Off Gas
Purification
Light
LightOil
Oil
Fractionator
Fixed Bed
Hydrotreater
Separator
Preheater
Slurry
Feed Pump
Catalyst
Pressure
Reducing
Settler
CLB
Separator
Middle
MiddleOil
Oil
Solvent
De-ashing
Sludge
CLB Run Down
150t/d Pilot Plant
New
Energy yard,
and Industrial
Technology
Development Organization
1.coal
2.coal
slurry preparation,3.coal
liquefaction,
4. Distillation, 5.hydrogen, 6.tank yard, 7.control room
BCL Process
50 t/d Pilot Plant Project in Australia
７
4
Achievement
(1981 – 1990, at Australia)
•
•
•
•
•
Demonstration of brown coal
liquefaction concept
Oil yield of 52wt%
Continuous operation of
1,700hrs
Demonstration of high
efficiency de-watering
process
Demonstration of solvent deashing process in high deashing ratio
2
3
6
Demonstration of NEDOL
process
Oil yield of 58wt%
Continuous operation of
1,920 hrs
High coal concentration of
50wt%
Demonstration of special
developed equipment
Purge Gas
(Fuel Gas)
Separator
Separator
CLB Recycle
Solvent Recycle
DAO Recycle
•
Recycle Gas
Compressor
Reactor
H2
Slurry
Making
•
Inline
Hydrotreatment
Hydrogenation
Recycle Solvent
Preheater
Solvent Hydrogenation
WASAKA explained that NEDO had developed two direct
processes following fundamental research: the Brown Coal
Liquefaction (BCL) process for lignite and later, the NEDO
Liquefaction (NEDOL) process for sub-bituminous and
bituminous coal which was developed to pilot stage at a 150 t/d
plant where eight test runs were completed over three years.
Coal liquefaction development ended in Japan in 2000, although
international co-operation with Indonesia and China has
continued.
Evaporator
Residue
Separators
Hydrogenated
Solvent
Design & Construction
International Collaboration
Indonesia
China
Removed
Water
Heater
Preheater
Design & Construction
Operation
Slurry
De-watering
Gas
Naphtha
Hydrogen
Pulverizer
1 t/d PSU etc.
Up-grading
H2
Distillation
Atmospheric
Tower
Mixer
Improved BCL
process
50t/d Pilot Plant Construction Operation
BCL process Improvement
Supporting Research
150 t/d Pilot Plant
2005
Catalyst
BCL Process
NEDOL process
Coal Preparation
５
６
1
Three coal liquefaction reactors are arranged in series, each
11 m long with an internal diameter of 1 m
Major
Major Sections
Sections of
of 150
150 t/d
t/d PP
PP
WASAKA was proud to report that the NEDOL process attains
a higher yield than many competing processes (58% by weight
on a dry, ash-free (daf) basis).
Slurry pre-heating
coal liquefaction
Comparison of coal liquefaction
processes
EDS*1
CTSL*2
USA
USA
Sub-bituminous Sub-bituminous
Bituminous
Bituminous
250t/d PP
3t/d PDU
Stage of development
Operation period
1977-1982
1992Liquefaction reactor Bubble column
Ebulated bed
type
Catalyst
Nil
Iron
Reaction temperature
723
723
(K)
Reaction pressure
17
17
(MPa)
Vacuum
Solvent deashing
Solid liquid
distillation
separation
Solvent coal ratio (by
2.0-2.9
2.0
weight)
Liquefaction yield
55
52-74
(wt%, daf)
3.6
3.8-5.0
(bbl/t coal)
Yes
Yes
Bottoms recycling*4
Process
Country
Coal
distillation
New IG
Germany
Bituminous
NEDOL
Japan
Sub-bituminous
Bituminous
150t/d PP
1996-1998
Bubble column
200t/d PP
1981-1987
Bubble
column
Iron
753
Iron
723
30
17
Vacuum
distillation
Vacuum
distillation
1.0
1.5
50-58
3.4-4.2
54-62
4.0-4.7
No
No
NEDO has also developed an installation for upgrading coal
liquefaction oil at Funakawa using an improved catalyst.
WASAKA reported successful results: high cetane diesel
(42-43) and fuels that meet Japanese standards.
Upgrading of Coal Liquefaction Oil
Objectives
WASAKA presented results from 1996 to 1998 when the
NEDOL pilot plant was operated on three coals, including two
low-rank Indonesian coals. He noted that two Chinese coals
had been tested on the small-scale PSU.
Schedule
Schedule of
of 150
150 t/d
t/d PP
PP
・1983.10; establishment of NCOL
・1983-1987; design of 250 t/d PP
・1987-1991; design of 150t/d PP
・
1996.7;
mechanical
New Energy and Industrial Technology
Development
Organizationcompletion
10
1996
平成8年度
11 12
1
2
3
4
5
6
Shakedown
試運転ーⅡ
shakedown
試運転ーⅠ
7
1997
平成9年度
9 10 11 12
8
1
2
Run-2
3
4
1998
平成10年度
5
6
7
8
Yes
Cetane Number
(Diesel )
> 35
(>50 after
blended)
Yes
(>40)
N,S in Oil
Satisfy JIS
Yes
Continuous
Operation hrs
> 1,000 h
Yes
-Demonstration of upgrading process
-JIS gasoline production
-JIS diesel oil production
-Continuous operation over 2000 hrs
9
40 bbl/d PDU plant at Funakawa, Akita
Run-6,7
Run-3,4-1
target
> 95
Achievements at Funakawa plant
Run-4-2,5
Run-1
Results
Octane Number
(Gasoline)
achieved
1.Oil yield
over 54wt%
58wt% (Run-3,4-1)
2.Slurry conc.
40～50wt%
50wt% (Run-5)
3.Coal
more than 3 types 3 types (Run-6,7)
4.Continuous operation over 1,000 hr
1,920 hr (Run-3,4-1)
5.liq. catalyst (FeS)
1.5～3wt% (Run-3)
2～3wt
Challenging tasks
WASAKA concluded by saying that Japan was looking to
co-operate with Indonesia on development of the BCL process,
and also with China, since both countries have large oil
requirements and plentiful coal resources. In Indonesia, low
interest rate, official loans may assist. In China, WASAKA said
that any co-operation plan could include technology transfer, if
required.
higher thermal efficiency
slurry heat exchanger (Run-2～7)
Commercial Experience in South Africa with CTL
and Coal-to-Chemicals
-
Mr André STEYNBERG, Technology Manager for CTL at Sasol
Technology (Pty) Ltd began with Sasol’s 50 years of experience
with indirect conversion processes for oil, gas and coal with five
different Fischer-Tropsch (F-T) processes using both two-phase
and three-phase fluid bed reactors.
Bit.
Noting Sasol’s track record of technology improvement and
application, STEYNBERG said that the technology development
curve had not plateaued, with further scope for process
intensification to give higher yields, and improved performance
from catalysts that have yet to reach their intrinsic limits.
However, he said that the F-T reactors themselves had been
demonstrated at their maximum feasible size, such that there
were no further economies of equipment scale (see photo).
Coals employed in NEDOL process
Carbon content (wt%, daf coal)
72 73 74 75 76 77 78 79 80 81 82 83 84
Adaro (Indonesia)
Wandoan (Australia)
Taiheiyo (Japan)
Tanito-Harum (Indonesia)
Illinois#6 (USA)
Yilan (China)
Sub-bit.
●
Ikeshima (Japan)
Wyoming (USA)
Low rank sub-bit.
◎
-
◎ ◎
Shenhua (China)
● ◎ ◎
-
●
-
-
-
-
-
-
-
-
-
-
◎
Low rank bit.
Coal for NEDOL Process
◎ : tested at 1t/d PSU
● : tested at 1t/d PSU and 150t/d PP
7
He noted that current conditions, in respect of oil prices,
favoured CTL development and were similar to those in the
mid-1970s when Sasol made its decision to invest in the Sasol
Two plant at Secunda.
Sasol Advanced Synthol (SAS)
Transport of 10.7 m SAS reactor sections
STEYNBERG outlined Sasol’s history through two periods: as
a state-owned corporation and, since 1979, as a private-sector
company. OPEC’s oil price hikes were an important influence
during the first period and led to two large CTL plants being built
with some urgency. The second period was characterised by
ongoing technology improvement and diversification into higher
value products for a global market.
When assessing potential CTL projects, STEYNBERG identified
some key prerequisites sought by Sasol:
• Large coal deposits, sufficient to supply plants with a
minimum size of 80 000 b/d.
• Stranded coal, due to its low-quality or location, making it
unsuitable for alternative applications, such as electricity
generation.
• Government support for the very large capital investments,
on the grounds of improved energy security through decreased
dependence on imported energy, and to shield developers from
oil price volatility.
Key drivers for a viable CTL
business
Access to:
¾ large reserves of low cost gasifiable coal (a minimum of
approximately 2 – 4 billion tons) at proposed location.
Minimum plant capacity: ≈ 80 000 barrels per day to
realize economy of scale benefits.
¾ “Stranded coal” (e.g. due to quality or location) which can
Beginning with Sasolburg, where the reactor is still making
waxes, STEYNBERG outlined Sasol’s F-T reactor development.
The world’s first commercial CTL plant, initially producing about
8 000 b/d, was the Sasol One plant opened in 1955 at
Sasolburg using both German and American technologies. The
Sasol Two and Sasol Three plants were commissioned in 1980
and 1983 respectively and, in 1989, Sasol unveiled its Sasol
Advanced Synthol (SAS) reactor at commercial scale. In
general, synthesis feed gas (syngas) from a coal gasifier is
passed over (in fixed bed tubular Arge reactors), or circulated
with (in circulating fluidised bed (CFB) Synthol reactors), or
percolated through (in Sasol Slurry Phase Distillate (SPD)
reactors and Sasol Advanced Synthol (SAS) reactors) iron- or
cobalt-based catalysts at between 220°C and 350°C to produce
F-T liquids.
Sasol’s Fischer-Tropsch Reactor Development
Capacity per reactor (bbl/day)
20000
20000
15000
11000
6500
10000
3500
2000
5000
17000
7500
100
500
0
1955
1980
1983
2500
100
700
1982
1987
1989
1990
1991
1993
1995
1998
Oryx,
2006
Year of first operation
High Temperature
Synthol
Advanced Synthol
Low Temperature
Arge
Slurry
Sasol produces almost 40% of South Africa’s liquid transport
fuels, but STEYNBERG explained that Sasol’s business went
far beyond CTL – from coal mining to chemicals (ammonia,
nitrogenous fertilisers and commercial explosives, waxes,
phenolics such as phenol and cresols, solvents such as
alcohols and ketones, polyethylene, polypropylene, alpha
olefins such as 1-hexene and 1-octene, coke, tar, sulphur and
noble gases).
Variety of Industrial Processes
not be easily monetised in other ways.
Coal processing
Syngas production akin to MeOH and ammonia plants
Hydrocarbon synthesis
Drive for energy security supported by current
global energy dynamics
Ability and will to provide enabling support
- gas, liquid and solid mixtures
- recycles and solids separation
- large volumes flammable materials at high pressure that auto-ignite
Conditions today similar to when
Sasol was established….
80
SasolIIIIwas
wasjustified
justifiedat
atcurrent
currentoil
oilprice
pricelevels
levels
Sasol
70
Crude Oil Price ($/Barrel)
60
Crude oil prices once again
at 1973 levels
50
40
30
20
10
0
1955
1960
1965
1970
1975
1980
US$ of the day (Nominal)
8
Refinery operations
Chemical processing
Integrated utility systems
Power generation
Catalyst manufacture has elements of mineral processing
combined with the precision found in the pharmaceutical
industry
1985
1990
2003 US$ (Real)
1995
2000
The low temperature Sasol Slurry Phase Distillate (SPD)
process, using cobalt catalyst, is now part of a three-step
process to produce primarily diesel fuel and naphtha from
natural gas. A full-scale, commercial slurry phase reactor was
commissioned at Sasolburg by Sasol in 1993 using iron catalyst
for the production of waxes and paraffins, and the proprietary
technology has then been further developed for GTL plants with
an advanced cobalt catalyst. During 2006, a 34 000 b/d GTL
plant was commissioned in Qatar in partnership with Qatar
Petroleum, with another in Nigeria operating from 2010, in
partnership with Chevron. The Sasol Chevron company, with its
headquarters in London, was formed to further develop the
global GTL business.
In 2004, the gasifiers at Sasolburg were shut down when
pipeline natural gas from Mozambique replaced coal as the
feedstock; natural gas also now supplements the coal feed at
Secunda.
Sasol uses three, fundamentally different F-T technologies: low
temperature cobalt catalyst, low temperature iron catalyst and
high temperature iron catalyst.
Sasol’s Fe-HTFT technology with
additional chemicals
Fe-HTFT
Gas
Coal
Fuels
Chemicals
3 % LPG
33 % Naphtha
Coal
Syngas
production
SASOL
Fe -HTFT
Product
upgrading
33 % Diesel
26% Propylene
5 % other olefins and
oxygenates
Sasol Infrachem (SCI) - Sasolburg
Further processing of the streams
Synthesis
gas
Rectisol
Arge
Reactors
Product
Separation
Slurry
Bed
Reactor
Product
Separation
Complex due to many different
products with differed market
drivers. Therefore a phased
approach has proven to be
successful
Tailgas Dew Point
Correction
Shift
Raw gas
Coal
Gasification
Methanol
Reactor
Oxygen
Air
Butene and butylenes
Hexene
Octene
Nonene
Detergent alcohols
Ethanol
N and iso-propanol
N and iso-butanol
Acetone
MEK
Towngas
PSA
Benfield
Product
Separation
Ethylene
H2 to NH3
Production
Air
Separation
CO2
Sasol Synthetic Fuels, based at Secunda, operates the world’s
only CTL plant, with 80 Lurgi gasifiers at the now integrated
Sasol Two and Sasol Three plants.
The high temperature Sasol Advanced Synthol (SAS) reactor
was developed during the 1980s as a more efficient and costeffective successor to the CFB Synthol reactor. It operates at
about 350°C with an iron-based catalyst to produce, in a single
step, synthetic crude oil for downstream refining into fuels and
chemicals. Nine SAS reactors (from Korea and Japan) are now
operating at Secunda, having replaced the original 16 Synthol
reactors in 1999, and now produce the equivalent of about
160 000 b/d of product fuels and chemicals.
Secunda
STEYNBERG alluded to the complexity of the CTL and F-T
processes, but also pointed to opportunities for CO2 capture: at
the syngas purification stage, where sulphur and CO2 are
stripped using a physical organic solvent in the Rectisol
process; CO2 is also removed from F-T products using the hot
potassium carbonate Benfield process. CO2 is currently
vented at Secunda, but STEYNBERG said that whilst CCS is
not yet practiced by SASOL, the company had all the
competencies needed to undertake such projects.
CO2 application and storage
opportunities
Geological storage in saline aquifers and depleted oil/gas
reservoirs
Enhanced oil recovery
Enhanced Coal Bed Methane (CBM) extraction
Competencies needed:
Gas treatment and compression :
Synfuels, Sastech, SPI CPF in Mozambique
Raw Gas
High pressure transmission lines :
CO2
Rectisol
Sastech, Sasol Gas (Rompco)
Gasification
Water
Pure Gas
Gas reservoirs, gas wells:
SPI
Fresh Feed
Synthol
H2 Rich
Methane
Reforming
Reaction Water
1-octene
1-hexene Condensation
Distillation
Benfield
CO2
CH4 Rich
H2
PSA
Cracker
Cooling Water
Oxygenate
Work-up
Alcohol
Ketone
Acetic Acid
Pt Reformer
Gasoline
Coal geology :
Sasol Mining
Oil field development :
SPI and external
This is the type of project that Sasol can do
Diesel
Hydrotreat
Cryogenic
Separation
C2=/C 2
Activated
Sludge
C5/C6
C3/C4
Separation
Ethylene Propylene
Catpoly
Diesel
Isomerization
Gasoline
The 3 different Sasol Fischer-Tropsch technologies
Cobalt low temperature Fischer -Tropsch (Co-LTFT)
Iron low temperature Fischer-Tropsch (Fe-LTFT)
Iron high temperature Fischer-Tropsch (Fe-HTFT)
Finally, Sasol is engaged on a feasibility study for two CTL
plants in China: one with Shenhua Corporation, focusing on a
site in Shaanxi Province about 650 km west of Beijing; and the
other with Shenhua Ningxia Coal Company, focusing on a site
about 1 000 km west of Beijing.
Discussion
The 3 technologies produce fundamentally different types of
hydrocarbons and thus ultimately have the potential to produce different
chemical products
100%
90%
Opening the discussion, Dr John TOPPER remarked on the
continuous technical development of these complex processes
that had taken place over many years, particularly in South
Africa, and helped at times by timely oil price rises.
Dr Dan LASHOF, Science Director at the Natural Resource
Defense Council’s Climate Center, sought clarification on the
energy efficiency of direct processes (often quoted to be
58-72%) and whether the figures included for the additional
refining needed beyond the liquefaction step itself, thus allowing
comparison with indirect F-T processes.
80%
70%
60%
50%
40%
30%
20%
10%
0%
Co-LTFT
Olefins
Fe-LTFT
alkanes
oxygenates
Fe-HTFT
aromatics
WASAKA responded that the NEDO process was 60-63%
efficient with higher levels possible, but not above 70%.
9
CHIARO wanted to know more about resource use, he fully
understood the coal demand CTL could create, but what of the
quantity and quality of water?
Mr David GRAY, former Director of the British Coal Petrol and
Diesel from Coal Project, asked what the yield was from the
competing processes per tonne of coal, after accounting for
process energy demand, energy which itself must come from
coal (i.e. how much of the coal ends up in products that can
displace oil products)? He was also interested to hear how
much transport fuel Sasol could produce if this were the sole
focus of the company?
WASAKA indicated that around 50% of the coal (dry, ash-free
basis) was converted into product after upgrading, depending
on the coal, process and conditions.
STEYNBERG quoted motor fuel yields from Sasol’s indirect
process of about two barrels of oil products per tonne of
6
coal on a dry, ash-free basis – plants under study in China
would produce about 70% diesel and 30% naphtha. He added
that for gasoline production, a high temperature F-T process
with iron catalyst was the best technology.
60
60
Past
50
Billions of Barrels
STEYNBERG agreed that CTL plants needed to be sited near
available coal and water resources. Water provides essential
hydrogen and process cooling. Whilst the latter can be
minimised by making best use of air cooling, STEYNBERG
replied that water consumption was typically between one
and two cubic metres per tonne of coal on a dry, ash-free
basis.
World is Consuming More Oil
and Finding Less
50
Future
Production
40
40
30
30
Past discovery
by ExxonMobil
20
20
“Growing
Gap”
10
10
0
1930
1950
1970
1990
2010
2030
0
2050
3
He foresaw a situation more economically damaging than the
1970s energy crises, unless there was a greater effort to meet
growing world energy demand. Oil imports into the USA had
risen from 35% in the mid 1970s to 60% today, raising
economic concerns as well as energy security concerns.
Security Concerns: U.S.
Imports Continue to Increase
SESSION 2: Policy Drivers for CTL in the USA,
Industry’s Response and the Environmental
Implications
Today’s high oil prices make coal a competitive source for
transport fuels, but commercial risks remain high and only
those projects that are economically viable and
environmentally sound are likely to proceed. Incentives,
available under the recent Transportation Act, could
accelerate the conversion of the vast US coal resource into
transport fuels (a 50c/gal tax credit is available under the
Safe, Accountable, Flexible, and Efficient Transportation
Equity Act of 2005 – equivalent to c.$20/bbl – and possible
loan guarantees under the Energy Policy Act of 2005). The
US Department of Energy is supporting a commercial-scale
project to convert waste coal into F-T diesel and power. In
addition, the US Department of Defense’s concept of a single
fuel for the battlefield opens up opportunities for alternative
fuels; a coal-based fuel would reduce the inherent risks and
vulnerabilities associated with oil-based supplies.
Mr Steven LEER, Chairman and Chief Executive Officer at Arch
Coal Inc, chaired this session, noting a shift in emphasis from
the technical to the economic in three presentations on CTL
developments in the USA.
BEZDEK saw a solution in exploiting US coal, oil shale, heavy
oil and biomass resources (>2-4 trillion barrels), these
“alternative oil” resources being larger than the world’s
conventional oil reserves (2-3 trillion barrels). He observed that
the USA has more coal reserves than any other country, several
hundred years even with increasing utilisation rates.
Coal Fields of the United States –
Lower 48 States
Policy Implications for CTL in the USA
Dr Roger BEZDEK, President of Management Information
Services Inc. began with his belief that the USA was not facing
an energy crisis, but rather a liquid fuels crisis. For the last two
decades or more, he said, the world has been consuming more
oil than it had been finding, e.g. oil consumption in 2005
(30 billion barrels) was six times greater than oil
discoveries (5 billion barrels).
____________________________________________________________________________________________________
Note: Alaska also has substantial coal reserves.
7
BEZDEK introduced the Southern States Energy Board (SSEB)
5
American Energy Security Study , essentially a plan to replace
all imported oil by 2030, beginning in 2010.
10
growth that would help eliminate trade and budget deficits,
quantifying the annual benefits as (2005 dollars):
REDUCTION IN U.S. OIL IMPORTS
• $185 billion in new investments
100%
• $332 billion in increased industry sales
90%
80%
• 1.4 million new jobs
U.S. Oil Imports
70%
60%
• $14 billion in profits
50%
• $94 billion in increased federal, state and local tax revenues
40%
30%
• $625 billion reduction in US trade deficit
20%
BEZDEK referred to the many policy-related actions already
underway and a number of incentives aimed at CTL.
10%
0%
2007
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
The study:
• developed a plan for the US to establish energy security and
independence through the production of alternative oil and liquid
fuels;
• emphasised enhanced oil recovery using CO2 and increased
transport efficiency; and,
• developed policy and legislative recommendations.
To eliminate imports would require all options: coal-to-liquids
(29% in 2030), biomass (24%), efficiency measures in the
transport sector (16%), oil shale (16%), and enhanced oil
recovery (15%). If oil imports were held steady, at the 2005
level of 13 mb/d, BEZDEK said demand growth to 25 mb/d
and declining US production would open a supply gap of
5 mb/d by 2025 – five to six times more oil than Australia
currently consumes. He called for early and massive action
because of the 8-10 year lead time before these options would
have a major impact. To establish a programme, SSEB was
working with Congress and the Administration.
THE PATH TO U.S. ENERGY SECURITY
AND INDEPENDENCE
Trans.Efficiency
20
Oil Shale
MMbpd
EOR
Import Gap
Biomass
15
CTL
10
Conventional
Oil Production
5
• President Bush: U.S. is “addicted to oil” & must reduce oil
imports
• Studies and plans being developed by Federal agencies:
Dept. of Energy, Dept. of Defense, Unconventional Fuels
Task Force, DOE labs
• Studies and plans being developed by state governments,
SSEB, Western Governors Association
• Many states have passed CTL legislation & are building CTL
plants
• U.S. Congress: Study mandated for GAO, Congressional
Caucus formed, CTL incentives legislation passed
• Independent initiatives: National Academy of Sciences,
National Coal Council, National Petroleum Council
16
U.S. FEDERAL GOVERNMENT
CTL INCENTIVES
• EPACT 1992: Court orders for AFVs
• EPAct 2005: Financial incentives, loans & loan
guarantees, earmarks, $1.4B in ITCs, Incentives for
Innovative Technologies program
• SAFETEA-LU 2005 provides a $0.50/gal. excise tax
credit for CTL products
• Legislation: Many Bills in U.S. Congress: Expensing of
CTL equipment, loan guarantees, excise & investment
tax credits, Trust Fund for CTL development, matching
grants, require use of CTL fuel in SPR, R&D incentives,
purchase agreements, production tax credits, mandate
use of CTL fuels in Federal fleet, accelerated
depreciation, cost-shared demonstrations
18
i30
25
WHAT IS THE USA DOING?
20
29
20
27
20
25
20
23
20
21
20
19
20
17
20
15
20
13
20
11
20
09
20
07
0
10
In the case of CTL, the SSEB study anticipated dozens of
20-60 000 b/d plants such that, by 2030, 5.6 mb/d would be
produced. BEZDEK reported that other studies also estimated
a huge potential for CTL in the USA:
• US DOE National Energy Technology Laboratory study (July
2006) – 5.1 mb/d by 2027.
• US National Coal Council Study (March 2006) – 2.6 mb/d by
2025.
• US DOE Unconventional Fuels Task Force (November 2006)
– 2.5 mb/d by 2035.
BEZDEK listed the following benefits from adoption of the SSEB
initiative:
reduce risk and lower oil prices;
foster new
technology;
create millions of jobs;
and, revitalise the
manufacturing sector. He spoke of the enhanced economic
KEY ROLE OF CONGRESSIONAL
LEGISLATIVE INCENTIVES
• As noted, U.S. Federal law SAFETEA-LU 2005 currently
provides a $0.50/gal. excise tax credit for CTL products.
• However, this incentive is set to expire in 2009, before
any major new CTL plants can come online.
• Its extension through 2020 will provide critically needed
market incentives for the development of CTL plants.
• This extension is critical, because the tax credit will
reduce CTL OPEX by $20/bbl.
• Legislation to extend this tax credit has been introduced
in the U.S. Congress.
He called for an extension of the CTL tax credit from 2009 to
2020.
11
U.S. DEPT. OF ENERGY INITIATIVES
• Secretary Bodman has emphasized the need for CTL
• DOE mandated National Coal Council and National
Petroleum Council to conduct independent studies
• DOE conducting a series of studies to estimate feasibility
& impacts of rapid CTL development
• Unconventional Fuels Task Force: Developing
commercialization plan, schedule, budget, and
incentives for accelerated CTL development
• DOE labs conducting CTL R&D: NETL, Los Alamos,
Oak Ridge, etc.
• Increased budgets for CTL programs
In conclusion, BEZDEK referred back to the feasibility studies
that indicate the USA could produce 3-5 mb/d of CTL liquids
by 2030 and again noted the activity, at all levels of
government, with that objective.
CTL Projects – key issues and economics
Mr Robert KELLY, Executive Officer at DKRW Energy LLC,
presented from a project developer’s perspective, notably on
two projects with Arch Coal, but also other projects in Montana,
and in Wyoming where the Medicine Bow plant is one of the first
commercial CTL projects in the USA.
DKRW Advanced Fuels
DKRW US CTL Opportunities
Montana
BEZDEK noted that the US Department of Defense itself
consumes 400 000 b/d – more than most countries.
Arch Coal
Medicine Bow
U.S. DEPT. OF DEFENSE INITIATIVES
• Office of the Secretary of Defense Clean Fuel Initiative:
catalyze industry to produce CTL fuels for the military
• Battlefield Use Fuel of the Future Program
-- 3 stages (evaluation, demo, implementation)
-- leading to CTL F-T fuel procurement by 2010
• Total Energy Development Program
-- Utilize domestic coal to produce CTL fuels
-- Couple program with advanced technologies
-- Focus on qualification & certification
• Naval Research Advisory Committee: Financing CTL
plants viable if DOD makes long-term commitment
Source: http://www.eia.doe.gov/cneaf/coal/reserves/chapter1.html#chapter1a.html
Confidential & Proprietary
www.DKRWenergy.com
5
KELLY saw three drivers for CTL:
He saw state governments moving ahead faster than Federal
government, with highly-skilled, well-paid, technical and
professional jobs being the key driver in many states, especially
coal-producing states.
STATE GOVERNMENT CTL INCENTIVES
• Many states promoting CTL development: Arizona,
Colorado, Kentucky, Illinois, Mississippi, Montana, North
Dakota, Ohio, Pennsylvania, South Dakota, Virginia,
West Virginia, Wyoming
• State CTL incentives include: Consortia to purchase
CTL fuels, tax credits, financing assistance, grants, job
training, alternative fuels incentives, alternative energy
portfolio standards, strategic partnerships, public vehicle
fuel mandates, site assistance, accelerated permitting,
public energy authorities, tax increment financing,
property tax relief, alternative energy revolving loans
• Cities: Require fleets to use alternate fuels – Denver,
Chicago, Oakland, Portland, San Francisco, etc.
22
• Economics: strong oil demand and rising real prices, versus
stable coal prices, mean the price gap in favour of coal will
widen. To keep oil supply and demand in balance, will require
significant growth in unconventional oil production – US DOE
International Energy Outlook 2006 forecasts a rise from
1.8 mb/d in 2003 to 11.5 mb/d in 2030.
• Energy security: large coal reserves in key industrial nations –
59% of world fossil energy reserves lies in coal, with the USA,
China and India sitting on 50% of these coal reserves, countries
that will all be significant oil importers over the next 20 years.
• Environment: CTL produces low sulphur, high cetane F-T
fuels and sequesterable CO2, responding to environmental
regulations (US EPA Tier 2 sulphur levels in diesel <15 ppm by
2007) and helping reduce CO2 emission through the better fuel
efficiency of diesel-engined vehicles.
DKRW Advanced Fuels
Economics: Strong Demand & High Prices
Strong Demand is Keeping Prices Firm
Steadily Increasing World Oil Demand
DOE Oil Forecast
World Oil Consumption
$120.00
140.00
23
12
$40.00
$20.00
2028
2026
2024
2022
2020
$-
Year
2018
0.00
$60.00
2016
20.00
2014
40.00
$80.00
2012
60.00
$100.00
2010
80.00
2008
WTI Oil Price $/BBL
100.00
20
03
20
06
20
09
20
12
20
15
20
18
20
21
20
24
20
27
20
30
• Illinois: Rentech to convert fertilizer plant to
CTL for gas and clean fuel
• Mississippi: Agreement with Rentech for
$700M 10K bpd plant
• North Dakota: MOU with Headwaters and
others for 10K – 50K bpd plant (5-7 yrs.)
Pennsylvania: WMPI building $612M 5K bpd
plant by 2008 (Sasol, Shell, and Nextant)
• South Dakota: Designing a 28K bpd plant; site
planning to begin in late 2006
• Virginia: Planning a 10K bpd modular plant
MM Bbls/Day
120.00
2006
STATE GOVERNMENT CTL PROJECTS
Year
Source: US DOE Annual Energy Outlook 2006
The World Will Consume 40 Million More
Barrels of Oil per Day by 2030
Real 2004$
Nominal $
Strong Asian Demand and Tight Global
Supplies Keep Markets Firm
7
www.DKRWenergy.com
He explained that the price differential between coal and diesel
(c.20% above the oil price shown below), provides an arbitrage
opportunity for those ready to invest capital in CTL plants.
DKRW Advanced Fuels
DKRW Advanced Fuels
Economics: Low Coal Feedstock Costs
Disadvantages of Scale in CTL Plants
Coal Reserve Opportunities Limited
DOE Fuel Price Forecasts 2003-2030
• Larger reserve position required--- 2x-8x
$20.00
$18.00
• Fewer mine-mouth opportunities—rail costs
$/mmbtu
$16.00
$14.00
Project Financing is More Difficult
$12.00
Oil
$10.00
• Limits to project financing --- $1B
Coal
$8.00
• Higher WACC as scale increases
$6.00
$4.00
Development costs are larger
$2.00
• Larger development costs incurred 2x-4X
2027
2023
2019
2015
2011
2007
2003
$0.00
• Significant financial risks before FID complete
Source: US DOE Annual Energy Outlook 2006
There are more opportunities, a lower cost of capital,
and less development risk in smaller CTL projects
Coal is Projected to Have a Significantly Lower Cost Than
Oil Over the Next 25-30 Years—Btu Arbitrage
www.DKRWenergy.com
8
KELLY moved on to examine the key strategic issues when
developing CTL projects:
• Scale – how big, or how small?
• Product mix – liquid fuels, power, chemicals, CO2.
www.DKRWenergy.com
15
KELLY reflected that big projects may suit a small number of
big companies with access to sufficient equity, but DKRW’s
business model aimed at fighting economies of scale with wellstructured, smaller projects.
DKRW Advanced Fuels
• Contracts – cost and security of coal feedstock, and liquid fuel
off-take agreements.
Scale & Development Cost Risk
• Environmental – including CO2.
Scale and Development Costs
• Construction and permanent financing – EPC partner.
150
$MM
DKRW Advanced Fuels
100
50
Advantages of Scale in CTL Plants
0
10000
20000
40000
80000
Capacity (bpd)
100.0
80.0
60.0
40.0
20.0
0.0
10000
20000
40000
80000
Opex vs Capacity in CTL Plants
Index 10000 BPD =100
Index 10000 BPD = 100
Capex vs Capacity in CTL Plants
120.0
Source: Scully Capital Analysis for DOD 2006 2.5% Capex
120.0
Large scale plants incur significantly higher
development costs prior to the FID
100.0
80.0
60.0
40.0
20.0
0.0
10000
BPD of Capacity
20000
40000
Source: Headwaters ACC Presentation
There are capital and operating cost
benefits of large scale plants
14
16
www.DKRWenergy.com
80000
BPD of Capacity
www.DKRWenergy.com
(year-2006 dollars)
Despite these clear scale economies, KELLY argued that
smaller CTL projects had attractions, particularly when it
came to seeking capital – large projects carry greater upfront
costs (e.g. front-end engineering and design (FEED) costs and
permitting costs prior to the final investment decision (FID)) and
greater financial risks. Moreover, project financing is more
widely available below $1 billion (i.e. 10-15 000 b/d) at a lower
weighted average cost of capital (WACC) than for, say, a
$5-7 billion, 80 000 b/d CTL plant. Finally, large projects need
large coal reserves (e.g. 2-4 billion tonnes) such as found in the
Powder River Basin and China, but few other places. Coal
consumption is then typically beyond what a single mine can
supply to a mine mouth CTL plant, thus increasing exposure to
rail cost risks.
KELLY presented details of the Medicine Bow CTL project
which will use a low-temperature iron catalyst to produce ultralow sulphur diesel and naphtha, with 275 MW of electric power
generated from waste heat and tail gas, of which 60 MW would
be exported – a true polygeneration plant. DKRW’s own
intellectual property, in terms of gasifier / F-T process
integration, brought unique added value to the project.
DKRW Advanced Fuels
Medicine Bow Fuel & Power
Coal
Secure Coal Resources
Entered into Option with
Arch Coal to purchase
coal reserves in Carbon
Basin Reserve
Underground
Continuous Coal Mine
Owned
Mine built and operated
by Arch
Permits for Surface &
Continuous Mining
completed
Construction expected
to commence QIV 2007
Conversion
Facility
Package Technology & EPC
Coal-to-Liquids Plant
Coal Mine at plant
Gasification (GE)
Fischer Tropsch
(Rentech)
Hydrocracking (UOP)
Permit applications to
be submitted in 2006
Expected Construction
start = end of 2007
Expected I.S.D. = end
of 2010
17
Liquids & Other
Products
Sell Products
Capacity = 10,00015,000 barrels / day
Diesel (ultra low sulfur)
Naphtha
Long-term Purchase
Contract
Shipped via pipeline
Export Power 60MW
CO2 (to EOR)
Sulfur
Chemicals
www.DKRWenergy.com
CO2 can be captured, liquefied and used for EOR in
Wyoming where it would remain sequestered after the tertiary
recovery of crude oil at rates only slightly below the CTL plant’s
13
own output. The mine mouth design ensures a competitive coal
feedstock and DKRW has acquired an option on 180 Mt of
permitted bituminous coal reserves in the Carbon Basin that
would support the initial plant (in-service date (ISD) end of
2010), and future expansions.
This product development unit (PDU) will be used to train
operators, validate Rentech process designs and supply fuels
for testing, including to the US DoD.
Product Development Unit
DKRW Advanced Fuels
Medicine Bow Project Participants
►First Fully Integrated CTL
Production Unit in the US
On-line: 2007
Arch Coal: Carbon Basin Reserve Option
Advances Rentech capabilities
10 bpd of finished product
Commerce City, Colorado
General Electric: Gasification License
Rentech: Fischer Tropsch License
►Facility Deliverables
Architect’s Rendering of the PDU
Actual products in volume
available for end user testing and
evaluation
Ability to refine FT reactor
performance parameters
Feedstock analysis and validation
of CO2 variables based on syngas
quality and process design
Training of facility operators
Refiner/Marketer: Liquids Off-Take Agreement
Exploration Company: CO2 Off-Take Agreement
EPC Contractor: SNC-Lavalin
Financial Advisor: Citibank
3
Key Project Participants in Medicine Bow
18
www.DKRWenergy.com
Financing the project, including the coal mine, will require
$1.5-2.0 billion. A debt to equity ratio of 65:35 is proposed, the
debt comprising loans backed by Federal loan guarantees,
advances from the EPC turnkey contractor, and insurance
company borrowings. Equity will come from a public offering
and strategic partners – KELLY saw value in being the first CTL
developer to seek capital from the market.
By engineering a smaller plant with a good initial return, KELLY
explained that the potential then existed for greater economies
of scale to be achieved during two later expansions of the
project up to 30 000 b/d. He anticipated capital cost reductions
of up to 25%, as experience was gained with CTL plants, and
higher income from more diverse and valuable chemical
products over time.
KELLY concluded by outlining the features of a successful CTL
project: well structured debt/equity, key technologies and coal
reserves secured early, on competitive terms, and positive
public policy incentives. However, he stressed that if CTL
was to succeed, then projects had to be commercially viable
without state support. KELLY was optimistic of future growth
prospects in a huge global market.
Rentech’s strategic plan is to develop a repeatable and
scaleable CTL process up to 50 000 b/d, building on its
patented iron catalyst for F-T synthetic diesel production, and
thus jump-start CTL production in the USA. To that end, KERR
reported that Rentech had acquired an ammonia fertiliser plant
for conversion from natural gas to coal. An oversized gasifier
will feed excess syngas to a 1 500-1 800 b/d CTL plant and
55% of the CO2 removed prior to F-T synthesis can be used for
urea production. Interestingly, the fertiliser plant economics
support 50% debt, whilst the CTL plant is entirely funded with
equity.
Strategies for Energy and the Environment
► Coal is the primary US domestic
energy resource:
►At Rentech, we:
Develop energy solutions
265 billion tons of proven,
developed coal reserves
Work to protect the
environment
Are carbon-capture ready
U.S. Coal Supply Regions
Evaluate every project for
maximum carbon capture
potential
Sequestration of CO2 from CTL Processes
Utilizing Rentech’s technology
to convert just 5% of U.S. coal
reserves would double the
known domestic oil reserves.
Mr Merrick KERR, Chief Financial Officer at Rentech Inc.,
presented his company’s long history of F-T catalyst technology
development, culminating in the first, fully-integrated CTL
pilot plant of 10 b/d at Commerce City, Colorado.
Rentech’s Premium Synthetic Diesel
25 years of Technology Development
Sterling, CO Plant
(1982-1987)
Zuni, CO Plant
(1988-1989)
6
► High Performance
X Developed Rentech’s proprietary and
patented iron catalyst
► Usable in Today’s Engines, Pipelines
► Ultra-low in Sulfur
X Used syngas gas as feedstock to produce
FT diesel for engine testing
► Significant Environmental Advantages
Boulder, CO Catalyst Plant
(1990-1991)
Pueblo / Denver, CO
(1993-Present)
X Produced over 22,000 pounds of Rentech’s catalyst
FT Fuel Emissions Reductions (1) Relative to EPA Low
Sulfur Diesel
X Proved the technology using different operating conditions,
HC
CO
Synhytech Plant, Pueblo, CO
(1992-1993)
(17%)
X Verified Rentech Process at full scale
X Exclusive CTL license / non-exclusive GTL license
PM
(13%) (15%)
(1998-2003)
X Tested Rentech FT catalyst technology in DOE joint industry effort
(45%)
(55%)
(60%)
(62%)
(52%)
(72%)
Cruise
(1)
X First fully integrated domestic CTL facility will be located at
Idle
HC = Hydrocarbon, CO = Carbon Monoxide, C02 = Carbon Dioxide, N0x = Nitrogen Oxide, PM =
Particulate Matter. Data from U.S. Military testing.
5
Rentech’s new R&D center
2
14
NOx
(4%)
X Then largest FT slurry reactors in the world
La Porte, TX
Commerce City, CO (2007)
CO2
and feedstocks, including coal
X Still serving as Rentech’s R&D facilities
KERR turned to CO2 capture where he saw three alternatives in
descending order of attractiveness:
• Revenue-generating options: food-grade CO2, capture into
other products (e.g. urea), EOR, and enhanced coal bed
methane recovery (ECBM).
• Sequestration alternatives: salt domes, saline reservoirs, and
geological strata.
• Theoretical possibilities:
algae gasification, fast-growth
forests, and deep-sea entrapment.
Using results from work with the State of Wyoming, KERR said
that ECBM needs a $5/tCO2 credit to be profitable at current
natural gas prices.
KERR concluded with a list of Rentech’s current projects,
including at East Dubuque, Illinois, where Rentech hopes that a
CO2 pipeline, proposed in the Governor’s energy plan for EOR
in southern Illinois, will run close enough to allow 100%
sequestration. At Natchez, Mississippi, coal and petcoke would
be converted, and two joint development projects with Peabody
Energy in Illinois and Montana, both include CO2 capture-ready
designs for EOR and ECBM.
Rentech Projects
East Dubuque
►Strategic Location
On the Mississippi River
Existing Ammonia Plant
Conversion to Illinois coal feedstock
Enhanced Coal Bed Methane Recovery
►CO2 sequestration alternatives
Food grade for carbonated beverages
Trapped in Urea, a fertilizer product
Proposed CO2 pipeline for Enhanced Oil Recovery
►Inject CO2 into coal seams to enhance gas production
►First US commercial scale CTL & FT plant
Coal has up to 10 times the affinity to absorb CO2 over methane
Currently in Front End Engineering & Design
Methane is chased out and produced
Natchez
►Evaluation:
On the Mississippi River
Near existing oil fields with Enhanced Oil Recovery
Potential to be profitable with a carbon credit of $5/ton
2000-psi

Sited at or nearby Peabody mines
Initial project sizes:
10,000 and 30,000 Bbl/d
Scalable, repeatable design
► Projects engineered to be carbon-capture
ready
► Phase 1

One-year Scoping and feasibility
Sites under consideration in Montana
and Illinois Basin
Rentech Process Licensee
►Ideal CO2 sequestration location
► DKRW and Arch Coal
►Currently in feasibility and scoping study
► Working with oil and gas company to
incorporate carbon capture
Enhanced Oil Recovery
Gas Product
to 3rd Party
Compression
and Dehydration
1500-psi
► 2 projects under study
►Strategic Location
Not profitable given current conditions even at $6/Mscf gas and zero cost
CO2 (due to time and volume of CO2 required before gas begins to flow)
FischerTropsch Coalto-Liquids Plant
Peabody Energy Joint
Development Agreement

Medicine Bow, Wyoming
11
CO 2
Pipeline
CO 2 To
Injection Well
Discussion
Product from
Production Well
Coal Depth = 1,260 feet
8
In contrast, he quoted a CO2 value of $10-20/tCO2 when used
in EOR projects compared with a cost of production of
$7-15/tCO2, noting that this data was site specific to Wyoming.
BEZDEK replied that efficiency improvements did lead to a
substantial demand reduction in the study. Whilst electric
vehicles and hydrogen raised their own difficulties and had not
been studied, he was aware of other work. BEZDEK returned
to the win-win opportunity that CTL with CCS coupled to EOR
offered in terms of energy supply.
Enhanced Oil Recovery
►Inject CO2 into existing oil fields to extract additional production
►Evaluation: Highly attractive project economics
Investment required for well development, distribution and re-injection is
approximately $165 million for a 1,400 tpd CO2 project
Breakeven CO2 value:
$10 - 20 / ton
(depending on market oil price)
FischerTropsch Coalto-Liquids Plant
2000-psi
Gas/
Oil/
Water
Sep.
1500-psi
CO 2
Pipeline
KERR observed that the efficiency of new vehicle technologies
was not necessarily an improvement: he quoted 55 mpg for
diesel vehicles and 50 mpg for electric hybrids.
Gas
Product
CO2
Recycle
Facility
EORCO 2
Compressor
2500-psi
Gas Product to
3rd party
compression &
dehydration
Water Product
Oil
Product
CO2 To
InjectionWell
Product from
ProductionWell
Well Depth = 9,500 feet
Dr Stephan SINGER, Head of the European Climate and
Energy Policy Unit at WWF, wondered if CTL would survive in
a post-Bush, carbon-constrained world, because it failed to
reduce CO2 emissions. He asked if the SSEB study had
considered alternatives, such as coal-to-hydrogen and electric
cars, and whether improving vehicle efficiency had been
factored in?
9
Mr David GRAY, former Director of the British Coal Petrol and
Diesel from Coal Project, asked if consumers would consider
CTL fuels to be environmentally acceptable, whether oil refiners
would permit blending of coal products for distribution, and
whether manufacturers would guarantee vehicle engines used
with coal-based fuels? He thought that the proposal to produce
5 mb/d in the USA was incredible – requiring, he believed, a
doubling of US coal output.
BEZDEK agreed that the supply gap was indeed challenging at
5 mb/d, but would be bridged by energy efficiency measures, oil
shale, biomass, biodiesel and electric hybrid vehicles, with coal
playing a part through CTL.
Impacts of CO2 Capture on Wyoming Project
►Significant CAPEX required
KELLY confirmed that oil refiners would accept blending of F-T
fuels – DKRW had spent the previous year negotiating detailed
specifications and commercial terms with major refiners and
marketers in the Rocky Mountain area to allow pipeline
shipment to Denver of F-T fuels where they would go into
commercial batch.
To capture and clean CO2 stream
Gas separation and clean-up costs for syngas prior to entering the FT
reactor are inherent to CTL costs (unlike IGCC, where CO2 separation
is not required by process and is an additional cost)
Compression costs are significant to reach liquid phase at 2,000 psi
from separation pressures of 1 atm
►Total cost: $7 - $15 / ton
To provide pipeline quality CO2 at the plant fence
Includes return on capital for compression
10
KERR referred to the September 2006 announcement by the
US Department of Defense following the successful trials of a
synthetic jet fuel (50:50 F-T:JP 8) in two engines of a B-52
Stratofortress bomber. Produced from natural gas for these
trials, but with the stated aim of moving to coal-based fuels
by 2009/10.
15
Mr Matthias HARTUNG, Executive Vice President at RWE
Power AG, asked if the coal industry was engaged and
contributing to the efforts to mitigate CO2 including through CO2
storage?
LEER explained that the industry was putting money into
projects jointly supported by government, projects at utility
companies and projects at national laboratories. Under almost
any scenario, he saw a significant increase in coal use, in
the USA, China, India and elsewhere, such that the key
question was to find ways of safely storing CO2. LEER was
convinced that technology would provide the answers; the
developed countries had a responsibility to develop the
technologies and to share these with developing countries. This
would take time, but with the forecast energy demand growth to
2030, all options would be needed including coal with CCS. He
said that to exclude particular energy sources was not good
public policy and that it was unrealistic to expect that any
country would not exploit its indigenous coal resource.
KELLY spoke as a US-focussed project developer who, like
others, was assuming that carbon would have a price in the
future and that CO2 would have to be sequestered, even
though there was no current policy constraint on CO2 emissions.
Developers were motivated not only by the economic potential
of projects linked to EOR, but also by the longer term need to
deal with CO2. He saw better energy efficiency as an inherent
driver – developers sought the maximum output from CTL
plants.
Dr Atul ARYA, Vice President of Group Strategy at BP plc,
suggested that given the scale and complexity of future CO2
management, the coal industry should collaborate with the oil
industry, although he was unsure on precisely how. He thought
it better to incentivise energy diversity rather than energy
independence. ARYA then posed this dilemma: if the USA
achieved greater energy independence through successful CTL
projects, then oil prices would presumably fall, making the
projects uneconomic.
BEZDEK said the SSEB study did not evaluate the CO2
emissions associated with each alternative, but agreed that
hydrogen presented an interesting alternative and that the
issues it raised where now being addressed. He agreed that
the global warming was a difficult long-term problem and the
carbon issue had to be addressed in concert.
KERR returned to the equivalence of emissions from CTL fuels
compared to conventional oil products. With CO2 emissions
from diesel use accounting for about 20% of transportation
emissions in the USA, he wondered if this issue was
overplayed. CTL with CCS neither increased nor decreased
CO2 emissions, but brought other environmental benefits
alongside security and economic benefits for the nation.
SESSION 3: CTL Projects in China and the
Developing World
Shenhua Group is constructing the first process train of a
USD 3 billion, 60 000 b/d (3.2 mtpa), direct coal liquefaction
plant at Ordos in Inner Mongolia Autonomous Region, with a
planned expansion to 5 mtpa. The company plans further
CTL projects, including two plants in Ningxia Hui
Autonomous Region (each 60-80 000 b/d) and a USD
5 billion, 80 000 b/d plant in Shaanxi Province, which are
progressing using well-proven, indirect liquefaction
technologies from Sasol and Shell. China aims to produce
50 mtoe annually by 2020, from 200 million tonnes of coal. In
response, Yankuang Group has two coal-to-chemicals plants
under construction at Yulin in Shaanxi Province, one FischerTropsch and one based on methanol synthesis, Xinao Group
has funding for a major dimethyl ether (DME) project in Inner
Mongolia, and Lu’an Group has a small CTL project at Tunliu,
Shanxi Province. Many other proposals for polygeneration
plants, producing electricity, hydrogen, liquid fuels and
chemicals, are also under consideration, although China’s
National Development and Reform Commission set new
capital thresholds in July 2006, thus limiting future
development to projects >3 mtpa.
BEZDEK believed the goal of energy independence was
worthy, if only to reduce the rate of growth of imports. It would
require many diverse measures, including a commitment to
energy efficiency, demand reduction and alternative fuels, and
other measures not yet considered. The impact on world oil
markets would be positive, but with Chinese demand growth,
he thought the price impact might be relative modest.
Mr Eric FORD, Chief Executive Officer of Anglo Coal Australia
Pty Ltd, began this session by welcoming participants from
China, noting the important CTL developments that were well
underway.
Dr Don ELDER asked if the Rentech project economics treated
CO2 as a credit of $5/tCO2 or as an avoided cost? He also
asked a more fundamental question on the feasibility of
constructing as many as one hundred 50 000 b/d CTL projects
in the USA. Had the economic analysis considered the
inflationary pressures of such a large programme on costs
of materials, labour, technology, coal, water, etc.?
Dr ZHANG Yuzhuo, Chairman of China Shenhua Coal
Liquefaction Corporation and Vice President of Shenhua Group
Corporation Ltd, began by explaining why China needed to
develop CTL: in the previous 7-8 years, the Chinese economy
BEZDEK replied that Nth plant costs had been assessed with
different capital costs assumptions. However, he believed that
there would be huge demand from all energy sectors which
would therefore all be faced with similar inflationary
pressures. He did have a concern about a shortage of labour,
especially following the downsizing during the 1990s when the
US oil and gas industry lost half a million people.
The situation of oil supply severely falling short of demand
is becoming increasingly prominent
¾
China became a net oil importing country in 1993;
¾
In 2005, China consumed 300 Mt of oil and imported 127 Mt of crude
crude oil.
¾
China has become the world's second largest oil consumer and the third
largest oil importer.
300.0
Production
Consumption
Import
250.0
200.0
Mt
KERR responded that the CO2 credit assumed a plant already
running with an established baseline such that the avoided CO2
would have a value.
China’s Development Strategy for Coal-toLiquids Industry
150.0
100.0
Mr Daniel CICERO pointed to the similar CO2 emissions from
CTL fuels and petroleum fuels, such that CTL, even with CO2
sequestration, would make no contribution to the 80% CO2
reduction targets called for. He wondered if the SSEB study
had considered other alternatives, specifically coal-to-hydrogen
with CCS?
16
50.0
0.0
-50.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Oil Pruduction and
Consumption in China
had doubled and oil supply was now a critical issue. Having
been a net oil importer since 1993, China’s oil import
dependence could reach 60%-62% by 2020.
tonnes per annum, underpinning economic growth,
contributing to severe pollution problems.
Coal-Dominated Energy Production and
Consumption Mix
18232
15000
8947
10000
5848
5000
1855
0
1990
1995
2000
2500
2000
1500
1000
1311.76
1302.97
1995
2000
0
1990
Year
Oil Consumption / Mt
150
¾
It is predicted that by 2020,
China's oil consumption will
224.39
200
2005
Year
300
250
Coal consumption has entered a rapid growth period
since 2000.
987.03
500
2005
300
exceed 450 Mt.
160.65
Coal has been China's main source of energy for quite a
long time;
2220
Coal Production & Consumption
/Mt
GDP /Billion Yuan
Energy Consumption / Mtec
China’s demands for energy and oil consumption
increase with its economic growth
20000
2500
¾
In 2005
Raw coal production ：2.19 billion
tons
Coal consumption ：2.14 billion
tons
Share of coal in energy
consumption : 68.7%
Production
2000
¾
Consumption
1500
¾
1000
114.86
100
but
500
¾
0
1990
Oil import may reach
2001
2002
2003
2004
2005
Year
50
0
1990
1995
2000
60%~62%.
2005
Year
ZHANG showed that China’s energy resources are relatively
small, given the size of its population. Coal accounts for almost
90% of China’s total proven energy reserves, although less than
60% of its remaining exploitable resources, whilst oil accounts
for only 2.8% of proven reserves and 3.4% of exploitable
resources.
Clean Coal Technologie in Favor of Environmental Protection
The proportion of coal burning induced
contamination to the total contamination
100
Percentage
Energy Resources
China’s fossil energy reserves is of higher than 823
billion tce.
Chinese per capita energy resources is only about 51% of
the world average.
Coal is the main share of China’s energy resources.
Natural
Gas
0.3%
Crude Oil
2.8%
Natural
Gas
1.3%
Crude Oil
3.4%
Hydropower
9.5%
Raw Coal
87.4%
60
70
SO2
NOx
TSP
60
40
20
0
CO2
Direct coal burning results in low productivity and severe
pollution. The economic loss every year caused SO2 pollution
and acid rain due to coal burning is astonishing. Coal
liquefaction product is super clean fuel with no sulfur.
ZHANG believed that CTL could add value to western China’s,
low-cost coal resources by supplying affordable energy and
allowing easier transport of smaller volumes of higher value
products. He noted that the rail system was already overloaded
with coal movements which accounted for over 40% of all
rail freight in China.
Hydropower
36.5%
R a w C o al
58 . 8 %
80
85
74
Energy Reserves Mix
Exploitation Energy Mix
Coal Conversion Will Add Value to Coal and Make
Transportation Easier
Turning to energy consumption patterns, ZHANG showed that
China was much more dependent on coal than other countries,
almost 70% of total demand, and less dependent on oil. He
noted how quickly coal use had grown since 2000, to 2.1 billion
● The freight volume is reduced greatly
● The sales revenue is increased greatly
Hydrocarbon/5 tons of coal
煤转化重量变化
Coal has met the energy needs of China's
重量（万吨）
economic growth
Comparison of energy consumption mix in 2005
between China and other countries
6300
15000
3100
2800
205
500
80
Energy Consumption / ％
70
68.7
C oal
O il
Natural Gas
60
50
45
40
36
40
32
31
30
25
21.2
18
20
21
Coal
Liquefied
Oil
Polyolefin
150 Mt of coal can be converted to 28 Mt of product oil plus 2.05 Mt of
polyolefin
•Convert to the equivalent heating value, the price ratio is about 20:1 in
the west of China
10
10
2.8
0
C hina （ 2005 ）
Asia & O ceania （ 2004 ）
Europe （ 2004 ）
North America （ 2004 ）
With an annual production of 220 Mt, Shenhua Group is China’s
largest coal producer. It also owns 13 GW of coal-fired power
plants, 1 500 km of railways and two ports with a combined
capacity of 80 mtpa. ZHANG reported that Shenhua’s CTL and
coal-to-chemicals developments were in full progress, strongly
supported by the Group’s other activities. He explained that
17
Shenhua had adopted three process routes: direct and indirect
coal liquefaction (DCL and IDCL) to produce oil products, and
the methanol intermediate route to produce olefins that typically
have been derived from oil in China.
Direct Coal Liquefaction Process
ZHANG moved on to describe Shenhua’s commercial-scale
DCL demonstration project that will produce a little over
25 000 b/d (1.1 mtoe per year).
He said that this first,
demonstration process train was intended to eliminate any
technical risks with the remaining trains of the first and second
phases.
Shenhua Direct Coal Liquefaction (DCL)
Demonstration Project
The Shenhua DCL process, ZHANG explained, uses a new,
highly-efficient, synthetic catalyst developed in China which has
very high activation and low cost. More that 90% by weight of
the coal is converted and oil yield reaches 57% on a dry, ashfree basis.
Shenhua DCL Process and High-Efficiency Catalyst
Catalyst
分馏
改质
分离
备煤
Gas
Construction Site :
Inner Mongolia
Gasoline
Planned Scale :
5 million tons of oil products per year
Diesel Oil
制浆
Slurry preparation Liquefaction Separation Upgrading Fractionation
净化
气化
空分
( in two phases )
Jet fuel
Residue
N2
Air
Shenhua direct coal liquefaction commercial demonstration
project is an important component of China’
China’s oil
substitution strategy. It’
It’s the first largelarge-scale direct coal
liquefaction plant in the world after the World War II.
Recycle solvent
Coal
Preparation
液化
Coal
Project description
Demonstration Scale :
year
one million tons of oil products per
( the first train in Phase
Phase I )
H2
O2
Air Separation
煤煤煤放放放放： 8万放
Gasification
Purification
连连制备制制连连制： 11
放放放放： 8万放
The process has been proven on a 6 t/d Process Development
Unit (PDU) in Shanghai, operational since May 2004 with
support from Japanese, German and US equipment suppliers.
The third test run was still in progress as ZHANG spoke, having
achieved 1 400 hours continuous operation.
Shenhua’s DCL PDU established
in Shanghai
神华煤制油研究中心中试基地
The product slate was biased towards diesel because China is
short of this fuel:
product
tonnes/year
LPG
naphtha
diesel
phenol
total
102 100
249 900
714 600
3 600
1 070 200
Shenhua DCL Demonstration Project
The construction of Shenhua DCL demonstration project will be
completed in 2007.
In 2008, the plant will be put into demonstration test run.
18
ZHANG said that the first plant was 68% complete with two
reactors already lifted and installed on site, including the world’s
largest single reactor (2 250 tonnes). Ground breaking took
place on 25 August 2004, pre-commissioning is scheduled
during 2007, with final commissioning, test run and start-up in
2008.
ZHANG stated that Shenhua would construct more CTL
plants, one after the other, in Inner Mongolia, Shaanxi,
Ningxia, Xinjiang and elsewhere such that, by 2020,
production capacity of oil products would reach 30 mtpa.
The integrated development of DCL and IDCL is part of
Shenhua’s plan.
Turning to Shenhua’s IDCL projects, ZHANG stated that his
company was working with Sasol and Shell on the feasibility of
CTL projects at two locations in western China to produce fuels
(naphtha and diesel) and chemicals (oxygenates).
With respect to environmental performance, ZHANG reported
that Shenhua’s mine mouth CTL plants made use of GE
technology to eliminate waste water discharges – residues
would be used as fuel for power generation, the cement industry
would take all ash, and a market exists for sulphur. In addition,
the potential to capture and store CO2 at an abandoned
mine was being investigated in a project with the US DOE.
Fischer-Tropsch Process
NZE: An environmentally-friendly industry
¾
To produce high quality oils and chemicals based on coal
¾
All water will be recycled and no discharge of waste water
¾
Residue from direct coal liquefaction can be used as fuel for
gasification or self-operated power plant
¾
Ash from gasification and power plant can be used as feedstock
for cement plant and building materials
¾
All sulfur from coal can be transformed into sulfur products
¾
International cooperation is in considering for the test of
injecting CO2 into the abandoned mine so as to reduce gas
emission
In addition, three parallel IDCL projects are underway in China,
one of which is run by Shenhua – a 4 000 b/d (170 000 toe per
year) demonstration plant.
Shenhua Indirect Coal Liquefaction (IDCL) Project
In Chinese Academy of
Sciences, an IDCL pilot plant
test has been completed;
Construction of an IDCL
demonstration plant is
underway in full swing
The third coal conversion route being exploited by Shenhua is
coal-to-olefins via coal gasification, methanol synthesis and
methanol dehydration using mature processes: methanol-topropylene (MTP) developed by Lurgi and methanol-to-olefins
(MTO) developed by UOP and the Dalian Institute of Chemistry
and Physics at the China Academy of Sciences. ZHANG
reported that a rapid construction programme was underway
and that, in the next 2-3 years, total methanol production would
reach 10 mtpa from a number of plants such as the MTP project
at Ningxia Coal Area that converts 4.7 mtpa of coal, firstly into
1.8 mtpa of methanol and than into 600 ktpa of polypropylene
(PP) and other chemicals using Institut Français du Pétrole
(IFP) technology licensed from Lurgi. ZHANG briefly mentioned
a feasibility study with DOW Chemical for a large-scale MTO
project.
Shenhua MTO Project: Consumption and
Product Slate
Shenhua has an advantages in coal resources
for CTL development
乙
Fuel Coal: 1.28 Mt/a
Coal for gasification
2.01 x 105 m3/h
Oxygen
煤
气
化
甲
醇
合
成
3 x 105 t/a
PE
烯
1.80Mt/a
3.45Mt/a
甲醇制烯烃
The coal resources being developed by Shenhua Group are
mainly concentrated in the west, north and northwest parts of
China, which are good resources suitable for coal gasification,
coal liquefaction and steam coal production.
聚
聚
聚
丙
丙
烯
3.1 x 105 t/a
PP
9.4 x 104 t/a
Butylene
3.7 x 104 t/a
C5 over
1.4 x 104 t/a
Ethane and propane
Methanol
19
Shenhua MTP Project
which includes the capital investment required for on-site power
generation.
Comparison of different conversion technology
ICL
Unit
DCL
HT
LT
Efficiency
%
59.75
41.56
41.26
Technical
Products
%daf
55.15
38.09
43.2
Recovery
t/GJ
0.16
0.25
0.26
Water
Resource
t/t
7
11.21
11.96
Coal
tce/GJ
0.061
0.075
0.076
RMB/t
7260
9110.07
8414.82
Investment
RMB/GJ
169.76
200.05
183.01
Economic
RMB/t
1771.06
2191.11
1845.89
Cost per ton
RMB/GJ
41.41
48.12
40.15
IRR
%
10.16
14.96
9.64
Item
Project is in implementation at Ningxia Coal
Area, Shenhua Group.( 1.8 million tons of
Methanol to produce 600 thousand tons of PP
and other chemicals )
By 2020, ZHANG said that China’s strategy was to produce
1 mb/d (50 mtpa) of products from CTL to limit oil imports
below 50% of demand. To achieve this, he referred to
incentives that were being discussed among different
government departments. He acknowledged that CTL was not
applicable everywhere, but in western China, with its low-cost
coal ($8-10/tonne) and access to a reliable water supply from
the Yellow River, CTL was viable, especially when compared
with the alternative of transporting coal from Xinjiang in the west
2 500 km to the coastal area.
Environ.
kg-C/GJ
20.09
34.72
35.61
29.22
kg/GJ
0.01
0.004
0.004
0.003
NOx
Dust
Water
Residue
kg/GJ
kg/GJ
kg/GJ
kg/GJ
0.09
0.01
6.87
3.36
0.133
0.01
6.29
9.92
0.186
0.013
6.46
10.29
0.17
0.02
5.58
8.86
Data from China Coal Research Institute, Research Report,2005
He noted the high efficiency of DCL that resulted in 40%
lower CO2 emissions compared with IDCL. He saw both coal
gasification and liquefaction as important components in China’s
strategy to derive electric power, heat, transport fuels and
chemicals cleanly from coal.
CTL is an important route to implement clean coal
strategy in China
Coal based
PolyPoly-generation
Thermal &
Chemical products
No need to renovate the infrastructure and energyenergy-use facility for
CTL development, but all other routes (such as hydrogen energy)
IGCC
power generation
may need high renovation cost for this purpose.
Converting coal in the west China into oils can change railway
Electric
power
Liquefaction
Hydrogen
transport to pipeline transport so as to alleviate the tension of
of the
energy
transportation.
¾
0.31
7.05
0.068
3295.08
144.12
1083.97
47.41
14.53
SO 2
Gasification
¾
45.64
100.35
CO2
CTL becomes viable in specific areas in China
¾
Methanol
The modern coal liquefaction technology can achieve nearnear-zero
emissions of pollutants. Almost no sulfur is contained in oil
Chemical
products
Power fuel
Realize clean use
products, which can be used in major cities with high
environmental standards.
Actively promote and steadily implement the
CTL strategy in future

To make scientific and overall planning and rational
distribution of CTL projects, taking into account of coal and
water resources allocation, development of the regional
economy, environment and community.
To insist on large scale, intensive and automatic production
so as to improve environment, increase efficiency and reduce
consumption.
To strengthen the R&D, demonstration and popularization of
new technology, new processes and new equipment.
To ensure the sustainable, healthy and steady development of
CTL technology and industry.
ZHANG presented comparative, techno-economic data from the
China Coal Research Institute for the three different coal
conversion technologies that Shenhua was employing, data
20
Overall, this contributed to China’s energy security strategy
of using western China’s rich coal resource to reduce the
country’s dependence on imported oil and to avoid the
economic impacts of high oil prices. In adding some further
conclusions, ZHANG praised the many equipment suppliers to
Shenhua’s CTL projects, companies from Japan, USA, France
and Germany, and extended a welcome to those who wished to
make a site visit.
Conclusions
• Different technological routes can be adopted
for oil substitution. New DCL process, F-T
synthesis process, MTO/MTO processes may be
suitable in China for large scale fuel/feed-stock
production.
• It can only be competitive for CTL business
when oil price keeps relatively high and coalderived-oil be produced with low cost.
• Environmental impacts of CTL need further
studied.
• We are looking forward to the wide and
extensive exchanges and cooperation with
friends both at home and abroad.
CTL Technology in China and Polygeneration
Opportunities
Prof LI Zheng, Director of the Tsinghua-BP Clean Energy
Research and Education Centre, presented on the general
energy situation in China and on how alternative fuels and
polygeneration could add to energy security, environmental
protection and sustainable mobility. To ensure sufficient energy
supply during a period of rapid economic growth, LI outlined the
energy challenges that China faces, many related to coal use:
• huge demand, but limited resources and supply capacity;
• shortage of liquid fuels and high dependency on imports;
• severe pollution;
• clean energy needed for rural and urbanising areas; and,
• huge and increasing CO2 emissions.
Since 1990, oil demand has trebled and recent growth in energy
consumption has outstripped economic growth due to strong
demand from heavy industry (e.g. ferrous & non-ferrous metals,
construction materials and chemicals).
Further industrialisation will ensure demand for energy
continues to rise, although the economy’s energy intensity
should pass a peak and then decline as structural changes take
effect.
LI presented this energy flow chart for China, showing that of
the 2.1 billion tonnes of coal equivalent (tce) total energy
supplied in 2004 (excluding biomass), the useful heat and work
used totalled just 0.7 billion tonnes. He drew attention to
industry’s 69% share of total final energy consumption, this
being much greater than in OECD countries.
China’s future energy demand depends not only on continued
industrialisation, but also on urbanisation trends; an urban
dweller uses 3.5 times more energy than a rural inhabitant
and LI explained that the current urbanisation rate of 41% would
rise by one percentage point each year to 2020 as China
develops some of the most populous cities in Asia.
He gave examples of urban planning in Shanghai and
Chongqing where population densities are very much higher
than in US and European cities.
NOx pollution from cars was already a major problem in
metropolitan areas, and LI predicted that this would become
worse as demand for personal transport grows.
21
He moved on to illustrate the use of alternative transport fuels,
beginning with a fleet of 100 buses running on methanol in
Shanxi since 2004.
LI saw an important role for alternative fuels in China. In the
near term, they could supplement oil supply to minimise oil
import costs and, together, could provide China with a strategic
reserve to ensure energy security. In the longer term, they offer
sustainable transport solutions with improved environmental
performance, giving time for renewable energy options to
become technically practical and economically affordable.
He did not suggest a unique solution existed; of the many
alternative fuel options, LI believed the most likely to be:
• CNG/LNG – mature and relatively easy, but market led by
imports
• Bio-ethanol – policy led and 1 Mt produced in 2005, but
expensive
• GTL – limited by resources and price
• Bio-diesel – only a small production
• Coal derived fuels – CTL, DME and methanol
All needed to be developed, but LI expected that CTL, with its
large potential, may be the main solution. However, it is very
capital intensive and LI noted the one trillion Yuan investment
already announced as project developers, especially coal
producers, responded to incentives and high oil prices in what
has become an overheated sector. Nevertheless, he quoted
Premier Wen who said, “Shenhua’s CTL projects are an
important part of national energy security strategy” and
acknowledged that CTL was one way to reduce coal transport
bottlenecks. With NDRC’s recent bar on CTL projects below
3 mtpa, LI believed that the future success of CTL depends on
improved economics flowing from the current demonstration
projects.
22
He listed the many active or proposed DME projects in China
and noted that the use of DME in vehicles is being promoted in
Shanghai.
LI introduced polygeneration – combining the production of fuels
with power generation – as an important solution to China’s
energy challenge. The gasification process is clean and
efficient, allowing high sulphur coal to be used for power
generation, CTL fuels, town gas, LPG and hydrogen. It
facilitates up to 90% CO2 capture, but is flexible enough to allow
different configurations depending on the product demand and
CO2 capture requirement.
Polygeneration offers the potential for CO2 reduction at a lower
incremental cost: compared to supercritical plant, it can reduce
CO2 by 11%, with further reductions possible as more hydrogen
is produced.
The Shell Perspective on Coal-to-Liquids
As a starting point, LI favoured large-scale methanol production
coupled with small-scale electricity generation.
Mr Nicolás XIMÉNEZ BRUIDEGOM, General Manager: Clean
Coal Energy Europe at Shell Gas & Power International, fleeted
over coal’s abundance and recent high demand growth as
countries, led by China, sought alternatives for oil and gas, to
concentrate on the operational and CO2 challenges of CTL
plants – familiar territory for Shell which offers turn-key plants
based on the Shell Coal Gasification Process (SCGP) and the
Shell Middle Distillate Synthesis Process (SMDS). Noting the
low emissions of conventional pollutants from CTL plants and
the potential to capture CO2 efficiently, he said that the latter
was a necessary step if coal was to move forward as an
environmentally-friendly fuel of the future, rather than back
to the dirty ways of the Industry Revolution.
LI reported that polygeneration was a strategic element of
China’s medium- and long-term science and technology
planning, with fundamental research projects already underway
with coal gas and coke oven gas. As a demonstration
programme, MOST has solicited three or four IGCC plants of
120 MWe and 200 MWe, plus one or two polygeneration plants
of 100 000 toe per year / 60 MWe.
In conclusion, LI made the following points:
• China’s energy demand will continue increasing due to rapid
industrialisation and urbanisation.
• Alternative fuels could supplement dwindling oil supplies and
act as a buffer to minimise oil import costs in the short term and
ensure sustainable mobility in the long term.
• Polygeneration is an important solution to China’s energy
challenges: by decreasing conventional pollutants; producing
alternative fuels for ensuring oil security; and, providing future
CO2 reduction options at a lower incremental capital cost.
• Large-scale methanol production with small-scale power
generation could be a reasonable first step for the
demonstration of polygeneration and can accommodate
fluctuating power demand.
XIMÉNEZ explained that Shell’s coal gasification developments
stemmed from the 1970s oil crises, but slowed when natural gas
became briefly abundant and cheap. Since the mid-90s, Shell
has concentrating on scaling up the technologies, notably in
China and Qatar, with China leading the way having taken 15
commercial licences over the previous five years. He
stressed Shell’s belief that only CTL plants of 70 000 b/d or
above made economic sense, hence its careful selection of
projects to pursue. In addition, he felt that only the largest
companies could manage CTL projects given their sheer size
and complexity.
Shell’s gasification project list is dominated by chemical plant
applications, but includes two CTL plants and a number of IGCC
projects.
23
significantly more than the 3.5 mtpa emitted from a similar sized
GTL plant.
XIMÉNEZ claimed Shell had the experience and know-how to
capture and store CO2, referring to projects in Norway and
Australia, where the company’s ability to characterise suitable
storage sites added considerable value. He then presented this
long list of hurdles that any CTL project developer must clear.
On economics, he noted the huge differences in capital and
operating costs between different locations, e.g. California and
China, despite similar product values. XIMÉNEZ saw great
uncertainty in the future framework for CO2 management,
yet CTL projects with CCS demanded an economic driver
for CO2 sequestration over a 30-40 year operational period.
Finally, he recommended that resource holders without oil
refining experience needed partners with expertise in the
development and operation of large (petro)chemical plants given the operational complexity of these projects.
XIMÉNEZ offered these details of Shell’s CTL project in China,
whilst the Monash CTL project is described below.
Discussion
For a CTL project to be successful, XIMÉNEZ identified these
key factors:
• low-cost, stranded feedstock supply, which might also be of
poor quality – hence Shell’s partnerships with coal producers
Shenhua and Anglo;
• technology choice;
• marketing of the premium products, which often have greater
value than products from conventional refining, e.g. ultra-low
sulphur diesel;
• operational excellence; and
• CO2 management – 16 mtpa of CO2 is emitted from a
70 000 b/d plant, equivalent to a 3 GW coal-fired utility plant and
24
Dr Roger BEZDEK thought the Chinese 1 mb/d target for 2020
rather ambitious and enquired if there was a detailed, bottomup assessment of how many plants this implied?
ZHANG replied that Shenhua’s target in the next 5 years was
four plants producing a little over 10 mtoe per annum; after
that, another five projects were planned in the following 5-6
year period. He said many other companies had projects in
planning that would proceed soon.
KERR asked what catalyst technology Shenhua used at its
large-scale F-T demonstration plant?
ZHANG said an iron catalyst developed by the Chinese
Academy of Sciences.
Mr Yoshihiko NAKAGAKI, President of the Electric Power
Development Company, also acknowledged China’s ambitious
CTL commercialisation plans and asked if there were any
estimates of the impact on CO2 emissions, with and without
CCS.
He wondered if China’s energy demand growth,
especially in the transport sector, might be reduced through
efficiency measures.
ZHANG was able to quote from a comparison of life-cycle CO2
emissions:
gCO2/km
conventionally refined diesel
DCL diesel
IDCL diesel
929
2 163
2 615
He went on to explain that Shenhua was investigating CO2
storage in a project with the US DOE. The demonstration plant
lay near PetroChina’s mature Changqing oil field where EOR
was being discussed. Shenhua also had a number of
adjacent coal mines which might be suitable for CO2 injection
and ZHANG saw this as a cost effective solution.
Before introducing the speakers, Dr Don ELDER, Chief
Executive Officer of Solid Energy New Zealand Ltd, drew on
previous sessions to observe that some huge changes were
likely in the energy business; he calculated that if CO2 were to
trade at a price of, say, $15-30/tCO2, then emissions from coal
use alone would have a tradeable value of $150-300 billion,
turning the management of CO2 emissions into a larger
business than mining coal.
Prospects for Coal-to-Liquids in Australasia
Mr Jeff COCHRANE, Chief Executive Officer of Monash
Energy, presented the Monash Energy project, located in the
Latrobe Valley, Victoria, south-east Australia, as part of a
response to Australia’s widening oil supply/demand gap. Anglo
Coal created Monash Energy in 2005 when it acquired the CTL
project from a local entrepreneur, following a wider corporate
strategy review, dating back to 2002, that had looked to more
sustainable ways of using coal.
ZHANG also mentioned China’s energy conservation measures
with the ambitious target of achieving a 20% reduction in
emissions per unit of GDP over 5 years. LI added that the
Communist Party wished to double GDP per capita by 2010
whilst decreasing energy intensity. The measures being taken
could be broadly split three ways: improved technology, an
economic trend towards less energy intensive activity, and
influencing consumer behaviour.
Oil, Energy Security & Balance of Payments (Australia)
Mr Masaki TAKAHASHI, Senior Power Engineer at the World
Bank, asked if conversion of coal to liquid fuels would really
alleviate pressures on the Chinese rail system since most coal
was transported for power generation – a demand that would
remain. He also wanted to know what plans China had to
deploy IGCC.
ZHANG replied that the bottlenecks were in moving coal to
eastern China. Coal movements would continue to grow
because, each year, over the next 5 years, China would add
an average of 50 GW of new coal-fired plant meaning that
coal from central China would certainly be required in the east.
However, the plan is to build CTL plants in the far west – in
Ningxia where an existing PetroChina oil pipeline infrastructure
has sufficient capacity to transport the additional 10 mtoe of
products proposed. Regarding IGCC plans, ZHANG could not
speak for the Chinese government, but noted Shenhua’s IGCC
proposals at Shanghai and Wenzhou, and expected the
government to approve several other IGCC projects. He added
that MOST was supporting an IGCC pilot that would be used to
test the integration of different technologies prior to going ahead
with a large, commercial 600-800 MW plant.
Slide 3
COCHRANE saw CTL as one measure among many: nuclear,
energy conservation, efficiency improvements and others, that
would all be needed to close the demand-supply gap and
improve energy security.
Questions?
Thank You
LI offered his perspective on IGCC in a country where the
limited supplies of natural gas are needed by the domestic
sector, and are not generally used for electricity generation.
IGCC could convert coal cleanly, perhaps making use of
existing CCGT plant, whilst the co-production of power and
chemicals, such as methanol, could improve plant economics.
SESSION 4: Prospects for CTL in Europe,
Australasia and Globally
www.monashenergy.com.au
The world’s biggest lignite or brown coal reserves lie in
Australia, some 38 billion tonnes. India and the USA have
similarly large reserves, whilst substantial reserves exist in
many other countries, including Germany where annual
production of 180 million tonnes underpins one quarter of the
country’s electricity production. Despite their low calorific
value and often high moisture content, all these reserves are
suitable for converting to liquid fuels, providing appropriate
technologies are available. Globally, brown coal resources
are similar in magnitude to non-conventional oil resources,
and hard coal resources exceed the combined total of all
types of oil and gas resources. What then is the oil industry’s
view on the future of coal as a source of alternative fuels?
Photo courtesy of Woodside
Slide 11
The proposed Monash project will sit adjacent to a large,
30 mtpa brown coal (lignite) mine with a 300 m thick seam.
Monash Energy has a mining licence for 13 billion tonnes,
although the Latrobe Valley has over 150 billion tonnes of
accessible coal resources. 25 mtpa of this low-cost, low-quality,
wet coal (calorific value of 7 GJ/t) will be dried and gasified to
yield a syngas that will be converted to liquid fuels by F-T
synthesis and electricity – 1.2 t of brown coal produces one
barrel of high-quality diesel or 1 000 kWh of electricity.
Syngas will be used to generate the plant’s own electricity
needs and potentially some exports. Water requirements are
25
reduced significantly because of the high moisture content of
the brown coal. Captured CO2 will be stored in offshore
depleted oil and gas fields in the Gippsland Basin which
have been well characterised over the years. COCHRANE
noted that other companies were also looking at prospects in
the Latrobe Valley. He stressed that the technologies – from
bucket wheel excavators, through drying and gasification, to F-T
synthesis – were all proven and CTL based on gasification
offered a flexible solution, citing the 25% co-feeding of biomass
at Buggenum and the potential to use wastes and sewage
sludge to supplement the coal feedstock.
Also in New Zealand
Major lignite deposits on the South
Island in Otago and Southland
Estimated recoverable lignite
reserve of up to 10 Billion tonnes
Solid Energy interests;
• Croydon
• Mataura
L&M interests:
• Hawkdun
• Ashers-Waituna
Gasification Provides the Flexibility
Slide 8
From Mine to Wheel – the role of lignite-toliquids in tomorrow’s energy supply
Potential
Feeds Feeds
and Potential
Products
from Gasification
Monash
and Monash
Outputs
Slide 6
COCHRANE believed that CTL had a future – it was just a
question of when, because waiting until market conditions were
overwhelmingly right placed a major strategic risk on
communities who would otherwise face supply disruptions and
high costs. He believed it was time to fully establish the
technology and begin the process of capital and operating cost
improvements, with early-movers building plants in the locations
having the best competitive advantages (low-cost coal resource,
product market and geology for CCS). With their high capital
cost, he saw CTL projects being driven by large coal and oil
companies, possibly in partnership. COCHRANE called for
stable policy frameworks and government incentives to
offset the commercial risks being taken by early movers,
especially for those projects with CCS. He was confident
that, like the analogous LNG projects on Australia’s NW shelf,
which faced the challenges of high capex and low oil prices
when originally proposed, CTL projects can succeed.
Mr Matthias HARTUNG, Executive Vice President at RWE
Power AG, held out the prospect that lignite-derived fuels could
relieve oil supply capacity bottlenecks and lift dependency on oil
imported from unstable regions. High oil prices had led to great
hopes for renewable fuels, but he foresaw a rediscovery of coal
hydroliquefaction.
With some 90 billion tonnes of classified lignite reserves in
Europe, exploitable under internationally-competitive conditions,
HARTUNG believed it to be an indispensable element to
guarantee a sustainable and competitive energy mix.
Lignite reserves are available over the long term for
secure energy supplies in Europe
Reserves in bn t
Position: 2005
41.3
No quantified data where reserves are
< 0.15 bn t or unkown
Poland
Germany
13.9
Czech
Republic 2.3
Slovakia
3.4
Hungary
Slovenia
Romania
Croatia
1.9
Bosnia- Serbia
Herzegovina
Bulgaria
2.0
3.4
Montenegro
Macedonia
Spain
Albania
5.9
Early Mover Location
7.3
Turkey
Greece
RWE Power •
Lignite’s main use is in power generation and he saw this
continuing in the long term with technological improvements.
The efficiency of RWE’s new BoA 2/3 1000 MW units is 35%
higher than the old units they will replace, and RWE’s unique
fluidised bed drying technology (WTA) will see a further
10% gain. Beyond that, new materials will allow 700°C steam
temperatures and efficiency >50%. Simultaneously, RWE is
following two routes to zero-CO2 coal-fired power plant –
scrubbing CO2 from existing plant and IGCC with CCS. The
latter route gives RWE the option of lignite hydroliquefaction.
Slide 7
Across the Tasman Sea, Solid Energy New Zealand Ltd and
L&M Group are promoting CTL projects using the South Island’s
vast lignite reserves to boost indigenous energy production.
26
RWE: 30 years of experience in coal gasification,
carbon capture tested as well
Power plant renewal programme of
RWE Power – innovation horizons
for today
Efficiency boosted
by renewal,
currently BoA 2/3,
HC-fired twin unit…
Power plant fleet: continuous renewal
First dry
lignite-fired
PP
for tomorrow
First
zeroCO2
IGCC
WTA prototype
First
retrofit/
new-build
plant
with CO2
scrubbing
700 °C
demonstr. PP
700 °C test facilities
HTW pilot plant1)
1974-1985
~ 3 MW th
HKV test plant2)
1976-1982
~ 3 MW th
for the day after tomorrow
New project:
Zero-CO2 450-MW IGCC with carbon storage
HTW demonstration plant1)
1980-1997
~ 160 MWth
Carbon capture: 2 mill. t
New project:
CO2 scrubbing for conv. power plant
RWE Power •
6
RWE Power
RWE believes that IGCC meets several basic requirements:
it can use a domestic energy resource, it allows CO2
capture, it is cost effective, and it can be implemented now.
HARTUNG explained that the size chosen for this commercial
project reflects the size of the largest available gas turbines.
The RWE zero-CO2 coal-fired power plant project incl.
carbon storage is the response to central tasks of the
future
HARTUNG admitted that the timetable for the proposed IGCC
project was ambitious, with CO2 storage on the critical path and
requiring approvals under a new legal framework. He therefore
called on policy makers, especially the European Commission,
for support.
The timetable of the IGCC CCS project is
ambitious, carbon capture is the critical path
Use of a readily available, domestic energy source
Significant cut in CO2 emissions
Cost-efficient electricity generation
Rapid implementation of technology
¨
¨
~ 36 MW th
1) HTW – High-temperature Winkler gasification process
2) HKV – Coal hydrogasification; 3) Raw lignite througphut
RWE Power has a sustainable strategy for power plant renewal.
-
Pressurized HTW
gasification1)
1986-1992
Today
Power plant
Zero-CO2 coal-based power generation is a building block of the future
IGCC is the technology that offers these advantages
Basic technology:
IGCC
El. capacity:
450 MW gross/ 360 MW net
Net efficiency:
40%
CO2 storage:
2.3 million t/a
8/2007
2010
Planning,
approval
Project
development
Decision on
energy source/site
CO2 storage
2014
Construction,
commissioning
Approval,
decision to build
Construction,
commissioning
Screening, exploration, approval
Approval
CO2 storage site:
2014
RWE budget:
~ €1 billion
Start of operation
The geological conditions prevailing in the storage facility will determine which quantities of
CO2 can be stored at the beginning and how the volume can be increased.
depleted gas reservoir or
saline aquifer
Commissioning:
Start of operation
Implementation in 2014 calls for support by all stakeholders, e.g. also by
policy-makers.
RWE Power
RWE Power
HARTUNG went on to explain that CO2 capture requires the
H2/CO syngas to be shifted to H2/CO2. After CO2 scrubbing, the
hydrogen fuel is combusted in a gas turbine – the only
component unproven for this IGCC application at this scale.
IGCC with carbon capture is based on
largely tried and tested technology
GT:
ST:
GT+ ST:
CO2 avoidance costs are a suitable way to benchmark the
technology options and HARTUNG presented the following
results from RWE’s own analysis which includes the cost of
transport and storage. He noted that, CCS is more economic
than conventional power generation, when CO2 trades >€30/t.
CO2 avoidance costs for the zero-CO2 power plant
routes incl. carbon transport and storage are some
€30/t CO2
290 MW
160 MW
450 MW
Air from GT
Air
Power
N2 to GT
GT + ST
ASU
50
O2
80 t/h
Steam
Steam
Gas cooling/
dedusting
Dust
Lignite
WTA
drier
Steam
Steam
H2-rich fuel gas
236,000 Nm3/h
Gasifier
350 t/h
CO2 avoidance costs cp. with dry lignite-fired power plant in €/t CO2*
450 MW el
Sulphur capt.
and recovery
HT & LT
CO shift
technisch/wirtschaftl.
Technically/economically
unsicheruncertain
großtechnisch
Robust on a belastbar
commercial scale
40
CO2
Scrubbing
30
CO2
CO2
compression
20
Pipeline
300 t/h
10

Carbon capture is relatively elegant and efficient in this process
CO2-Abtrennung ist hier relativ elegant und effizient
Nearly all IGCC carbon capture components have been trialled on a
Bausteine des IGCC mit Abtrennung sind fast alle kommerziell erprobt
commercial scale
verbleibende Entwicklungsaufgaben:
Remaining development tasks:
- Gasturbine für H -reiches Brenngas
- Gas turbine for H22-rich fuel gas
- Optimales Gesamtkonzept
- Optimum overall concept
0
LG scrubbing
HC scrubbing
LG oxyfuel
LG IGCC
HC IGCC
HC oxyfuel
5
8
RWE Power
RWE has a long history in coal gasification, most recently with a
High-Temperature Winkler (HTW) gasifier for methanol
production that ran commercially for ten years during which time
two million tonnes of CO2 were scrubbed from the syngas.
RWE Power
In addition to its proven status, HARTUNG saw other
advantages with IGCC: fuel flexibility and the option to produce
chemical products from the syngas, including synthetic natural
gas (SNG) and high quality diesel.
27
prospects for CTL. He noted the impact of global GDP on this
forecast, especially assumptions about the USA, China and
India.
Fuel and product flexibility of the IGCC
process
Fuel
flexibility
Using forecasts from the US Energy Information Administration,
he showed that between now and 2020, another 20 mb/d of oil
production was needed, in addition to the new capacity needed
to replace depleting fields in mature oil and gas provinces, such
as the southern USA, Alaska and the North Sea. Energy
conservation may reduce demand growth for hydrocarbons, as
would lighter cars and hybrids; production from the ambitious
biofuels industry may become significant; or other events could
herald rapid change, such as the intense competition between
natural gas and coal over the previous five years in the USA.
Product
flexibility
Gas
CO2
Lignite
Kohle
1t
CO2
capture
Gas
treatment
Gasifier
Biomass
as an alternative
or additionally
Waste
CCGT
Electricity
~ 580 m³
H2
~ 180 m³
SNG
~ 270 kg
~ 140 l
Methanol
Motor fuels
World oil reserves
The flexibility of the IGCC process opens up additional fuel and
product options that offer economic potential.
RWE Power
HARTUNG presented the economics of producing these fuels
and hinted at the volumes of lignite needed to meet German
motor fuel and natural gas demand.
Billion barrels
1200
FSU
1000
Non-OPEC
800
Production costs of coal-to-liquid products:
syngas and Fischer-Tropsch diesel
600
180 m3
SNG
Methanization
WTA
predrying
1 t lignite
Gasification
Syngas cleaning
15
20
25
8
140 l
Motor fuel
0
1980
1985
1990
1995
2000
Example – Diesel production from lignite
30
300
400
Natural gas / SNG price [€/MWh (GCV)]
6
OPEC
200
Fischer-Tropsch
Example – SNG production from lignite
400
500
600
Diesel price [€/t]
40
10
60
[$/mill. ft³ ]
80
Crude oil price [$/bbl]
20 million tons of lignite cover some 3% of German motor fuel consumption 10
or 4.6% of German natural gas/SNG demand.
RWE Power
HARTUNG concluded by linking the zero-CO2 power generation
pathway, typified by RWE’s 450 MW project, with a CTL
production pathway using the same gasification technology.
Thus, developers could react flexibly to market opportunities
created by the relative prices of electricity, oil and natural gas.
2005
Source: BP Statistical Review ‘06
ARYA showed that conventional oil reserves are plentiful and
that industry is investing to raise future production, but he
recognised that the world was looking at alternatives to bring
energy diversity – quoting Sheikh Yamani, “the Stone Age did
not end for lack of stone, and the Oil Age will end long before
the world runs out of oil”. He pointed to Saudi Arabia’s massive
reserves, and to investments in production expansion in Nigeria
and Angola, as well as in non-OPEC countries, such as Russia
and Azerbaijan.
Future oil supply projections
Oil supply by provenance
The Context for Coal-to-Liquids – an oil industry
view
Dr Atul ARYA, Vice President of Group Strategy at BP plc,
brought an alternative perspective to the workshop with an oil
supply/demand outlook and how this would influence the
mmbd
120
100
80
60
40
Oil demand forecasted to grow in line with
GDP growth
20
0
2003
2006
2009
2012
OPEC
2015
Non-OPEC
2018
2021
2024
2027
2030
Non-Conventional
Development of global oil products demand by sector
Non-conventional: Oil sands, Biofuels, X-heavy oil, GTL, CTL, other
Assuming 57$/b in 2030 – inflation adjusted
Source: EIA - Reference case 2006
mmbd
120
100
80
80
92
98
118
111
104
• Overall growth till 2020 at
1.6% p.a. falling to 1.3% p.a.
afterwards
• Transportation fuels account
for more than 50% of demand
60
40
• Transportation will contribute
more than 50% of future
demand growth
20
0
2003
2010
Electricity
Residential
2015
Assuming 57$/b in 2030 – inflation adjusted
28
2020
Commercial
2025
Industrial
2030
Transportation
Source: EIA 2006 – reference case
By 2020, non-conventional oil supplies, including CTL, could be
7.7% of the total 104.1 mb/d oil supply. BP’s own analysis
indicates slightly higher growth in non-conventional
production, driven by energy diversity considerations
rather than any perceptions of oil shortages. CTL is shown
to account for 0.9 mb/d or 9% of non-conventional supply and
<1% of total supply. ARYA distinguished between oil sands and
heavy oil projects, where investments were being made, and the
other non-conventionals, including CTL, which would not
be economic if oil prices fell from current highs.
Energy Prices
Non-Conventionals growing rapidly
1995-2000 average = 100
Development of Non-Conventional
• Non-conventional is set to
grow by 8% pa till 2020
mmbd
10
• Most of the growth in Oil
Sands, GTL and X-heavy
already underpinned by firm
investment projects
8
6
• CTL expected to account in
2020 for
• 9% of non-conventional
• 2% of non-OPEC
• 1% of total supply
4
2
0
1990
1995
2000
2005
Oil Sands
Biofuels
GTL
2010
CTL
2015
X-Heavy
Gas
Coal
300
200
100
0
1999
2020
Oil
400
2000
2001
2002
2003
2004
2005
2006 ytd
Others
Note: Oil = Dated Brent, Gas = Henry Hub, Coal = average of US, European and Japanese prices
Source: BP internal analysis
ARYA warned against assuming that, among the nonconventional resources, coal would be preferred – the
prospects for extra heavy oil, bitumen and oil shale, in
Canada, the USA and Venezuela, might be better. In fact, he
showed that these resources were geographically diverse, often
in large, energy-consuming countries, and that their exploitation
was ripe for technological development.
Others
Others
9%
9%
Bitumen
Africa
Africa
3%
3%
Discussion
Source: IEA WEO 2004, BP internal analysis
Similarly, he cautioned against basing long-term investment
decisions on the current “perturbation” in oil prices. These had
been >$40/bbl for just 2 years and >$60/bbl for less than a year,
whilst the historical average was <$30/bbl.
Oil Markets Today
Dated Brent
80
2006
• Prices still high but
have retreated
70
60
• Inventories high
2005
50
• Risks perceived to
have fallen
2004
40
30
2003
20
10
Jan
Mar
May
Jul
Sep
• Consumer nations want security of supply and one option is to
increase diversity.
• CTL and biofuels production require large volumes of scarce
water, limiting their long-term sustainability.
• About 7 Trillion bbl of non-conventional oil-in-place
• Most of the resource is in the Americas
• Base case recovery expected to be about 250 billion barrels
• Ultimate recovery could exceed 1,250 billion barrels
US$/bbl
• Sufficient resources exist to meet future demand growth.
• Carbon footprint may increase CTL costs when compared to
other non-conventionals (e.g. biofuels) – ARYA saw this as a
real policy challenge for the IEA, DOE, EU and governments
everywhere.
MidEast
MidEast
1%
1%
Venezuela
Venezuela
19%
19%
• Oil demand would continue to grow – particularly in the USA,
China and India.
• Economics depend on long-term future oil and coal prices and
capital costs (plant location).
(Extra)Heavy Oil
Oil Shale
USA
USA
32%
32%
He concluded with the following:
• Opportunities are growing to diversify into non-conventional
supplies, including CTL where success may depend upon
collaboration and co-operation between coal and oil companies.
Non-conventional oil resources
Canada
Canada
36%
36%
Source: BP internal analysis
Nov
Source: Platt’s
ARYA noted that CTL economics also depended on coal prices,
themselves subject to market pressure.
Dr Don ELDER led the discussion, noting two, very different
perspectives on future CTL production: 3-5 mb/d in the USA by
2030, according to speakers in Session 2, but maybe only
1 mb/d globally by 2020, according to Dr Atul ARYA from BP.
Mr David GRAY asked if sufficient oil refining capacity existed,
including capacity to process heavy oils, and what the
underlying cost of oil supply would then be when this is factored
in.
ARYA saw no refining constraints and believed there would be
enough capacity through to 2020, although with some product
mismatches in Europe (gasoline surplus) and the USA (long on
diesel, short on gasoline). He added that China was building
enough new capacity, India already had a surplus, and that
OPEC was keen to build their own refineries to capture more of
the oil supply value chain. He observed that industry was
investing in Canadian heavy oil processing capacity. However,
he did foresee competition for capital in the refining industry if
biofuels developed strongly in response to policy incentives. On
oil production costs, ARYA responded that whilst these are low
in Saudi Arabia, they rise significantly offshore and especially in
the deeper waters now being explored by Western oil
companies – not helped by the inflationary pressures seen over
the previous few years, citing the six-fold increase in drilling rig
costs.
Dr Roger BEZDEK queried the accuracy of figures for
conventional oil reserves, particularly in the Middle East which
might be overstated, and whether the oil industry could meet
demand over the next 30-40 years?
29
ARYA responded with BP’s view that plenty of oil remained in
the ground, outside of mature provinces such as the USA and
North Sea, and enough new projects existed to meet the 1.7%
average demand growth forecast by IEA over the next 5-10
years.
Beyond that, the challenge would be to convert
resources into viable projects and he reminded participants that,
for many years, there had been no oil shortages – industry had
delivered.
Mr Justin MUNDY, Special Advisor to the UK Government’s
Foreign & Commonwealth Office, observed that many of the
projects presented depended on a carbon price and wondered if
there was enough depth and liquidity in the carbon market to
capitalise this. ELDER suggested that certainty was more
important than price.
ARYA agreed that a long-term policy framework was needed
to allow a carbon price to develop, otherwise clean
investments, such as BP’s own projects at Peterhead in the UK
and at Carson in California, would not proceed.
HARTUNG added that a CO2 value was a pre-condition of
RWE’s CO2-free IGCC power project, yet under the EU ETS,
this value was uncertain and unknown beyond 2012.
Nevertheless, his company was committed to developing a
response to the threat posed by greenhouse gas emissions and
would press ahead with projects in anticipation of post-2012
legislation leading ultimately to large cuts in CO2 emissions.
Mr Robert KELLY asked about the size of the Monash project
and how lignite liquefaction costs compared with those for hard
coal?
COCHRANE replied that Monash was a 60 000 b/d project and
that the key advantage of lignite was price stability over 20 or
more years. Since the low CV brown coal reserve had no
alternative market, its price was equal to its extraction cost and
not some other opportunity cost, as would be the case with high
CV hard coal which can be traded.
SESSION 5: Coal Market and Policy Implications
of a Growing CTL Demand
Mr Preston CHIARO, Chief Executive – Energy at Rio Tinto
and CIAB Chairman, returned to the chair and posed a series of
searching questions to the six panellists. He asked panellists to
raise their own questions before inviting a wider discussion
among participants.
Dr Victor K Der, Director – Office of Clean
Energy Systems, US Department of Energy
Chair: Are we moving in the wrong direction with CTL – trying
to develop a technology that will be obsolete by the time it is up
to scale because of increasing concerns over CO2 and hence
7
efforts to reduce emissions? For example, the Stern Review
calls for a 25% reduction below current emission levels in the
face of growing demand for power and transport fuels – when
CTL is fully developed, there may be no demand for CTL fuels.
DER did not see liquid fuels disappearing, the issue was how
they would be produced and how the CO2 issue would be
addressed by regulation or other means. In the near term, EOR
opportunities give some comfort in the market place that CTL
fuels can be introduced to bring diversity without a CO2 penalty.
The long-term future of CTL depends on the success of zeroemission projects such as FutureGen and others. DER said
that a unique aim of the DOE’s R&D effort was to develop
low-cost technologies that allow CO2 capture and hydrogen
use without having to place a value on the avoided carbon
emissions. CTL could then be emission free, at least at the
point of production. With many $billions invested in CTL over
30 years, DER felt that it was now down to industry to take it
forward as a business, responding to the right incentives. How
far and how quickly the transportation sector would evolve was
unclear to DER; improved efficiency, the use of hybrids, and
30
electric vehicles supplied from zero-carbon sources were all
possible, although solar-powered cars were surely a more
distant prospect.
Mr Roger Bezdek, President, Management
Information Services Inc
Chair: If CTL is driven by the price differential between oil and
coal, what price gap is needed to secure investments in the face
of the technical risks and the need for a long-term coal supply?
BEZDEK replied that the gap needed to be substantial and
semi-permanent, unless a floor price for CTL fuels existed
through government intervention. Oil price cycles, as seen in
the late 1970s and early 1980s, and carbon pricing – whether
through cap-and-trade or CCS regulation – would influence
decisions.
BEZDEK warned that a switch to alternative
sources, whether coal, oil shale, EOR or biomass, might result
in lower oil prices that benefit the economy, but these low prices
would perversely hurt the new developers of crucial
infrastructure – unless support mechanisms were in place. On
the other hand, he noted that new conventional oil projects
were themselves often only profitable at oil prices at which
CTL was already competitive, citing $40-50/bbl for the Jack
No.2 project in deep waters off the US Gulf Coast. He
concluded that perhaps oil prices would remain at a level that
left CTL competitive.
BEZDEK reflected on how CTL might be incentivised and
suggested that an empirical answer may lie in the development
of Canadian oil sands where 1 mb/d was now produced with the
potential to double or quadruple production. Since the late
1960s, through periods of high and low oil prices, with the
support of Federal and provincial governments, the Canadians
had responded to the imperative to develop successful oil sands
projects.
Mr Jeff Cochrane, Chief Executive Officer,
Monash Energy
Chair: The boom in China and trends elsewhere have created a
huge demand for skilled labour; for example, Rio Tinto has
difficulty finding people to work on conventional coal mining
projects in Australia, whilst university graduates are not
attracted into mining. Where will Anglo and other companies
around the world recruit the skilled chemical and process
engineers needed for complex CTL projects?
COCHRANE recognised this difficulty, but thought that CTL
itself would make the industry more attractive for graduates who
could then be part of a new, cleaner energy future rather than
simply working in an industry seen by some as old fashioned.
The skills shortage was more acute in industries with a poor
image. He drew a comparison with the nuclear industry that
faced a similar problem – so few had learnt nuclear engineering
over the last 20 years that new nuclear build programmes would
struggle.
COCHRANE foresaw multi-national teams of
scientists and engineers working on projects in all parts of
the world, and was even hopeful of recruiting people back from
the oil industry.
COCHRANE explored how risks were being managed at the
Monash project to secure long-term capital investment. Coal
mining, drying and gasification each involved technology risks
that Anglo had assessed and eliminated through design and
knowledge from experience elsewhere. Reducing regulatory
risk meant that CCS was an integral part of the project. He
foresaw CTL becoming an important source of clean fuels in
Australia, extending to renewable fuels should biomass be
co-fed (20-40%) with coal.
Mr André Steynberg, Technology Manager for
CTL, Sasol Technology (Pty) Ltd
Chair: In the 1970s, a rush to develop many energy and coal
projects was followed by a slack period. How do companies
and countries maintain a knowledge base when activity is so
erratic? How predictable are capital costs given the need for
resources, such as steel, which are subject to price cycles.
STEYNBERG remarked that upfront capital was needed to
assess projects; there was no easy alternative to making this
investment and commitment of resources that would sometimes
yield a return and other times not.
STEYNBERG did not consider resource depletion to be an
issue and reflected that a major alternative use of coal was for
electricity generation; alternatives existed but coal was chosen
because it was cheapest. CCS would alter the economics and
push up the costs of coal-fired generation such that consumers
would be obliged to pay more for electricity since no other,
equally cheap option existed.
Dr ZHANG Yuzhuo, Chairman, Shenhua Coal
Liquefaction Corporation & Vice President of
Shenhua Group Corporation Limited
Chair: How is China different? Are capital and operating costs
lower than in other parts of the world? Whilst applauding
Shenhua for taking the lead, how has it moved so quickly? Can
the Chinese model be replicated elsewhere?
ZHANG explained that China started CTL project pre-feasibility
studies in 1997 when oil prices were <$20/bbl and nobody
believed CTL could be economic. In 2002, ZHANG moved from
the China Coal Research Institute to head the project.
Following studies with international engineering companies and
the US DOE, ZHANG saw three major elements that cause the
cost structure to differ in China when compared with, for
example, USA:
• Capital cost location factor of 0.7 (70%).
• Cheaper coal available from a competitive regional market, in
contrast to an oil price set in an imperfect international market
by monopolistic forces. ZHANG said that CTL could not
compete on a cost basis, even in China where oil from the
largest oil field, PetroChina’s Daqing field, cost $15/bbl and
marginal fields produced at $22/bbl. In the case of coal, traders
in Shanghai compete with those in Japan, but Shenhua’s CTL
projects are based on mine mouth supply at below $10/tonne for
high quality coal, compared with the $20-25/tonne assumed for
USA in the pre-feasibility studies.
• Lower labour costs – $10 000/yr is above average for an
engineer – which also result in low maintenance costs. ZHANG
noted that CTL developers had to compete with oil refineries for
people, so salaries were higher than in the coal industry but not
as high as in some other competing industries.
ZHANG went on to explain a particular issue with the high
taxation of CTL projects. Value added tax is applied at the
appropriate rate for oil products of 13%; but, in the case of CTL,
the raw material cost is very low compared with the sales
income, resulting in a large tax take. Shenhua is negotiating
with the Chinese government for a tax reduction to the same
level that an oil refinery would pay for each barrel of product.
Finally, ZHANG noted that CO2 is not yet an economic issue
because China is not committed to make any emission
reductions. However, he believed that by 2012 it will be an
issue for developing countries, adding perhaps $8/bbl to
costs if CCS is required and not sustainable if international oil
prices fall below $40/bbl.
ZHANG reflected that the marginal cost of capturing one
tonne of CO2 from a CTL plant in China was very low, just a
few $ – less than most mitigation options in the USA and
Europe. However, he questioned whether any company would
invest in China with this objective. The Chair added that CCS
was not, in any case, allowable under CDM.
Mr Bill Senior, Senior Advisor – Technology, BP
Alternative Energy
Chair: The US government has moved to encourage CTL, but
what is the optimum government policy? If there should be
encouragement, what form should it take and how should it link
to carbon pricing, whether set by trading or tax?
SENIOR painted a picture of trade offs between the three key
drivers: energy, environment and economics. In Europe, he
saw climate as the strongest driver, but even there, energy
security was never far behind. The carbon intensity of CTL
meant that incentives, such as fiscal support, designed to
mitigate high oil prices could be at odds with climate policy. For
example, SENIOR noted that the specific incentives in the USA
supported alternative, coal-derived fuels which may have a
carbon footprint much greater than crude oil, i.e. the current
baseline as determined by the market. He quoted CO2
emissions from coal, on a mine-to-wheel versus well-towheel basis, of some 1.8-2.0x those of oil, if CO2 capture
and storage was not employed. CCS allows a substantial
reduction at a relatively low cost (from 16 MtCO2 to 3 MtCO2 in
the case of the Monash project). However, SENIOR observed
that CCS only takes emissions towards the crude oil
baseline and he felt governments would have to look seriously
at any incentives for CTL whilst pursuing policies to reduce
emissions – raising challenges for governments and
corporations. SENIOR was encouraged that most CTL project
developers included CCS. He remarked on the scale of CO2
storage required. In the USA, c.30 MtCO2 each year is used for
EOR, BP’s In Salah project in Algeria re-injects 1 MtCO2/yr. At
13 MtCO2/yr, the Monash project was a huge jump in scale; if
CTL plants were deployed to produce say 5 mb/d, then
1 250 MtCO2/yr would have to be stored underground. BP
advocates a carbon market policy approach, through expanded
emissions trading, as the primary policy measure to mitigate
CO2 emissions; for CCS to become eligible, enabling policy on
licensing, storage integrity, monitoring and liabilities must be
developed. SENIOR’s opinion was that power generation
may be a much better opportunity to deploy CCS because
emissions can be reduced below current baselines.
SENIOR reflected on the baseline question: a CTL plant had
large abatement potential at low cost in absolute terms, but not
when compared with a conventional oil refinery producing the
same products.
He did not believe that any public
discussion on baselines for CTL plants had occurred.
Whilst today’s CDM would not support CCS at CTL plants, a
post-Kyoto framework that included developing countries with
prices similar to the EU ETS ($20-30/tCO2) could be a source of
value to CTL developers. SENIOR saw a complicated and
uncertain landscape ahead.
Finally, he offered some insight into the skills issue. Since BP
set up its Alternative Energy business in 2005, it has proved to
be a magnet for engineers interested in working in hydrogen
power (i.e. fossil power with CCS), solar and other renewables.
SENIOR believed that zero-emission coal offers an appealing
future that should attract young engineers. With so many
talented engineers and scientists in China, he expected that
multi-national companies would respond to capitalise on
this resource, but wherever the skills lay, he suggested that
greater collaboration between industries was vital.
Discussion
CHIARO asked if Sasol had been approached by anyone
interested in earning value by reducing the CO2 emissions from
its long-established CTL projects?
STEYNBERG replied that South Africa unfortunately had no oil
fields and so no EOR opportunities. However, there were
possibilities with enhanced coal bed methane (ECBM) which
Sasol was exploring, although this was complicated by coal
resource ownership issues – Sasol does not own coal resources
31
suitable for ECBM production. In China, Sasol was involved
in projects designed to be CO2 “capture ready”.
On skills, CHIARO asked if China was training enough people in
the right disciplines to service the growing CTL industry?
LI spoke of the traditionally strong teaching of coal chemistry,
combustion and power engineering at many Chinese
universities which now offer tailored courses, building on these
fundamentals, such that demand for skills would be met.
ZHANG added that Shenhua had anticipated the need for many
more trained people, so had signed an agreement with the
China University of Petroleum to switch third year
undergraduates from refinery courses to courses in CTL. With
many graduates currently unable to find jobs, ZHANG reported
that this initiative had worked to the extent that skills shortages
would not be an issue.
Dr Stephan SINGER, Head of the European Climate and
Energy Policy Unit at WWF, spoke strongly against CTL
because it fell short of carbon-free coal use, unlike coal in power
generation with CCS where gains compared to current
baselines were real. He believed that coal’s role in the
transport sector could only be through hydrogen
production with CCS to reduce emissions far below
baselines. He politely suggested that China, with its rapid
economic development, had the opportunity to establish an
infrastructure that responded to the climate challenge. His
suggestion was a huge pilot demonstration of coal-to-hydrogen
for transport in a major city. Within a generation, such a
demonstration would allow many outstanding issues to be
addressed by engineers who, he felt, were bored by traditional
nuclear and fossil engineering.
SENIOR queried how transport infrastructure would evolve in
the long term – many believed that hydrogen looked expensive.
He acknowledge that achieving a sustainable solution through
the progressive improvement of current infrastructure was a
great challenge. SENIOR pointed to hybrid cars, electric
vehicles and the trend towards DME and methanol fuels in
China, but offered no clear view on the future of transport
except that coal would almost certainly be a feedstock.
CHIARO broadened the question to include plug-in electric
hybrids.
ZHANG shared his experience as a member of the National
Energy Experts Group.
The Minister of Science and
Technology had asked the Group for data on providing a
major city in China with hydrogen rather than gasoline.
One conclusion was that 1.6 tonnes of coal could yield enough
hydrogen for a fuel cell car travelling 20 000 km per year. After
several seminars and workshops, the national view was that
whilst China could leapfrog other countries and build a new
hydrogen infrastructure, especially in areas where gasoline
distribution was sparse, this would not happen because fuel cell
cars are currently too expensive and there is no viable means of
transporting hydrogen 800-1 000 km from mine mouth plants.
ZHANG reported that Shenhua and Shell were already building
a few hydrogen filling stations in Beijing and Shanghai, but that
it would be 20 years before one could talk of a “hydrogen age”.
He contrasted this analysis with the use of coal for power
generation where China had no alternative – power demand
would double in the next 15 years and 70% would be coalfired.
Dr Kelly THAMBIMUTHU, Chief Executive Officer of the Centre
for Low Emission Technology in Australia, noted that if the
carbon footprint of CTL with CCS was no different than fuels
refined from crude oil, then the energy security value of using
coal should make this route attractive in some countries. He
went on to explore the climate challenge and felt that solutions
demanded the wholesale replanning of energy infrastructures,
yet the debate rarely went beyond the energy efficiency of
existing infrastructure.
32
CHIARO contrasted countries, mainly interested in energy
security, with companies, mainly interested in profits, and asked
who should be responsible for designing and putting in place
new energy infrastructure when the boundaries of responsibility
were rarely clear?
COCHRANE suggested that rather than “CTL”, the industry
should talk of “CTX” or coal-to-X, where X was the chosen
product from which the infrastructure follows. Coal was the
important starting point and investment in technology would
allow an optimum energy vector to be chosen.
Mr Robert KELLY returned to the question of whether CTL or
power generation was an appropriate use of coal. He said that
if CO2 mitigation with, for example, EOR was included, then, for
transportation, decisions depended simply on the preferred
primary energy source used to produce the secondary fuel,
alongside the associated costs. He noted that DOE and EIA
projects included significant conservation efforts of 1-2% per
year, yet demand from the transport sector would continue to
grow and CTL was a reaction to that growth. Responding to
THAMBIMUTHU, he agreed that all externalities needed
consideration: a carbon price and markets would lead to
carbon abatement strategies in response to the
environmental externality; whilst in China, India and the USA,
geopolitical externalities had an impact on national security
and economic security through high oil prices.
Mr Roger WICKS, Head of Energy at Anglo American, started
from the premise of a carbon-constrained world with two
competing imperatives: energy security and climate protection.
If security was the predominant driver, then WICKS sensed that
enough competing activity in different fields was taking place at
a sufficient pace to meet the imperative. However, to address
the climate imperative demanded a much greater level of
urgency as detailed in the Stern Review and elsewhere. He
saw CCS on a massive scale as being the key mechanism
that would buy time and ultimately secure a long-term
future for the coal industry. As part of the CIAB’s role to
inform the IEA, he wanted to know what could be done to
radically accelerate CCS technology deployment, certainly in
a much shorter timescale than, for example, the development of
Canadian oil sands referred to by BEZDEK. In this respect,
WICKS asked if there was something to be learnt from the
Chinese: “What is it that Shenhua is doing that enables
research to be carried out, technology proven and projects built
at such a pace? Perhaps the political system or private
companies free of the constraints found in Western
boardrooms?”
ZHANG replied by outlining a long-term strategy that flowed
from China’s mix of natural resource: small oil reserves and
abundant coal. Thirty years ago, China had started research
into CTL, learning from Japan, Germany and USA. A turning
point came in 1993 when China became a net oil importer,
resulting in a foreign currency deficit (unlike today). The
government responded by using coal in place of fuel oil.
Another turning point came in 1996 when Premier Li Peng
said that a CTL plant must be operational within the next
5 years, a goal that is now being realised.
Mr Justin MUNDY, Special Advisor to the UK Government’s
Foreign & Commonwealth Office, reflected on energy security
and climate security, but asked again what could be done to
make coal part of the solution rather than part of the problem.
He was not entirely convinced that an agreement on this had
been reached at the workshop. Analogous to national security,
which could be broken down into hard security (e.g. deployment
of troops and counter terrorism) and soft security (e.g. resolving
tensions that would otherwise lead to the need for hard
security), MUNDY split climate security in to a combination of
energy security, water security and agricultural security. All
three had to be in balance from a public policy perspective and
he believed that CTL without CCS was such a massive
imbalance that the coal industry would fail in its ambition to
be part of any solution. He called on the industry not to rely
on normal solutions and normal technologies, but to leapfrog to
new solutions, perhaps hydrogen, whilst avoiding any
economic assessments that ignored the cost of carbon.
Mr Yoshihiko NAKAGAKI, President of the Electric Power
Development Company, noted the strong relationship between
CTL and IGCC, such that plant economics could be improved
by designing for flexible production of liquid fuels and electricity.
He explained that Japan was expediting the development of
coal gasification with the flexibility to supply hydrogen for IGFC.
In the longer term, he thought CTL may have limited impact
on oil supply because of a scarcity of viable projects and a
lack of CO2 emission benefits, even with CCS. NAKAGAKI
believed that hydrogen production from coal could be a cleaner
and more economic route than CTL.
Dr Dan LASHOF, Science Director at the Natural Resource
Defense Council’s Climate Center, continued on the security
theme when he stated that energy and climate issues needed to
be addressed simultaneously and urgently, not separately.
Many options were available in the transportation sector:
vehicle efficiency, biofuels and part electrification, but he was
not persuaded that CTL was a sensible option, even with CCS,
since its emission performance was no better than gasoline. He
thought that other products could be important, such as
hydrogen, but noted that the GTX concept only applied to IDCL
and not DCL, so investors should be wary of projects
without product flexibility. He spoke vehemently against the
50c tax credit in the USA for CTL fuels and anticipated much
greater public scrutiny, and better alignment with climate policy,
if its renewal was ever debated, noting that an emission
performance standard should be built into any measures to
incentivise alternative fuels.
Dr Rolf LINKOHR, Director of the Centre for European Energy
Strategy and Special Advisor to Andris Piebalgs, European
Commissioner for Energy, wondered how the day’s debate
would have sounded in, say, 1895. Most would have suggested
using coal in steam engines for transport, modernists might
have preferred electric cars, only a few would have picked liquid
fuels. LINKOHR pointed to the difficulty of predicting the future,
but economics and the environment would drive outcomes.
8
Briefly noting the EC’s developing hydrogen strategy ,
LINKOHR moved on to speak about how CDM could help the
coal industry following the decision at COP-11 that CCS should
be on the agenda at COP-12 in Nairobi. A workshop in Bonn
held in May 2006 brought together signatories to the Kyoto
Protocol and all agreed that clean coal with CCS should be
integrated into CDM – a move that could put climate policies
back on track by alleviating the burden of CO2 from coal use.
Finally, LINKOHR called for greater international cooperation
aimed at developing innovative technologies in response to
economic and environmental needs. He believed the energy
industry lacked an international body with the stature to
achieve this.
producing hydrogen at a proposed CTL project with CCS was
below that of gasoline, but ELDER observed that the $150 000
cost of a hydrogen car made it an impossibility.
ELDER concluded by saying that the coal industry was doing
a lot and that it was time for others to do what they needed
to be doing.
Summing up:
Mr Ian CRONSHAW, Head of the Energy Diversification
Division, spoke on behalf of the IEA, an organisation that values
its contacts with industry through the CIAB. He welcomed the
information-rich presentations and vigorous debate during the
day’s workshop. With energy security back at the top of the
agenda and carbon emissions rising, he believed governments
and industry needed to maintain a healthy collaboration. He
was particularly pleased to see unanimity among participants
on the need to tackle CO2 emissions and that the coal
industry could be part of a solution. In his vote of thanks, he
made special mention of the speakers and delegates from
China, noting how important it was to share knowledge and
experience within what had become a truly global industry.
Mr Preston CHIARO sensed much interest in coal-to-liquids –
companies hoping to profit from it and some governments
hoping that it would enhance energy security. It was clear to
him that a huge amount of expertise already existed to execute
large CTL projects. Resource demands would be significant:
low-cost coal, water, power, skilled people and capital investors
willing to face new risks.
CHIARO understood that
environmental challenges remained, especially in relation to
CO2 where the volumes captured and stored today would need
scaling by 1 000x-10 000x to have an impact on atmospheric
concentrations. For CTL to be successful, he believed that
collaboration and co-operation between industrial sectors was
essential.
CHIARO warned that CTL would face strong
competition from the traditional oil supply industry, a growing
renewable industry, and even from the nuclear industry. In
answer to his own earlier question, CHIARO saw CTL as
neither a dead-end technology nor an essential technology, but
a technology that was likely to play a part in the future fuel
supplies of countries endowed with rich coal resources.
CHIARO thanked the IEA staff, speakers, session chairs,
participants, CIAB Members, guests and CIAB Associates,
especially those involved in the organisation of a stimulating
workshop.
***
Dr Don ELDER offered some concluding remarks from the
industry. He felt that is was easy for industry critics to exploit
the climate challenge and dismiss the steps that the coal
industry is taking.
CTL with CCS yields an emission
performance
equivalent
to
conventional
oil,
and
coal-to-hydrogen is substantially better. The coal industry is
moving forward with projects, ELDER said, while others, mainly
governments, are talking about issues that they could and
should be addressing. For example:
• If CO2 was recognised as an issue, not a pollutant, then
governments would make regulation of its storage easier, yet he
observed a worrying trend in the opposite direction. ELDER
wanted CCS to become a commodity, not something that needs
$50 million for research before a project can start.
• If the hydrogen economy was so desirable, those talking would
be making it happen. In New Zealand, the marginal cost of
33
Annex – Workshop Participants
CIAB MEMBERS ATTENDING:
Ms
Barbara F
ALTIZER
Dr
Selahaddin
ANAC
Mr
Preston
CHIARO
Mr
Andrea
CLAVARINO
Dr
Don
ELDER
Mr
Eric
FORD
Mr
Robert H
GENTILE
Mr
John Nils
HANSON
Mr
Matthias
HARTUNG
Mr
Masami
IIJIMA
Mr
Steven F
LEER
Dr
Steve
LENNON
Mr
Colin
MARSHALL
Mr
Jean-Claude
MULLER
Mr
David
MURRAY
Mr
Yoshihiko
NAKAGAKI
Mr
Petr
PAULKNER
Mr
Doug
RITCHIE
Mr
Seppo
RUOHONEN
Mr
Mahomed
SEEDAT
Dr
Jürgen W
STADELHOFER
Mr
Roger
WICKS
Executive Director, Eastern Coal Council
General Director, Turkish Coal Enterprises
Chief Executive - Energy, Rio Tinto
Chairman, Assocarboni & Executive Vice President, Coeclerici Group
Chief Executive Officer, Solid Energy New Zealand
Chief Executive Officer, Anglo Coal Australia
President & CEO, Leonardo Technologies
Chairman, Joy Global
Executive Vice President, RWE Power
Managing Officer & Chief Operating Officer, Mitsui
Chairman & CEO, Arch Coal
Managing Director - Resources and Strategy , Eskom
President & CEO, Rio Tinto Energy America
Chairman & CEO, ATIC Services
President - Metallurgical Coal, BHP Billiton
President, Electric Power Development Company
Chairman of the Board, Coal Energy
Managing Director, Rio Tinto Coal Australia
Managing Director, Helsinki Energy
President - Energy Coal, BHP Billiton
President & CEO, RAG Coal International
Head of Energy, Anglo American
USA
TUR
GBR
ITA
NZL
AUS
USA
USA
DEU
JPN
USA
ZAF
USA
FRA
AUS
JPN
CZE
AUS
FIN
ZAF
DEU
ZAF
CIAB ASSOCIATES ATTENDING:
Mr
Julian
BEERE
Ms
Alison
BROWN
Mr
Mike
DANCISON
Ms
Mücella
ERSOY
Mr
Greg
EVERETT
Mr
Davide
GIULIANI
Prof
Allan
JONES
Mr
Kauno
KAIJA
Mr
Bill
KOPPE
Mr
Stéphane
LEMOINE
Mr
Andy
LLOYD
Mr
Roland
LÜBKE
Mr
Wolfgang
MÜLKENS
Mr
Kyohei
NAKAMURA
Mr
Stan
PILLAY
Ms
Wendy
POULTON
Mr
Shu
SAKAMOTO
Dr
Hans-Wilhelm
SCHIFFER
Mr
Don
SEALE
Mr
Deck
SLONE
Mr
Michael W
SUTHERLIN
Mr
Yukio
TAKEBE
Mr
Eric
VAN VLIET
Mr
Colin
WHYTE
Mr
Ross H
WILLIMS
Dr
Carl
ZIPPER
Vice President - Strategy, BHP Billiton
General Counsel & Company Secretary, Solid Energy New Zealand
Director - New Generation Development, American Electric Power
Chief Engineer, Turkish Coal Enterprises
General Manager - Strategy, Delta Electricity
Senior Trader, ENEL
Head of Research & Development, E.ON UK
Director, Helsinki Energy
Development Manager, Anglo Coal Australia
Chief Operating Officer, ATIC Services
Mining Executive, Rio Tinto
German Hard Coal Association
Energy Analyst, Federation of German Industries
Business Planning Department, Electric Power Development Company
Senior Divisional Manager - Sustainable Development, Anglo Coal
General Manager - Corporate Sustainability, Eskom
Manager - Fuel Planning, Tokyo Electric Power
Head - Energy Economics, RWE Power
Executive Vice President and Chief Marketing Officer, Norfolk Southern
Vice President - Investor & Public Relations, Arch Coal
CEO & President, Joy Mining Machinery
General Manager, Ferrous Raw Materials Dept., Mitsui & Co
Managing Director - Generation Section, EnergieNed
General Manager - Sustainable Development, Xstrata Coal
Vice President - Commercial Relations, BHP Billiton
Associate Professor, Virginia Polytechnic Institute & State University
ZAF
NZL
USA
TUR
AUS
ITA
GBR
FIN
AUS
FRA
AUS
DEU
DEU
JPN
ZAF
ZAF
JPN
DEU
USA
USA
USA
GBR
NLD
AUS
AUS
USA
GUESTS:
Mr
Harry
Mr
Milton
Mr
Stu
Mr
Nick
Mr
Vladimir
Dr
Kelly
Dr
John
General Manager, IEA Greenhouse Gas R&D Programme
Chief Executive, World Coal Institute
Director - Generation Sector, Electric Power Research Institute
Director - Technology and External Affairs, Alstom Power
General Director, Siberian Coal and Energy Company (SUEK)
Chief Executive Officer, Centre for Low Emission Technology
Managing Director, IEA Clean Coal Centre
GBR
GBR
USA
GBR
RUS
AUS
GBR
Vice President - Group Strategy, BP plc
President, Management Information Services
Technology Manager - Hydrogen & Syngas, NETL
Chief Executive Officer, Monash Energy
Director - Office of Clean Energy Systems, US Department of Energy
GBR
USA
USA
AUS
USA
AUDUS
CATELIN
DALTON
OTTER
RASHEVSKY
THAMBIMUTHU
TOPPER
WORKSHOP SPEAKERS:
Dr
Atul
ARYA
Dr
Roger
BEZDEK
Mr
Daniel C
CICERO
Mr
Jeff
COCHRANE
Mr
Victor K
DER
34
Mr
Mr
Prof
Mr
Mr
Dr
Mr
Robert C
I Merrick
Zheng
Bill
André
Sadao
Nicolás
Dr
Yuzhuo
IEA & STAFF:
Dr
Sankar
Mr
Ian
Mr
Michel
Mr
Brian
Mr
Hideaki
Ms
Noriko
Mr
Claude
Ms
Mikiyo
Mr
Jacek
Mr
Brian
Ms
Yoshiko
KELLY
KERR
LI
SENIOR
STEYNBERG
WASAKA
XIMÉNEZ
BRUIDEGOM
ZHANG
Executive Officer, DKRW Energy
Chief Financial Officer, Rentech
Director, Tsinghua-BP Clean Energy Research & Education Centre
Senior Advisor - Technology, BP plc
Technology Manager for Coal-to-Liquids Technologies, Sasol Technology
Director General - Environment Technology Development Dept, NEDO
General Manager Clean Coal Energy Europe, Shell Gas and Power International
USA
USA
CHN
GBR
ZAF
JPN
NLD
Chairman, Shenhua Coal Liquefaction Corporation
CHN
BHATTACHARYA
CRONSHAW
FRANCOEUR
HEATH
KATO
KATO
MANDIL
MORIOKA
PODKANSKI
RICKETTS
YONEKURA
Energy Technology Policy Analyst (Clean Coal), IEA
Head - Energy Diversification Division, IEA
Head - Coal Statistics Section, IEA
Executive Co-ordinator, CIAB
secretary, Electric Power Development Company
interpreter, Electric Power Development Company
Executive Director, IEA
interpreter, Tokyo Electric Power
Principal Administrator, IEA
Energy Analyst - Coal, IEA
interpreter, Electric Power Development Company
INT
INT
INT
GBR
JPN
JPN
INT
JPN
INT
INT
JPN
Consultant (former Chairman BRGM and ANDRA)
Director, VGB PowerTech
Researcher, IEA Clean Coal Centre
General Manager, World Coal Institute
Partner, Technology Market Strategies
Secretary General, European Association for Coal and Lignite
former Intellectual Property Manager GTL Technology, retired from ExxonMobil
Director, EURISCOAL
Strategy Manager, TOTAL Gas and Power
Advisor - Heavy Oil Upgrading / Coal Liquefaction, BP plc
Gray & Associates, former Director British Coal Petrol & Diesel from Coal Project
Director - Systems Analysis Group, Research Centre Jülich
Consultant, Syngas Consultants
Group Technology Manager, BG plc
Senior Research Fellow, Oxford Institute of Energy Studies
Science Director - Climate Center, Natural Resource Defense Council
Economist - Energy & Primary Materials, Natexis Banques Populaires
Director - Coal Liquefaction, Beijing Research Institute of Coal Chemistry
Political Analyst - Energy, French Foreign Affairs Ministry
Director, Centre for European Energy Strategy
Senior Business Development Manager, TOTAL Gas and Power
Special Advisor to UK Government, Foreign & Commonwealth Office
Higher Executive Officer, Norwegian Ministry of Petroleum and Energy
Operations Officer, World Bank Office in Poland
Senior Advisor, Tsinghua-BP Clean Energy Research & Education Centre
Marketing & Business Director, Air Liquide
Chief Executive Officer, DKRW Advanced Fuels
National Manager - Advanced Technologies Group, Toyota
DKRW Energy LLC
Economist, TOTAL Gas and Power
Director - Refining & Petrochemicals, Institut Français du Pétrole
Manager, Toyota
Expert Adviser to Strategy Committee, SUEK
Head European Climate and Energy Policy Unit, WWF European Policy Office
Deputy Manager - Procurement, Shenhua Coal Liquefaction Corporation
Environment & Energy Policy Manager, International Chamber of Commerce
Senior Power Engineer, World Bank
Sustainable Energy Section, UN Economic Commission for Europe
Future Energy & Mobility Structures Research Group, Wuppertal Institute
former Principal Research Scientist, retired from DuPont Canada
Director of Public Procurement Department, Kompania W glowa
Chief Representative of Paris Office, NEDO
Business Manager, Shenhua Group Corporation
FRA
DEU
GBR
GBR
GBR
BEL
USA
BEL
FRA
DEU
GBR
DEU
GBR
GBR
GBR
USA
FRA
CHN
FRA
BEL
FRA
GBR
NOR
POL
USA
FRA
USA
USA
USA
FRA
FRA
USA
RUS
BEL
CHN
FRA
USA
CHE
DEU
AUS
POL
JPN
CHN
WORKSHOP DELEGATES:
Mr
Maurice
ALLÈGRE
Dr
Franz
BAUER
Ms
Anne
CARPENTER
Ms
Christine
COPLEY
Mr
Geoff
CROCKER
Mr
Thorsten
DIERCKS
Dr
Rocco A
FIATO
Mr
Jacques
GLORIEUX
Mr
Jean-Paul
GOETSCHY
Dr Ing Ulrich
GRÄSER
Mr
M David
GRAY
Mr
Jürgen-Friedrich HAKE
Eur-Ing Chris
HIGMAN
Mr
David
JONES
Mr
Malcolm
KEAY
Dr
Daniel A
LASHOF
Mr
Thierry
LEFRANÇOIS
Dr
Kejian
LI
Mme
Delphine
LIDA
Dr
Rolf
LINKOHR
Mr
Jean-Michel
MERZEAU
Mr
Justin
MUNDY
Mr
Kjetil
OSEN
Mr
Roman
PALAC
Dr
Christos G
PAPADOPOULOS
Mr
Nicolas
PERRIN
Mr
H David
RAMM
Mr
Bill
REINERT
Mr
James
ROONEY
Ms
Yasmine
SARI
Dr
Patrick
SARRAZIN
Mr
Craig
SCOTT
Mr
Igor
SHELUKHIN
Dr
Stephan
SINGER
Mr
Qiang
SONG
Mr
Robert
STASTNY
Mr
Masaki
TAKAHASHI
Mr
Clark
TALKINGTON
Mr
Daniel
VALLENTIN
Dr
Geoff
WHITFIELD
Mr
Witold
WINIARSKI
Mr
Yutaka
YOSHIMOTO
Mr
Zhilong
ZHANG
35
Organising Committee
Andy Lloyd, Rio Tinto (chair) / Milton Catelin, World Coal Institute /
Sylvie Cornot-Gandolfe, ATIC Services / Brian Heath, CIAB / Bill Koppe,
Anglo Coal / Roland Lübke, GVST / Kyohei Nakamura, J Power / Fred
Palmer, Peabody / Stan Pillay, Anglo Coal / Wendy Poulton, Eskom /
Brian Ricketts, IEA / Hans-Wilhelm Schiffer, RWE Power / Deck Slone,
Arch Coal / John Topper, IEA Clean Coal Centre.
Notes
1
See, for example, information provided by the National Mining
Association [www.futurecoalfuels.org] and Coal: America’s Energy
Future, Washington DC: The National Coal Council, March 2006.
2
Coal Liquefaction, Technology Status Report 010, DTI/Pub URN
99/1120, London: Department of Trade and Industry, October 1999
[www.dti.gov.uk/files/file18326.pdf?pubpdfdload=99%2F1120].
3
Coal: Liquids Fuels, London: World Coal Institute, October 2006,
[www.worldcoal.org].
4
Mitreteck, Inc, Gray, D. and G. C. Tomlinson, Assessing the Economic
Impact of Indirect Liquefaction Process Improvements, Sandia National
Laboratories Contractor Report SAND89-7089, October 1990.
5
American Energy Security – building a bridge to energy independence
and to a sustainable energy future, Norcross, GA: The Southern States
Energy Board, July 2006 [www.sseb.org/AES/AES.htm]
6
Typically, about 15 MJ of coal energy is needed to make one barrel of
liquid fuel product. Conversion efficiency can be improved by using
more modern but also more expensive technologies e.g. IGCC to
provide process steam and electricity needs.
7
Stern, N., The Economics of Climate Change: The Stern Review,
Cambridge University Press, 30 October 2006.
8
Draft Implementation Plan - Status 2006, European Hydrogen and
Fuel Cell Technology Platform, European Commission, October 2006.
Coal Industry Advisory Board
For more information about the IEA Coal Industry Advisory
Board, please refer to www.iea.org/ciab, or contact Brian
Ricketts at the IEA ([email protected]) or Brian Heath,
CIAB Executive Co-ordinator ([email protected]).
IEA – International Energy Agency
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tel:
+33 (0)1 40 57 65 00/01
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36
[email protected]
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