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Development and Energy Security
D1 - What are the reasons of the growing interest in CTL and more generally in coal conversion?
D2 - Is coal conversion commercially operated today?
D3 - What are the world reserves of oil, gas and coal?
D4 - Where are the reserves of oil, gas and coal located?
D5 - Where are conversion projects developing?
D6 - Why are there not more coal conversion plants in operation?
Technology
T1 - What is the competitiveness of CTL?
T2 - What is the investment cost of a CTL plant?
T3 - What CTL technologies are available?
T4 - What technologies are available for producing Natural Gas?
T5 - What is the difference between coal gasification and CTL?
Environment
E1 - What is the environmental footprint of CTL?
E2 - What is a Well to Wheels (WTW) analysis?
Development and Energy Security
D1 - What are the reasons of the growing interest in CTL and more generally in coal conversion?
The growing energy needs, particularly in developing countries, and the uncertainties on oil availability have made coal conversion attractive, particularly in countries with large coal reserves.
Not only nations have an interest in coal conversion: the perspective of higher oil prices in the future has also pushed private and state-owned companies to launch conversion projects.
Strategic stakes will be addressed in the first plenary session (14 April) of the Conference.
D2 - Is coal conversion commercially operated today?
Conversion operations can be split into three types:
- Coal to Liquid Fuels or “CTL”: CTL is operated in South Africa, where it covers around 30% of the needs of liquid fuels and petrochemicals. Several CTL “demonstration” plants are being tested in China, with capacities from 5 to 20,000 bbl/day;
- Coal to Substitute Natural Gas or “SNG”: a 4.3 Mm3/day plant is running in North Dakota (USA), while several small size capacities are operated in China
- Coal to Chemicals: production of methanol and petrochemical derivatives: large plants are operated in China, with a total output in the range of 15 Mt/year.
D3 - What are the world reserves of oil, gas and coal?
Reserves can be simply expressed in “number of years” resulting from the division of proven reserves as of December 31, 2008 by the 2008 consumption. Two sets of statistics can be mentioned:
For the 2008 BP statistics published in 2009, fossil reserves* represent:
- Oil: 42 years
- Gas: 60 years
- Coal: 122 years.
The German BGR 2008 Status, published in 2009, includes reserves* and resources**:
- Oil: 41 years of reserves plus 23 years of resources
- Gas: 59 years of reserves plus 75 years of resources
- Hard coal: 126 years of reserves plus 2,715 years of resources.
- Lignite: 275 years of reserves plus 4,276 years of resources.
*Reserves are the volumes which can be profitably recovered using current technology.
**Resources are geologically indicated quantities or demonstrated ones which at present are not economically recoverable.
D4 - Where are the reserves of oil, gas and coal located?
Oil and gas reserves are mainly located in the Middle East and a limited number of other countries, while coal reserves are more evenly distributed. According to the BP 2008 statistics published in 2009,
- The oil reserves are mostly located in the Middle East and to a lesser degree in Russia, Venezuela, Kazakhstan, Libya and Nigeria, which collectively account for 84% of the world reserves;
- The gas reserves are mostly located in the Middle East and Russia, which collectively account for 64% of the world reserves;
- The coal reserves are mostly located in the USA, Russia, China, India, Australia and South Africa which collectively account for 82% of the world reserves.
D5 - Where are conversion projects developing?
Most advanced projects are in China. Several projects are being developed in the USA. Others are in Australia, Botswana, Canada, India, Indonesia, New Zealand, the Philippines, South Africa, South Korea and Vietnam.
Representatives of these countries are invited to participate in the “Energy Security” session of the Conference on 14 April, 2010.
D6 - Why are there not more coal conversion plants in operation?
The lead time (time elapsed from decision and the plant start-up) of projects such as CTL is more than five years. Given that capital expenditure amounts to several billion dollars or euros, investment decisions can only be taken after serious consideration which includes the project environmental impact, a major stake for the industry and the community.
Other parameters in conversion investment decisions include:
- the volatility of crude oil price;
- the level and volatility of coal market price;
- the evolution of fiscal policies;
- the environmental regulations and their evolution (mainly on CO2 emissions management).
Technology
T1 - What is the competitiveness of CTL?
CTL costs vary with several parameters such as construction costs and the price of coal, as well as local specificities.
Revenues depend mainly on the price of crude oil, from which are produced comparable products.
The cost of carbon storage, or CO2 emissions, will also impact CTL economics.
The notion of “crude barrel equivalent price” is commonly used to measure the competitiveness of CTL with crude oil for producing given outputs. In commonly available CTL “crude equivalent prices” vary from $45/bbl to $90/bbl.
For the Jul’08-Jun’09 fiscal year, the “Sasol Synfuels” Business Unit (a part of the Sasol South African Energy Cluster) registered a US$ 2.8bn operating profit over US$ 4.2bn revenues, with a $68.1/bbl average Brent price and an average production of 150,000 bbl/day.
CTL competitiveness will be addressed in the workshops (13 April) as well as in the plenary sessions of 14 April.
T2 - What is the investment cost of a CTL plant?
Capital expenditure amounts vary mainly with the cost of construction.
Commonly available figures vary from $80,000 to $120,000 per daily barrel of capacity.
The US Department of Energy published a report on Coal and Biomass To Liquids, in January 2009, in which several cases are studied. For a 50,000 daily barrel capacity, capital expenditure is estimated from $106,000 to $115,000 per daily barrel, depending on the % of CO2 sequestrated and the % of biomass acceptable as feedstock. These estimates were made in 2008 with highest estimated cost of construction.
T3 - What CTL technologies are available?
Two main technology routes are proposed commercially:
- The “Indirect Coal Liquefaction”: coal is first gasified to a synthetic gas (mainly carbon monoxide and hydrogen). This gas, after purification, is converted to liquid products under a second process, mainly the “Fisher-Tropsch” or the “Methanol-To-Gasoline” processes;
- The “Direct Coal Liquefaction”: pulverized coal is dissolved in a slurry recycled from the heart of the process. Hydrogen is then added at high pressure before the slurry is sent to a reactor where interaction results in the production of liquid hydrocarbons.
Mild pyrolysis, a pioneering process, after little interest in previous decades, has received renewed interest in the last years.
Technologies will be discussed during the Technology Workshops of 13 April and the Plenary Sessions of 14 and 15 April.
T4 - What technologies are available for producing Natural Gas?
Methane produced from coal or biomass is called “Substitute Natural Gas” or “SNG” (sometimes “Synthetic Natural gas”).
- Gasification and methanation
Coal and biomass are first gasified to a synthetic gas (mainly carbon monoxide and hydrogen). In a second step, methane is produced under “methanation”.
- Catalytic Steam Gasification
Coal is combined with a catalyst in large quantities before a gasification which directly produces methane and CO2.
- Hydrogasification
Coal and biomass are hydrogasified to methane (SNG) directly with hydrogen. The hydrogen is obtained by steam gasification of part of the methane obtained from the hydrogasifier.
T5 - What is the difference between coal gasification and CTL?
- “Coal gasification” means the conversion of coal to a synthetic gas, predominantly carbon monoxide and hydrogen. This “syngas” can have several uses. It can produce power production with a better global yield than combustion: this power production is called Integrated Gasification Combined Cycle or IGCC. Syngas can also be the raw material for producing hydrocarbons: liquid fuels, natural gas or petrochemicals.
- “CTL” means the conversion of coal to liquid hydrocarbons. It can be made through different processes, notably the “indirect route”, the first step of which is Coal gasification, but also through processes without gasification.
Today, most CTL projects are based on the indirect route, therefore Coal gasification.
Environment
E1 - What is the environmental footprint of CTL?
CTL is a process industry with similarities to refining. As such, water consumption, effluent emissions and waste management need to be carefully handled.
Focus is mostly on the emissions of CO2 emissions, a the most important greenhouse gas (GHG). Multiple studies are being conducted on emission evaluation and reduction and on Carbon Capture and Storage (CCS), predicted to play a key role in CTL.
On the other hand, liquid fuels produced by CTL contain fewer impurities than conventional fuels, which reduces pollutant emissions where the fuels are consumed.
Environment stakes, key in coal conversion, will be developed on 15 April.
E2 - What is a Well to Wheels (WTW) analysis?
For a given energy source, the Well to Wheels analysis results in the evaluation of the total environmental footprint, from primary energy extraction up to the final use by the consumer (“from the well to the wheels of a vehicle”). WTW analyses can compare any energy footprint to others, including biofuels, in a meaningful way.
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