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Liquid wind and gas to Japan?

Published Friday, April 24, 2015
The Land of the Rising Sun is thinking of importing Norwegian wind and gas by sea in the form of liquid hydrogen. This could offer Norway new prospects for wealth creation and exports, say a pair of Norwegian researchers.
Main intro image The Japanese company Kawasaki Heavy Industries envisages that Japan will import large quantities of energy in the form of liquified hydrogen – perhaps including from Norway – in large specialised spherical-tank liquified hydrogen carriers like this. Illustration: Kawasaki Heavy Industries
Hydrogen is used in industry, and when it is utilised as a fuel it emits only water. Japan’s Kawasaki Heavy Industries (KHI) is currently studying for supplying Japan with CO2-free hydrogen.

Both wind-power and natural gas can be transformed into hydrogen power. On behalf of KHI, and with additional financing by Norway’s state-funded CLIMIT programme, SINTEF has started to survey the possibility of Norway producing the green hydrogen that Japan wants.

SINTEF researchers David Berstad and Petter Nekså have discussed the content of their latest report in an article for the Norwegian business daily “Dagens Næringsliv” dated April 10.

“Japan’s interest in this topic demonstrates that the low-carbon society of the future could offer Norway new prospects for wealth creation and exports,” say the two researchers.

“Many people have claimed that nothing will ever come of the ‘hydrogen economy’, but the Japanese authorities have already started to phase it in. Toyota, the largest car manufacturer in the world, is skipping the electric car stage and moving straight on to hydrogen,” the SINTEF scientists point out in their article.

Here follows the complete article, reprinted with kind permission of the business daily “Dagens Næringsliv”:

Norway exports huge quantities of unrefined natural gas and oil, plus electricity. For its part, Japan is a major net importer of energy, and is preparing to transport much of it to the country in the form of liquid hydrogen.

On their way to a low-carbon economy, the Japanese are looking for exporters who are capable of producing hydrogen without creating CO2 emissions. With Japanese industry as our client, SINTEF has recently completed a preliminary feasibility study of Norway as such a producer.

Hydrogen is used in industry, and when it is utilised as a fuel its only emission is water. Many people have claimed that nothing will ever come of the ‘hydrogen economy’, but the Japanese authorities have started to phase it in. Toyota, the largest car manufacturer in the world, is skipping electric cars and going straight on to hydrogen.

Can be made from both water and natural gas

Hydrogen will never be greener than the way in which it is generated. The simplest way is to start with water and split this into hydrogen and oxygen using electricity (water electrolysis), for example by using ‘green’ electricity from renewable energy sources.

At present, however, it is cheapest to generate hydrogen from gas, oil or coal, but such processes also produce CO2 as a by-product. In order to generate pure hydrogen, the CO2 must be removed. Most fossil-fuelled hydrogen generating plants emit CO2 from this process, but in the USA some of it is extracted from the process, and is used for enhanced oil recovery. CO2 can also be pumped down into geological strata for permanent storage, a solution that makes hydrogen generation from fossil sources virtually emission-free.

Norway has what Japan lacks

Japan’s Kawasaki Heavy Industries (KHI) group is currently studying CO2-free supply lines for hydrogen. One of the projects that the company is evaluating involves hydrogen production from Australian brown coal, with the CO2 being stored on the Australian continental shelf. The hydrogen would be liquefied and transported to Japan in large specialised vessels.

KHI is also studying other alternatives. Theoretically, Japan could produce hydrogen on its own territory from imported natural gas, but it is still not certain whether its geology is suitable for CO2 storage. Nor does the country have an excess of renewable energy for electrolysis. Norway has both a suitable geology and plenty of renewable energy.

Wind power and CCS projects

On behalf of KHI, and with additional financing by Norway’s state-funded CLIMIT programme, SINTEF has started to survey the possibilities at home. KHI envisages annual shipments of around 225,000 tonnes of hydrogen, which would be sufficient to power three million cars. For Norway to generate all of this by electrolysis would require some 14 TWh of energy a year, equivalent to 10 – 12 per cent of the country’s electricity production, and it would need a significant increase in our generating and distribution capacity.

In the green certificate market, Norway is expected to produce 13 TWh of new, renewable energy annually by 2020, according to the aims of the scheme. If all of this were to be sent to hydrogen generation, the Japanese requirements as outlined above could theoretically be met via electrolysis alone. However, the necessary facilities are being developed extremely slowly, and it is not clear how rapidly production capacity will increase.

On the other hand, natural gas is readily available as a source of energy, and Norway could fulfil such an order without using more than roughly 1.5 per cent of the country’s gas production. The feasibility study shows that a resource-optimal solution would probably be to combine electrolysis and production from natural gas, with one third of the total coming from electrolysis, for example. This balance could be altered in the course of time, as gas production tapers off and wind-power generation rises.

Apart from Japan, the European continent is a potential recipient of Norwegian hydrogen. With Norway’s access to renewable energy, natural gas and CO2 storage sites, this country could become a major supplier of green hydrogen. And last but not least; could hydrogen generation be the full-scale project for carbon capture and storage that the politicians are looking for?

With national energy security still being a dominant concern because of increasing dependence on imported oil, there is interest in producing more of our oil from domestic sources. By far the largest single supplier of oil to the U.S. is Canada. But, we must be concerned that an equal amount of imports comes, in total, from four countries wracked by instability or with governments hostile to the U.S.: Algeria, Angola, Iraq, and Venezuela.

In addition, the global trade in oil means that, even though the U.S. imports no oil from Iran, and little from Libya, if further unrest in the Middle East should happen to take Iranian and/or Libyan crude off the world market for a time, global oil prices would skyrocket, directly impacting the American economy. Oil is truly the life blood of any industrialized society. Without it, continued and sustained economic growth and social stability would be impossible. Oil provides us with transportation fuels that give us the freedom of personal mobility. About two-thirds of petroleum consumption in the U.S. is in the transportation sector; from the other perspective, some 95-97% of transportation energy derives from petroleum. A second aspect of the vital importance of petroleum is that it provides key petrochemicals for plastics, urethanes, and synthetic fibers. This application accounts for an estimated 16% of petroleum used in the U.S., and over 25% of petroleum processed in the Gulf Coast region.

XTL is coal and/or biomass liquefactoin via Fischer Tropsch synthesis

XTL is the conversion of carbonaceous feedstocks to a mixture of hydrogen and carbon monoxide, called synthesis gas, followed by the separate step of producing liquid hydrocarbon fuels from the gas via Fischer-Tropsch synthesis. In principle, any carbonaceous feedstock could be used (given appropriate technology for its conversion to synthesis gas), including biomass, coal, coal/biomass blends, natural gas, municipal solid waste, natural bitumens and heavy oils, and waste tires. Synthesis gas conversion technologies also offer potential routes to hydrogen, substitute natural gas, and various solvents or intermediates such as alcohols and aldehydes.

How DCL differs from XTL

The principal alternative to XTL is direct coal liquefaction (DCL), which is the conversion of coal to liquids without the intervening step of producing synthesis gas. The primary DCL technology is hydroliquefaction, the reaction of coal with hydrogen and/or a hydrogen-donor solvent, usually in the presence of a catalyst. Liquids can also be obtained from coal by pyrolysis, and by solvent extraction with various solvents in the sub- or supercritical regimes. Some work has been done on the co-liquefaction of coal blended with materials such as scrap plastic, scrap rubber, or heavy oils. A second major difference between DCL and XTL is that usually XTL products are clean liquids that can be used as transportation fuels with minimal refining, whereas the primary liquids from DCL are usually aromatic with nitrogen, oxygen, and/or sulfur incorporated, so will require substantial downstream refining to meet performance and environmental requirements for transportation fuel usage.

The Shenhua Process The world’s only commercial-scale hydroliquefaction plant is the so-called Shenhua plant, built by the Shenhua Group Corporation in Majata, Inner Mongolia. The Shenhua process represents evolutionary development of earlier work beginning with the H-Coal process (Hydrocarbon Research, Inc.), with further improvements by Hydrocarbon Technology Inc. and Headwaters. Bituminous coal is slurried with recycle solvent and catalyst. The slurry is fed to a liquefaction reactor (the largest one ever built, with a 6000 ton/day capacity), followed by solid-liquid separation. The primary liquids are hydrotreated to produce primarily diesel fuel and naphtha, in amount of 24,000 barrels per day. On an annual basis, the Shenhua plant expects to utilize about 3.5 million metric tons of coal, producing 715,000 metric tons of diesel fuel, 250,000 metric tons of naphtha, 120,000 metric tons of LPG, and about 3,500 metric tons of phenols. On a dry, ash-free basis, about 57% of the coal is converted to liquids.

There are no Coal/Biomass CBTL plants

CBTL process
CBTL process
The concept of gasifying mixtures of coal and biomass together in the same plant to produce liquid fuels is novel and no such plant currently exists. There are many gasifiers that can gasify biomass but most of these are usually small scale, use air instead of oxygen, operate at lower temperatures thus producing tars, and operate at low or atmospheric pressure. All of those characteristics would make them unsuitable for producing FT liquid fuels.

CTL technology has a proven track record and is technically viable. However, although Sasol has successful commercial plants in operation, the integration of modern entrained-flow coal gasification with advanced FT synthesis has yet to be demonstrated commercially. There are no commercial or even small scale plants are currently in operation to convert mixtures of coal and biomass to liquid fuels.

If a CBTL plant did exist it would work like this

The plant would operate just like a CTL plant except that biomass is gasified in addition to the coal. Separate gasifiers could theoretically be used for the biomass and the coal; however it may be more efficient and less costly if the same gasifier could convert both feeds simultaneously. This would be similar to the situation at NUON where the Shell gasifier was able to gasify both wood and biomass. In this conceptual plant, high pressure, entrained-flow gasification with oxygen is used to convert the coal and biomass into synthesis gas. This synthesis gas is cleaned using conventional gas cleaning technology. Slurry-phase FT reactors are used to convert the clean synthesis gas into raw FT products. Hydrotreating and hydrocracking/hydroisomerization are used to convert the raw FT products into naphtha and diesel. All power required in the plants is generated on-site. Unfortunately, there is very little data in the literature for the gasification of biomass in entrained high pressure gasifiers. Because of the fibrous nature of most biomass sources, the material is very difficult to pretreat and feed into a high pressure gasifier. Typical problems include clumping and bridging. However, the successful demonstration at the NUON plant does indicate that co- gasification is technically feasible provided that the biomass receives the appropriate pretreatment and preparation.

Barriers to XTL plants being built

Although the United States still imports about 11 MMBPD of oil from the unstable Middle East and other potentially hostile countries and world oil prices are currently hovering around $90 to $100 per barrel, no commercial U.S. XTL plants are being built. This is because of the considerable number of barriers to deployment of XTL. These barriers can be classified as technical, economic, environmental, commercial, and social.

Under economic barriers, the uncertainties about future oil prices are a significant barrier. The high capital expenditures needed for large scale CTL plants is a major barrier. It is anticipated that the capital for large (greater than 50,000 BPD) CTL plants will be over $150,000 -$160,000 per daily barrel. Therefore, a 50,000 BPD FT CTL plant could cost over $8 billion. The investment risk for such a large sum is considerable. For GTL the capital cost is lower but a 50,000 BPD plant would still require an investment of over $3.5 billion. Also for CBTL the cost of delivered biomass is very high.

Water use in CTL plants is also an important environmental issue particularly in geographical areas of low rainfall.

Significant deployment of CTL facilities will require the use of large quantities of coal and this will mean an expansion of the coal mining industry. For example, a 50,000 BPD CTL plant will use approximately 7 million tons of coal per annum. There is considerable opposition to increased coal mining. Another issue concerns actual commercial deployment of CTL. Who would take the lead in commercial deployment of XTL technologies?

If many XTL plants were to be built worldwide at the same time then there will be competition for critical process equipment and engineering and labor skills. There is already evidence that this bottleneck is being encountered worldwide because of the large number of simultaneous construction projects. Finally, there are the issues of permitting and the usual public reluctance to accept the need for new facilities especially coal based plants. Particular barriers to deployment of CBTL technologies include the high cost of biomass feedstock, the availability of sustainable quantities of biomass feed stock, the GHG and energy penalties associated with the cultivation, harvesting, and preparation of the biomass feed, the high cost of biomass transport, and the technical problems with feeding biomass to high pressure gasification systems.

If water availability presents no problems and water cooling is used for all applications the expected use would be in the range 7-10 barrels of water per barrel of liquid fuel product for CTL and CBTL plants. On the other hand, if water is scarce, in Western locations for example, then maximum use of air cooling could be made.

Because no FT CTL plants have been built since Sasols II and III in South Africa in the early 1980s, it is very difficult to accurately estimate the capital costs of new FT CTL plants that would be built in the U.S. in today’s economic climate. The tight EPC market has resulted in large escalations of capital costs for major projects. For example, costs for new IGCC plants are estimated to be over $4,000/kW compared to estimates of around $2,500/kW just a few years ago. Likewise, the costs for new Oil Sands projects in Canada have experienced escalations of 70% or more.

DCL deployment faces many of the same barriers that have already been identified and discussed in the XTL section of this white paper. These include the significant technical risks (especially given only one commercial-scale DCL plant running in the world, and that only for about two years) with the attendant question of who would take the lead in building the first plant(s); the very high capital expense, at least for hydroliquefaction, and the related investment risk; questions of permitting, which will be made all the more complicated by the antipathy of the public and many NGOs to coal; likely shortages of process equipment and skilled labor; the need for substantial expansion of the mining industry; and a need to deal with CO2 and other environmental issues.

The primary liquid from hydroliquefaction, carbonization, or solvent extraction is likely to be highly aromatic, also containing various compounds of oxygen, nitrogen, and sulfur. It will require significant downstream refining to produce liquid fuels that meet market and environmental specifications. These additional downstream processes will add capital and operating costs. These processes, especially hydroliquefaction, will consume substantial amounts of hydrogen. The likely way of obtaining hydrogen is via coal gasification. Not only does this also add to capex and opex, it implies that all of the various operations of a gasification plant must be embedded inside a hydroliquefaction plant. If one needs to install gasifiers and ancillary equipment anyway, perhaps XTL would be a better choice. Especially with low-temperature carbonization, and somewhat will solvent extraction, inevitably there will be a solid product containing unreacted or partially reacted coal and ash. Unless a use exists for the solid, it will be a major cost to collect and dispose of in an environmentally acceptable manner.

Barriers to economically successful, commercial-scale direct liquefaction of coal include:

Selection of materials of construction for reactor vessels and ancillary equipment, to withstand high-temperature, high- pressure hydrogen environments and abrasive coal or mineral slurries.
Finding an inexpensive and convenient source of process heat.
Finding an inexpensive source of hydrogen, ideally one that does not contribute to the carbon footprint.. Separation of coal mineral matter and unreacted or partially reacted coal particles from the process stream.
Subsequent post-liquefaction upgrading and refining of the “synthetic crude oil” from liquefaction into commercial-quality, marketable liquid fuels. It has been presumed that the primary liquids would be treated in the standard unit operations of an oil refinery, but there seems to be little verification of this. A related issue is that the final, upgraded products of DCL have been assumed to be fungible with the comparable petroleum-derived products. This point does not seem to be fully demonstrated either.
Estimated Economics for DCL Plants It has been nearly twenty years since a detailed economic analysis was done for hydroliquefaction, and possibly much longer for solvent extraction or carbonization. A hydroliquefaction plant capital cost, for coal being converted to clean, specification-grade transportation fuels, is likely in the range of $120,000 per daily barrel of capacity. Estimated cost of the finished liquid products is $0.20 per gallon higher than from a CTL plant. It should be noted that the estimated cost of $120,000 per daily barrel is about double of the claimed cost of the Shenhua plant ($62,500). The figure for the Shenhua plant was based on 2008 dollars; the world has seen significant increases in capital equipment prices since then. In addition, it is not clear what basis was used for conversion of yuan to US dollars. Therefore, this is not to say that one figure or the other is grossly in error, but they probably can be taken as “bookends” for the cost of a plant.

In China, a tug of war over coal gas: Cleaner air but worse for the climate
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By Simon Denyer May 5
HEXIGTEN, CHINA — Amid the rolling grasslands of northern China, a gleaming new industrial complex offers a beguiling vision for the nation’s leaders. Here, on a sandy plain among scattered flocks of sheep, a flagship plant promises to use China’s surplus coal while simultaneously delivering cleaner skies over its crowded eastern cities.

Modeled on a similar and much older plant in North Dakota, the Hexigten complex in China’s Inner Mongolia transforms coal into methane by treating it with heat, steam and oxygen. It then pipes the supposedly cleaner gas to Beijing to heat and power the capital’s homes.

In the past two years, with anger over the country’s smoggy skies rising and demand for coal declining, China has enthusiastically embraced coal gasification. It has proposed to build more than 50 plants like this in its sparsely populated north and west and to create by far the largest synthetic natural gas (SNG) industry in the world.


Although the enthusiasm has since waned somewhat — mainly over questions about the industry’s economic viability — coal gasification still has powerful backers. But a visit to the semi-arid grasslands of the Asian steppe soon clouds the rosy vision they espouse.

Here, even before the factory’s twin smokestacks come into view, the stench of sulfur poisons the air, leaving humans and animals gasping for breath for miles around. Likewise, underground water supplies are receding, while wastewater pools threaten to leach dangerous heavy metals into the soil, according to Greenpeace research.

Protests by local herders have reportedly been suppressed, and a Washington Post reporting team was harassed by police and security officials on a recent trip.

Not only is this industry exporting pollution from the politically powerful capital city to the politically marginalized grasslands and deserts of Inner Mongolia and Xinjiang, but it also has a potentially powerful impact on the global climate.

The entire process of turning coal into gas, and then burning that gas somewhere else, produces significantly more greenhouse gases than just burning the coal in the first place. The industry is also extremely water-intensive, putting pressure on water supplies in some of China’s most arid regions.


“If they keep going with coal-to-gas, they are going to produce so much greenhouse gas that they won’t reach their targets,” said Chi-Jen Yang, a research scientist at Duke University’s Center on Global Change, adding that this could lock China into a high-carbon path of development for decades to come.

In effect, he said, China has been trying to address short-term, local problems — smog and a recession in the coal industry — by exacerbating the long-term global problem of climate change.

Last November, in an agreement with President Obama, Chinese President Xi Jinping pledged that his country’s emissions of carbon dioxide would peak around 2030, or sooner if possible. But with China already producing twice the emissions of the United States, the prospect of the country adding more through a coal-to-gas industry has alarmed environmentalists.


Fortunately, Yang and others say, there has been a rethink, and the headlong rush into SNG has given way to a more sober assessment over the past year.

This reassessment has not come out of respect for local herders, and not even because of Xi’s climate-change commitments. It has come simply because the economic rationale for the industry appears to be evaporating.

The removal of subsidies has seen natural gas prices rise, depressing domestic demand, while Beijing has also been busy securing gas supplies from abroad. In addition, a slowing economy has cut energy demand more generally; there simply isn’t the need for synthetic natural gas that policymakers projected a few years ago.

“The coal-to-gas industry has shown signs of developing too fast,” state media reported in July, citing China’s National Energy Administration and promising stricter controls. “The coal-to-gas and coal-to-oil industry should not stop, but it should not be developed too fast.”

The plant at Hexigten, run by a state-owned company, Datang, was supposed to demonstrate the industry’s feasibility when it began operations in December 2013. But it has struggled financially and technologically: Two people died and four were injured by a hydrogen-sulfide leak in January 2014.


Later that year, Datang restructured the project’s finances and tried to sell the plant, Yang said. “Nobody wanted to buy,” he said. “I guess they scared all the other investment away.” Datang declined to comment.

Chinese policymakers often point to a pioneering gasification plant in the coal fields of North Dakota as evidence of the industry’s viability. But they don’t mention that the project, the Great Plains Synfuels Plant, went bankrupt and was bailed out by the U.S. government in 1986.

The Great Plains plant also uses carbon-capture technology to limit its emissions, something no Chinese plant does at this stage.

As China ponders its next step, there is a huge amount at stake. In early 2014, China’s National Energy Administration said it wanted to see the country produce 50 billion cubic meters of synthetic natural gas a year by 2020, but it had approved projects that could see output climb more than four times higher. Greenpeace calculates that if China goes ahead with projects already in preparation or under construction, the coal-to-gas industry would cancel out all the emissions cuts the United States hopes to make by 2020.

But in signs of a further retreat last December, China Energy News, a state-run newspaper, quoted an unnamed policymaker as saying China would “probably” suspend projects that had not already begun construction and limit the production of synthetic gas to just 15 billion cubic meters by 2020.

Li Shuo, a senior climate and energy policy officer at Greenpeace East Asia, says project construction has slowed and there is greater understanding of the economic, technological and environmental limitations of coal gasification.

“But I would be a bit cautious to reach the conclusion that China is not going ahead with coal-to-gas, he said. “My impression is we are at a critical juncture now.”

Old habits
There are powerful forces that still favor the industry, which some policymakers see as strategically important in securing China’s energy independence, a key national security goal. Coal-rich provinces also appear to be keen on the industry.


In the end, the decision on whether and how quickly to proceed will be a sign of whether the Chinese government really wants to push for a more environmentally friendly, economically sustainable growth model, or whether it will persist with old habits, through reliance on state-owned heavy industries that have already poisoned the nation’s air, water and soil.

China’s new energy minister, Nuer Baikeli, toured coal-to-chemicals plants in Inner Mongolia and elsewhere in March, and pushed for one plant, at Ordos, to begin a second phase of production. State media reported him as saying that the industry needed massive pilot projects to promote innovation; otherwise, he said, it would be merely “building castles in the air.”

Until December, Baikeli was governor of Xinjiang, a province where the coal-to-gas industry had promised a big boost to the economy and a captive market for its coal.

“Provinces have strong economic incentives to push for these plants, to lock in a use for their coal for decades,” said Rob Jackson, a professor in the School of Earth Sciences at Stanford University. “You can’t underestimate the importance of local economic development.”

Nowhere is that more true than in Inner Mongolia and Xinjiang, where environmental considerations pale in comparison to the desire to maintain economic growth — and social stability — at almost any cost.

“Local governments have not changed their minds at all,” said Ma Wen, another climate and energy expert at Greenpeace.

Not only are Inner Mongolia, Xinjiang and others still pushing for more investment in the coal-to-chemicals industry, but China is promoting similar projects in neighboring Kazakhstan and Mongolia under its Silk Road economic-development plan, he said.

Outside the Datang plant, herders complained of dizziness, headaches, nausea and sore throats because of the foul air, while some animals had died prematurely. At least three protests took place last year against the plant, each involving hundreds of local residents. Still, nothing had changed: Several arrests had been made, one villager said, and no compensation had been paid.

The plant uses water from a nearby lake for its industrial process, but water use by its employees, who live on the compound, is sucking up scarce underground supplies, Greenpeace says.

“No matter how deep you dig a well, you can’t get water now,” said one man living near the plant, who said he had been told by security officials to stay indoors and not talk to reporters but did so anyway, by telephone.

“No matter how many times you protest, the government always stands on the side of the factory,” he said.

Xu Jing contributed to this report.

http://www.latimes.com/business/money/la-fi-mo-coal-global-environment-20131216,0,4864739.story#axzz2pUhGRttg

http://www.americaspower.org/cct-glossary-terms Skip to main content America's Power Follow us on: Advanced search + Search form Search Affordable Abundant Clean Coal Technology Issues & Policy Newsroom Behind The Plug Video Take Action You are here Clean Coal Technology » CCT Glossary Clean Coal Technology Now Baseload Power Baseload power is the amount of power required to meet the minimum consumer demand for electricity generation. Carbon Capture The process of separating relatively pure carbon dioxide gas as a by-product of industrial processes (including synthetic ammonia production, hydrogen production and limestone calcination) and electricity generated from fossil fuels, such as coal and natural gas. Clean Coal Technology The entire suite of technologies – both pre- and post-combustion – that can be used to reduce the environmental footprint of coal-based electricity plants. These technologies include devices that increase the operational efficiency of a power plant, as well as those technologies that reduce emissions. Carbon Dioxide (CO2) A colorless, odorless, non-poisonous gas that is a normal part of Earth’s atmosphere. It is an unavoidable product of the combustion (oxidation) of carbon in fossil fuels (hydrocarbons) and biomass (carbohydrates). It is a greenhouse gas, along with water vapor, methane and others such as chlorofluorocarbons. Coal Gasification The process of converting coal into synthetic “natural” gas by a process using incomplete combustion to create carbon monoxide (CO). The CO is transformed into a substitute natural gas through chemical interaction with a catalyst for use as a fuel or further processing and concentration into an industrial feedstock or liquid fuel. Carbon Sequestration The fixation (or storage) of atmospheric carbon dioxide in a geologic or biologic sink. Enhanced Oil Recovery Techniques used to recover residual petroleum resources left behind in depleted oil reservoirs through the injection of water and gases, such as carbon dioxide, into the oil-bearing geologic strata. Flue Gas Emissions from fossil fuel combustion that are directed into the atmosphere through an enclosed passageway or stack. In modern facilities, the flue gas first is directed through a series of devices designed to rid the gases of specific emissions (e.g., sulfur dioxide, particulate matter and mercury) before its release into the atmosphere. FutureGen A private-public partnership to design, build and operate the world’s first coal-fueled, near-zero emissions power plant. The facility’s design is intended to support the testing of commercial-scale carbon capture and sequestration. Greenhouse Gas Any one of a group of gases such as carbon dioxide, methane, water vapor (clouds), and a variety of manmade chemicals that trap the sun’s radiant energy and prevent it from passing back out through Earth’s atmosphere and into space. Integrated Gasification Combined Cycle (IGCC) A technology for generating electricity that utilizes coal gasification to produce a synthesis gas. The “syngas” undergoes a cleaning process that removes particulates and sulfur compounds. The gas then is converted into electricity using a combustion turbine. Waste heat from the gasification process is used by additional turbines to generate supplemental electricity (a combined cycle), thereby increasing the efficiency of converting coal into electricity. The process integrates coal gasification with a combined cycle, both of which enjoy a long operating experience; it’s their integration that is innovative. Marginal Cost A change in cost in conjunction with a change in units of quantity supplied or produced. Nitrogen Oxides (NOx) Compounds of nitrogen and oxygen produced by the combustion of fossil fuels. Particulate Matter A small mass of solid or liquid matter that remains individually dispersed in gas or liquid emissions. It can take the form of an aerosol, dust, fume, mist, smoke or spray. Pilot Project An activity planned as a test or trial. Scrubber Post-combustion technology that utilizes a chemical reaction to trap emissions, such as sulfur, present in flue gas prior to its release into the atmosphere. Sulfur Oxides (SOx) Compounds containing sulfur and oxygen, such as sulfur dioxide (SO2) and sulfur trioxide (SO3), created when coal, containing sulfur, is combusted. Super Critical Technology A subcritical steam generation unit operates at pressures such that water boils first and is then converted to superheated steam. At supercritical pressures, water is heated to produce superheated steam without boiling. Due to the improved thermodynamics of expanding higher pressure and temperature steam through the turbine, a supercritical steam generating unit is more efficient than a subcritical unit. Ultra-Supercritical Generation Ultra-supercritical (USC) steam generation represents an increase in steam cycle efficiency. A USC unit operates above supercritical pressure and at advanced steam temperatures above 1,100 degrees Fahrenheit (593o C), resulting in a more efficient steam cycle. This increased efficiency reduces fuel consumption, reagent consumption, solid waste, water use and operating costs. Recommend Twitter LinkedIn Print Abundant Resources Learn about coal, America’s most abundant, domestically produced energy source. Learn more + Read the Facts & Figures + Share: Share on email Join America's Power: via Facebook via Twitter Stay Informed Who We Are Contact Us FAQs Privacy Policy Terms & Conditions Behind the Plug Press Room Site Map © 2007-2014 American Coalition for Clean Coal Electricity

http://seekingalpha.com/article/881391-energy-after-the-peak-merger-of-coal-and-refiners-replaces-conventional-oil Energy After The Peak: Merger Of Coal And Refiners Replaces Conventional Oil September 21, 2012 | 58 comments | includes: SUN, VLO, WLB Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I am presently working on several coal to liquid projects. (More...) The chart above shows the number of refineries and their output in North America over time. Its clear following the 1970 oil shock that major integrated oil companies have not invested in refineries. This gave rise to the independent refiners as an important resource in the US. Over half of the refining capacity is now owned by independent refineries. The two largest are; Valero Energy Corp. (VLO): Valero is the largest independent refining company in North America and has a capacity of 3.3 million barrels per day. Sunoco Inc. (SUN): The second largest independent, Sunoco refines 990,000 barrels of crude a day. Performance of these refinery stocks may be due for a powerful comeback! To understand how this might occur, let's look at some recent history and the long term trend in the oil business and how these stocks and others like them might benefit from these changes. Major oil companies have for 40 years now under-invested in refineries, creating an artificial scarcity in oil. Some experts observe, if you do not have crude to run through them, why invest in new refineries? But is that received wisdom true? While it is certainly true that the logistic curve computed for conventional oil production in 1954 is accurate, it is not true that conventional oil is the only energy supply available in sufficient abundance at a competitive cost. We have known since 1911 that hydrogen may be added to coal to produce petroleum products. Frederich Bergius received a Nobel Prize in 1931 for this achievement. Following World War II Truman backed the production of a 200,000 barrel per day coal liquefaction plant based on Bergius' process. IG Farben ceded the technology to the UN as part of War Reparations for Germany. BP (BP) acquired the technology and canvassed the White House to close the Missouri plant. Truman kept it open. The plant sold oil that was competitive in quality and cost with conventional oil. BP persisted and eventually Eisenhower created an energy committee which recommended closure of the plant. When South Africa passed their apartheid policies in 1948, and expanded them in 1950, Saudi Arabia refused to sell oil to that country. As a result, South Africans began developing their coal reserves. BP denied them the use of the Bergius direct hydrogenation process, so South Africa used the inferior Fischer-Tropsch process. Until the Shenhua coal company began construction of a Bergius direct hydrognation reactor, most investors thought wrongly that Fischer-Tropsch was the only way to produce coal and that the liquids produced were the best that could be done. Despite the excellent work of Bergius in 1911, the US has supported billions of dollars in coal research, research that ignores Bergius and finds, surprisingly, the need for more research going forward. The numbers for Bergius are, one metric ton of coal is converted into 6.2 barrels of liquid fuels with the application of 125 kilograms of hydrogen gas. This hydrogen gas may be produced by carrying out a shift reaction with another 375 kilograms of coal and 1,125 liters of water. It may also be produced by a high temperature nuclear reactor by direct thermolysis as suggested by Brookhaven Labs and Westinghouse in 1961. This in response to a request from JFK to find a solution to the problem of oil shortages before the crisis hit. BNL felt that with a dedicated effort, we could have oil at competitive rates of $2 per barrel by 1968 and by 1988 transition to an all hydrogen economy where energy costs were $0.20 per barrel equivalent. Many rosy scenarios were built around an industrial economy with energy that abundant at that price. Now, that's leadership! The report languished on the desk of president Johnson after November 1963 and was eventually forgotten. It was resurrected by Jimmy Carter, a former US Navy nuclear engineer. Unfortunately, the very month Carter submitted his revised plan to Congress three things happened that galvanized the nation. The family of Karen Silkwood received a $5 million wrongful death settlement against Kerr-McGee. Ms. Silkwood processed plutonium pellets at Kerr-McGee's Cimmarron fuel processing site. This got the nation asking the question, just how safe is nuclear power? As the media began grinding out this question to a concerned nation, after thirty years of safe nuclear power, as far as most Americans were concerned at the time, Three Mile Island melted down and released radioactive waste despite assurances previously that this could never happen. Then, finally, as a coup de grace, the hit movie China Syndrome, with Jane Fonda, was released to rave reviews. At the end of this unfortunate sequence of events the result on capitol hill was predictable, the nation will spend any amount of money needed to address the energy issues facing it, it will not consider any solution based on nuclear energy. Over the next decade America spent more money on energy research than it spent going to the moon. The result? More research is needed. Bergius was ignored. That's old technology. Old technology or not, the total cost of producing oil today with Bergius is $8.57 per barrel. At today's prices, this produces a gross profit in excess of $100 per barrel! The US consumes 6.8 billion barrels of oil per year. If we made 6.8 billion barrels from domestic coal we would add over $10 billion per week to our economy. This cash flow may be hypothecated to cover all external debt, and bring sanity back to our economy. We might even consider an oil backed dollar in this case. How might these independent refineries benefit from Bergius' technology? Well, they could convert themselves to domestically sourced integrated oil companies using US coal to make petrol. This could be achieved by merging with an appropriately sized coal mine. Such an announcement would precede a dramatic increase in value of both companies. The impact of such a merger would be large. Consider Westmoreland Coal Company (WLB). It has coal reserves of 389.9 million tons of coal and a market cap of $162.94 million, producing $0.42 of value for each ton of reserves. Now, consider Sunoco, Inc., it has no oil reserves and retails 990,000 barrels of oil per day. As a result, it has a market cap of $4.15 billion and sales of $44.61 billion. Look what happens when we merge these two companies and build a $5.54 billion Bergius reactor to make SUN oil from WLB coal: First, the SEC allows us to value WLB's coal as 2.4 billion barrels of oil at nearly $14 billion - providing tremendous returns straight-away. Next, SUN cost of sales plummet and profits skyrocket, increasing market cap to over $170 billion! (click to enlarge) Obviously, with increased valuation, the company is in a strong position to expand. Other independents will also be inspired to compete. Eventually all of America's 279 billion tons of coal will be valued as 1.8 trillion barrels of notional oil production in the future. This is more than twice the oil left in the world today from conventional sources. A reserve of oil that is worth well over $8.8 trillion in the ground. This vast and rising value forms the basis for further productive expansion of the US' industrial economy for another generation.

http://coaltooil.com/ John M. Kocol is developing CoalToOil.com plants that will use a brand new "game changer" American invented Bennett coal to oil process that is much cleaner than the Fischer-Tropsch process, and CO2 would also be converted to methanol at John M. Kocol's CO2toMethanol.com plants via the Olah CO2 to methanol process. End product from plants, gasoline made from coal and methanol made from CO2 [methanol will be converted to gasoline using ExxonMobil's methanol to gasoline technology], will be sold throughout the U.S. and Mexico at John M. Kocol's USMEXenergy.com gasoline stations, resulting in American and Mexican energy independence! COAL-->CoalToOil.com plants-->OIL,GAS, CO2-->SUN, WATER, CO2-->CO2toMethanol.com plants-->METHANOL-->USMEXenergy.com gasoline stations that will sell gasoline made from coal and renewable methanol throughout the U.S. and Mexico Converting CO2 to methanol is synergistic for coal to oil conversion by making it a clean, renewable source of fuel. Meanwhile, pumping CO2 underground according to John M. Kocol is extremely unsafe, for what do you do when the CO2 begins to leak into our clean drinking water and into our air? Read "Coal-to-oil raises long-term environmental questions despite plans to capture CO2" by Willow Belden, Wyoming Public Radio, 2/10/12. Synonymous coal-to-oil terms: coal conversion, coal gasification, coal hydrogenation, coal liquefaction, coal-to-crude oil, coal-to-diesel, coal-to-fuel, coal-to-gas, coal-to-liquid fuel, coal-to-liquids (CTL), coal-to-oil, coal-to-petroleum, liquid coal, methanol-to-gasoline (MTG), underground coal gasification (UCG). Did you know that oil can be made from coal? According to former Department of Energy (DOE) scientist Richard Wolfe, "oil also can be extracted from coal. In fact, oil extraction is the first step toward producing diesel fuel and then gas. Coal is oil before it becomes coal." (Bristol Herald Courier, June 8, 2008, "Inventor Claims To Have Developed ‘Super Clean’ Coal" by Michael Owens). John M. Kocol wrote about using deep unmineable coal seams for underground coal gasification (UCG) (coal2oil conversion process that takes place underground) in What's Next In Science & Technology: "Storing carbon dioxide in deep coal seams could also provide useful methane gas,"06/27/07. HISTORICAL ANALYSIS Below courtesy CleanCoal.com.au: Coal to Oil [CoalToOil.com] (Coal 2 Oil) Explained. The lack of stability in the Middle East and demand pressures from India and China has caused dramatic increases in the price of oil which has affected the global economy. However there are alternative resources that can be used for the production of oil – the main ones being black and brown coal. It just so happens that Australia and particularly the Latrobe Valley and Gippsland Basin in Victoria have some 500+ years of low cost, low sulfur, high moisture Brown Coal that is ideal for (coal2oil) conversion to quality gasoline, aviation fuel and carbon fibers. The history of "Coal 2 Oil" is not unlike the VHS v Beta phenomena whereby Beta had the best tape product but marketing and circumstances of the day lead VHS to dominate as the commercial product of choice. In coal-to-oil (coal2oil) there are two main technologies – 1) Fischer-Tropsch (VHS) & 2) Bergius Hydrogenation (Beta) ECT’s unique de-watering ‘Coldry’ process is applicable to both (coal to oil) technologies; however we are proposing to pursue the 2nd and less popular coal-to-oil (coal2oil) Hydrogenation process which has been developed by the Japanese after many years of testing using Brown Coal from the Latrobe Valley (1988-95). (John M. Kocol favors the American invented coal-to-oil Karrick process over the Fischer-Tropsch and the Bergius coal-to-oil conversion processes). Why are we choosing the less proven (coal to oil) process? The reported differences between the (coal2oil) processes show that Hydrogenation has a higher yield of petroleum per tonne of coal, lower cost and lower greenhouse output than its Fischer-Tropsch (coal to oil) counterpart. Below is an outline of the general (coal2oil) processes and the different products produced: Fischer – Tropsch (coal to oil) Synthesis (as used by SASOL South Africa) Fischer – Tropsch Natural SynGas (GTL) Fischer – Tropsch BTL (Biomass to Liquid) Fischer – Tropsch CTL Coal to Liquid (coal2oil) Bergius Hydrogenation Process (Liquefaction "coal2oil" Japanese Style) Coal To Liquids (CTL) (coal to oil) v Current Crude Oil Refineries CTL (coal to oil) Production Costs Latest News - Japan Ready to Move on Coal Liquefaction (coal2oil) Fischer – Tropsch Synthesis. This (coal2oil) technology evolved in 1925 when Professor Franz Fischer, founding director of the Kaiser-Wilhelm Institute of Coal Research in Germany and his head of department, Dr Hans Tropsch, patented a (coal to oil) process to produce liquid hydrocarbons from carbon monoxide gas and hydrogen using metal catalysts. The hydrocarbons synthesized in the process were made primarily of liquid alkenes (paraffin’s). Other by-products were olefins (basis of all poly plastics & fibers), alcohols, and solid paraffin’s (waxes). The required gas mixture of carbon monoxide and hydrogen - the so called synthesis gas - is created through a reaction of coke or coal with steam and oxygen, at temperatures over 900 degrees C. In the past, town gas and gas for lamps were a carbon monoxide-hydrogen mixture, made by gasifying coke in gas works. In the 1970’s it was replaced with imported natural gas (methane). Coal gasification (coal2oil) and Fischer-Tropsch (German coal2oil conversion process) hydrocarbon synthesis together bring about a two-stage sequence of reactions which allows the production (conversion of coal to oil) of liquid fuels like diesel and petrol out of solid combustible black coal. For indirect coal liquefaction (coal2oil), Fischer-Tropsch Synthesis can be used on all types of coal as well as other raw materials which contain coal. Fischer-Tropsch (turning coal-to-oil [CoalToOil.com]) Synthesis took its first serious place in industry in 1935 at Celanese AG chemical company. By the beginning of the 1940s, some 600,000 tonnes of liquid hydrocarbons were produced per year in German facilities, made from coal using Fischer-Tropsch Synthesis. Just prior to WW II Germany licensed the (coal2oil) process to four facilities in Japan, as well as a plant in France and in Manchuria. After WW II, the destruction of most of the (coal2oil) production plants and competition from Middle East crude oil made petrol production from coal unprofitable. The only new (coal to oil) production facilities built were in South Africa in 1950 in Sasolburg (hence the brand name SASOL). These (coal to oil) plants were government backed for political reasons (the apartheid era). Currently, the two (coal-to-oil) plants operated by SASOL represent about 28 % of South Africa's diesel and petrol needs, processing some 45 million tonnes of black coal per year. Fischer – Tropsch Natural SynGas (GTL) Syngas can also be created from natural gas and is less costly than making it from coal. Since 1993, Shell in Malaysia (Bintulu) and PetroSA in South Africa (Mossel Bay) have been operating industrial (coal2oil) Fischer-Tropsch Synthesis facilities, which produce liquid fuels from syngas (Gas To Liquid, GTL). A third similar plant is being built by SASOL and Qatar Petroleum in Qatar in the Persian Gulf. In 2005, nine more GTL-facilities were being planned world-wide; most of them using Fischer-Tropsch Synthesis. Fischer – Tropsch BTL (Biomass to Liquid) For a number of years German companies have been developing processes to create liquid fuels from biomass (Biomass to Liquid, BTL) the most notable among them being Future Energy GmbH which uses Fischer-Tropsch Synthesis. The syngas is produced from wood, straw, and other raw materials of plant origin. Fischer – Tropsch CTL (Coal to Liquid). In 2006 (in 2011 many more coal2oil plants are being planned) the first US coal-to-diesel production facility is planned in Gilberton, Pennsylvania (ultracleanfuels.com). It will use indirect coal liquefaction (CTL), via coal gasification and Fischer-Tropsch. China, too, has been investing in (coal to oil) technology using indirect Fischer-Tropsch Synthesis / black coal. Significantly in 2002 China began planning a commercial coal liquefaction (coal2oil) plant using the Japanese version of the Bergius /coal hydrogenation (coal2oil) process in Inner Mongolia with commissioning expected in 2008. Bergius Hydrogenation Process (Liquefaction Japanese Style) The second method (direct coal liquefaction "coal2oil") was invented a few years before Fischer-Tropsch, in 1913 in Hanover by Friedrich Bergius. Coal hydrogenation (coal2oil), aka coal liquefaction (coal to oil), involves converting coal into an oil (like crude oil), that can be processed in refineries to make petrol. The Bergius (coal to oil) process, however, works best with Brown Coal and "geologically young" black coal. (Coal To Oil) v Current Crude Oil Refineries Coal liquefaction by whichever route, is capital intensive and therefore benefits substantially from economies of scale. Most studies on process economics have assumed that a full-scale commercial (coal2oil) plant would produce 50,000 - 100,000 bbl/day of liquid products. Such a plant would process 15,000 - 35,000 tonnes/day of black coal or up to double that amount of brown coal. Since coal is more difficult to transport than oil, it would, as a general principle, be better for coal-to-oil (CoalToOil.com) to be carried out in the country of origin and preferably close to the resource. (Coal to oil) Production Costs The use of the Hydrogenation (coal to oil) process and low cost brown coal (USD $4/t) and ECT’s front end ‘Coldry’ drying / de-watering process is predicted to achieve a (coal2oil) production cost of around USD$25 - $30 per barrel (crude oil equivalent) which is a remarkable improvement over the last couple of decades costs. Production costs for the Fischer-Tropsch (coal to oil) process using mainly black coal are purported to be around USD$40+/barrel. Latest News - Japan Ready to Move on Coal Liquefaction (coal2oil) The following information comes from NEDOL Japan who did much of this work in the Latrobe Valley, Victoria. Announcement on June 12 in Tokyo advised: “Japan plans to provide Asian nations – particularly China – with the technology to liquefy coal (convert coal to oil) as part of a broader effort to reduce global dependence on crude oil.” Through NEDOL they will join with Chinese (coal to oil conversion) companies (including Shenhua) “and plan to have a (coal2oil) plant operating by around 2010.” “Construction costs are estimated at 100b Yen (USD877m).” “Japan has also entered into (coal2oil) talks with the Indonesian government”… “Japan was also considering operating (coal to oil plants) in India and Mongolia.” FAQ Q: Are any companies turning coal2oil? A: Here are companies that are using or developing clean coal to oil technology: Baard Energy BP Chevron Texaco CIC Energy Corp Coal India Ltd coal2oil.com Conoco Phillips Consol Energy Inc Dakota Gasification Company Eastman Chemical Company Emery Energy Company Ergo Exergy Excelsior Energy ExxonMobil Gail India Ltd GE Energy Gasification Group Global Resource Corp Great Point Energy Green Rock Energy LLC Headwaters Linc Energy Ltd Metex Resources Ltd Mississippi Power Company Oil and Natural Gas Limited (ONGC) Peabody Energy Pertamina Reliance Industries Ltd (RIL) Rentech Sasol Sasol Chevron Shell Shenhua Group Silverado Green Fuel Inc Sinopec Syntroleum WMPI Q: How much coal is needed to make 1 barrel of oil? A: 1/2 ton of coal makes 1 barrel of oil. Q: Why use coal-to-oil or CO2-to-Methanol conversion instead of ethanol? A: Alternative sources (ethanol, wind, water) are unreliable. Please read Harvard Magazine, November-December 2006, "The Ethanol Illusion" by Michael B. McElroy, and U.S. News & World Report, Feb. 12, 2007, "Overselling Ethanol" by Marianne Lavelle and Bret Schulte. Also see the Pickens Plan which supports converting coal to oil. Converting coal to oil is now cheaper, and the coal to oil technology is more efficient. With increased ethanol demand, a food price spike has followed. Therefore, the solution to the predicament that we find ourselves in is to find a way to make more clean energy without using food. Turning coal-to-oil and carbon dioxide-to-methanol is the way to make more clean fuel. Using ethanol which is a corn based fuel for transportation is one of the reasons why we have a global food crisis. According to India's finance minister Palaniappan Chidambaram, "When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels." Washington Times, April 23, 2008, "Not by bread alone" by Arnaud de Borchgrave. Also read Washington Times, May 6, 2008, "The rise and fall of ethanol" by Times editorial staff. Q: How many gallons are there in 1 metric ton of gasoline? A: 380 gallons = 1 MT of gasoline. ____ CoalToOil.com and CO2toMethanol.com are USMEXenergy.com companies.