King coal reclaims his hyrdocarbon territory

High crude costs make coal-to-liquids and coal-to-gas technologies economically and politically attractive
By Administrator
Thu 31 Aug 2006 12:00 PM

Later this year, a US Air Force B-52 bomber will take off powered by jet fuel produced from coal. If the test flight is as successful as the synfuel tests have been during this year’s ground tests then its vibrations will reverberate through the Gulf.

The US government says it wants to develop a single fuel to power its military equipment from tanks to camping stoves—and it wants it to come from US coal, not Middle East oil or gas.

The Bush administration is starting its hugely ambitious experiment with the air force, whose fuel consumption during the Balkans war in the 1990s single handedly drove up oil prices—when an F-16 fighter plane starts its afterburners, it burns some 28 gallons of fuel per minute.

The USAF consumes more than three billion gallons of aviation fuel a year, more than half of all fossil fuel used by the US government, and its bill for jet fuel last year topped US $4.7 billion. Each increase of $10 per barrel of oil drives up air force fuel costs by $600 million per year, which gives the Pentagon a powerful incentive to promote alternative sources to petroleum. The USAF thinks coal-to-jet fuel would cost the equivalent of $40 to $45 per barrel of oil.

Furthermore, it is lighter than crude oil fuel. In a typical fighter aircraft there would be about 500 kg of weight less. This would give the aircraft longer range and/or let it carry a heavier payload. Synfuel burns cooler, which means less metal fatigue, and burns cleaner than traditional jet fuel, reducing particle matter—the first source of heat picked up by heat-seeking missiles and is very pronounced on radar—by up to 90% compared to conventional fuel.

As the cost of oil keeps rising on the world market, some techniques for extracting energy previously deemed too costly to pursue are now being re-examined.

The first step of turning changing of coal into liquids was taken in the 1800s, when Western cities used enormous polluting ovens to transform coal into natural gas for illuminating streets and homes. During World War II, Germany completed the process by turning coal into gas and gas into liquid fuel for its tanks, based on the Fischer-Tropsch technology that German scientists developed in the 1920s.

There was a flurry of interest during the energy crisis of the 1970s, with the US government underwriting research programmes for producing gas from coal. But the crisis passed, and so did the interest, with one exception—South Africa. Apartheid era Pretoria faced oil sanctions and turned to its petrochemical industry to develop an alternative, from which Sasol’s gas-to-liquids technology was born. Sasol is also heavily involved in the once-again popular coal research too. And that research has returned to Germany, where the first CTL work was done.

US-based synthetic fuels technology developer, Syntroleum, which is carrying out the B-52 tests, is working in a partnership with German firm Sustec to build a coal-to-liquids plant in Germany. “The project’s moving very quickly and will probably be onstream by late 2009,” said Greg Jenkins, Syntroleum’s executive vice president, and chief financial officer. And coal-abundant Uncle Sam is eyeing the plant with energy-hungry eyes.

Energy entrepreneur Andrew Perlman, founder and chief executive officer of US-based Greatpoint Energy, said: “The US has more coal than any other country,” says Perlman, “and it’s cheap as dirt.”

The United States possesses 26% of the world’s coal.

His company uses a gasifier to turn coal into natural gas or methane at less than half the cost of other coal-based technologies. It produces far more energy per unit of coal than coal-to-liquids processes do, and needs less energy to produce what Greatpoint Energy calls “Bluegas”. Nonetheless, coal-derived gas is not as versatile as GTL and CTL products and is mainly used in power stations.

Gas- and coal-derived liquids can be delivered to any port and used for many purposes, which is why there is so much interest in Sasol’s work in South Africa and Qatar.

“We are at the threshold of providing the world with an attractive alternative to crude-derived transportation fuels,” said Pat Davies, chief executive at Sasol.

The world’s second-largest energy consumer, China, which also sits on top of centuries’ worth of coal reserves, has turned to Sasol for help.

Coal makes up 65% of China’s primary energy consumption, and China is both the largest consumer and producer of coal in the world. In the first four months of this year, China’s coal consumption rose by 13.8% over the same period of last year. And with soaring crude prices China is experimenting with CTL.

Sasol’s engineering partner for its GTL projects, Foster Wheeler, announced recently that its UK subsidiary has entered a joint venture with China Huanqiu Contracting & Engineering Corp and was awarded a feasibility study by Sasol Synfuels International and its Chinese partners, China Shenhua Coal Liquefaction Corporation Ltd. and Ningxia Luneng Energy and High Chemistry Investment Group.

The project includes design and construction of two 80,000 barrels per day coal-to-liquids facilities to be built at Ningxia Autonomous Region and Shaanxi Province, both in coal-rich west of China.

“Foster Wheeler is delighted to be awarded this contract,” said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy.

China is also investing heavily in coal gasification, with two small-scale plants already operating. Coalbed methane production is being developed, with recent investors in this effort including BP, ChevronTexaco, and Virgin Oil, which was awarded a concession for exploration in Ningxia province in January 2001.

ChevronTexaco is the largest foreign investor in coalbed methane, with activities in several provinces. US firm, Far East Energy has received approval from Chinese authorities in April 2004 for a farmout agreement with ConocoPhillips, under which it would undertake exploratory drilling for coalbed methane in Shaanxi province, in a location near the west-to-east pipeline route.

At the heart of the GTL, CTL and CTG processes are catalysts.

In Greatpoint Energy’s coal-to-gasses gasifier, the coal and the catalyst are combined with steam and subjected to pressure, which causes a chemical reaction that converts them into carbon monoxide and hydrogen. GreatPoint says the key to its new technology is the catalyst it uses—a combination of readily available metals. In the GTL technology, air or oxygen are mixed with natural gas and steam under pressure and incompletely burned to produce a mix of carbon monoxide and hydrogen. The mix goes through a Fischer-Tropsch reactor to produce the fuels, including the jet fuel that is being tried out by the USAF. If the B-52 tests are successful King Coal may return to challenge oil for the energy throne.

“The world’s largest consumer and producer of coal, China, is turning to South Africa’s petrochemical giant Sasol to help it develop coal-to-liquids technology to reduce its dependence on petroleum imports.”

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