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Coal to Liquids (CTL): An Overview
Rio de JaneiroMarch 2007
Dr. Dan DriscollProject Manager
Gasification and Fuels Division
National Energy Technology Laboratory
Interest Drivers for CTL
“Addicted to oil” – State of the Union address 2006 US petroleum imports in 2005 exceeded $250 billion 35% of energy consumption is from Oil 1
Daily world consumption is 84 million bbl/d – 20% higher than 1995 – expect 120M by 2030
World vehicle ownership at 700 M; – double by 2030 to 1.5 billion; – developingcountries to triple
96% of all energy used for transportation – largest demand for oil World oil supplies could peak between 2016 and 2037 2
Oil resources not equitably distributed globally; coal more wide spread Concerns in: Energy security and Economic Development
Oil availability supply issues Infrastructure difficulties
Coal remains the most abundant fossil fuel in the world. Products produced from oil can be made from coal. Outside Activities:
National Coal Council Report (March 2006) identified capacity to support production of 2.6million bpd of liquid fuels from coal by 2025. See www.NationalCoalCouncil.org
Southern States Energy Board Report (July 2006) called for aggressive federal investment inCTL incentives “to encourage the private sector to step forward on a massive scale.” Seewww.AmericanEnergySecurity.org
DOD Air Force Request for Interest in Military Alternative Fuels
1Ref: World Coal Institute Report “Coal-to-Liquids” November 20062Ref: Hirsch, Robert, et, al., “Peaking of World Oil Production: Impacts, Mitigation, & RiskManagement”, NETL, February 2005
Rate of Use
FranceS. KoreaBrazilCanadaIndiaRussiaGermanyChina
U.S.Japan
Mexico0% 10% 15% 20%5% 25%
U.S. Dependence on Foreign OilOil Reserves
U.S.NigeriaLibyaRussiaVenezuelaU.A.E.KuwaitIraqIranCanadaSaudi Arabia
2%2%
3%5%
6%8%8%
9%10%
14%21%
Updated July 2005. Source: International Energy Annual 2003 (EIA), Tables 1.2 and 8.1-O&GJ. Canada’s reserves include tar sands.
The United States usesmore oil than the nextfive highest-consumingnations combined.
3%3%3%3%3%3%3%
7%
25%7%
3%
U.S. Energy Sources
Energy Source
% of U.S.Electricity
Supply
% of TotalU.S. Energy
SupplyOil 3 39Natural Gas 15 23Coal 51 22Nuclear 20 8Hydroelectric 8 4Biomass 1 3Other Renewables 1 1
Why Coal?
Coal Reserves are Abundant
Provides over halfNation’s electricity
Abundant domesticreserves
Low, relativelystable prices 0
100
200
300
Coal Oil Gas
Years Supply at CurrentProduction Rates
Eastern
Western
U. S. Coal Resources Are Widely Distributed
Delineation of U.S. Coal Resources and Reserves
Source: EIA Coal Reserves Data 1997http://www.eia.doe.gov/cneaf/coal/reserves/chapter1.html#chapter1a.html
Sufficient reserve tomeet projecteddemand forelectricity and up to4MMBPD CTLindustry for over100 years
1 ton of coal produces2 barrels of liquid
Coal-to-Liquids – Rationale
U.S. economy requires a reliable supply of liquid fuels for nationalsecurity and economic stability.
Oil refineries operating at > 90% capacity, refining capacity highlyconcentrated in Gulf Coast
Rising oil prices and imports, moratoriums for off-shore drilling Increasing concern about terrorism/natural disasters on petroleum
supply chain.
Coal-derived liquid fuelscan supplement oil-basedfuels and moderate fuelprice increases.
Coal to Liquids TechnologiesConversion Technologies:
Direct Liquefaction (Bergius Hydrocracking)Indirect (Gasification + Fischer-Tropsch) Liquefaction.
Direct Liquefaction - Dormant in theU.S. but being actively pursued inChina. The Shenhua project in InnerMongolia will bring a full scale singletrain, 20,000 BPD commercial unitinto production in 2008 usingHeadwaters technology.
Inner Mongolia Coal Liquefaction Plant Schematic, China 2006
Direct Coal Conversion Projects
Originally developed in Germany in 1917Used to produce aviation fuel in WWIIUS spent $3.6 billion on DCC from 1975-2000Headwaters Technology licensed to China in 2002
Lawrenceville, NJ3 TPD (30 bpd)
Catlettsburg, KY250 – 600 TPD
(1,800 bpd)
Inner Mongolia, China4,200 TPD
(17,000 bpd)
Direct Coal Conversion to Liquid Fuels
Gas RecoveryTreatment
Refining
Fractionation
SolventDeashing
Hydro-treating
Unit
Coalconversion
Ash Reject
Heavy VacuumGas Oil
Diesel FuelGasoline
LPG
Methane& Ethane
H2S, NH3, COx
H-DonorSlurry
Slurry
Deashed Oil
Recycled H2Make-upH2
Coal +Catalyst
Gasifier
Unconverted Coal
Direct ConversionAdvantages
Conceptually simpleprocess
Produces high-octanegasoline
More energy efficientthan indirect conversion(i.e. more fuel / BTUsproduced per ton of coal)
Products have higherenergy density(BTU/gallon) thanindirect conversion
Disadvantages
High aromatic content Low-cetane number
diesel Potential water and air
emissions issues Fuels produced are not a
good environmental fitfor the U.S. market
May have higheroperating expenses thanindirect conversion
Indirect Coal Conversion
Originally developed in Germany in 1923(Franz Fischer and Hans Tropsch)
Used to produce diesel fuel during WW-IICurrently used to produce liquid fuels and chemicals
in South Africa
Secunda, South Africa150,000 bpd
Brownsville, TX7,000 bpdGTL Plant
• Designed by HRI (Headwaters predecessor)• First commercial use of High Temp. FT• Operated 1950-55• Shut down when oil price dropped due to
Middle East oil discoveries.
Example of Prior Large Scale US-based Facilities World Large Scale Facilities
Indirect Coal Conversion
Gasification &Gas Cleaning
Fischer-TropschSynthesis
FT ProductSeparation &
Upgrading
Electric PowerGeneration
Oxygen/Steam
CoalPetcoke
Biomassetc
Sulfur,CO2
and Ash
Steam
Electricity
Steam Tail Gas
H2 + COSyngas
CxHyLiquids& Wax
Water&
Oxygenates
Ultra-CleanLiquid Fuels& ChemicalFeedstocks
Catalyst
Gasification- A Versatile Source of Fuels
Water
Oxygen Extreme Conditions:1,000 psig or more2,600 Deg FCorrosive slag and H2S gas
Products (syngas)CO (Carbon Monoxide)H2 (Hydrogen)[CO/H2 ratio can be adjusted]
By-productsH2S (Hydrogen Sulfide)CO2 (Carbon Dioxide)Slag (Minerals from Coal)
GasClean-Up
BeforeProduct
Use
Coal,biomass,pet. coke
Coal Gasification Chemistry
2C (coal) + ½O2 + H2O = 2CO + H2
Simultaneous Three Body Collisions are UnlikelyMultiple Bi-Molecular Interaction Mechanism in Effect
C + O2 = CO2
C + CO2 = 2COC + ½O2 = CO
C + H2O = CO + H2
C + 2H2 = CH4
GasifiersGE Energy
(Chevron-Texaco)
KBRTransportReactor
ConocoPhillipsE-Gas
ShellSCGP
Siemens(GSP/Noell)
Slurry-feed Dry-feed
Comparison of Gasifier Characteristics
Controlcarbon &inventorycarryover
Raw gascooling
Carbon ConversionFines andHydrocarbon liquids
Issues
ModerateLowModerateModerateLowHighSteam Req.
ModerateHighModerateModerateLowLowOxidant Req.
1,500-1,900>2,3001,700-1,9001,700-1,900800-1,200800-1,200Gas Temp. (°F)
AnyAnyAnyLowHighLowCoal Rank
BetterUnlimitedBetterGoodBetterthan dryash
LimitedFines
~1/16in~ 100 Mesh~1/4 in~1/4 in~2in~2inCoal Feed
DrySlaggingAgglomerateDrySlaggingDryAsh Cond.
TransportFlow(KBR)
EntrainedFlow
(GE, Shell,E-Gas, Siemens)
Fluidized Bed(U-Gas & HTW)
Moving Bed(Lurgi & BGL)
Products from Syngas
BuildingBlocks
forChemicalIndustry
Clean SyngasH2, CO, CO2
Gasificationand GasCleaning
GasTurbine
Clean Electricity
Separation
of H2
from CO2
Shift Reaction
CO + H2O H2 + CO2
CO2 forSequestration
H2
H2
StationaryFuel Cells
TransportationFuels Fuel Cell Vehicle
Fischer- Tropsch or MethanolSynthesis
2nH2 + nCO (- CH2-)n + nH2O
CO + 2H2 CH3OHMethane(SNG)
Methanation
CO + 3H2 CH4 + H2O
Fischer-Tropsch (F-T) Technology
CO(g) + 2H2(g) (CH2)n(l) + H2O(g) ΔH0 = -165kJ/mol
The water produced combines with CO in the water-gas shift reaction to form H2 and CO2
CO(g) + H2O(g) (CO2)(g) + H2(g) ΔH0 = - 41.2kJ/mol
The overall F-T reaction is therefore described as follows:
2CO(g) + H2(g) (-CH2-)n(l) + CO2(g) ΔH0 = -206 kJ/mol
Another approach to liquid fuels via synthesis gas is methanol production.
CO(g) + 2H2(g) CH3OH(l)
Methanol can be used directly or converted into gasoline through a process suchas the Mobil process using zeolite catalysts.
*With Fe-based Catalysis
Anderson Schultz Flory Distribution
Indirect Conversion
The liquid products from indirect conversion process are zerosulfur, near zero aromatic hydrocarbons. Minimal refiningneeded to produce ultra-clean diesel or jet fuel.
Carbon dioxide produced during indirect conversion can becaptured for subsequent storage.
Indirect conversion plants can co-produce electric power toimprove process economics.
If hydrogen is the preferred fuel in the future, these plants maybe easily reconfigured to produce fuel cell grade hydrogen
SASOL in South Africa has two large,indirect coal conversion facilities(SASOL II and III) that currently produce
about 150,000 BPD of liquid fuels.
Indirect Conversion
Advantages
Ultra-clean products Well suited for CO2
capture Well suited for electric
power co-production May have lower
operating expenses thandirect conversion
Disadvantages
Conceptually morecomplex than directconversion
Less efficient fuelproduction than direct
Produces low-octanegasoline
Fewer BTUs per gallonthan direct conversionproducts
Comparison of Typical Direct and IndirectLiquefaction Final Product Slate
0.6730.764Naphtha specific gravity
2%5%Naphtha aromatics
Nil<0.5 ppmNaphtha sulfur
45-75>100Naphtha octane (RON)
0.7800.865Diesel specific gravity
<4%4.8%Diesel aromatics
<1 ppm<5 ppmDiesel sulfur
70-7542-47Diesel cetane
80% diesel20% naphtha
65% diesel35% naphtha
Distillable product mix
IndirectDirect
Hybrid ConversionA hybrid conversion facility is basically a direct
and indirect conversion facility built next to oneanother.
The products of the direct and indirect conversiontrains complement each other and can be blendedto produce high quality diesel and gasoline.
Headwaters Technology Innovation hasconducted a feasibility study for a 60,000 bbl/dhybrid plant to be built in the Philippines by privateand government entities.
Hybrid Coal Conversion Concept
CoalGasification
ProductRefining &Blending
Direct Coalconversion
Water/gas ShiftHydrogenRecovery
Indirectconversion
(Fischer-Tropsch)
H2 FinalProducts
Raw DCL Products
Raw ICL Products
Coal
FT Tail Gas
H2
CO2
Plants Under Consideration in the UnitedStates
Planning
Engineering
Key
Summary of CTL Projects in United States
Planning50,000BituminousUnidentifiedAlexander County (Cairo, IL)IL
Planning10,000BituminousAEP MountaineerWV
Planning22,000Sub-bituminous/ligniteDKRW Energy (Roundup, MT)MT
PlanningNot availableLigniteSynfuel Inc.LA
Planning10,000Coal/petcokeRentechMS
Planning10,000BituminousMingo CountyWV
Planning5,000AnthraciteWMPIPA
Planning25,000BituminousAmerican Clean Coal FuelsIL
Engineering2,000BituminousRentech, (East Dubuque, IL)*IL
Planning10,000 – 50,000Sub-bituminousRentechWY
Planning11,000BituminousDKRW Energy (Medicine Bow, WY)WY
Planning2 plants, 35,000 eachBituminousRentech, Baard EnergyOH
Planning40,000LigniteHeadwaters, GRE, NACC, FalkirkND
Planning10,000 – 150,000Sub-bituminous/ligniteState of MontanaMT
Planning10,000 – 50,000BituminousHopi Tribe, HeadwatersAZ
StatusCapacity (bpd)Coal TypeDevelopersState
* will also co-produce fertilizer.
CTL Pilot Plants in the United States
OperationalUp to 30HeadwatersIncorporatedNew Jersey
Shutdown300 – 400ConocoPhillipsOklahoma
Shutdown – 9/0670SyntroleumOklahoma
Operational in 200710 – 15RentechColorado
StatusCapacity (bpd)OwnerState
Existing and Potential CTL Projects
Ref: from Headwaters Inc. J.N. Ward Senate Briefing 1-19-07
Summary of CTL World-Wide
Operational & 2nd PlannedPilot plantOil India LtdIndia
Planning--SiemensChina
Planning80,000SasolSouth Africa
Planning50,000L&M GroupNew Zealand
Planning50,000HeadwatersPhilippines
Planning60,000Anglo American/ShellAustralia
Construction~76,000Pertamina/AccelonIndonesia
PlanningTwo 700-bpd demo plantsHeadwaters/UK Race InvestmentChina
Planning70,000 – 80,000Shell/ShenhuaChina
Planning80,000 (each plant)Sasol JV (2 studies)China
Construction40,000 (initially) 180,000 plannedYankuangChina
Construction~3,000 to 4,000Lu’an GroupChina
Construction – Operationalin 2007
20,000 (initially)ShenhuaChina
Operational150,000SasolSouth Africa
StatusCapacity (bpd)Owner/DeveloperCountry
Coal to Liquids Developments
Zeus Development Corpwww.SYNGASRefiner.com
Coal to Liquids
China CTL plants move aheadCheap feedstock: ~$5/bblLabor and other direct cost:~$15/bbl
US CTL plant activity somewhatstalled
Developers seeking financing
Reduce capex/opex
Optimum logistics between cheaplow-rank feedstocks and markets
Sasol estimates CTL plant rangesfrom $60Kb/d to $80K/b/d for 50K-b/dand 80K-b/d plant, respectively
• China’s Shenhua and Ningxia CTLplants could cost between $5B to$7B, up from $6B, and consume15MM to 19MM tpy of coal.
• Sasol in talks with two US firms and isbusy improving its processes to offsetrising costs
• DKRW is seeking financing for its$2.75B Medicine Bow, WY plantusing GE gasifier and Rentech FTreactor
• US CTL plant costs from $1.2 billionto $3 billion with MT small plant at$1.5B up to $8B for larger plants.
Source - Cornitius, 2006, “The Impacts of Synfuels on World PetroleumSupply”, presented at 2006 EIA Energy Outlook and Modeling Conference.
DOE CTL Research Activities ICRC – ($5M):
Produce gallon/barrel quantities of FTliquids from coal-derived syngas withCobalt-based catalysts to be furtherprocessed into No. 2 diesel for small-scaletesting as ultra-clean transportation fuel,evaluated as fuel for specialized vehiclesfor the military, and tested as feed to areformer to produce hydrogen.
Status:Negotiating with two partners to produce
lab and large scale quantities of FT liquidsfrom "live" coal-derived synthesis gas.
Lab ScaleCSTR
Nikiski AK FT Plant
DOE CTL Research Activities
Headwaters Technology Innovation Group(HTIG) – ($4.2M):Produce barrel quantities of coal-derived liquids
using Iron-based FT synthesis in PDU-scalereactor.
Investigate primary and secondary wax/catalystseparation, hydrotreating and hydrocracking ofneat FT liquid products, and hydrogen yieldfrom product reforming.
Status:PDU planned at the Gas Technology Institute’s
(GTI) facility in Des Plaines, IL.PDU fabrication and operation proposed to be
done by HTIG.HTIG will utilize their hydocracking facility to
upgrade raw FT wax products.
WMPI-Gilberton (DOE CCPI Project) Gasify anthracite waste (4,700 tons/day) to
produce syngas using high pressureoxygen-blown gasifiers.
Co-produce electric power (41MW) andsteam together with 5,000 barrels per dayof synthetic hydrocarbon liquid fuels via FTsynthesis.
A Shell gasifier and RectisolTM processremoves contaminants from the plant’seffluent and concentrates CO2 forsequestration.
Benefits- If successful, technology may beapplied throughout the U.S. enablingreclamation of coal wastes into high-cetane diesel fuel.
Shell SCGP Gasifier
Hydrogen from Coal Research
Coal can also serve as a source for purehydrogen fuel
Liquid production with subsequent reformingEthanol (higher alcohols)
2CO + H2 = H3CH2COH + H2O
Direct separationAdvanced membrane systems
Hydrogen “filter”Water Gas Shift (WGS) Membrance reactors
LSU/Clemson/ORNL/ConocoPhillips
Catalytic process for the synthesis of ethanolfrom coal-derived syngas
Current yields – 5%Target yield – 45% (95% selectivity, 3 year life)
Catalyst
Coal
heat
Co core
3.2 nmintentional “gaps” in shell toprovide Co-Cu interfaces
Cu shell
surfactant
Rh core
Fe shell
intentional gaps in shell toprovide Rh-Fe interfaces
Fe core
Rh shell
2-5 nm
Figure 4. Core-shell nanostructured catalysts particles: Fecore-Rh shellCore-shell nanostructured catalystsparticles: Fe core-Rh shell.
Steam/O2
C2H5OH
Gas Separation from Shifted Syngas(Conventional Technology)
CO2• Low PressureChemical Solvents(MEA, DEA)
• High PressurePhysical Solvents(Dimethylether ofPolyethylene Glycol,Methanol)
• Hybrid SolventsPurisol, Sulfinol
H2
•Cryogenics(Large-Scale,High Cost)
• Pressure SwingAbsorption(Limited to ModestTemperatures)
• Membrane Systems(Chemical Damagefrom H2S, LimitedTemp. Tolerance)
ConvertedSyngas:
H2H20CO2
CO2•AdvancedMembraneSystems
(High and LowTemp)
•Low TemperatureHydrateFormationProcesses
H2•AdvancedMembraneSystems
Organic/Inorganic
Proton & MixedConducting
Porous/Dense
Homogeneous/Asymmetric
Gas Separation from Shifted Syngas(Advanced Applications)
ConvertedSyngas:
H2H20CO2
Membrane-Based Hydrogen Separation
Micro Porous Dense Metallic
Dense Ceramic Research TopicsMembrane materials and fabrication
Optimum diffusivity, flux, resistance,tolerance to impurities, temperature,
pressure.Large-scale production, cost.
Defect control and managementFundamental knowledge base
Mass transport, selectivity, kineticsMembrane reactors
Seals, synergy versus challenges
Desiredflux ~ 300ft3/ft2-hr at
100 psidelta P
with99.99%
purity andcost
<$100/ft2
HighHighPressure COPressure CO22
(Ready for(Ready forSequestration)Sequestration)
SynthesisSynthesisGas...Gas...
(H2, CO2, CO,plus H2O)
PurePureHydrogenHydrogen
Water-Gas-Shift Membrane Reactor Concept
- WGS Reaction: CO + H2O CO2 + H2- High-T operation for favorable kinetics- Membrane removes H2 to “shift” unfavorableequilibrium to produce more H2.
Hydrogen Separation Membrane Projects
Eltron Research, Inc Scale up H2 separation ceramic
membrane for FutureGen and choosemembrane system configuration.
Selectivity = 99.999%+ Demonstrated 1000 psi delta P, 270
psi permeate pressure 11 months continuous operation in
simulated syngas Demonstrated large-scale wafer flux of
100 ft3/hr/ft2 at 100 psi at 420oC. Begun design and construction of 1.3
#/day H2 separation facility to obtainengineering data.
Eltron Research, Inc Scale up H2 separation ceramic
membrane for FutureGen and choosemembrane system configuration.
Selectivity = 99.999%+ Demonstrated 1000 psi delta P, 270
psi permeate pressure 11 months continuous operation in
simulated syngas Demonstrated large-scale wafer flux of
100 ft3/hr/ft2 at 100 psi at 420oC. Begun design and construction of 1.3
#/day H2 separation facility to obtainengineering data.
NETL Intramural R&D Using high pressure hydrogen test
facility to verify contractor results. Tested Eltron membrane at 400° C
for ~ 30 hrs.
Cross-section of anelectro-deposited alloycatalyst film on a metalmembrane at EltronResearch
Hydrogen Separation Membrane Projects
Argonne National LabDevelop dense cermet membrane.Microstructural evaluation of series
3e membrane after exposure tosimulated coal gas revealedserious deterioration after 1100hours.
Southwest Research InstituteDevelop thin dense self-supported
Pd-Cu alloy membrane.Formation of 110 in2 membranes
< 5 micrometers thick.Best H2 flux 242 ft3/hr/ft2 at 20 psi
at 400oC.
Argonne National LabDevelop dense cermet membrane.Microstructural evaluation of series
3e membrane after exposure tosimulated coal gas revealedserious deterioration after 1100hours.
Southwest Research InstituteDevelop thin dense self-supported
Pd-Cu alloy membrane.Formation of 110 in2 membranes
< 5 micrometers thick.Best H2 flux 242 ft3/hr/ft2 at 20 psi
at 400oC.
Gas Technology Institute Develop novel reactor using dual-
phase non-porous membranes. Constructed HTHP test unit. Fabricated two membrane types One type had selectivity ~2000
for H2S over CO2. Another type showed CO2 flux up
to 0.02 ccSTP/cm2/min withselectivity over He.
Oak Ridge National Lab Develop ceramic porous
membrane. Demonstrated fabrication for 1
meter tubes. Completed single-gas tests
showing potential for highselectivity.
ANL membranefabrication
GTI supportedmembrane tube
SWRImembrane
WGS Reactor/Hydrogen SeparationMembrane Projects
Aspen Products Group•Develop a robust WGS membranereactor using contaminant-tolerant,highly active WGS catalyst andPd/Cu coated Ta membrane.•Demonstrated that a low-costnanosized WGS catalyst is activeand stable in 300-500C range.•Fabricated 26 tubular membraneswith different catalyst coatings andlayer thicknesses•Demonstrated high H2 permeabilityin presence of H2S and water.
Aspen Products Group•Develop a robust WGS membranereactor using contaminant-tolerant,highly active WGS catalyst andPd/Cu coated Ta membrane.•Demonstrated that a low-costnanosized WGS catalyst is activeand stable in 300-500C range.•Fabricated 26 tubular membraneswith different catalyst coatings andlayer thicknesses•Demonstrated high H2 permeabilityin presence of H2S and water.
Media & Process Technology Construct commercially-ready
membrane reactor for CO2capture with low parasitic energy.
Achieved complete conversion ofCO and concentration of CO2 insingle-stage WGS-MR at lowshift-T and stoichiometricsteam/CO ratio.
Superior performance and costsrelative to program goals.
WGS Reactor/Hydrogen SeparationMembrane Projects
United Technologies, Corp. Identify Pd-Cu tri-metallic alloy
membranes with high stability andhydrogen permeation: synthesizeS and Cl tolerant WGS catalyst.
Two materials selected for furtherstudy with dopants G5 and J6,respectively.
Thermodynamic solubilitypredictions selected compositionrange of 1.0 to 1.5 % for the G5alloy. Permeation projected toexceed B2 bcc Pd-Cu.
Nine candidate WGS catalystswere prepared and analyzed; sixwere selected for testing.
University of Wyoming/WRI Develop an improved monolithic
WGS catalyst and a vanadiumalloy hydrogen separationmembrane.
FT Fuels - Domestic Fleet Tests
Fleet test in Denali NationalPark summer 2004.
Fleet test in Washington D.Cin September 2004.
Synthesis gas-derived clean fuels.
Natural Gas Derived FT Fuels
Air Force Approach
Conduct demonstration on B-52/TF33 ground/flight
Define next steps for systematic approach to certification of newfuels
Rationale for B-52 Testing
Decision to use B-52 for demo supported by: Safety
8 Engines Ability to isolate test fuel and feed only 2 engines TF33 non-afterburning, less complex, subsonic flight envelope
Aircraft AvailableTarget aircraft selected to retire
(no impact to test or operationalfleet)
Successful Demonstrations:Two engine test - 9/2006Eight engine test with mixed jet
fuel/FT fuel – 12/2006
Request for InformationSynthetic Fuel
DESC Request for Information (RFI) Issued May 30, 2006 Closed August 10, 2006 (initially set for July 31, 2006) Responses received – 28 total (22 interested in production)
Objectives RFI PART I: Short-Term Objective (through 2011)
Identify responsible potential sources of synthetic fuel meeting theFischer-Tropsch DRAFT specification
Determine feasibility of 200M USG requirement 100M USG Air Force 100M USG Navy
RFI PART II: Long-Term Objective (past 2011) Investigate long-term prospects for the manufacture and supply of
aviation synthetic fuels on a larger scale
Aviation Alternative Fuels Roadmap
Aviation Alternative Fuels Roadmap The commercial sector and government must work
together to promote/embrace alternative fuels to securesupply availability, to minimize price volatility, to improveoperational and to explore the potential to reduceenvironmental impact.….. Adopted 5/24/06 by AIA/ATA/FAA sponsoredworkshop with DOE, DoD and NASA stakeholders
Follow-up meeting Oct 23-24, 2006 to furtherdefine Roadmap
Profile of a Coal-to-Liquids (CTL) Plant Capacity: 40,000 bpd (13.2 million bpy)
LPG: 2,700 bpd (7%)Naphtha: 12,100 bpd (30%)Diesel: 25,200 bpd (63%)
Capital cost: $3.6 billion Annual revenue: $1 billion Coal consumption: 8.6 million tpy Production cost with 0% IRR: $44/bbl fuel ($35/bbl crude oil
equivalent) Production cost with 15% IRR: $60/bbl fuel ($48/bbl crude oil
equivalent) CTL plant employment: 250 people Land area: 480 acres Make-up Water: 25,000 gpm (36,000 acre-feet per year) CO2 recovery: 8,000 to 25,000 tpd (depending on level of
recovery)Ref: Headwaters Inc. J.N. Ward Senate Briefing 1-19-07
CTL Projected Cost
Configuration Plant Size
TotalCapital
Cost MM$Capital Cost
$/DBTotal CoalInput (TPD)
SequesterCost$/DB
RSPCapital/
DBRSP O&M/
DBRSP Coal/
DB
PowerCredit
$35.6/MWh Total $/DB
Crude OilEquivalent$/DB ($10Premium)
Capture Ready 20000 BPD 1772 80,500 10,772 NA 32 13 19 -2 62 52
w/Sequestration 20000 BPD 1772 80,500 10,772 4 32 13 19 -2 66 56
Capture Ready 50000 BPD 3737 67,900 26,930 NA 27 14 19 -3 57 47
w/Sequestration 50000 BPD 3737 67,900 26,930 4 27 14 19 -3 61 51
Incentive – Guaranteed Price Floor$55/DB for 20,000 BPD plants$45/DB for 50,000 BPD plants
9 20,000 BPD plants9 50,000 BPD plants3 bituminous, 3 sub-bituminous, 3 ligniteAll plants w/90% carbon capture &
sequestrationConstruct 3 plants/year
- start 2008- first production on line 2011
Total Incentive Cost: ~$6 BillionTotal Capital Investment : $49BBIncremental Employment: 125,000
- Mining 10,000
- Construction 22,500- Plant Operation 7,200- Indirect 85,350
Incremental Coal Production: 94MM TPY630,000 BPD production by 2025
EIA WOPReference Case
Costs & BenefitsDeployment Strategy
2005 $49.702015 $43.002030 $49.19
Barriers to Creationof a Significant U.S. Industry
Economic Risk
Technical Uncertainty
Needed Incremental Investmentin Infrastructure
Ready Availability of CriticalMaterials, Resources and Skills
Environmental Concerns
World oil price volatility is the single greatest impeding thedeployment of CTL facilities; petroleum industry capital drawnto higher profit producing crude oil E&P
Although plant components have been operated at commercialscale, the efficient integration of advanced coal gasification withadvanced F-T synthesis technologies poses significant risk
CTL facilities will require the use of large quantities of coaldriving a significant expansion of the U.S. coal mining industry;current railroads and railcars are inadequate to handle projectedincreases coal demand; additional barge capacity will likely berequired; mine mouth plants coal-fuel plants will need pipelineconnects
Multiple CTL plants built concurrently worldwide will createcompetition for critical process equipment, engineering, laborskills and materials
As a carbon-rich fossil fuel, coal releases large quantities ofcarbon dioxide when converted into fuels and power whichmust be economically controlled
A Path Forward…
Build and Operate a few Pioneer PlantsSubsidize the completion of 3 to 5 front-end engineering design studiesFacilitate “Early Commercial Learning Experience”Identify barriers to process improvement and cost reductionDevelop a greater understanding of the issues surrounding carbon capture,
transport, sequestration, monitoring and verification of permanent storage
Initiate a Program of Targeted ResearchBuild a comprehensive R&D plan built on barriers derived from
actual operation of pre-commercial sized plants
Investigate Financial IncentivesTax Credits (EPACT 2005 Section 1307)Loan GuaranteesGuaranteed Price Floors
Formulate and test F-T fuels for early commercial marketsDOD, Clean Cities, Northeast Home Heating Oil Reserve
Involve, Coordinate, and Exchange Informationwith Interested Foreign Governments
Coal to Liquids Summary
Coal is a viable alternative feedstock for the production ofliquid fuels and hydrogen
Development of a U.S. CTL industry could help mitigate therisks of an energy crisis.
Proactive development of a CTL industry can beaccomplished by industry lead with government support dueto high risks involved.
CTL can capture carbon for sequestration
Convincing demonstrations and multi-agency joint nationalimplementation plan could be a first step.
DOE well positioned to produce, test, and certify liquid fuelsproduced from coal.
Benefits are measured in the billions of dollars.
NETL website:www.netl.doe.gov
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Fossil Energy website:www.fe.doe.gov
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