Transcript GoedeDoha NatGas Conference March2009

Gas industry: rising
to the global environmental challenge
- Life cycle analysis of GTL
Fred Goede
Sasol Limited
7th Doha Natural Gas Conference
11 March 2009
An integrated oil and gas company
with substantial chemical interests
Sasol has primary and secondary listing on the JSE and the NYSE
• Market capitalisation of US$ 31 billion (October 2008)
Current production capacity
• Coal [mostly for conversion into fuels] - 45 million tons per annum
• Liquid fuels [from coal & gas in SA] ~8 mtpa (160 000 bpd )
• Liquid fuels [from crude oil] ~ 4.6 mtpa (95 000 bpd)
Gas to liquids projects outside South Africa
• Oryx GTL in Qatar 49% stake with Qatar Petroleum; Escravos GTL in
Nigeria under construction – both nameplate 1.3 mtpa (34 000 bpd)
US$ 546m
Currently undertaking feasibility coal to liquids studies in China, India
and US
Contents
• Climate science and solutions
• Life cycle analysis (LCA)
- motivation, methodologies and results
• Future climate mitigation strategies
• Communication and awareness
• Conclusion
Protecting the environment
environmental realities (climate change, pollution, water, waste...)
environmental expectations (governments, society, shareholders…)
sourcing of gas
conversion process
(e.g. GTL)
products
(e.g. clean fuels)
Reducing carbon emissions is particularly
challenging; incremental reduction will help a bit
Models differ widely in their estimates of contributions to the virtual triangle from
structural shifts (towards services), energy efficiency, and carbon-free energy
Natural gas switch plays an important part,
although no silver bullet exists
Scenarios for GHG emissions will climb over a
‘hump’
developing countries will increase
emissions at least until 2020 (best
case), before reducing to reach
current levels by 2050
developed countries already
reducing, aiming almost carbon
neutral by 2050
world can reach IPCC target of
550ppm if world emissions are 25%
below 1990 levels in 2050
Sasol GTL fuel technology offers viable
alternatives to crude-derived fuel
• large resource base with natural gas
• diversifies energy resource base and thus improves
energy security
• uses existing fuel distribution systems
• products interchangeable to the end user
• offers environmental benefits
• proven technology that is already applied on a large
scale
the world is not short of energy – but short of innovative
solutions
Our LCA history
• Conducting LCAs since mid 1990s as entry ticket to
government negotiations and to build in-house understanding
• Commissioned independent LCA study in 2002 transportation
fuel technologies aimed at monetising remote natural gas
• LCA compared Sasol GTL technology with a modern refinery
(Business-as-usual)
• Dr Michael Wang (Argonne National Laboratory) acted as
critical external reviewer
• Further progress was made since, to address the
development areas identified in the first studies
In addition, LCA helped us understand recent
changes in proposed fuel legislation
During January 2007 the following was announced:
 California Low Carbon Fuel Standard (LCFS) for
transportation fuels - 2020 target to reduce carbon intensity
of passenger-vehicle fuels by at least 10%
 Draft EU Fuel Quality Directive targets on GHG emission
reduction - mandatory reporting of “lifecycle GHG
emissions” for fuels from 2009 and fuel suppliers to reduce
GHG by 1% p.a. between 2011 and 2020
”Licence to sell”
“ No data – no market”
LCA methodologies
•The EIA process is more suitable approach for evaluating
GTL production facility environmental effects, not LCA
•But for the impacts of a whole industry, LCA is a better tool
• A subset approach is called ‘well-to-wheels– focussing on transport
fuels only, allocating burdens on one product and normalizing results
per unit of distance travelled, a simple method
• LCA Systems Boundary Expansion approach is more suitable for global
issues like GHG emissions, but is more complex
•Other GTL products like GTL naphtha, GTL kerosene, GTL
normal-paraffin and GTL lubricant base oils are important to
be included in the LCA
Two different types of LCA’s
Allocation method (Wellto-wheels) method
System Boundary
Expansion (SBE) method
Not ISO compliant
ISO 14040 series compliant
GM/ DOE, CSIRO,
CONCAWE
Focus on one specific
product
Sasol Chevron, Shell,
Conoco Phillips
Focus on technology and all
resulting products
Results: GTL GHG
emissions 10-15% higher
than Refinery
Results: GTL GHG
emissions comparable to
Refinery
Position on methodology
GTL makes co-products that are less carbon intensive than
comparable routes (e.g. GTL naphtha vs. Refinery naphtha) and in
the case of GTL naphtha there is a downstream benefit. These
benefits CANNOT be captured using an allocation approach. Full
substitution/ displacement as used in system boundary expansion
for LCA, is required
WHY?
Substitution/ displacement is a more comprehensive analyses.
Given the critical issues of GHG emissions and future requirements,
a comprehensive view is necessary
The future energy requirements will depend on a diversity of
alternative fuels and fair methodologies are imperative to ensure
they all receive equitable treatment going forward
Business as Usual (Refinery) and GTL
cases used
• Refining crude oil is the current (an in the foreseeable
future) the main process to deliver road transportation fuels.
Large scale (200,000 bbl/d) modern complex/ semi-complex
refinery was used to supply three regions - typical crude and
product slate for US, EU and Japan
• GTL case was scaled up and based on nominal 34,000 bbl/d
name plate ORYX GTL design data, the plant that is in
operation today
• 2010 focus
- 10ppm (EU), 15ppm (US), 50ppm (Japan) for ULSD
- No technology advancements were taken into account
GTL shows better particulate and acidifying
emissions
particulate emissions
acidifying emissions (SOx and NOx)
 Upstream
 Transportation to user
 Upstream
 Production
 Use
 Production
Refining system
GTL system
Conventional
Diesel
Ultra low
sulphur
diesel
 Use
Diesel blend
(20% GTL, 80%
ultra low sulphur
diesel)
Conventional
Gasoline
Greenhouse gas results per lifecycle phase
All refinery products
120,000
Transportation fuels only
120,000
tonnes eq. CO2
Basis: 200,000 bbl/d Refinery
100,000
100,000
80,000
80,000
60,000
60,000
40,000
40,000
20,000
20,000
-
Refinery
GTL
Refinery
Feedstock Production and Transport
Production Plant
Products Transport and Storage
Products Use
GTL
Additional GTL benefits not claimed at this
stage
GTL is an emerging industry and technology that requires
correct accounting for all GTL co-products
Looking into the future, further refinements could reduce
carbon burden below refinery:
•
•
•
•
Further expand product slate, e.g. normal-paraffin and base oil
Develop dedicated engines with vehicle manufacturers
Further improve GTL process efficiency through energy integration
GTL offers CO2 emissions mainly from a single source (production
plant), compared to tailpipe emissions. As a result, carbon capture and
storage can be done more cheaply than combustion sources, but CCS
needs a regulatory framework and financing incentives (UNEP, 2005)
Updated GTL LCA results – lubricant base oil
case study
• The allocation WTW method yields 454 g CO2e/mile for GTL
• However, using the LCA system boundary expansion
method- 291 g CO2e/mile (26% better than conventional diesel)
- 35% better than GTL diesel allocation method, mainly due to benefits
of GTL lubricant base oil
• Higher quality GTL lubricant base oils when compared to
refinery product, has downstream carbon savings and
extended oil drainage intervals
% Difference from Conventional
Diesel
Life cycle GHG emissions comparing Allocation
method with SBE method
20
GTL Diesel
Allocation
15
10
Baseline: Conventional Diesel (Allocation)
5
0
-5
1
-10
-15
-20
-25
-30
GTL Diesel
Comprehensive
Co-product
Accounting:
2010
GTL Diesel
Comprehensive
Co-product
Accounting:
2020
Key message from LCA
The Sasol GTL process offers significant benefits in
air quality due to its lower emissions of
hydrocarbons, nitrogen oxides and sulphur oxides
when compared to refinery
These benefits are achieved with no greenhouse gas
penalty and shows even better improvements if all
GTL products are properly accounted for
We know the carbon solution is complex
GTL offers an competitive part of the energy solution, but national and
international efforts are essential to deal with the complex social, economic
and technical challenges presented by carbon
A much broader and multifaceted approach is required and other criteria
pollutants also have to be considered, which includes engagement with
appropriate stakeholders to gain mutual understanding of the situation
“there is no single GHG solution, but with commitment,
timing and correct investment decisions, business has the
opportunity to make a difference ”
Thank you
[email protected]
Sasol Limited, P.O. Box 5486, Johannesburg, South Africa. Tel +27-11-344-0145