Transcript Document

Coal-to-Liquids: Technology,
Commercialization, and Potential
Contribution to US and Global
Energy Pool
27th USAEE/IAEE North American Conference
Houston, Texas
September 2007
Iraj Isaac Rahmim, Ph.D.
E-MetaVenture, Inc.
Houston, Texas
Copyright  2007 by E-MetaVenture, Inc. All Rights Reserved.
Introduction

Significant recent interest in non-petroleum-based sources of energy
– GTL, CTL, BTL

CTL of particular interest in US, China, Russia, India, Australia,…
– Governments, inter-governmental bodies, private sector,
environmental organizations
– Sense that things are picking up in speed

Much of the technology is old but specific applications are
considered
– Require working-out various synergies and technical elements
– Require careful evaluation of economics, environmental
implications, strategic impacts
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Key Topics

CTL technology

Interested parties and drivers

CTL implementation status and projections

Likely impacts of CTL commercialization

CTL economics and the issue of CO2 recovery and
sequestration
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CTL Blocks
Gasification involves pyrolysis, combustion, and gasification chemistries:
2 C-H + 3/2 O2  2CO + H2O + Heat
C-H + H2O  CO + 1.5 H2
Also, some Water-Gas Shift: CO + H2O  CO2 + H2
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F-T converts SynGas to hydrocarbons:
CO + ? H2  —CH2— + CO2 + H2O + Heat
(long chain)
4
CTL Products

Product Upgrading can involve a number of activities:
– Primarily hydrocracking of wax to lighter diesel and naphtha
Sample product slate for 50 MBD facility
No HC With HC
LPG
1
2
Naphtha
9
13
Diesel
25
35
Comments
Similar to other plant
(LNG, refinery) LPG





Lubes
Wax
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5
<1
<1
Straight chain paraffinic
Near zero sulfur

High cetane
Near zero sulfur


High grade
Low volatility
Low pour point

High quality


Can be co-processed
and marketed with them

Preferred use: steam
cracker feed



Low density
Low aromatics
Low viscosity
Low sulfur
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Interested Parties
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CTL Drivers






Large coal reserves exist with over 140 years remaining at current
production
Demand for oil and natural gas is to continue rapid growth
The majority of coal reserves in the world are located outside the
Middle East (e.g., US, Russia, China, India, Australia)  resource
security
The demand for transportation fuels, particularly diesel and other
distillates, is projected to grow rapidly into the foreseeable future
If this demand is to be met using crude oil, a significant “refinery
gap” must be filled
Significant technological improvements in CTL components during
the past two decades  improved process economics
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Driver: Energy and Product Demand
Global Reserves
Oil
(incl. Canadian
Oil Sands)
Natural Gas
Coal
(4 Grades)
Proved Reserves
1,372 X 109 Bbl
191 X 109 Tons
6,405 TCF
479 X 109 Tons
Energy Basis
(quadrillion Btu)
7,600
6,600
8,500
191,000
165,000
213,000
41
63
147
Resource
MTOE Basis
(million tons oil
equivalent)
Years Remaining
(at current
production)
BP Statistical Survey or World Energy (2007)
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Driver: Energy and Product Demand
Global Resource Demand Projections
© OECD/IEA, 2007, Key World Energy Statistics.
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Driver: Resource Availability/Strategy
Global Distribution of Coal Resources
Million Tons of Proved Reserves (2006)
78,500
254,432
28%
296,889
32%
246,643
92,445
19,893
2%
114,500
50,755
6%
North America
287,095
32%
USA
S. & Cent. America
Russian Federation
Europe & Eurasia
China
Africa & Middle East
India
Asia Pacific
Australia
157,010
BP Statistical Survey of World Energy.
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Driver: Resource Availability/Strategy
Distribution of Coal Resources—USA
US Geological Survey Open-File Report OF 96-92.
Anthracite, Semi-Anthracite,
Meta-Anthracite
Sub-Bituminous
Low-Volatile Bituminous
Lignite
Medium and High-Volatile Bituminous
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Coking Coal
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Driver: Energy and Product Demand
Global Distillate Demand Projections
Middle Distillate Consumption (MBD)
45 , 000
40 , 000
35 , 000
30 , 000
Projected Total at
growth
25 , 000
3%
20 , 000
Rest of World ( Excl FSU )
15 , 000
Asia Pacific
10 , 000
Europe
5 , 000
North America
-
1977
1987
1995
2000
2005
2010
2015
2020
“Refinery Gap”
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Driver: Technology

Individual CTL process elements have been around
for many decades

Significant technical improvements during the past
two decades:
– Fischer-Tropsch
– Hydroprocessing

Evolutionary advancements in gasification, gas
treating, power generation,…

CO2 capture, compression, transportation,
sequestration
Impact on
Process
Economics
Environmental Concerns  Later
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CTL Facilities and Projects
Existing
Location
Size
(BPD)
Sasol I
Sasolburg,
South Africa
5,600
1955; Sasol technology
Sasol II/III
Secunda,
South Africa
124,000
1955/1980; Light olefins
and gasoline; Sasol
technology
Petro SA
(formerly
Mossgas)
Mossel Bay,
South Africa
22,500
1991; Gasoline and diesel;
Sasol technology
Company
Comments
Converted to GTL—using NG from Mozambique (circa 2004)?
A number of operational pilot plants. Examples: Rentech (15 BPD), Headwaters (30 BPD).
Also two commercial GTL units operational.
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CTL Facilities and Projects
In the Works (USA)
Project Lead
Project Partners
Location
Feedstock
Status
Capacity (BPD)
Cost (US$ million)
American Clean
Coal Fuels
None cited
Oakland, IL
Bituminous,
Biomass
Feasibility
25,000
N/A
Synfuels, Inc.
GE, HaldorTopsoe, NACC,
ExxonMobil
Ascension Parish, LA
Lignite
Feasibility
N/A
5,000
DKRW
Advanced Fuels
Rentech, GE
Medicine Bow, WY
Bituminous
Design
(2011)
13,000
1,400
DKRW
Advanced Fuels
Rentech, GE,
Bull Mountain
Land Co.
Roundtop, MT
Sub-bituminous,
Lignite
Feasibility
22,000
1,000-5,000
AIDEA
ANTRL, CPC
Cook Inlet, AK
Sub-bituminous
Feasibility
80,000
5,000-8,000
Mingo County
Rentech
WV
Bituminous
Feasibility
20,000
2,000
WMPI
Sasol, Shell, DOE
Gilberton, PA
Anthracite Culm
Design
5,000
612
Rentech/Peabody
N/A
MT
Sub-bituminous,
Lignite
Feasibility
10,000-30,000
N/A
Rentech/Peabody
N/A
Southern IL, SW IN, Western KY
Bituminous
Feasibility
10,000-30,000
N/A
Rentech
Kiewit Energy
Co.,
WorleyParsons
East Dubuque, IL
Bituminous
Construction
(2010)
1,800
800
Baard Energy
AMEC Paragon
Wellsvile, OH
Sub-bituminous,
Lignite
Feasibility
35,000
4,000
Headwaters
Hopi Tribe
AZ
Bituminous
Feasibility
10,000-50,000
N/A
Headwaters
NACC, GRE,
Falkirk
ND
Lignite
Feasibility
40,000
3,600
DOE/Office of Fossil Energy—DOE/FE-0509, Green Car Congress
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CTL Facilities and Projects
In the Works (Non-US)—Partial
Project Lead
Location
Status
Capacity (BPD)
Shenhua
Ordos City, Inner Mongolia, PRC
Construction
20,000
Lu’an
PRC
Construction?
3,000-4,000
Yankuang
PRC
Construction?
40,000-180,000
Sasol JV
PRC
Planning
80,000
Shell/Shenhua
PRC
Planning
70,000-80,000
Headwaters/UK Race Investments
PRC
Planning
70,000-80,000
Pertamina/Accelon
Indonesia
Construction?
76,000
Headwaters
Philippines
Planning
50,000
Alton Resources plc, Jacobs Consultancy, MineConsult
Australia
Feasibility
45,000
Anglo American (Monash), Shell
Victoria, Australia
Feasibility
60,000
L&M Group
New Zealand
Planning
50,000
DOE/Office of Fossil Energy—DOE/FE-0509, Green Car Congress
Also, a number of related projects world-wide: gasification, CCS, direct coal-to-liquids,
coal-to-chemicals,…
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CTL Facilities and Projects
EIA Projection to 2030: Coal used in CTL (USA)
Projected US Coal to CTL (long-Tons/Day)
350,000
As % Total
Consumption:
300,000
250,000
200,000
2015:
1.2
2020:
1.9
2025:
5.2
2030:
6.3
150,000
100,000
50,000
0
2004
2009
2014
2019
2024
2029
Year
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CTL Facilities and Projects
EIA Projection to 2030: Liquid Fuels from CTL (USA)
Projected US Liquid Fuels from CTL (Barrels/Day)
600,000
As % Total
Jet+Distillate
Consumption:
500,000
2015:
1.3
2020:
1.9
2025:
5.6
2030:
6.2
400,000
300,000
200,000
100,000
0
2004
2009
2014
2019
2024
2029
Year
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A Word on GTL Diesel Supply
Projections

A large number of potential projects; only a small fraction likely to be built

Qatar: self-described GTL capital
– Oryx I: 2006 start up; March 2007 upgrader on line, May 2007 1st product lift
– Shell Pearl: 2009 (cost issues: $18 billion)
– ExxonMobil: 2011 (canceled Feb. 2007)
– Marathon, ConcoPhillips on hold per Qatar government temporary moratorium—
likely to hold at least until 2009

Nigeria:
– Escravos (Sasol/Chevron): under construction (delays and cost increase)

California Energy Commission estimate (early 2000s):
– 2010: 75 MBD global GTL diesel capacity
– 2015: 388 MBD
– 2020: 800 MBD

Sasol Chevron estimate: 600 MBD by 2016-2019
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More on CTL Diesel Projections
Global

US (Baker and O’Brien study):
– 2017-2022: 4-6 large-scale (>40 MBD) CTL in Western US
– Some smaller plants under consideration in the Eastern US
 Potential: 250 MBD of middle distillates

PRC :
– A number of projects under study/planning/construction
 Example: 20 MBD plant in Inner Mongolia
– CTL considered a key component of the PRCs overall, long-term energy strategy
– A new key issue: recent environmental concerns of the PRC government
– Projected (Robinson and Tatterson, OGJ Feb 2007 study): as much as 160 MBD
liquid fuels

Others: various projects under study/planning


2020 Hand-waving estimate (global): 300-500 MBD
2030: 600-1,000 MBD—many unknown factors
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What Impact will CTL have on…

Coal market? Proved reserves, production, production increase
capability

Liquid fuels market? Supply/demand, change in other sources
– Diesel
– Jet
Some factors affecting CTL
growth:
– Naphtha (for cracking or blending)
- Petroleum prices


US v. worldwide
Regional markets
-Capital availability
- E&C resources

A word on specialty products: lubes and waxes

Environmental impact
- Technology
- Movement on CCS
- Incentives and regulations
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Policy Action (1)
Regulations and Incentives—Key Factor

Multiple forms of incentives under consideration (or in effect) in
various jurisdictions. Include:
– Direct subsidies or price guarantees
 Example: 2005 Federal Transportation Bill—$0.50/gallon of
FT naphtha and diesel.
– Loan guarantees
 Example: EPAct 2005—loan guarantees for gasification
projects with < 65% output as electricity.
– Investment tax credit
 EPAct 2005—20% credit applied to first $650MM
investment during first year of operation
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Policy Action (2)
Regulations and Incentives—Key Factor

Other incentives:
– USAF Synthetic Fuel Initiative: successfully tested 50/50 Syntroleum
FT fuel; targeting 50% synfuel use (domestic) by 2016; awarded 7,500
Bbl FT jet fuel for 2007.
– Government funding of R&D and demonstration units

Environmental regulations/incentives:
– Multiple on emissions from plant and fuel
– Multiple on fuel quality
– EU: Emissions Trading Scheme
– Voluntary emissions trading markets (e.g., Chicago Climate Exchange)
– US State initiatives (e.g., California, several NE States)

In flux. Subject to lobbying by interest groups on all sides.
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Typical Overall CTL Balance
Two Recent Studies
Total Liquid Product Capacity
Coal (Illinois #6, bituminous)—TPD
Other feeds: air, water, …
Diesel—BPD
Naphtha—BPD
CO2—TPD
Net Power—MW
Other products: S, slag, fuel gas,…
Bbl Liquid/Ton Coal
Ton CO2/Ton Coal (carbon/carbon)
Ton CO2/Ton Coal
Overall Thermal Efficiency—% HHV
*
**
***
11,000 BPD*
4,891
50,000 BPD**
24,533
7,500
3,509
6,035
9.7
27,819
22,173
32,481
124.3
2.25
0.53
1.23
51***
2.04
0.57
1.32
47***
NETL study for DOD/Air Force (August 2007)
NETL/DOE study (April 2007)
Not verified. Does not include all energy recovered in process.
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Typical CTL Economics
50,000 BPD*
OPERATING COST*
(annual, 1st year basis)
CAPITAL COST**
Coal and Slurry Prep
Gasification
$ 425 MM
$ 1,150 MM
67%
Fixed
$ 230 MM
Variable (net)
$ -20 MM
Air Separation Unit
$ 425 MM
Purchased Feed
$ 300 MM
SynGas Clean-Up
$ 850 MM
TOC
$ 510 MM
WGS + FT
$ 510 MM
12%
ROI
16.8 %
Product Upgrading
$ 210 MM
5%
Simple Payout
6 years
Power Generation
$ 255 MM
•
16%
Other
$ 425 MM
TIC
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$ 4,250 MM
* One scenario. For discussion purposes only.
Results depend on a number of variables and
parameters including: product prices, plant
availability, EPC cost, % debt financing,…
** Excludes CO2 compression, transportation,
sequestration costs.
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Driver: Environmental Concerns (1)

As we go from lighter hydrocarbon resources (Natural Gas) to
heavier (Crude Oils) to heaviest (Coal)
– C/H increases
– More CO2 made during conversion to useable fuels

KEY POINT: every single coal carbon molecule, when converted to
fuel, will eventually end up in CO2
– Question is NOT whether we make CO2
– Rather, it IS where we make CO2 and what we do with it
– (Same applies to natural gas and crude oil)

Key: Capture, Compress, Transport (pipeline), Sequester (“CCS”)
– Multiple sequestration options under consideration
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Driver: Environmental Concerns (2)

Concern: All agree that CCS is necessary for CTL but
major parties do not incorporate the cost of CCS in their
economics

Concern: Though CTL+CCS compare well with oil
refining in terms of CO2 emissions, there are other
options (e.g., BTL, nuclear, wind) with significantly
lower CO2 emissions

(Concern: Some sequestration options are technically
unproven or risky)
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CO2 from CTL

Given production of a typical 0.65 ton CO2 per Bbl of
liquid products
– 50,000 BPD plant: 11.3 million tons CO2/year

Question:
– Is this significant?
– How important is it to capture, compress, transport,
and sequester (CCS)?
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Worldwide Large Stationary CO2 Sources
Number of Sources
Emissions
(million tons CO2/year)
Power
4,942
10,539
Cement Production
1,175
932
Refineries
638
798
Iron and Steel Industry
269
646
Petrochemicals Industry
470
379
Oil and Gas Processing
Not Available
50
Other Fossil Fuels
90
33
Bioethanol and Bioenergy
303
91
TOTAL
7,887
13,466
Process
Intergovernmental Panel on Climate Change (2005)
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CO2 Emission Projections from CTL

Typical CCS in the context of CTL: 80-90% CO2 emission reduction
– Recovers as much as 95% of the CO2
– However, CCS uses energy  lower net reduction


CTL with no CCS: emissions worse than refineries, better than coal-fired power
plants
CTL with CCS: emissions on par with refineries

Consider earlier EIA US CTL projections:
Projected Emissions from CTL
(million tons CO2/years)
without CCS
with CCS
2015
10-41
1-8
2020
28-61
3-12
2030
175-230
17-46
2030 CTL Emissions as % 2005
Global Stationary Sources
1.3-1.7
0.1-0.3
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CO2 Capture, Compression, Transport,
Sequestration (CCS) (1)

Capture includes separation/concentration, treating (e.g., dehydration), etc.
– Mature technology used extensively in gas plants and refineries
worldwide

Compression: to pressure acceptable to pipeline

Transport—a number of factors
– Distance
– Tons per year
– <1000 km + >millions of tons per year: pipeline most economical
– >1000 km + <millions of tons per year: tankers
– Mature technology (e.g., >2,500 km pipelines transporting > 40 million
tons of CO2 per year in the US
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CO2 Capture, Compression, Transport,
Sequestration (CCS) (2)


Sequestration can involve
– Use in enhanced oil recovery (EOR)
 Example: currently, in US, 30 millions tons per year CO 2 is injected for EOR
applications
–
Injection in depleted oil/gas fields or other suitable geologic formations
 Most likely option (largest capacity, location, stability/leak)
 Current example: 1 million tons per year CO 2 from Sleipner gas field is injected into
saline aquifer under North Sea
–
Ocean storage
 In R&D; Technical issues
–
Conversion to inorganic carbonates or direct industrial use
 Small
In essence: every one of the elements in the CCS chain is tested/run-commercially. However, not
all together in one chain.
– Very active area: R&D as well as commercial testing
– Very high likelihood of technical success
– QUESTION: impact on economics?
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Economics of CTL + CCS

CCS economics vary wildly, depending on factors such as capture process specifics,
pipeline length, injection reservoir type and depth, etc.

One study (IPCC 2005) (incl. amortized add’l capital):
– Capture from power plant: $15-75/ton CO2
– Transport (250 km): $1-8
– Geological storage (excl. remediation/liability): $0.5-8

Another study (MIT 2007):
– Capture/compression: $25/ton CO2
– Transportation/storage: $5

A third study (Australia 2006) (capital cost for 0.5 million TPY CO2, equiv. to approx.
2,200 BPD with 50 km pipeline):
– Capture: $25 MM
– Compression: $8 MM
– Pipeline: $15 MM
– Sequestration: $3 MM
– Net operating cost: $24/ton CO2 captured (incl. amortized capital)
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Rough CTL+CCS Economics
50,000 BPD*

Consider 50,000 BPD CTL

Addition of CCS (incl. 50 km pipeline):
– $300 MM extra to TIC
– Or $230 MM/year to operating costs (including amortized
TIC addition)
Case
CTL
CTL+CCS
ROI
16.8 %
11.3 %
Simple Payout
6 years
9 years
*
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One scenario. For discussion purposes only. Results
depend on a number of variables and parameters.
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Summary

Significant new interest in CTL

Many parties—pro and con—in a number of countries
– Energy security and strategy, environmental impact, product quality

Mature technology; many variable affecting economics

Large number of projects—mostly in study; a few in design or construction

Projection for CTL diesel suggests 1-2% of demand by 2020, 6-7% by 2030

Capital intensive but multiple studies show potential for reasonable
economics

Environmental impact key—CO2 capture, compression, transmission,
sequestration
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Contact Information
Iraj Isaac Rahmim, PhD
E-MetaVenture, Inc.
P. O. Box 271522
Houston, Texas 77277-1522
USA
Telephone: USA (713) 446-8867
Email: [email protected]
www.e-metaventure.com
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