[Tanada]

underground-coal-gassification-t69418.html

[kildred590]

- Gasholders were a common sight until well in the 1990s.

- Producer gas was superseded by natural gas for domestic and industrial use in the 1970s. It was highly toxic, carcinogenic and explosive.

- Producer gas was the principal cause of deaths in the "pea-soupers" that plagued London in the 20th century.

- New technology in the 1950s made gasification for electricity production unviable. It is more efficient to burn coal in high temperature furnaces.

[GoghGoner]

One plant never got off the ground in Indiana and the other is producing very little energy so far. The other plant in the USA is down in Mississippi and is just getting running after major budget overages.

http://watchdog.org/207385/coal-gasification-woes/

Are large-scale coal gasification projects worth all the expense?

“If somebody makes a breakthrough technology it may be worthwhile, but so far it hasn’t made much financial sense,” said Dan Kish, senior vice president of policy at the Institute for Energy Research, a Washington, D.C.-based think tank that advocates for free-market solutions to energy issues.

“Coal gasification is not new. It’s been around at least 30 years,” said Alison Kerester, executive director at the Gasification Technologies Council, which advocates for the industry. “What’s new with Duke and Kemper is the scale … Anytime you’re going to scale up like that, you inevitably are going to have issues that come up during construction and initial operation that need to be resolved.”

[Tanada]

Using federal incentive programs touted as being 'clean coal' and 'carbon capture and storage' oriented systems the Obama Administration encouraged the construction of the Kemper Mississippi lignite coal gassification with integrated gas turbine combustion and carbon capture of the CO2 generated.

The plant is about four years behind schedule and not too surprisingly actually cost four times the original estimate to build. Last fall they finally started producing power by piping natural gas from the local pipeline through the system to supply methane to the gas turbine generator set.

The original plan called for the power plant to convert 4 Million tons of local Lignite coal into a mixed gas which would then be burned in the gas turbines. After combustion some 65% of the CO2 was intended to be captured and sequestered to give the plant the same CO2 emission rating as it has burning Natural Gas.

In January the gassifier unit one finally started converting the Lignite into fuel gas for the GT generator set.

Now it is being reported that the sequestration pipeline has developed leaks and they are debating if they should just switch back to burning natural gas so they can leave the sequestration equipment permanently idled. Of course the miners who would be making a living providing that 4 million tons a year of fuel are not thrilled by the idea that after years of massive cost over runs on the construction of the plant they might now lose the jobs they were being promised would last 30-50 years, the expected lifetime of the plant.

What will natural gas prices look like over the next 40 years?

Well, over the past 20 years, prices recorded at the dominant Henry Hub distribution center in Erath, Louisiana, ranged from a low of $1.05 per million BTU to a high of $18.48. Over the past 10 years prices ranged from $1.46 to $13.31.

The current price is $2.60. Forecasts show prices rising over the next two decades, but they vary in pace and amount. The U.S. Energy Administration projects natural gas prices through 2040 using multiple scenarios that encompass demand, supply, exports and various consumption projections. Its latest forecasts indicate prices may remain below $4.50 or jump as high as $9.20.

The only knowable thing about natural gas prices is they are volatile.

When Mississippi Power Company proposed its Kemper lignite plant to the Public Service Commission over a decade ago, traditional coal-fired plants were under attack by environmentalists and EPA and natural gas prices were high, averaging $7.81 at Henry Hub from 2005 through 2008. The company and the commission deemed it prudent for Mississippi Power to pursue an alternative fuel source for its next baseload power plant. The alternatives were nuclear and clean coal. Given Mississippi’s vast, cheap lignite deposits, the clean coal alternative was chosen.

All know what happened next. Shale oil discoveries dramatically ramped up gas supplies, driving down prices. And the costs to build the lignite plant skyrocketed.

Over the next several months, PSC commissioners will be tempted, and politically pressured, to gaze into a crystal ball and guess what natural gas prices will be over the next 40 years. That’s because the lignite plant will soon come fully online and the commission has linked the “viability” of the plant to natural gas prices.

Yes, the technology works. Syngas produced from lignite coal has powered electricity generation, which has been delivered to Mississippi Power customers for weeks now. Carbon dioxide has been sequestered, sulfuric acid produced, and both delivered to downstream users.

The final hurdle for the plant to come fully online is for both syngas turbines to operate simultaneously for a specified period of time.

When it does, the company will ask commissioners to approve rates to allow recovery of costs for building and operating the multi-function facility. Building costs for the power plant were capped at $2.8 billion. Another $1.4 billion was authorized for the CO2 pipeline, the coal mining operation, and limited other items. Allowable operating costs have yet to be determined.

How much cost to allow Mississippi Power to recover from ratepayers will be the great challenge for our elected commissioners. Politicians tend to focus on the moment. Utility companies must focus on multiple decades. That’s why major power generators have diversified baseload fuel supplies. History has shown reliance on a single fuel source over time to be imprudent.

So, the real analysis facing commissioners is not what natural gas prices may do, but how much rate payers should invest to provide Mississippi Power necessary and prudent fuel diversification.

http://www.hattiesburgamerican.com/stor ... /99497606/

Mississippi Power announced Monday it expects the Kemper energy facility to be operational with lignite coal by April 30.

Kemper plant cost rises $70M as start date pushed again

The company also upped the cost estimate by $70 million in its February report to the Mississippi Public Service Commission, which spokesman Jeff Shepard said will be paid by Mississippi Power and Southern Co. and not its customers.

The breakdown of costs is: $45 million related to extending the projected schedule through April 30, $15 million for start-up fuel and $10 million for outage work and operational maintenance and improvements.

In its January report, Mississippi Power reported leaks in tubes on one of the syngas coolers and estimated the start date at mid-March. The company said the leaks in the tubes made that date unattainable.

“The schedule adjustment is related to repairs of tube leaks and associated corrective actions in one of the project’s syngas coolers,” Shepard said. “The repairs have been completed and the new schedule reflects the time needed for restarting that portion of the plant and to achieve integrated operation of all plant systems.”

While one syngas system was down for repairs, he said the other system remained in operation and producing clean syngas for chemical product production and electric power generation.

Integrated operation will occur when both of the plant’s gasification systems, the gas cleanup and generation systems operate simultaneously, he said.

http://www.sunherald.com/news/business/ ... 62009.html

[ROCKMAN]

T - "So, the real analysis facing commissioners is not what natural gas prices may do, but how much rate payers should invest to provide Mississippi Power necessary and prudent fuel diversification." It sounds as if the folks in MS running the program have the process ass backwards: you don't build out the infrastructure and then ask the rate payers if they'll cover the costs.

ERCOT in Texas went the other way. Years ago it asked the voters in the state capital, Austin, if they would INITIALLY pay above market rate for alt electricity in return for lower LONG TERM rates. They voted yes. And recently folks in Georgetown, Texas opted for the same deal in their plan to go 100% green with a combination of wind and solar. This allowed the PRIVATE INVESTORS the ability to acquire financing for both new projects based upon a GUARENTEED future revenue stream.

But making investment decision based on assumptions of future commodity prices which ARE NOT guaranteed is risky business. Look what the PRIVATE INVESTMENT in the largest CO2 sequestration project on the planet is dealing with:

"Over the decades and after producing 400 million bbls the oil flowing out of West Ranch had slowed to a trickle, barely enough to bother with. But the field’s owner, billionaire Jeffrey Hildebrand of Hilcorp Energy, knew there was a lot of black gold left to be coaxed out of West Ranch. All it needed was a good shot of carbon dioxide. Used to be there was no CO2 supply anywhere near Vanderbilt. But there is now. As of last week Hilcorp is now receiving and injecting 5,200 tons a day of carbon dioxide at West Ranch.

NRG took the lead on the project in 2014 because “someone needed to prove the concept,” says CEO Mauricio Gutierrez, and because the company expected to make money on it. “We took the risk on behalf of our investors,” he says. The trouble is, the deal was built on 2014 expectations that oil prices couldn’t possibly drop below $75 a barrel. Surprise. “At 50-dollar oil it’s very challenging,” says Gutierrez.

{Since the consumers aren't responsible for any part of the investors' profitability the cost over runs and low oil prices don't impact them}

is is a good first project, but we are not done with CCS,” says Gutierrez. He’s careful to downplay expectations of new capture technologies, which he suspects will continue to require higher oil prices (or a hefty carbon tax) before the economics work out. If someone does discover the Holy Grail of 100% carbon capture at no additional cost of electricity, he wants NRG to know about it. “I’d be a customer.”

If someday enough stars align for NRG to build a second carbon capture system, Gutierrez says a likely site would be their Big Cajun plant in New Roads, Louisiana -- another state with an ample supply of old oil fields that would love a reviving tonic of carbon dioxide."

[ROCKMAN]

The world's largest CO2 sequestration project only received about 10% of it's funding from the federal govt. It isn't President Obama's questionable CO2 sequestration project. It's NRG Energy et al questionable CO2 sequestration project.

Even if the sequestration side is a bust at least the US tax payers will get some return as a result of the additional oil recovery.

[Subjectivist]

The world's largest CO2 sequestration project only received about 10% of it's funding from the federal govt. It isn't President Obama's questionable CO2 sequestration project. It's NRG Energy et al questionable CO2 sequestration project.

Even if the sequestration side is a bust at least the US tax payers will get some return as a result of the additional oil recovery.

Seems to me the oil lease holders who get the CO2 injection will be the benificiaries. Any taxpayer benefit will be at the minimum end of the spectrum, the utility and oilco will do great.

[ROCKMAN]

"Any taxpayer benefit will be at the minimum end of the spectrum, the utility and oilco will do great." As the tax payers should since they are paying at the minimal end of the spectrum. BTW it the utility company (IOW the electricity consumers) paying almost all the cost including the profit margin from the loans provided by the other investors.

And let's not forget any additional oil production still benefits the tax payers (including those that get the 25% royalty off the top and the Texas citizens that get an additional 5%+ off the top from the production tax). And then there's the corporate tax paid by Hilcorp.

Considering all the money the feds have pissed away on goofy energy projects (and the hundreds of $millions it will lose selling SPR reserves for less then it cost it) this doesn't sound like a bad deal. It also helps the govt a tad in upholding its pledge to fight climate change. After all, we're doing it for the children. LOL.

[Tanada]

Indonesia is moving forward with plans to convert their vast coal resources into DME as substitute fuel replacing imported Propane and also as substitute diesel fuel for ICE applications.

Pertamina partners with Adaro, Indika for coal gasification facilities

The Jakarta Post Jakarta / Wed, December 9, 2020 / 07:04 pm State-owned oil and gas giant Pertamina signed on Monday a strategic partnership with privately owned coal mining giants PT Adaro Energy and PT Indika Energy to develop coal gasification facilities in Indonesia.

Pertamina president director Nicke Widyawati, in a joint statement on Monday, said the companies aimed to convert low-rank coal – the dirtiest fossil fuel – into dimethyl ether (DME), which would replace imported liquefied petroleum gas (LPG) as the go-to cooking gas in Indonesia. “This aligns with Pertamina’s strategy going forward to optimize [domestic] natural resources as feedstock to produce energy so we can reduce imports and the trade deficit,” she said. Pertamina’s partnership with Adaro and Indika is meant to fill the gap in domestic DME supply needed by Pertamina, the country’s largest LPG distributor.

The switch to DME is supposed to lower the consumption of LPG, a fuel the country has been heavily importing at the cost of widening its trade deficit, a key vulnerability for Southeast Asia’s largest economy.

From January to October this year, the trade deficit in oil and gas reached US$5.14 billion, as imports stood at $11.68 billion against exports at $6.54 billion, Statistics Indonesia (BPS) data shows. The trade deficit is less than $7.99 billion recorded in the same period last year.

Indonesia to mix coal-based DME, LPG as cooking gas to reduce imports In October this year alone, Indonesia’s oil and gas imports fell by 38.6 percent year-on-year (yoy) to US$1.08 billion from the same month in 2019, amid cooling economic activities due to the COVID-19 outbreak.

Nicke had told lawmakers in Jakarta in February that Pertamina’s own under-construction, coal-to-DME plant in South Sumatra could only replace roughly a quarter of the country’s total imported LPG. Pertamina’s plant, being jointly developed with national coal miner PT Bukit Asam and United States-based Air Products, is slated to produce 1.4 million tons of DME annually, compared to the country’s need for roughly 5 million tons of LPG annually. Meanwhile, while Adaro is currently looking to develop a coal-to-methanol facility and Indika an underground coal gasification facility, the statement did not indicate which company would build the capacity to convert these coal derivatives into DME.

Both miners' facilities are slated to be built in Kalimantan. “[Indika] is committed to studying downstream technology,” the coal miner wrote in a separate statement on Monday. The deal also brings Adaro and Indika closer to securing a state-backed DME offtaker for their capital-intensive projects that according to one landmark study, might not always be economically competitive with imported LPG.

An Institute for Energy Economics and Financial Analysis (IEEFA) study published on Nov. 10 calculated that at current low LPG prices, Bukit Asam would face $377 million dollars in operational losses each year in selling DME at competitive prices with LPG. The government countered the study in a statement on Monday by saying that LPG prices had averaged at $600 per ton over the past 10 years, higher than the $365 per ton price tag used in IEEFA's study, and thus, the project was "economical and not a loss”. “That means Pertamina is committing itself to a capacity payment for DME, whose profit or loss depends on the LPG prices at that time,” IEEFA analyst Elrika Hamdi to The Jakarta Post on Tuesday. For Adaro, Indika and Bukit Asam, downstreaming is also a means of diversifying its coal business as the global market slowly moves away from coal-fired power plants, the biggest market for the dry fuel. Adaro commissioner Arini Saraswaty Subianto, who Forbes listed as one of Indonesia’s richest women last year, said in the joint statement that the downstreaming project “opened the opportunity to diversify and develop Adaro’s business”. FOLLOW OUR SOCIAL MEDIA The Jakarta Post

LINK

[Subjectivist]

Indonesia is kind f the poster child for this idea. They were early OPEC members and the wealth from exports gave their culture certain expectations like the convenience of cooking with bottled LPG. Now that an effective technology for manufacturing DME as an LPG substitute from gasified coal which Indonesia has vast reserves of deciding to use those reserves and ignore CO2 emissions is almost inescapable. Any government telling the common folks to go without after they are used to abundance is going to have a hard time staying in power.