Tanada – here’s the latest on the CTL hype and the reality. I suspect the basic problem boils down to taking a process that works fine on a laboratory bench and convincing someone to spend $billions of THEIR money to make it work on a large scale.
From:”Coal-to-liquid prospects dim, but boosters won't say die”
http://www.eenews.net/stories/1059981383“It's been two years since Sen. Joe Manchin (D) and other West Virginia politicians gathered near here to break ground for and sing the praises of what they said would be the first U.S. plant to turn coal into gasoline -- and create hundreds of jobs on a former strip mine near the Kentucky line. Engineering and site preparation followed the pep rally, but there's not much to show for the effort here in Mingo County. Developers haven't yet locked up financing for a $3 billion plant they say won't be up and running until at least 2016.”
As often is the case many cheerleaders who have lots of positive worlds to offer but not a penny of their own money.
"The details are much more time-consuming that we anticipated," said Randall Harris, technical director for TransGas Development Systems LLC's Adams Fork Energy project. "But we have so far not hit a roadblock."
I would consider not having the $3 billion loan a bit of a road block.
“But many question whether the coal-to-liquids effort is even on the road. The West Virginia project is one of several CTL proposals around the country struggling in the face of expanded stores of cheap domestic petroleum, heightened environmental scrutiny and increased focus on renewable sources of energy. "The big problem is the large front-end cost to build the plant," said Burt Davis, associate director for clean fuels and chemicals at the University of Kentucky's Center for Applied Energy Research. "And the only way you can see building the plant is that you're going to have 20 to 30 years to pay for it, and nobody has been willing to take that risk in North America."
Another problem for CTL boosters -- who have for decades been pressing to expand uses for U.S. coal -- is the new abundance of cheap natural gas, which has encouraged some companies to switch their focus from turning coal into gasoline to turning gas into liquid transportation fuel.
“TransGas' Harris, once a National Energy Technology Laboratory senior engineer, who is working to develop two other CTL sites in Kentucky, says that if more people knew more about coal-to-liquids technology, they would back the effort.”
And again the folks who do know about CTL don’t have the money but are “positive” it will be a good investment…for someone else.
"We are now focusing on the last of the detailed engineering in advance of placing fabrication orders," he said in a telephone interview. "We are talking with several international as well as domestic fabricators."
They can “talk” all they want but the fabricators need to see the money.
Along with the planned Mingo County plant, Houston-based DKRW Advanced Fuels LLC's Medicine Bow project in Wyoming's Carbon County is also among the most prominent CTL efforts. Last year the company announced it had entered a construction contract with Chinese Sinopec Engineering Group. DKRW said the facility would produce more than 11,000 barrels of low-sulfur gasoline every day and create 400 full-time jobs. "This project not only creates a bigger market for Wyoming coal," Sen. Mike Enzi (R-Wyo.) said last year, "it helps develop its most abundant energy source -- coal."
But early this year, the company saw its fortunes turn as repeated construction delays jeopardized a key permit from the Wyoming Department of Environmental Quality's industrial siting office. "We required DKRW to submit an updated socioeconomic report to see how the local communities would be affected by this change in schedule," Esch said. "I've had no indication from DKRW that they don't intend to proceed."
PA coal magnate John Rich has been trying to build a Pennsylvania CTL plant for at least a decade.
At one point the company, hoping to get funding from the Department of Energy, backed by Pennsylvania politicians from both sides of the aisle, said construction would begin in 2006. Last year the company said it sued critics who called the project a failure. "As our company continues to obtain necessary commitments for this project, we cannot allow our name to be slandered in a political smear campaign," Rich said in a statement.
And again a great and viable project…if he could just get someone else to pay for it. I would think a “coal magnate” could afford to do it with his own capex.
“With the United States' status as the world's second largest coal producer coupled with its long-term dependence on foreign sources of energy, many companies and politicians have for decades wanted to capitalize on CTL here.”
Companies that want to get paid for building the plants, companies that want to sell coal to the plants and politicians who want someone to spend their money to build plants in their states. Great…got everything they need. Except someone who wants to write the check.
“The late Sen. Robert Byrd (D-W.Va.) used his clout as an appropriator to secure funds for CTL development in his home state. His push for CTL began during the Kennedy administration, and he continued to champion the effort until his death in 2010. More recent CTL backers include President Obama, who introduced legislation as an Illinois senator along with retired Kentucky Republican Sen. Jim Bunning.”
And since Senator Obama couldn’t get a CTL plant built to use his Illinois coal two years ago president Obama’s EPA gave the final Clean Air permit for a plant built in Texas that would buy Illinois coal for the next 30 years.
“And the Obama administration has sought to cut funding for CTL technology to focus on carbon capture efforts, coal gasification and making power plants more efficient. Current federal spending levels for coal and coal biomass to liquids are under $5 million a year. Obama's latest budget request says, "This area of research is a low priority relative to other activities which are expected to yield greater public benefits."
But Department of Energy researchers say they haven't given up on the technology. Jenny Tennant, a gasification leader for DOE's National Energy Technology Laboratory, said ongoing research on gasification can benefit CTL, too. That's because while there is a way of turning coal directly into liquid fuel, under the more popular Fischer-Tropsch process, companies must first turn coal into synthetic gas or syngas.
And again someone else who won’t be investing a penny into building a CTL plant thinks it’s a good idea.
“Even with federal, state and private efforts, the U.S. Energy Information Administration said late last year that it projected the startup of the first CTL plants in the United States to be in 2023, "with penetration of the technology far more modest" when compared with previous estimates. A peer-reviewed study by Sweden's Uppsala University senior lecturer Mikael Hook questioned the prospects of CTL around the world, and particularly in the United States. "The economic analysis shows that many CTL studies assume conditions that are optimistic at best. In addition, the strong risk for a CTL plant to become a financial black hole is highlighted," he wrote in a paper presented last fall at the Pittsburgh Coal Conference. "It is unrealistic to claim that CTL provides a feasible solution to liquid fuels shortages created by peak oil," Hook added. "At best, it can be only a minor contributor and must be combined with other strategies to ensure future liquid fuel supply."
The International Energy Agency in its most recent coal market report noted that China has several CTL projects in various stages of development. Sasol is involved in CTL projects there and in India. "China has actively pursued coal liquefaction technology since the 1950s," said the report. "Throughout this time, China has treated coal-to-liquids as a research and development topic, yet this mindset has changed over the last two decades as CTL moved from laboratories to large-scale demonstration projects." However, the IEA report also said that China's National Development and Reform Commission had told local governments to hold off on approving CTL projects, especially smaller ones.
During a recent briefing in Washington, D.C., IEA analyst Laszlo Varro was pessimistic about CTL. "Essentially, energy policy needs to replicate a war blockade," he said. "The only country that has meaningful investments in coal to liquids is China."
Coal against petroleum - Among the major impediments to CTL efforts in the United States are development costs, intense water need and emissions of heat-trapping greenhouse gases. The question has been whether getting liquid fuel from coal creates fewer emissions than through drilling oil. CTL boosters say that with carbon capture and sequestration technologies, a CTL plant can meet or outperform petroleum as a raw material for liquid transportation fuel. Adding biomass to the process, they say, can make it more environmentally friendly. "It was found that diesel fuel can be produced from coal that has a lower life cycle greenhouse gas emissions profile than conventional petroleum-derived diesel fuel on a well-to-wheels basis," DOE said in a 2011 report. The report adds, "This requires the sequestration of carbon dioxide produced at the facility, and methane mitigation practices may be required in the case of certain bituminous coals which are particularly high in methane content."
So if someone else pays to sequester the CO2 and they eliminate the methane emissions from coal mining that they’ve yet been able to do CTL will work great.
“TransGas Development's Harris brags about emission controls at the proposed Mingo County plant.” Our technology," he said, "captures all the CO2 because you have to remove it before it gets to the catalyst." Using stored CO2 for enhanced oil recovery can help make the process more economical. And with a barrel of crude oil hovering at around $95 on the world market, Harris said, "Oil prices are still in the sweet spot for CTL." But carbon capture and sequestration (CCS), and the use of CO2 enhanced oil recovery (EOR), has yet to prove itself on a significant commercial scale. Harris says that while the EOR market has yet to develop here in the Appalachians, he envisions TransGas becoming the top supplier of CO2 for increasing the region's oil production, which he said holds significant potential.
IOW he can sequester the CO2 but at the moment but they has no place to put it. I thought sequester meant you put it someplace where it would do no harm. BTW once the CO2 is pulled out of the process it has to be shipped via pipelines. I suspect they haven’t worked that into their project economic analysis.
Environmentalists are not convinced. They see CTL with the same skepticism that they view "clean coal" projects overall. Plus, the technology means continued reliance on mining and fossil fuels that many don't even want to consider. "Relying on liquid coal as an alternative fuel could nearly double carbon pollution per gallon of transportation fuels, and increases the devastating effects of coal mining felt by communities and ecosystems stretching from Appalachia to the Rocky Mountains," the Natural Resources Defense Council says in a 2011 fact sheet.
Such arguments don't hold much sway with Steve Jenkins, gasification services vice president at CH2M Hill Inc., a major engineering and construction firm. "I can never explain for the environmentalists," he said. With the continued demand for oil coupled with coal's abundance and high petroleum prices, Jenkins sees a market for the CTL technology. "And so we are seeing foreign investors that want to get into the U.S. because they see that we are not reducing our use of gasoline," he said in a recent interview. "Particularly when you site the plant [near the mine], you have eliminated a large portion of the feedstock, which is transportation," Jenkins added. "Your economics show that today and in the future, coal to liquids plants make economic sense."
And one more time: a cheerleader that will make a nice income whether the CTL is a profitable effort or not since he’ll get paid for building the plant and won’t have a penny invested in it. Reminds of a couple of years ago when 3 groups tried to sell me their Eagle Ford Shales acreage. They had great things to say about the drilling potential. So I made all 3 the same offer: I would pay them the $millions they were asking for but instead of handing them a check I would use that money to pay for a portion of the drilling and give them the equivalent ownership in all the wells. Great offer, eh: not only would they get the money they wanted but I could make even more profit for them by investing in the wells. None of them took my offer which was Justas well since I never planned on doing the trades in the first place. We call it “having skin in the game.” A great way to separate the hustlers from the real earnest players.
So now that you know the current scoop how much of your life's saving are you ready to invest in a CTL plant? There seems to be a number of opportunities developing. LOL.
I have no doubt you get it and already did before this post.