Peak Oil News and Message Boards

"Backing this project would be wholly incompatible with the president’s climate action plan." Hmm... Seems rather compatible with offering 150 million acres of the offshore GOM for lease including off the west coast of Florida for the first time in more than 25 years, signing more DW GOM drilling permits than any other POTUS, establishing guidelines to permit seismic surveys in the Atlantic and including Atlantic lease sales in the next five-year leasing plan, promised $10 billions in loans from his gov't to Brazil’s state-owned oil company to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field, ordering his depts do everything possible to expedite the completion of the southern leg of the Keystone XL Pipeline (600,000 bopd capacity) which began delivering Canadian oil sands production directly to Texas refineries last January, allowed his Commerce Dept in just the last 14 months to issue 120 exception to the ban on exporting US oil, ordering his Treasury Dept to issue licenses giving special permission for oil investment in Burma for the first time in 15 years, appointing Susan Rice (who holds significant investments in more than a dozen Canadian oil companies that would benefit from the Keystone XL pipeline) as his national security advisor, has increased US coal exports by a bit more than 100% during his term with most coming from gov't lands, had his EPA grant the final Clean Air Permit that would allow the construction of the White Stallion coal-fired power plant in Texas...already the largest coal burning state in the country and recently allowing BP (the operator of the greatest oil spill in the history of the US) to begin operating again in US waters.

Oh sure, there were some inconsistent verbal points tossed out but overall rather consistent IMHO.

I

Yes it is hypocritical, in fact the Obama admin is going to be sued for being too slow to act on cc (see global warming/climate change thread).

A new report was published a couple of months ago about the EROEI of coal to liquid conversion.

http://www.mdpi.com/1996-1073/8/2/786/htm

Abstract: Currently, there are considerable discrepancies between China’s central government and some local governments in attitudes towards coal to liquids (CTL) technology. Energy return on investment (EROI) analysis of CTL could provide new insights that may help solve this dilemma. Unfortunately, there has been little research on this topic; this paper therefore analyses the EROI of China’s Shenhua Group Direct Coal Liquefaction (DCL) project, currently the only DCL commercial project in the world. The inclusion or omission of internal energy and by-products is controversial. The results show that the EROIstnd without by-product and with internal energy is 0.68–0.81; the EROIstnd (the standard EROI) without by-product and without internal energy is 3.70–5.53; the EROIstnd with by-product and with internal energy is 0.76–0.90; the EROIstnd with by-product and without internal energy is 4.13–6.14. Furthermore, it is necessary to consider carbon capture and storage (CCS) as a means to control the CO2 emissions. Considering the added energy inputs of CCS at the plant level, the EROIs decrease to 0.65–0.77, 2.87–3.97, 0.72–0.85, and 3.20–4.40, respectively. The extremely low, even negative, net energy, which may be due to high investments in infrastructure and low conversion efficiency, suggests CTL is not a good choice to replace conventional energy sources, and thus, Chinese government should be prudent when developing it.

So again as is the case of drilling for oil: EROEI vs profit margin. A hypothetical: if Chinese CTL projects have an EROEI of 7 and the cost to produce a bbl is 20% higher than the cost of importing a bbl will the Chinese pursue the effort? Second hypothetical: a CTL projects utilizes more energy the it produces but the cost of a produced bbl is 20% less then the cost of an imported bbl will the Chinese pursue the effort. Not possible, you say? As China continues to see auto sales boom motor fuel could become much more valuable then coal. IOW they might see using 100 Btu's of coal energy to create 80 Btu's of motor fuels to be a good trade. Remember we're talking about strong central govt control and not a free market dynamic.

ROCKMAN wrote:So again as is the case of drilling for oil: EROEI vs profit margin. A hypothetical: if Chinese CTL projects have an EROEI of 7 and the cost to produce a bbl is 20% higher than the cost of importing a bbl will the Chinese pursue the effort? Second hypothetical: a CTL projects utilizes more energy the it produces but the cost of a produced bbl is 20% less then the cost of an imported bbl will the Chinese pursue the effort. Not possible, you say? As China continues to see auto sales boom motor fuel could become much more valuable then coal. IOW they might see using 100 Btu's of coal energy to create 80 Btu's of motor fuels to be a good trade. Remember we're talking about strong central govt control and not a free market dynamic.

Spot on ROCKMAN, that is why I say we will burn it all. It might take us another century or a millennia, but as long as somebody does well from extracting fossil carbon and burning it humans will keep extracting it and burning it.

The direct coal liquifaction plant mentioned a couple posts above is still operating in inner mongolia China. The plant in question takes in 30,000 metric tons of coal per day and has a liquid output of 21,500/bbl/d. The plant uses a technology developed in the USA by an American company using DOE grant money back in the 1980's. When the company couldn't make progress using the technology here they sold it to a Chinese company to get back some of their internal investments in the research and development.

Reportedly the Chinese spent 2 Billion dollars to build the liquifaction facility and being sensible they built it on the edge of a vast coal field to make sure it would have cheap coal for the life of the plant. Presuming the plant last 50 years and operates close to 365/y the capital investment adds $5/bbl to the cost of the synthetic crude. The price of coal in the region varies from $15-$20/ton and the plant consumes 30,000/ton/d or $450,000-600,000/d over the last 12 months.
450,000/21,500=20.93+5=25.93 plus labor.
600,000/21,500=27.91+5=32.91 plus labor.

Depending on the labor cost which is reported to be low in the region this compares favorably with oil imported from OPEC. Due to the much higher NIMBY costs in the USA and higher labor rates it is entirely possible that the same plant built here would be a money loser instead of a money maker, especially during this window of fracking opportunities while we are extracting the light tight shale oil from our main resource locations.

One last thing, the plant in china has been accumulating a lot of salt as a byproduct and last year contracted another company to process and market the salt as a value added byproduct instead of just disposing of it directly as they had been.

MAINBOARD-LISTED Sunpower Group, which designs and builds energy conservation products in China, has secured a 22.58 million yuan (S$4.6 million) contract to provide services for a coal liquefaction project in Inner Mongolia.

The contract, given to its wholly owned subsidiary Jiangsu Sunpower Technology, was from China Shenhua Coal to Liquid and Chemical (CSCLC). Sunpower Group will provide engineering, procurement and construction (EPC) services to CSCLC's direct coal liquefaction project.

In particular, Sunpower will deploy its crystallisation separation technology, which recycles most of the industrial sodium sulphate salts and produces less of the remaining mixed salts that would otherwise have to be disposed of.

The EPC contract award marks Sunpower's first zero-liquid-discharge salt separation project in China, it said. It will be completed next year, and have a positive impact on its FY2017 results.

http://www.businesstimes.com.sg/compani ... first-coal

T - Good poop...thanks. BTW: "...sensible they built it on the edge of a vast coal field...". Why we locate Texas power plants close to our very low grade lignite. Which is also part of the explanation for Texas coal burning plants being the most efficient in the country. Not just because we're smarter (LOL) but we came to coal late: our plants are newer and thus built a bit down the learning curve.