Copyright 2007 by E-MetaVenture, Inc. All Rights Reserved. Coal-to-Liquids: Coal-to-Liquids: Technology, Technology, Commercialization, and Commercialization, and Potential Contribution to Potential Contribution to US and Global Energy Pool US and Global Energy Pool 27 th USAEE/IAEE North American Conference Houston, Texas September 2007 Iraj Isaac Rahmim, Ph.D. E-MetaVenture, Inc. Houston, Texas
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Copyright 2007 by E-MetaVenture, Inc. All Rights Reserved.
Coal-to-Liquids: Technology, Coal-to-Liquids: Technology, Commercialization, and Potential Commercialization, and Potential Contribution to US and Global Contribution to US and Global Energy PoolEnergy Pool
27th USAEE/IAEE North American ConferenceHouston, TexasSeptember 2007
Iraj Isaac Rahmim, Ph.D.E-MetaVenture, Inc.Houston, Texas
E-MetaVenture, Inc. 2
IntroductionIntroduction
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
E-MetaVenture, Inc. 3
Key TopicsKey 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
Driver: Resource Availability/StrategyDriver: Resource Availability/StrategyGlobal Distribution of Coal ResourcesGlobal Distribution of Coal ResourcesMillion Tons of Proved Reserves (2006)Million Tons of Proved Reserves (2006)
BP Statistical Survey of World Energy.
254,43228%
19,8932%
287,09532%
50,7556%
296,88932%
North America
S. & Cent. America
Europe & Eurasia
Africa & Middle East
Asia Pacific
246,643
157,010
114,500
92,445
78,500
USA
Russian Federation
China
India
Australia
E-MetaVenture, Inc. 11
Driver: Resource Availability/StrategyDriver: Resource Availability/StrategyDistribution of Coal Resources—USADistribution of Coal Resources—USA
US Geological Survey Open-File Report OF 96-92.
Anthracite, Semi-Anthracite, Meta-Anthracite
Coking CoalMedium and High-Volatile Bituminous
Low-Volatile Bituminous Lignite
Sub-Bituminous
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Driver: Energy and Product DemandDriver: Energy and Product DemandGlobal Distillate Demand ProjectionsGlobal Distillate Demand Projections
-
5 , 000
10 , 000
15 , 000
20 , 000
25 , 000
30 , 000
35 , 000
40 , 000
45 , 000
1977 1987 1995 2000 2005 2010 2015 2020
Mid
dle
Dis
tilla
te C
on
sum
pti
on
(M
BD
)
Projected Total at 3 %growth
Rest of World ( Excl FSU )
Asia Pacific
Europe
North America
“Refinery Gap”
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Driver: TechnologyDriver: 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 ProjectsCTL Facilities and ProjectsExistingExisting
Company Location Size (BPD) Comments
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
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 ProjectsCTL Facilities and ProjectsIn the Works (USA)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, Haldor-Topsoe, NACC, ExxonMobil
Ascension Parish, LA Lignite Feasibility N/A 5,000
DKRW Advanced Fuels Rentech, GE Medicine Bow, WY Bituminous Design
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 ProjectsCTL Facilities and ProjectsEIA Projection to 2030: Coal used in CTL (USA)EIA Projection to 2030: Coal used in CTL (USA)
As % Total Consumption:
2015: 1.2
2020: 1.9
2025: 5.2
2030: 6.3
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2004 2009 2014 2019 2024 2029
Year
Pro
ject
ed U
S C
oal
to
CT
L (
lon
g-T
on
s/D
ay)
E-MetaVenture, Inc. 18
CTL Facilities and ProjectsCTL Facilities and ProjectsEIA Projection to 2030: Liquid Fuels from CTL (USA)EIA Projection to 2030: Liquid Fuels from CTL (USA)
As % Total Jet+Distillate Consumption:
2015: 1.3
2020: 1.9
2025: 5.6
2030: 6.2
0
100,000
200,000
300,000
400,000
500,000
600,000
2004 2009 2014 2019 2024 2029
Year
Pro
ject
ed U
S L
iqu
id F
uel
s fr
om
CT
L (
Bar
rels
/Day
)
E-MetaVenture, Inc. 19
A Word on GTL Diesel Supply A Word on GTL Diesel Supply ProjectionsProjections
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 ProjectionsMore on CTL Diesel ProjectionsGlobalGlobal
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
What Impact will CTL have on…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– Naphtha (for cracking or blending)
US v. worldwide Regional markets
A word on specialty products: lubes and waxes
Environmental impact
Some factors affecting CTL growth:
- Petroleum prices
-Capital availability
- E&C resources
- Technology
- Movement on CCS
- Incentives and regulations
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Policy Action (1)Policy Action (1)Regulations and Incentives—Key FactorRegulations 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)Policy Action (2)Regulations and Incentives—Key FactorRegulations 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.
• * 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.
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
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)
E-MetaVenture, Inc. 28
COCO22 from CTL 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 COWorldwide Large Stationary CO22 Sources Sources
Process Number of SourcesEmissions
(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
Intergovernmental Panel on Climate Change (2005)
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COCO22 Emission Projections from CTL 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
Sequestration (CCS) (1)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
Sequestration (CCS) (2)Sequestration (CCS) (2) Sequestration can involve
– Use in enhanced oil recovery (EOR) Example: currently, in US, 30 millions tons per year CO2 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 CO2 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 + CCSEconomics 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):