Development and Energy Security
D1 – What are the reasons of the growing interest in Coal-To-X?
D2 – Is Coal-To-X commercially operated today?
D3 – What are the world reserves of oil, gas and coal?
D4 – Where are the reserves of oil, gas and coal located?
D5 – Where are CTX projects developing?
D6 – Why are there not more CTX plants in operation?
T1 – Is CTX competitive?
T2 – What is the investment cost of a CTL plant?
T3 – What CTL technologies are available?
T4 – What technologies are available for producing Natural Gas?
T5 – What is the difference between coal gasification and CTL?
Development and Energy Security
The growing energy needs, particularly in developing countries, and the uncertainties on oil availability have made Coal-To-X attractive, particularly in countries with large coal reserves.
Not only nations have an interest in Coal-To-X: the perspective of higher oil prices in the future has also pushed private and state-owned companies to launch conversion projects.
Coal-To-X operations can be split into three types:
- Coal to Liquid Fuels or “CTL”: CTL is operated in South Africa, where it covers around 30% of the needs of liquid fuels and petrochemicals. Several CTL “demonstration” plants are being tested in China, with capacities from 3 to 20,000 bbl/day;
- Coal to Substitute Natural Gas or “SNG”: a 4.3 Mm3/day plant is running in North Dakota (USA), while several small size capacities are operated in China;
- Coal to Chemicals: production of methanol and petrochemical derivatives: large plants are operated in China, with a total output in the range of 15 Mt/year.
Reserves can be simply expressed in “number of years” resulting from the division of proven reserves as of a given year by that year consumption. Two concepts are interesting:
– « Reserves » are the volumes which are proved to be in place and can be profitably recovered using current technology.
– « Resources » are proved volumes which at present are not economically recoverable.
It should be noted that the allocation of quantities in place are not reassigned permanently according to technology improvements or changes in energy economics, notably regarding the price of crude oil.
According to 2012 BP statistics published in 2013, conventional fossil reserves represent:
- Oil: 51 years (1,669 Gbbl reserves and 89.8 Mbbl/day consumption)
- Gas: 55 years (187.3 Tm3 reserves and 3.3 Tm3/y consumption)
- Coal: 109 years (861 Gt reserves and 7.9 Gt production).
Resources are significantly higher, notably for coal. In 2012, the German BGR Office communicated reserves and resources estimated at the end of 2011:
- Conventional oil: 41 years of reserves plus 39 years of resources
- Non-conventional oil (oil sands, extra heavy oil and shale oil): add 12 years of reserves plus 75 years of resources
- Conventional gas: 57 years of reserves plus 91 years of resources
- Non-conventional gas (shale gas, tight gas, coalbed methane, aquifer gas & gas hydrates: adds 2 years of reserves plus 142 years of resources
- Hard coal: 96 years of reserves plus 2,182 years of resources.
- Lignite: 104 years of reserves plus 1,574 years of resources.
Oil and gas reserves are mainly located in the Middle East and a limited number of other countries, while coal reserves are more evenly distributed. According to the BP 2008 statistics published in 2009,
- The oil reserves are mostly located in the Middle East and to a lesser degree in Russia, Venezuela, Kazakhstan, Libya and Nigeria, which collectively account for 84% of the world reserves;
- The gas reserves are mostly located in the Middle East and Russia, which collectively account for 64% of the world reserves;
- The coal reserves are mostly located in the USA, Russia, China, India, Australia and South Africa which collectively account for 82% of the world reserves.
Most advanced projects are in China. Conversion units are in construction in South Korea and India. Several projects are being developed in Australia, Botswana, Canada, India, Indonesia, Mongolia, South Africa, South Korea, the USA and Vietnam.
The lead time (time elapsed from decision and the plant start-up) of CTX projects is more than five years. Given that capital expenditure amounts to several billion dollars or euros, investment decisions can only be taken after several studies including on environmental impact, a major stake for the industry and the community.
Other parameters in CTX investment decisions include:
- the volatility of crude oil price;
- the level and volatility of coal market price;
- the evolution of fiscal policies;
- the environmental regulations and their evolution (mainly on CO2 emissions management).
CTL costs vary with several parameters such as construction costs and the price of coal, as well as local specificities.
Revenues depend mainly on the price of crude oil, from which comparable products are produced .
The cost of carbon storage, or CO2 emissions, will also impact economics.
“Crude barrel equivalent price” is commonly used to measure the competitiveness of CTX with crude oil. Crude equivalent prices commonly vary from $70/bbl to $110/bbl.
Capital expenditure amounts vary mainly with the cost of construction.
Commonly available figures vary from $80,000 to $120,000 per daily barrel of capacity.
The US Department of Energy published a report on Coal and Biomass To Liquids, in January 2009, in which several cases are studied. For a 50,000 daily barrel capacity, capital expenditure is estimated from $106,000 to $115,000 per daily barrel, depending on the % of CO2 sequestrated and the % of biomass acceptable as feedstock. These estimates were made in 2008 with highest estimated cost of construction.
Two main technology routes are proposed commercially:
- The “Indirect Coal Liquefaction”: coal is first gasified to a synthetic gas (mainly carbon monoxide and hydrogen). This gas, after purification, is converted to liquid products under a second process, mainly the “Fisher-Tropsch” or the “Methanol-To-Gasoline” processes;
- The “Direct Coal Liquefaction”: pulverized coal is dissolved in a slurry recycled from the heart of the process. Hydrogen is then added at high pressure before the slurry is sent to a reactor where interaction results in the production of liquid hydrocarbons.
Mild pyrolysis, a pioneering process, after little interest in previous decades, has received renewed interest in the last years.
Methane produced from coal or biomass is called “Substitute Natural Gas” or “SNG” (sometimes “Synthetic Natural gas”).
- Gasification and methanation
Coal and biomass are first gasified to a synthetic gas (mainly carbon monoxide and hydrogen). In a second step, methane is produced under “methanation”.
- Catalytic Steam Gasification
Coal is combined with a catalyst in large quantities before a gasification which directly produces methane and CO2.
Coal and biomass are hydrogasified to methane (SNG) directly with hydrogen. The hydrogen is obtained by steam gasification of part of the methane obtained from the hydrogasifier.
- “Coal gasification” means the conversion of coal to a synthetic gas, predominantly composed of carbon monoxide and hydrogen. This “syngas” can have several uses. It can produce electricity with a better global yield than combustion: this process is called Integrated Gasification Combined Cycle or IGCC. Syngas can also be the raw material for producing hydrocarbons: liquid fuels, natural gas or petrochemicals.
- “CTX” means the conversion of coal to « X » meaning « any hydrocarbons ». It can be made through different processes, notably the “indirect route”, the first step of which is coal gasification, but also through processes without gasification.
Today, most CTX operations and projects are based on the indirect route, which includes gasification.
CTX is a chemical industry which, as any industry, has an environmental footprint: water consumption, effluent emissions and waste management need to be carefully handled.
Focus is mostly on the emissions of CO2 emissions, the most important greenhouse gas (GHG). Multiple studies are being conducted on emission evaluation and reduction and on Carbon Capture and Storage (CCS), which should play a key role in mitigating CTX footprint.
On the other hand, hydrocarbons produced by CTX synthesis contain fewer impurities than conventional ones. For example, CTX-produced fuels are purer, which reduces pollutant emissions where they are consumed.
For a given energy source, the Well to Wheels analysis results in the evaluation of the total environmental footprint, from primary energy extraction up to the final use by the consumer (“from the well to the wheels of a vehicle”). WTW analyses can compare any energy footprint to others, including biofuels, in a meaningful way.