Senate Committee Convenes Coal Gasification Hearing
2 May 2006
As a follow-on to last week’s hearing on Coal Liquefaction (earlier post), the US Senate Committee on Energy and natural Resources convened a hearing Monday regarding the economic and environmental issues associated with coal gasification technology.
Testifying at the hearing were: David Garman, Under Secretary of Energy for Energy, Science and Environment, US Department of Energy; Brian Ferguson, CEO, Eastman Chemical Company; William Bruce, President, BRI Energy, LLC; Bill Douglas, Vice President, Econo-Power International Corp.; Bill Boycott, General Manager, Agrium USA, Inc.; and Antonia Herzog, Climate Center Staff Scientist, Natural Resources Defense Council.
DOE. The DOE’s David Garman took the opportunity to note that the DOE has been investigating gasification for decades, driven by the prospect of almost doubling coal-fired plant efficiency from an average current 32% (38% for current state-of-the-art) to 55% or 60% for commercially mature gasification-based power plants. Use of waste heat for co-generation or heating could increase fuel use efficiency to 70% to 80%, according to Garman.
However, the potential efficiency gains only tell part of the story. Today, new gasification applications have emerged that were not even imagined at the start of our research efforts.
For example, near-zero atmospheric emission systems, emitting minimal pollutants and carbon dioxide, are within our technical reach. In addition, gasification-based systems can be configured to produce clean hydrogen or liquid fuels, or a variety of petrochemicals, synthetic natural gas, or any combination of these products and electricity. Gasification-based systems are also projected as having the potential to produce these products at reasonable cost while using some of our most abundant domestic fuel resources—coal and biomass.
A variety of feedstocks, including coal, biomass, petroleum coke and residuals, or even waste can be gasified into a synthesis gas (or syngas) comprised mainly of carbon monoxide and hydrogen. From there a variety of pathways leading to a number of products are possible. But whether you are generating liquid fuels, electricity via combustion turbines, electricity via steam turbines, electricity via fuel cells, or hydrocarbon based products, gasification is the common technology at the heart of the process.—David Garmnan
To help with funding, the DOE has established a loan guarantee program for gasification projects.
Eastman Chemical. Eastman Chemical is a $7-billion global manufacturer and marketer of chemicals, fibers and plastics worldwide. It provides key differentiated coatings, adhesives and specialty plastics products; is the world’s largest producer of PET polymers for packaging; and is a major supplier of cellulose acetate fibers.
Brian Ferguson argued vigorously for commercial scale industrial implementations of gasification now, rather than a continued R&D focus to offset the rapidly rising energy and feedstock costs his company and the chemical industry faces.
My industry has experienced a cumulative $60 billion—that’s billion with a B—a $60 billion increase in our natural gas bill since the beginning of the decade.
...Dow Chemical Company...is currently building a $4 billion plant in Oman. This plant was originally going to be built in Freeport, Texas. But the high cost of natural gas in this country—which was 12 times higher in Texas than on the Arabian Peninsula—forced Dow to site it in the Middle East instead.
...Wide-spread deployment of sound, proven gasification technology is an important tool that can help keep currently-natural-gas-dependent globally competitive American industries in America.
Industry needs deployment of proven, commercial scale gasification technology now, not just more research and more demonstration projects that may, or may not be adopted by industry ten or fifteen years from now. While there is a need for future demonstration projects to validate key technologies, the real difference for America now is to assure that these incentives support investment in commercial-scale industrial gasification projects that are calculated to meet global competition so that these industries will still be contributing mightily to the American economy when those new technologies become available.
The BRI process, which can work with a variety of carbon-based feedstocks, can produce approximately 150 gallons of ethanol per dry ton of coal. Unlike other coal-to-liquids processes that use Fischer-Tropsch processing to produce liquid fuels, the BRI process releases little carbon dioxide to the atmosphere.
The only air emissions produced through our process will come when the ethanol we produce is combusted in an automobile by the end-user.—William Bruce
Econo-Power International (EPIC). EPIC builds, owns and operates industrial coal gasification systems. Bill Douglas argued that while the Energy Policy Act of 2005 is “a major step” in providing incentives to bring clean coal initiatives to the very large industrials and utility companies, it needs to be adjusted to better serve the small- and medium-sized business.
...these credits are restricted to certain industries and/or require that the fuel be used for a specific purpose such as the production of electricity.
This eliminates a large proportion of the US industrial base as potential users of synthetic fuel gas. The small- and medium-sized industrials are the companies having the greatest difficulty in dealing with the high price of natural gas and electricity used in their facilities. They are rapidly becoming non-competitive with other nations because of high energy costs.
These same companies are also reluctant to change energy sources from the tried and true natural gas and electricity infrastructure. For them, a commitment to change to a coal-based syngas will require some financial incentive. The way to provide these incentives is to modify EPACT to include the smaller industrials with incentives to use alternative energy sources such as Coal Gasification.—Bill Douglas
Agrium Kenai Nitrogen Operations (KNO). KNO is a manufacturing facility located in Kenai, Alaska, that relies upon natural gas as a feedstock to produce ammonia and urea fertilizers.
Bill Boycott told the committee that his company, unable to assure itself of a reliable, long term, reasonably priced supply of natural gas as the primary feedstock required for fertilizer production, is actively is evaluating the feasibility of constructing a coal gasification facility to produce the necessary hydrogen and carbon dioxide feedstocks for fertilizer production.
KNO has been confronted with ever deepening supply shortages since 2002 and acquiring and maintaining a steady supply of natural gas has been a challenge. Because of these shortages, long-term natural gas contracts are not possible and we now operate on year-to-year gas contracts.
Under these short-term arrangements we have been unable to acquire sufficient natural gas to meet our needs and, as a result, reduced our operations to 50% in 2005. This resulted in a reduction of 85 of our 230 full-time employees. This January, during a cold spell that significantly increased residential and commercial demand for heating, we were forced to shut down the entire operations for almost two weeks.
We only have an assured supply of natural gas for another six months, until October 31, 2006. If we are not successful in arranging additional supplies beyond that date we will be forced to shut down the plant on November 1, 2006.
In 2005, KNO initiated a two-year feasibility study to examine the use of gasification technology utilizing Alaskan coal and other appropriate indigenous fuel resources to produce the hydrogen, nitrogen and CO2 required to manufacture fertilizer. Components of the “Blue Sky” project include co-generation of power and carbon capture and sequestration for Enhanced Oil Recovery.
Like other witnesses, Boycott sought an robust enough implementation of the financial provisions of the Energy Policy Act supporting gasification to make the investment feasible.
NRDC. Acknowledging the likely necessity of coal gasification in the future, Antonia Herzog argued for appropriate investment in advanced technologies for the long term, and for energy efficiency and conservation of natural gas in the short term to address the high price and business issues raised in testimony before hers.
Coal has the advantages of being a cheap, abundant, and a domestic resource compared with oil and natural gas. However, the disadvantages of conventional coal use cannot be ignored. From underground accidents and mountain top removal mining, to collisions at coal train crossings, to air emissions of acidic, toxic, and heat-trapping pollution from coal combustion, to water pollution from coal mining and combustion wastes, the conventional coal fuel cycle is among the most environmentally destructive activities on earth.
But we can do better with both production and use of coal. And because the world is likely to continue to use significant amounts of coal for some time to come, we must do better...With the right standards and incentives we can fundamentally transform the way coal is produced and used in the United States and around the world.
...In particular, coal use and climate protection do not need to be irreconcilable activities. While energy efficiency and greater use of renewable resources must remain core components of a comprehensive strategy to address global warming, development and use of technologies such as coal gasification in combination with carbon dioxide (CO2) capture and permanent disposal in geologic repositories could enhance our ability to avoid a dangerous build-up of this heat-trapping gas in the atmosphere while creating a future for continued coal use.
...Current government policies are inadequate to drive the private sector to invest in carbon capture and storage systems in the time frame we need them. To accelerate the development of these systems and to create the market conditions for their use, we need to focus government funding more sharply on the most promising technologies. More importantly, we need to adopt reasonable binding measures to limit global warming emissions so that the private sector has a business rationale for prioritizing investment in this area.
...While coal gasification technology has been touted as the technology solution to supplement our natural gas supply and reduce our dependence on natural gas imports, the most effective way to lower natural gas demand, and prices, is to waste less
Gasified coal may have a role to play but in both the short-term and over the next two decades, efficiency and renewables are the lead actors in an effective strategy to moderate natural gas prices and balance our demand for natural gas with reasonable expectations of supply.
Some call coal “clean.” It is not and likely never will be compared to other energy options. Nonetheless, it appears inevitable that the US and other countries will continue to rely heavily on coal for many years. The good news is that with the right standards and incentives it is possible to chart a future for coal that is compatible with protecting public health, preserving special places, and avoiding dangerous global warming. It may not be possible to make coal clean, but by transforming the way coal is produced and used, it is possible to make coal dramatically cleaner—and safer—than it is today.—Antonia Herzog
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