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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.

BRI Energy. William Bruce spoke of BRI ENergy’s readiness to commercialize its gasification-fermentation process for producing ethanol. (Earlier post.)

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

May 2, 2006 in Coal, Coal-to-Liquids (CTL), Gasification, Power Generation | Permalink | Comments (7) | TrackBack (0)

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The transition from mineral to synthetic fuels will likely have to happen in two phases, to limit both cost and investment risk.

First, an infrastructure to produce and distribute such fuels (xTL, but also methanol and/or DME) has to be set up. In this first phase, the synthesis gas will be produced from natural gas or coal, depending on what is readily available in a particular location. As this new branch of the chemical industry ramps up, CO2 sequestration will feature ever more prominently. Note that measures to reduce CO2 production in sectors other than transportation (e.g. industrial processes, home heating/cooling) have the same net effect as sequestration.

Second, the feedstock must be shifted to biomass, to limit the overheads due to sequestration efforts. The downstream infrastructure for the synthesis gas will by then already be in place. This is not to say that work on biomass gasification should not proceed as fast as possible - rather, we should not use the GHG issue as an excuse for doing nothing at all on an industrial scale until biomass is ready. It will take advances in crossbreeding/GM as well as substantial improvements in energy efficiency before biomass can ever satisfy more than a small fraction of total transportation fuel demand.

Better, therefore, to decouple the implementation phases of the upstream and downstream portions of the eventual synthetic biofuels chain.

Rafael,
You are one of the straighter thinkers on this site. Nonetheless, I am going to take issue with some of your statements above:
First, an infrastructure to produce and distribute such fuels (xTL, but also methanol and/or DME) has to be set up.
Why go through all the cost of replacing infrastructure? It makes a lot more sense to convert syngas to the same diesel, gasoline and petrochemicals we are all familiar and comfortable with. As I pointed out before, SASOL has been doing this in South Africa for more than 50 years.

As this new branch of the chemical industry ramps up, CO2 sequestration will feature ever more prominently. Note that measures to reduce CO2 production in sectors other than transportation (e.g. industrial processes, home heating/cooling) have the same net effect as sequestration.
I doubt that sequestration can be done in a cost effective and energy efficient way. How many pounds of CO2 do you produce for every pound of CO2 captured?

As you point out, increasing efficiency and switching to biomass will achieve the same outcome - in an affordable and efficient way.

...until biomass is ready. It will take advances in crossbreeding/GM as well as substantial improvements in energy efficiency before biomass can ever satisfy more than a small fraction of total transportation fuel demand.
Not so fast, big guy! There is a lot of biomass available: 40% of landfill waste in the US is paper. And that 40% is growing as the "paperless" office concept spreads. Can hardly think of a better feedstock for gasification than paper. In general, waste is a great untapped resource for gasification. And using waste solves a disposal problem. It also improves the economics: in most cases you can charge a tipping fee for accepting waste.

What people should understand, is that when you grow a crop for fuel, it does not make a lot of sense to grow a crop where you are only going to use a small fraction of the total plant, like the seed (e.g. corn ethanol, soy biodiesel). Rather, you should graw a crop where you can use as much of the plant as possible (e.g. cane ethanol, algae).

Better, therefore, to decouple the implementation phases of the upstream and downstream portions of the eventual synthetic biofuels chain.
I would say the way to go is to start with waste in locations that make sense, such as the landfill of a big city. Once you are recovering a significant portion of all waste, it would be time to start looking for a dedicated energy crop.

The ideal energy crop would be an integrated affair: Grow algae in partially treated sewage. The algae becomes part of the treatment process, with clean water a nice byproduct. No need for fertilizer, sewage is loaded with all the nutrients needed. And after gasification, the bulk of the nutrients can be recovered from the ashes of the algal biomass.

It would further be beneficial if the algal pond can be located near a major CO2 emitter. In most cases plant growth is limited by the available CO2. Scrubbing the offgas from an indrustrial complex using the algal soup would capture a lot of the CO2 as well as other nasties (NOx, SOx).

That's how I think we should proceed. Unfortunately, it seems the average politician (and we don't seem to have any that would be called above average) cannot understand that there is a difference between biofuel produced from food (another farm subsidy) and biofuel produced from waste (win-win).

I'd argue that we should go for the option which has the greatest efficiency while requiring the least new infrastructure:  electric propulsion, starting with PHEV's.

This works perfectly with the BRI process, because it co-produces electricity and liquid fuel.  As the energy mix changes, it can be adapted to burn the syngas to produce more electricity rather than fermenting it.  Stationary electric generators can be made far more efficient than vehicle engines.  Last, the use of electric propulsion allows the use of non-chemical energy supplies such as nuclear, wind, solar and hydro to run transport.

No scheme that sticks to liquid fuel allows such flexibility, and if there's anything we're going to need for an uncertain future it's flexibility.

I'd argue that we should go for the option which has the greatest efficiency while requiring the least new infrastructure:  electric propulsion, starting with PHEV's.

This works perfectly with the BRI process, because it co-produces electricity and liquid fuel.  As the energy mix changes, it can be adapted to burn the syngas to produce more electricity rather than fermenting it.  Last, the use of electric propulsion allows the use of non-chemical energy supplies such as nuclear, wind, solar and hydro to run transport.

No scheme that sticks to liquid fuel allows such flexibility, and if there's anything we're going to need for an uncertain future it's flexibility.

Flexibility is good and I like PHEV's. You seem to be assuming that future electric power will be clean. I am not convinced it will be.

Liquid fuels offer important benefits over electricity, such as easy storage, rapid refueling, etc.

Also, note that due to fluctuating supply, you will need some form of storage if you plan to use a large portion of wind or solar electric power. Storing electricity means batteries. Batteries mean chemicals.

You seem to be assuming that future electric power will be clean. I am not convinced it will be.
A million exhausts Are not so easy to clean As one powerplant.
Liquid fuels offer important benefits over electricity, such as easy storage, rapid refueling, etc.
We've got ultracapacitors which can store multiple megawatt-hours in the volume of a 2-car garage, and batteries like the A123Systems cells which can charge to 80% in one minute.  In contrast to the rapidly-shrinking difference in benefits, the drawbacks of liquid fuels are not likely to vanish any time soon.
due to fluctuating supply, you will need some form of storage if you plan to use a large portion of wind or solar electric power.
No I don't.  If I've got a grid full of BRI biomass-to-energy converters, I can shift syngas from fermenters to gas turbines during periods of low wind and I can power down the whole system and let feedstock pile up when the wind is blowing hard or the sun is shining.  The tanks of liquid fuel represent days or weeks of buffer capacity which lets the gasifier/generator system run to follow the load curve.

Besides, if you've got EV's or PHEV's you've got hours of battery capacity anyway.  In typical commuting use, you don't care when you charge it as long as it's ready by the time you need it next.  It doesn't even have to be fully charged as long as it will get you where you want to go.  This is the demand-side manager's wet dream.

Engineer-Pöet's approach would allow progressive weaning of the current liquid fuel addiciton for our vehicles and domestic needs. PHEVs could be an excellent phased approach to EVs, requiring higher performance energy storage devices.

The electric energy infrastructure already exist and could meet increased night demands with minor upgrades. Producing the extra electric energy required for PHEVs and EVs is definately NOT a difficult problem for an advanced rich nation such as USA. There are so many proven and up-coming sustainable technologies available to produce electricity. Of course, waves, wind, solar and biomass could all contribute to progressively replaced imported fossil fuel.

Predominantly electric and pure electric vehicles are inherently more efficient, quieter and produce less air pollution than ICE vehicles. Using the same type of energy (electricity) for our transportation and domestic/home needs would be an advantage. Every house could eventually have a 50 KWh or 100 KWh compact storage device to allow in-house sun/wind power production and storage and eventually be freed from oil/gas and power companies.

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