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Shenhua Group Has 8 CTL Projects in Pipeline; Targeting 30M Tons per Year by 2020

16 June 2006

Shenhua1
Shenhua’s first direct coal liquefaction train is due to come online in 2007.

China Daily. Shenhua Group, China’s biggest coal producer (and the third-largest in the world) is planning eight Coal-to-Liquids projects that will produce some 30 million tons per year (about 600,000 barrels per day) of synthetic oil and products by 2020.

The first three of the eight projects will have a total capacity of 4 million tons per year, and are due to be completed by 2010. The eight plants will be built in Shaanxi, and the autonomous regions of Inner Mongolia, Xinjiang Uygur and Ningxia Hui. Shenhua is building both direct and indirect liquefaction projects. (Earlier post.)

The State-owned energy conglomerate is partnering with international companies, such as Royal Dutch Shell and Sasol on technology transfers.

“We have almost finalized talks with South Africa and will possibly sign a deal with them sometime next week,” Zhang [Yuzhuo] said, declining to give details of the accord.

China is forecasting that its oil consumption will increase to about 450 million tons (about 9 million barrels per day) by 2020—with 60–62% of that imported. Of that increase, China projects using 216 million tons of gasoline and diesel (about 4.7 million barrels per day) by 2020.

In 2005, China consumed 6.988 million barrels of oil per day, according to BP’s Statistical Review of World Energy 2006.

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June 16, 2006 in China, Coal-to-Liquids (CTL) | Permalink | Comments (22) | TrackBack (0)

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Sadly, it appear that peak oil will do nothing to stop China's determination to be an auto dependent society. Too bad they can't find some other symbol of affluence, of "having arrived".

The world of the future, especially China's future, won't be worth driving in.

At least the Chinese are smart enough to recognize that using oil for transportation would not only keep driving up the price. It would also expose the country to potential supply shocks and more importantly, lead to future diplomatic/trade/military conflicts with the West over access to energy resources. By relying on domestic coal instead, China avoids all of these risks.

The CTL process yields a synthetic diesel with no sulphur and a very high cetane number (low PM). China currently requries Euro 3 for new vehicles but could decide to require particulate filters on top of Euro 4 (expected ~2010).

On the other hand, coal - and especially, CTL - generates an awful lot of CO2. To compensate, Europe and Japan should encourage China to accelerate its deployments of renewable energy infrastructure for space heating/cooling, electricity generation and fuels. The US and Australia currently have no talking room in this regard.

Note that China is already fast becoming a leader in solar power. It also boasts some of the largest hydroelectric projects in the world, controversially so in the case of the Three Gorges Dam. That project's main objectives are flood control and, making the lower 2000 km of the Yangtze navigable for ocean-going ships bound for Chungking, the gateway to the 300m people living in China's interior.

Note also that all xTL plants differ mostly in the production of syngas; the downstream FT synthesis is essentially the same for e.g. BTL. The country's agricultural sector features massive low-cost labor resources and produces enormous quantities of biomass.

They will run out of coal by 2065 at this rate. Coal for electricity+CTL for organic compounds for fuels/ products means that they are going to use ever more coal. At an increased rate, they are going to run out of coal even sooner. Even if 60-80 mpg cars and combined cycle gasification plants+co-generation were built (60-80% efficiency vs ~35% currently), a one car per 3 person (400 million+ total) and mid-income consumption pattern would mean coal consumption would deplete chinese reserves by 2040. By then (if green tech/energy does not take off), it would be importing shiploads of coal from Austrailia (and elsewhere) at roughly 2+ billion tons a year; 55+ ultra large bulk carriers a day! All the while, the GHGs and pollution must be dealt with. Add to that, India.

If my arithmetic is correct this represents about half a million barrels per day. This won't come close to replacing oil depletion expected by 2020. If this is the world's biggest CTL project the damage may be limited.

What happens to the slug or waste products generated by this type of plant?

This, I hope, shall only be a short-term strategic move to ensure that China won't be taken energy-hostage of by unfolding events in the world, especially after the hostile take-over of Iraq and the on-going threat of Iran undergoing similar fate. This is a far more peaceful move than the Iraq invasion (Operation Iraqi Liberation, or O.I.L. for short). Otherwise, there are plenty of oil left in the world that can be extracted at very low cost, except that we are being price-gouged by OPEC for their own enrichment. I'm quite sure that China knows that. Thus, even a slight slackening of oil demand such as this CTL plan can reduce the price-gouging to a significant extent. Otherwise, only a true commitment to renewable carbon-neutral fuels such as hydrogen, methane, PHEV, EV, and may be to a smaller extent, BTL, can we avert the looming environmental catastrophe.

That is a HUGE complex!

China is just doing the exact same thing that the United States is doing: Playing the hand that it was dealt to the best extent. If you have oil, you use oil. If you have coal, you use coal. What happens if you need oil, and you don't have any? You pull some CTL voodoo and make petrochemicals.
Either way, solar/wind produced hydrogen (which is still barely visible over the horizon) is the only way, in my opinion, we will slow the downward spiral. Until then, the single source of clean transportation is active transport.
So, ride a bike.

The silver lining may be that we run out of fossil energy. Either that or large numbers of xTL plants that may be converted over to biomass (waste or crops) feedstock after fossil carbon runs out/becomes uneconomical. The syngas conversion step is the key to making a whole plethora of chemicals with Carbon, Hydrogen, and Oxygen (and Nitrogen since it is common and cheap).

Allen, there is a lot of fossil energy left, believe it or not. By the time we run out of fossil energy, the world will be so hot and so messed up that it won't be worth living on it any more. Look at it this way, when the earth was formed before life came about, there was no oxygen, only methane, CO2, ammonia, and few other gases. Life forms produced O2 to the level we have today, and the carbon in the CO2 was sequestered into fossil fuel and into limestone (carbonated rocks) in the ocean and earth crust. So you can see that there are still a lot of sequestered carbon in coals, gas and petrol.
No, we must start renewable energy development TODAY. There no time to waste.

“THE Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” Sheikh Zaki Yamani, former Saudi Arabian oil minister.

If it's not global warming, it will be the supply risk due to local politics in the oil producing countries and, tensions between oil consuming nations that prompt a shift toward renewables. Let's just hope we skip nuclear on the way there.

http://www.economist.com/opinion/displayStory.cfm?story_id=2155717

Actauly people greatly underesimate how much coal the us and china have. It was estimated that even if we were to covert coal and coal alone into liquid fuels to replace all oil we use now our coal would last 250 years. More then enough time to come up with better tech. And we dont plan to use that much coal. Nore do the chinese tho they admittedly have more people and less coal.

BECOMES UNECONOMICAL! That means that one or more of the following happens:
1) Fuel prices go ever higher; we already see a historical pattern more or less. I have come upon investment research that shows that oil prices grow (usually decade long) and stabilize (2 decades) over decades. They also show that oil prices do not retreat to, and stay at, previous levels after the rise phase for significant periods of time. This may be hard to see on charts due to rapidly fluctuating prices, (and the abberation of the late 90's due to the Asian financial crisis on inflation adjusted charts) but since the 70's, the price of oil has been above the levels of the 50's & 60's. We are now entering another period (decade, back dated to 2002-2003) of ever higher prices. The prices of crude oil would have to go a: $95+ a barrel to impact energy heavy/transport industries b: for the rest of US, it would be ~40% higher; $134+ a barrel.
2) Biofuels become cheaper to produce/run on. Either through straight economics, or govt. subsidies/taxes. IF you can make large quatities of the fuel at lower per mile costs (BTU, efficiency), then you can displace oil as a major fuel. Preferably, this would also be environmenally friendly. This is where xTL come in; they have the syngas step built in. Whether it (x) be natural gas, or coal, or whatever, it may be converted over to biomass fuels.
_
____Electricity may be produced for land transport/ hydrogen reasons, but if we go the route of photovotaaic cells, I can see fights over rare/exotic metals, and semi-metals. By the way, many deposits of these elements are in Africa, and other 3rd world/developing nations. Concentrator dishes with sterling engine generators may do the job, but they would either be 30%+ less efficient, or be very large large facilities (like Solar One) to get something close to 50% solar efficiency.
_
____On a side note, what happens if we strip enourmous amounts of CO2 out of the atmosphere?

____On a side note, what happens if we strip enourmous amounts of CO2 out of the atmosphere?

Let's cross that bridge if/when we get to it.

If all else fails all that will happen is america will string a wire mesh grid over every major road and power cars and trucks and such directly much like trams. Its far from elegant but it does actauly work.

Allen, xTL is OK for a limited number of vehicles, but we have far too many vehicles, too great consumption. Hitler tried CTL in WWII when his petrol suply was cut off, but did not produce no where near the amount of petrol that he needed to fight the war. You're right about the battery route requiring exotic materials, thus ending in shortage if cars are to use batteries en masse. So, what's left? Just use renewable methane and hydrogen right after you produce it. Pure and simple. Trucks use LNG and cars use Compressed Hydrogen or CNG for daily commute. Cars can also use CNG or LNG for long-distance trips. Jet planes can use LH2 or LNG as would rockets. Future Hypersonic Scramjet planes of course cannot use anything else but LH2, that can go from NY to Tokyo in 2 hours. Those who do not want to convert their vehicle to methane or H2 can still buy xTL fuel (synthetic liquid fuels), but of course at higher prices that just reflect the extra energy cost, facility cost, extra steps and labor involved. Don't forget the extra cost due to the potential pollution associated with any xTL plant, including oil spills, chemical leaking to the ground, and polluting by-products that must be gotten rid off, and additional GHG released?

What will be needed will be all the world leaders of a G8 summit meeting get together and declare to go a step beyond Kyoto. To lay down a plan, protocol, and commitment for phasing in the renewable methane and H2; and xTL synthetic fuel economy that every G8 members or even better, all the industrialized countries, G8 or non G8, can abide by. This will remove economic disincentive, disadvantage, and inertia for a few countries to start on the journey alone, or unilaterally, while waiting for the rest of the world to catch up.

Hitler tried CTL in WWII when his petrol suply was cut off, but did not produce no where near the amount of petrol that he needed to fight the war.
Some people have the amazing ability to read anything in history, regardless of what actually happened. Hilter lost the war due to a fuel shortage? I don't think so! Also note that South Africa has been producing CTL for ~50 years. Profitably, as well, as long as oil prices are above $35/bbl. In other words, very profitable for the last few years.

By the time we run out of fossil energy, the world will be so hot and so messed up that it won't be worth living on it any more. Look at it this way, when the earth was formed before life came about, there was no oxygen, only methane, CO2, ammonia, and few other gases. Life forms produced O2 to the level we have today, and the carbon in the CO2 was sequestered into fossil fuel and into limestone (carbonated rocks) in the ocean and earth crust. So you can see that there are still a lot of sequestered carbon in coals, gas and petrol.
Roger, there is something I don't understand. According to this theory, when earth was formed GHG were several orders of magnitude higher than today. What was the surface temperature at the time? 800°C? Yet somehow life got established and produced the relatively pleasant atmosphere we have today.

If that is true, why worry? The worst thing that could happen is that we go back to the orginal conditions and everything starts over again. True, we are going to need a lot of A/C at 800°C. But, even with minimum effort we can avoid that.

The point is that, according to this theory, life got established under the worst conditions imaginable. Far worse than man could ever create. So the existing natural system should be quite capable of correcting the relatively minor disturbances we are creating right now...

Yeah, right, Mr. Engineer. It won't be human life, nor even mammals. May be the dinosaurs will roam again.

Mr. Engineer, w/r/t CTL, Hitler did not have enough fuel to maintain his war effort to the level that he wanted. His aircraft fighters has to scrub their missions due to fuel shortage. His Russian campaign didn't help either, due to a vast supply logistic failure. Napoleon has said to the effect that an army can go only as far as their supply line.

Just because South Africa has been profitable at CTL does not mean that that process can supply most of our humongous petrol demand. Coal is already very valuable in the production of over 50% of our electricity and other industrial processes, including steel making. More coal strip mining and more environmental disasters? More environmental pollution due to increase use of Coal?

today in india we r facing fuel and power problems and still using animals like baffelos etc , for agriculture and transportation, solar energy is the only solution in coming days.

Anyone has the biography of Mr. Chen PiTing (chairman of the Shen Hua Group Corporation Ltd) ??

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