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China to Invest $128 Billion to Develop Coal-Based Synthetic Fuels
14 December 2006
Xinhua. China will invest more than one trillion yuan (US$128 billion) to develop alternative coal-based synthetic fuels to ease the country’s dependence on oil imports, according to the National Development and Reform Commission (NDRC).
The project aims to produce 30 million tons of liquefied coal and 20 million tons of dimethyl ether (DME) by 2020. Coal-to-olefin (CTO) output is expected to hit 8 million tons and coal methanol to reach 66 million tons.
The money will also be spent on building seven industrial bases nationwide to produce coal-based energy source on a massive scale, including the biggest alternative fuel production base in the lower reaches of the Yellow River.
Xinjiang is projected to produce 10 million tons of liquefied coal, and the eastern region of Inner Mongolia will become the major methanol supplier, with an annual capacity of 10 million tons.
A pipeline, at a cost of five billion yuan, will be built to transport 10 million tons of methanol a year from Inner Mongolia to the northeastern Liaoning province.
In July 2006, the Chinese government determined that it would not approve coal liquefaction (Coal-to-Liquids) projects with an annual production capacity of less than three million tons; coal to methanol or dimethyl ether (DME) projects of less than one million tons; and coal-to-alkene projects of less than 600,000 tons, according to a circular released by the National Development and Reform Commission (NDRC). (Earlier post.)
December 14, 2006 in China, Coal-to-Liquids (CTL), DME, Methanol | Permalink | Comments (31) | TrackBack (0)
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What are the odds they'll sequester the extra CO2? (I'm pretty sure I know the answer to that one already.)
Posted by: Neil | Dec 14, 2006 9:56:03 AM
Perhaps, at least they will be competing less on the world market for peak oil in the future.
Posted by: SJC | Dec 14, 2006 10:30:36 AM
China will let nothing stop their determination to build an auto based society so that they can fully experience the joy that America has had all these years living the high life in the fast life. They are determined to have the "good" life regardless of the consequences. When it comes down to choosing between the car and the planet, the Americans and the Chinese will choose the car every time, hands down.
Future generations can go eat algae.
China had the opportunity to build a sustainable society and increase the well being of their citizens at the same time. Instead, they have decided that the fun factor of the automobile overrides any considerations of livable cities, smog, global warming, water shortages, and all the other nasty things that we can just let the future citizens of the planet worry about.
Hmmm. $128 billion. Well, I guess you have to get them credit for realizing how unsustainable their given course is given the existence of peak oil and all the resource wars that problem implies.
Posted by: t | Dec 14, 2006 10:37:06 AM
Talk about sending the wrong signal. I suspect low cost Chinese manufacturing was a reason consumers enjoyed low prices for the last decade. Now it has unleashed an environmental monster and a backlash is looming. Then again the West has no moral authority to complain as the Chinese are only just catching up.
Even if the process CO2 was sequestered (which it won't be) there is still the tailpipe CO2.
Posted by: Aussie | Dec 14, 2006 12:10:50 PM
Well perhaps the rest of the world will have to end up slapping carbon taxes on their chinese imports. That is, after the rest of the world adopts a carbon price!
Posted by: marcus | Dec 14, 2006 1:20:23 PM
China has also been highly criticized for keeping their currency highly undervalued, which has the effect of increasing their industrial sector more than would occur otherwise.
The Chinese won't do anything that threatens their economic growth. That's not really a shock.
Posted by: Cervus | Dec 14, 2006 1:33:05 PM
posting errors
Posted by: allen_Z | Dec 14, 2006 1:44:22 PM
Mike,
What is up with this spam block? I can't post my comments.
Posted by: allen_Z | Dec 14, 2006 1:45:43 PM
Neil,
The CO2 might be piped for enhanced petroleum recovery.
Posted by: allen_Z | Dec 14, 2006 1:47:13 PM
The silver lining might be that there will be a massive installed capacity for conversin of carbon/hydrogen rich material into fuels/chemicals.
_The caveat is that it may be decades before this transition takes hold. Furthermore, the PRC may not have enough land to do this, even with algae and all human, animal, agri/forestry and other biomass wastes combined.
Posted by: allen_Z | Dec 14, 2006 1:55:39 PM
Allen:
The latest issue of Nature is devoted to biofuels and other alternatives like CTL. They mention that a combined CTL/BTL facility would still reduce net CO2 and act as a bridge to full BTL.
Posted by: Cervus | Dec 14, 2006 2:38:01 PM
This might not boost CO2 emissions very much.
China has huge pollution problems (according to both statistics and my son who has been there several times) but they are talking of changing course. Of course it is just talk for now.
The Chinese want growth but they also like 'showcase' projects. Their cleanup efforts are likely to focus on keeping the 'latest and greatest' activites very clean while allowing older industries to continue polluting heavily.
Posted by: K | Dec 14, 2006 3:00:30 PM
To their credit, China is putting in light rail for Beijing and Shanghai. These will probably be the largest subways in the world, and one of the goals is to make driving around the city slower and less appealing than taking the train.
However, cars will probably increase anyway. If they get anywhere near the US car density of ~0.77 cars/person, that's over a billion cars and we're in deep trouble, especially if they're big cars.
Finally, CTL and CTO take a lot of hydrogen, C to DME and C to MeOH take even more. Where is the hydrogen going to come from?
Posted by: ad | Dec 14, 2006 3:18:49 PM
Finally, CTL and CTO take a lot of hydrogen, C to DME and C to MeOH take even more. Where is the hydrogen going to come from?
From the water that is reacted with the coal, and from the coal itself (which has approximately one hydrogen per carbon, ignoring the water content.)
The CO/H ratio of the syngas can be adjusted by the water-gas shift reaction:
CO + H2O <--> CO2 + H2
Posted by: Paul Dietz | Dec 14, 2006 4:37:24 PM
ad,
"Where is the hydrogen going to come from?"
Very relevant question. The H2 comes from gasification of coal or biomass, resulting in H2 and CO. If the hydrogen economy is in place, one can stop right there and use the H2 for all kinds of energy needs. Very efficient and very low pollution. The heat resulted in the gasfication process can be recycled to produce electricity via steam turbine thus preventing energy wasting.
However, for now, additional steps will be necessary for Fischer-Tropsch synthesis to produce liquid fuels for current vehicles. This will entail considerable more complexity, cost, lower energy efficiency, and considerable more environmental pollution. The increase in pollution is per a recent GCC article comparing the pollution problem of current petroleum usage vs. replacing that with CTL products.
This is another argument for the eventual hydrogen economy, supplemented by crops of PHEV and BEV as well. Only electric vehicles and H2 vehicles will deliver pollution-free transportation that can make transition to the eventual all-renewable energy economy seamless. For now, generate H2 and electricity from coal or NG. For future, generate H2 and electricity from biomass, solar, or wind energy. Once the investment toward Hydrogen and electric vehicle infrastructure is made, hopefully sooner rather than later, our transportation energy security will be in much better shape!
CTL machinery now will allow China to easily switch to H2 production when the hydrogen economy is all in place. Tremendous progress is being made in H2 storage, generation and utilization that no doubt, one day we all will get to enjoy pollution-free transportation, as well as home heating and all industrial energy consumption!
Posted by: Roger Pham | Dec 14, 2006 6:10:46 PM
Also, CTL machinery and process will ensure much more rapid adoption of Clean Coal Technology, that, so far has not seen much use due to its high cost.
Instead, coal-fired powerplants are spewing out untold amounts of mercury and other pollutions into the air that we breath. The mercury will poison our future generations. How many people can remember the term "Mad as a hatter" when mercury was used in leather tanning for making leather hat? The Roman empire's decline, some historians blamed it to lead poisoning from the use of lead cup for wine consumption and lead pipes.
Hopefully, future historians won't get the chance to blame the demise of our civilization from mercury poisoning of the fetal brain development, causing new generations of mentally inferior people! May be it is already happening!!! Intense summer heat is not good for the brain, either! That's why most intellectual centers world-wide are located in colder climates. Heat can cause brain damage and predilection toward violence, and global warming ain't helping it, either!
Posted by: Roger Pham | Dec 14, 2006 6:26:23 PM
Extra H2? If they are gasifying coal, they have lots of carbon. So they take what they need to make what they want and decide what to do with the rest.
Posted by: SJC | Dec 14, 2006 7:31:05 PM
Allen: re piping CO2 for EOR. Are there any depleted oil wells in the area? Might be better off doing some algae farming.
Posted by: Neil | Dec 14, 2006 7:37:11 PM
In the end, will this $128 billion project produce more than half the GHG that the USA/Canada coal fired power plants already produce?
Being about the worse per capita polluters, we are not in a (good) position to judge others.
When China + India + Brazil + others with large population emit as much per capita GHG as we already do, it may be the proper time to quickly move to higher grounds.
OTOH, we could show the way and do as Germany has done, i.e. more (better) than Kyoto by a wide margin. However, there is no hope that it will happen, at least in Canada, with GHG at +24% instead of -12%.....
Posted by: Harvey D. | Dec 14, 2006 7:51:32 PM
From the water that is reacted with the coal, and from the coal itself (which has approximately one hydrogen per carbon, ignoring the water content.)
That's a pretty high hydrogen content coal (more like kerogen), but anyway ... that leaves a lot of carbon which either turns into CO2 or must be sequestered. H2 from water takes a lot of energy input, and more importantly, where's the water going to come from? BTL has the right C:H ratio to start with, but there's no excess H for CTL.
Posted by: ad | Dec 14, 2006 8:07:00 PM
more importantly, where's the water going to come from?
The water requirements for the chemical processing itself are modest. Almost all the water used in a CTL plant will be for evaporative cooling, unless they decide to pay a bit more for 'dry' cooling systems.
Posted by: Paul Dietz | Dec 14, 2006 8:51:18 PM
Harvey:
Don't forget that the majority of Germany's CO2 cuts came from shutting down the horribly inefficient Soviet-style industries that dominated the former East Germany.
Posted by: Cervus | Dec 14, 2006 9:57:01 PM
Harvey,
You are right that we must look at ourselves when judging others, and I wonder what percentage of China's energy consumption ends up on North American shelves.
I suppose all the plastic junk from WalMart that ends up in the land fill can be called a form of carbon sequestration.
Posted by: John Schreiber | Dec 15, 2006 2:47:34 AM
Cervus:
And the free lunch already ended. Despite massive measures (renewable electricity, increased use of NG, switch to diesel powered cars, more energy efficient homes and industry), German energy related CO2 emissions are practically unchanged from 1999 to 2005 at approximately 845 Gt.
Posted by: Andrey | Dec 15, 2006 2:50:03 AM
Still 1/4 of the Oil goes to power generation and heating, and if that Oil is replaced with some other fuel, that part could be better used for vehicles.
China has no other way, but to follow the Coal route and US and India are going to follow it.
Posted by: Max Reid | Dec 15, 2006 3:01:11 PM
we are so screwed
Posted by: Matt | Dec 15, 2006 3:18:31 PM
Neil,
Northern mainland China has many oil fields, most aging/declining. That is roughly 100-300mi from the coal rich regions. There is already infrastructure in place, for transport of coal, since many eastern cities have coal fired plants that need to be supplied, in order to keep a steady supply of electricity to the booming eastern/coastal areas.
ad,
In fact, they are in a transformation. Shifting from living in areas, with lifestyles that do not require them to travel much (on foot or bike) for day to day living, to a more car/rapid transit based model, many now travel miles to jobs, and to shop. However, many citizens in mainland china, even in wealthier areas, still walk. In larger cities (1+ million urban), sidewalks of main thoroughfares (4 or more lanes) are akin to those of Midtown here in NYC. Many intersections have elevated crosswalks, in the form of a large ring, to alleviate safety and traffic issues.
_Subways, even in the PRC, are expensive (>$1 billion/mile tunnel), and will face earthquake induced liquifaction issues. They do have the financial reserves, but the leadership appears hesitant to invest large chunks of it. Fear of overheating the economy is one reason. Building a rainy day/bailout fund is another. Projects that do get approval/funding often are high visibility megaprojects. This article notes one such high priced/high stakes endeavor. River diversion is another. Creation/expansion of subway/rapid transit systems in the biggest metro areas (>5 million urban) will be a third way to invest the funds.
Posted by: allen_Z | Dec 15, 2006 9:32:31 PM
Centre for Management Technology ( CMT )presents a complete and up to date overview of the industry, CTLtec 2007.
Global trends of Coal-to-liquids, Coal Gasification and Coal-to-Chemicals, DME, MTO, Fischer-Tropsch process will be covered + features key organisations and senior decision makers, providing attendees with exceptional networking and business opportunities.
A must attend event for your 2007 calendar. Don’t hesitate!
Register online @ http://www.cmtevents.com/events.aspx?EV=070317&PG=sy&FL=mar with your team
Posted by: May Chow | Dec 20, 2006 3:12:04 AM
The Chinese are working hard to improve their energy problems. For more information about DME, vist www.altfueltechnology.com
Posted by: Alternative Fuel Technology | Jan 23, 2007 12:22:05 PM
There are developments in DME/MEthanol in China today:
Access to methanol, a key primary input, to manufacture DME , Xinao recognise this and JV with Methanex to grow the DME Business. While there are several technology developments recently for selective production of olefins, especially propylene either from methanol or from DME. UOP and Lurgi are fairly advanced in the technology. In fact Lurgi AG, will be sharing their experience at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:
DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia
Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.
Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe
Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation
For more information: www.iceorganiser.com
Posted by: Cheryl Ho | May 22, 2007 10:39:46 PM
China is already most advanced in commercial use of DME as a mixture with LPG. China is mainly interested in DME production from their own coal resources as national policy. South Korea is also interested in DME. As KOGAS is predominant in handling gas in South Korea , MOU for market study in South Korea has been signed between TOTAL and KOGAS quite recently. Their interest of DME is for LPG market as well as fuel for diesel trucks.
If you would like to know more on the latest DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:
DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia
Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.
Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe
Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation
For more information: www.iceorganiser.com
Posted by: Cheryl Ho | May 23, 2007 8:16:36 PM
