Green Car Congress: US Representatives Introduce Coal-to-Liquids Legislation; CO2 Restrictions Part of the Proposal

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US Representatives Introduce Coal-to-Liquids Legislation; CO2 Restrictions Part of the Proposal

12 May 2007

Representative Rick Boucher (D-VA), Chairman of the Energy and Air Quality Subcommittee, and Representative John Shimkus (R-IL), this past week introduced a bill to promote the use of coal-to-liquids (CTL) transportation fuels. The legislation would establish price certainty to provide incentive for investment in CTL facilities.

The legislation introduced by Representatives Boucher and Shimkus would enable the Department of Energy (DOE) to enter agreements with up to six coal liquefaction projects for the purpose of establishing price parameters which will provide the projects with a federal price guarantee.

Under the legislation, if the price of crude oil falls below an agreed upon price— approximately $40 per barrel—the federal government would make a payment to the facility owner, thereby establishing a price floor for the facility’s product. Analysts consider $40 per barrel the threshold at which CTL becomes economic.

Conversely, if the price of crude oil were to rise above a certain ceiling, upwards of today’s market price per barrel, the facility operator would be required to make payments to the federal government. The legislation was established with both a floor and a ceiling to provide the necessary financial certainty to encourage the launch of coal-to-liquids projects while simultaneously insuring that participating facilities are not able to reap windfall profits simply by virtue of their participation in a program which lends federal backing in certain circumstances.

The exact price levels for the floor and ceiling as well as the amount of the payments would be established as part of each project’s agreement with the Department of Energy. In addition, the legislation requires that in order to qualify for this federal guarantee, each project must be certified as producing a fuel which has life cycle CO₂ emissions of at or below the levels of a comparable petroleum-based facility.

Multiple lifecycle analyses (LCAs) of different transportations fuels point to standard coal-based Fischer-Tropsch fuels (FT CTL) as having the worst Well-to-Wheels (WTW) greenhouse gas profile. The recent study done by the University of California for the California Low Carbon Fuel Standard (LCFS), for example, calculated the emissions of CTL transportation fuel on a full lifecycle basis to be 214 g CO₂ equivalent per MJ—2.3 times the impact of conventional reformulated gasoline or diesel. (Earlier post.)

Results of the INL-Baard study. Click to enlarge.

However, the US Department of Energy’s Idaho National Laboratory (INL) has just published a study modeling the greenhouse gas emissions of Baard Energy’s Ohio River Clean Fuels CTL project currently under development in Wellsville, Ohio.

The Baard project will co-feed the gasifiers with 30% biomass and 70% coal, and capture CO₂ for sequestration. According to the year-long INL study, the Baard CTL fuels will yield 46% less emissions of greenhouse gases than conventional low-sulfur diesel transportation fuels. All emission reductions documented in the study were measured on a wells-to-wheels basis using the Argonne National Lab GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) model of transportation fuels.

Resources:

Life-Cycle Greenhouse Gases and Urban Emissions from Fischer-Tropsch Diesel Fuels Derived from Coal and Biomass (Presentation)

May 12, 2007 in Coal-to-Liquids (CTL), Emissions | Permalink | Comments (37) | TrackBack (0)

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Comments

A price floor and ceiling seems like a good idea to me. I suppose that there are some downsides to such a structure and some might call them a form of subsidy, but when the private sector does not do what needs to be done for the country, this is one way to do it. Maybe whether is it SBA, FDIC, student loans or other forms of government insurance, this is what the Federal government can do to help things along. They can become the insurance company to the nation when no one else will at a reasonable price to get things done that the nation needs to get done.

Posted by: SJC | May 12, 2007 12:42:12 PM

___While the're at it, put in a floor price for gasoline, diesel, jet fuel, and other refined products too. For gasoline and diesel, $2.00-$2.55/ga (based on the regional/local std./cost of living) should be a good start. Increase the floor price yearly at the rate of inflation plus 5%. This would, more or less, create a predictable upward tick in fuel prices, and drive consumers to make choices. Such a floor price would provide for a way to foster all forms of alternative energy and efficiency improvement technology, not just specific efforts, like the CTL's above.

___The choice to go with CTL must be tempered with a viable plan for conversion to BTL and carbon sequestation/conversion (algae or solar thermalchemical conversion).

Posted by: allen_xl_z | May 12, 2007 2:16:21 PM

SJC:

The problem is that when those ventures fail, it's taxpayers who foot the bill. And when you involve public money like that, then it becomes a political issue rather than something that takes place between private entities.

Even without sequestration the Baard project looks promising indeed, from both a CO2 mitigation and energy security standpoint. It's a step forward to using biomass alone for xTL projects.

Posted by: Cervus | May 12, 2007 2:17:44 PM

Apart from the GHG angle I think SUV drivers will feel uncomfortable (or maybe not) with the amount of above-ground destruction going on to make CTL. In contrast oil is like drawing blood with a needle, a lot less visible. So CTL could actually create pressure to reduce liquid fuel demand.

Posted by: Aussie | May 12, 2007 2:41:29 PM

Can you say Carbon Tax, America?

"P-P-P-Pork!"

No, try harder.

Posted by: jcwinnie | May 12, 2007 4:28:18 PM

Coal... hmmm, such a destructive process.

Maybe the solution is to drink more sake?
http://news.yahoo.com/s/nm/20070511/lf_nm/japan_ethanol_dc;_ylt=AqXggRQk5PoixG7fz.nzg.Vg.3QA

Posted by: Michael | May 12, 2007 5:36:38 PM

The irony is that if enough of alternatives, including CTL, get put on the market--and the industries developed so they're poised to be able to quickly double again, threatening the Arabs--they could tame the price of oil and actually make having to pay out on that price floor a possibility. That would be money well-spent for the government, since it will save on all kinds of things including war. However, this prospect threatens biofuel investments. Even though biofuels are much better on GHG's than CTL even with sequestration at the plant.

So why not offer the same price band deal to biofuel makers, except with an additional credit for them to account for CO2 (until a carbon tax does this more straightforwardly)?

Posted by: P Schager | May 12, 2007 6:52:38 PM

This has nothing to do with ventures, it is price floors. If there were price floors for other energy commodities, perhaps there would be more investment, exploration and development.

How much has the tax payer had to pay for failure in Iraq...$500 billion..how much for the Savings and Loan mess...$500 billion..and some would complain about maybe 1/1000th as much for an investment in our future that did not quite work out?

Posted by: SJC | May 12, 2007 6:54:20 PM

This doesn't seem to be a price floor so much as: The Government agrees to pay the companies the difference between $40 a barrel and $40-$X, where $X is the price of oil under that amount. It more guarantees profitability should oil prices drop like a rock (unlikely). If oil dropped to $38 a barrel, then they'd get $2 a barrel.

Frankly, the price ceiling worries me far more. If their costs increase over the price of the ceiling, then they'll just go out of business.

Posted by: Cervus | May 12, 2007 7:27:21 PM

Funny how no one likes c-t-l projects, but lets hear what you have to say when our oil imports get cut off. We need these types of projects until we find something else to run our transportation system on! Wishful thinking doesn't cut it.

Posted by: OttoV | May 12, 2007 8:39:27 PM

CTL + BTL is a must at this time to ensure transportation energy security, for existing ICE vehicle fleet. Once H2-vehicles will come on to the scene, then Coal to Hydrogen can be quickly produced using existing gasifiers. These gasifiers should be dispersed so as to reduce the cost of transporting H2 over long distances. H2V and Coal to Hydrogen will be significantly more efficient than current CTL + ICE technology, so we will see significant reduction in CO2 footprint per passenger-mile traveled. Mark my word, H2V will one day be a reality. "You may smile, but they will come!"

Posted by: Roger Pham | May 12, 2007 10:22:37 PM

Roger,

H2-Vehicles in your mind means fuel cell or ICE?

Posted by: Floram | May 13, 2007 6:59:56 AM

They had to tie the price floor to something. The price of diesel and/or gasoline might have been better. The price of oil could drop but gasoline remains high because of demand and refinery shortages. In that case they still make a profit and get paid, which is not what is intended.

Posted by: SJC | May 13, 2007 7:12:59 AM

Going forward, we need price floors on all forms of fossil fuels. Alternatives of all kinds, including conservation, will be more successful if consumers and producers are assured that their investments are more likely to pay off.

Posted by: tom | May 13, 2007 7:40:03 AM

I hope this bill doesn't contain loopholes that allow "spray and pray" operations.

Roger: You sure are single minded! "H2V will one day be a reality" They may well be if big oil can force them down our throats. BEVs are a reality now (even if in small numbers)

Posted by: Neil | May 13, 2007 7:41:06 AM

Floram & Neil,
FCV and ICE-H2 can co-exist. In GM's vision, fuel cell cost may be reduced to $50/kw. Current H2 tank can store 4kg at reasonable cost, weight, and space. Major manufacturers are having working FCV/FC-PHEV prototypes. But they don't have working BEV prototypes anymore, as these have been crushed, sadly!
FC-PHEV would be ideal, if FC is still expensive, but if they can bring down the cost of FC to $50/kw, then a FC-HEV with a small battery pack is all that'll be needed, kinda like the Honda FCX or a similar concept envisioned by Toyota, or GM FCV-PHEV volt, or Ford Airstream concept... with ~ 50%-60% efficiency tank-to-wheel, or 3 times current conventional ICE vehicle technology. It doesn't take a genius to see that these will be the future of motorcars, given more limited energy availability.

With BEV, you still have the problem of range and how to charge it up for a 300-mi range in a few minutes! Major infrastructure upgrade before that can happen, even if your battery is ready for quick charge in under 5 minutes and won't blow up or get over-heated. And, like I've outlined before, there will be no energy efficiency advantage of BEV over FC-HEV or a very advanced H2-ICE-HEV, inspite of what you are reading today.

Posted by: Roger Pham | May 13, 2007 10:12:50 AM

Anyone that thinks CTL is a good thing, needs to go back and watch an inconvenient truth again.
Global warming = bad.
CTL = more global warming = double bad.

Now if you are a politico from VA and you want some jobs for your miners, I guess that you might not think about melting ice caps and shortage of fresh water and crop failures and other small details like that.

Posted by: KJD | May 13, 2007 12:51:25 PM

Now if you want to talk about hydrogen vs batteries, I will take that bait.

I was an early investor in Ballard power systems years ago. Lost a ton of money on that one thank you very much. Ask Ford how much money they have spent on fuel cell research and what have they got to show for it?

How much does a Honda FCX cost these days. Last I heard about a million bucks a pop.

In my garage is a Battery Electric vehicle that I built myself. It is what you call an R&D project and it is not much to look at for sure, but it is functional.

http://web.mac.com/kyledansie/iWeb/zevutah/Ninja_0507.html

It also gets me around town on a very small amount of energy. Last test run it used 137 watts per mile. When I recharge the batteries I use 100 % wind power, because I hate all the pollution from coal fired power plants.

How much did my homebuilt BEV cost?

About 3k so far with off the shelf parts, Zero carbon emissions, and on the road today.

Posted by: KJD | May 13, 2007 1:17:43 PM

KJD nice job but for heaven's sake stop using lead-acid, they are the model-Ts of batteries and so passe. Use A123 LiFePO4 (the best) or a cheaper chinese knockoff http://www.powerstream.com/LLL.htm

These batteries are 6 times capacity of lead-acid by volume and 10 times by weight. And they are safe and can deliver a lot more acceleration and speed.

For the same weight of battery, you will travel 250 miles.

Posted by: Beek | May 13, 2007 6:58:22 PM

KJD

Here is an 'anti'-inconvenient truth video.
http://video.google.com/videoplay?d...2170&q=movie+duration%3Along
Not all is true however, similar to that by Al Gore.

I really would like to find out if CO2 is the only reason for global warming.

A test I could think of is using two large glass containers, preferably both heat insulated, one filled with regular air, the other with a higher CO2 content e.g with 550 ppm, both exposed to sun light.

See what the temparure difference will be after a clear and sunny day.

Then there is that huge amount of 'naturally' generated CO2 besides the rather small amount of man made CO2.
Will it have an impact if we reduce the man made CO2 by say 30% or less?

Posted by: Floram | May 13, 2007 7:10:15 PM

As an add on.
What comes first, warming and then CO2, or first CO2 and then warming?

Posted by: Floram | May 13, 2007 7:17:53 PM

Coal-to-Liquids would be great for a few in the short-term, but bad for the many in the long-term: I haven't seen any unselfish arguments for it. This bill is irresponsible, and should never have been sponsored by a Chairman of the Energy and Air Quality Committee. We assume that he should be working for "good" air quality. I am writing to my representative, and to Speaker Pelosi. Would you like to as well?
http://www.house.gov/writerep/

Posted by: Eric | May 13, 2007 9:50:32 PM

Eric:

You'll note that the CTL technology that they advocate is actually less carbon-intensive then petroleum diesel. I fail to see how it's "irresponsible" in that light.

Posted by: Cervus | May 13, 2007 11:20:24 PM

My apologies for the last post: I may have spoken too soon. I did not read the last paragraph of the article, which says that Baard claims a 46 percent reduction in carbon dioxide over petro diesel. I looked for the Idaho National Laboratory study though, and could only find a Baard/INL presentation, which had this disturbing caveat:

* Carbon dioxide emission reductions are achieved using a 30 percent biomass co-feed, carbon capture and storage technology, and combined cycle, co-generation processes.

Baard plans to burn a huge amount of biomass. If their calculation lets them say that the biomass is "renewable" (carbon neutral), then I would look at their improvement over petro diesel as only 16 percent. Can they really sustain that as they start burning up their supply of wood "waste"? And does this co-generation process really help reduce emissions?

Aside from the obvious distruction from strip mining, I am also concerned about whatever else that may get released into the environment: are they sequestering all of the sulphur, mercury, etc? The Canadian oil sands scheme has already produced the world's largest toxic waste site. Seems like our legislators should at least be cautious.

Posted by: Eric | May 13, 2007 11:55:27 PM

What comes first, warming and then CO2, or first CO2 and then warming?

This is one of the perennial denialist canards. We know for sure that the current CO2 pulse is due to combustion of fossil fuels and (to a lesser extent) human destruction of biomass; it is not caused by rising temperatures.

Posted by: Paul Dietz | May 14, 2007 6:28:46 AM

A quick question...

Does anyone know of a resource that has the amount of energy required to produce a standard lead-acid car battery? I am curious as to how much ghg is generated in the creation of the lead and other component parts. I have heard that it is a very dirty process, and I would like to know how dirty it is?

Thanks...

Posted by: eric | May 14, 2007 7:10:51 AM

By Paul Dietz:
"We know for sure that the current CO2 pulse is due to combustion of fossil fuels ..."

Care to elaborate?
Would you have any proof of that?
Any fast and steady numbers?

CO2 fluctuates continuously over time. The sun spot activity and associated cosmic rays are likely to reason for that. What makes you believe that you are correct?
We don't even know the mechanisms or rather what influences the amount of clouds being formed. Clouds have a strong impact on global warming.

Just wondering. I don't know the answer either. I just don't know why your statement should be the only one that is absolutely right and nothing else.

Posted by: Floram | May 14, 2007 9:14:54 AM

Floram:

The irrefutable smoking gun comes from carbon isotopes. The oceans have a higher 13C/12C ratio than the atmosphere -- and the atmospheric ratio has been declining as CO2 concentrations in the air have increased. It is therefore impossible that the increase in atmospheric CO2 has been due to outgassing from the oceans. (And ditto for CO2 from volcanoes.)

Fossil fuels and biomass have lower 13C/12C ratios, due to isotope fractionation during photosynthesis. Biomass destruction can be ruled out as the source of most of the CO2 from 14C evidence and other sources.

Also, we have a fairly good handle on the CO2 output from fossil fuels, since governments keep track of what's being burned, if only to be able to tax it.

CO2 emissions from fossil fuel burning have exceeded the annual increase in atmospheric CO2 since around 1900. That is, all other contributions to atmospheric CO2 have been, combined, a net sink for over a century.

Posted by: Paul Dietz | May 14, 2007 12:19:46 PM

Ultimately CTL has the possibility to serve as an energy source (in addition to current renewables) that can eventually provide domestically produced hydrogen and/or electricity with extremely low carbon emissions assuming use of carbon capture and sequestration (CCS). Now obviously the CCS technology is not industrially viable at this point but it has the potential to be. There are growing pains that the industry must go through before all of the CTL benefits are realized and that is what this bill is helping to do, encourage businesses to go through these growing pains (and mitigate some of the risk in the process). CTL is not the end-all to our problem but neither is anything else. This will require a number of different technologies working together and CTL and IGCC will each play a big part in it.

Posted by: Andrew | May 14, 2007 12:32:39 PM

I would just like to say I appreciate the high level of intellect and thought on this comment board. All you see in the papers is "Coal is Filthy" ads.

This all revolves around Baard Energy because they plan to make jet fuel because the DoD will probably buy it. That's really what all of this is about. The government is trying really hard to do right by the CO2 issue in the fuels market, it would be nice to see biomass and sequestration be a part of the groundwork of a CTL industry (if it ever exists).

Posted by: DOE Engineer | May 15, 2007 6:58:02 AM

I would just like to say I appreciate the high level of intellect and thought on this comment board. All you see in the papers is "Coal is Filthy" ads.

Posted by: DOE Engineer | May 15, 2007 6:58:02 AM

By KJD:
"Now if you are a politico from VA and you want some jobs for your miners, I guess that you might not think about melting ice caps and shortage of fresh water and crop failures and other small details like that."

Viginia's number one natural resource is coal and a way of life for a large number of Virginians. You can't try to sell somebody on some idea if it means that they'd be losing their job that their family's been doing for generations. TCL is really bad when it comes to global warming. Furthermore, the way they extract the coal is extremely bad for the local ecosystem. However, we must create jobs that will replace those lost. And those people who lost their jobs must be trained for those newly created jobs in the alternative fuel sector. Also, we must convince not only those who are environmentally concious, but also those who value America's energy independence. Although, TCL is extremely bad for the environment, it is one of the best options for the US' energy independence.

Posted by: Karl | May 15, 2007 11:11:28 AM

Just noting that by mistake I wrote TCL instead of CTL*

Posted by: karl | May 15, 2007 11:13:54 AM

I would agree with Karl that job creation is an important thing. I was unemployed for 9 months in 2001 and again for a couple of months in 2005. It is devastating to ones self esteem, not to mention my bank account.

The question is what kind of jobs do we want to create. If we could have a carbon tax of say a penny a pound and apply that to transportation and electrical production, we would create demand for clean alternatives in both industries.

We could use the revenues from a carbon tax to subsidize solar power and wind power. All we would have to do for jobs is require that to get the subsidy the PV panels and wind mills MUST be produced in USA.

This would create thousands of jobs here at home. We could do the same for mass transit with light rail. How is that for a jobs program?

Posted by: KJD | May 16, 2007 7:56:27 AM

I agree with the carbon tax and using the money for renewables. That makes so much sense that it is almost sure not to be implemented.

You see, if contains that one little three letter word TAX. That is the "3rd rail" in American politics...touch it and you die.

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