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China May Halt Coal-to-Liquids Projects

10 June 2007

Xinhua. China may halt its coal-to-liquids projects, according to an official with the country’s top economic planning agency.

The consideration came after evaluation of the nation’s limited energy resources and its technological environment, a deputy director of the industry department of the National Development and Reform Commission (NDRC) told a seminar on China’s fuel ethanol development, held in Beijing on Saturday.

“Liquefied coal projects consume a lot of energy, though the successful industrialization of liquefied coal could help reduce the country’s dependence on petroleum,’ said the official who declined to be named.

The projects also require “huge” capital investment and increased consumption of water, as well as coal.

In March, Northwest China’s Ningxia Hui Autonomous Region announced it would invest more than 100 billion yuan (US$12.9 billion) to build Asia’s largest liquefied-coal base. The first projects would produce methanol and dimethyl ether from coal, as well as other chemicals.

A number of other coal liquefaction projects are underway or anticipated. Most recently, SES and Inner Mongolia Golden Concord (Xilinhot) Energy Co., Ltd., a subsidiary of Golden Concord Holdings Ltd., a private provider of electricity, steam and chilling water in China, signed a co-operative joint venture contract to build an integrated coal gasification plant and methanol and dimethyl ether (DME) production plant in the Inner Mongolia Autonomous Region of China. (Earlier post.)

In 2006, Shenhua Group, China’s biggest coal producer (and the third-largest in the world) announced that it was planning eight Coal-to-Liquids projects that would produce some 30 million tons per year (about 600,000 barrels per day) of synthetic oil and products by 2020. (Earlier post.)

In 2006, the NDRC announced that the government would no longer approve coal liquefaction 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. (Earlier post.)

Earlier this year, a panel of the Chinese Academy of Sciences (CAS) Academic Divisions issued a report recommending medium- and long-term development strategies for energy sources that can supplement or substitute for petroleum in China. Among the recommendations was deepening the research and development of key technologies that are directly or indirectly associated with coal liquefaction; supporting demonstration plants with an annual production capacity up to one million tons of substitute fuels using the two technological alternatives—direct (Bergius) and indirect (Fischer-Tropsch)—with a view to gaining experiences for industrial application of the production technologies. (Earlier post.)

The unnamed NDRC official at the fuel ethanol seminar said that China had begun its coal liquefaction projects without trial industrialization operation, and that the technologies involved were not sophisticated enough yet.

The fuel ethanol seminar was hosted by Chinese Academy of Engineering with sponsorship from Denmark-based Novozymes.

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Comments

CTL in large scale perhaps would be the final doom to the planet in regard to GW. I'm glad the Chinese government is reconsidering their decisions of building many of those plants. But, I do understand their situation. How to give the average Chinese citizen the same standard as the average American citizen? If China runs out of energy, then this problem will be an intellectual world democratic issue. Which men on earth have the rights to use the rest of all accumulated energy reserves? Is it the nations starting wars to secure their part of the world energy resources?

I believe one of the great environmental tragedies of recent times was the decision of China to adopt a car-centric transportation infrastructure. They could have gone another way, but decided to emulate the US model instead and thus to scale up the damage done by the automobile culture. What a lost opportunity!

I imagine that one of the motivations for these potential cancellations was the recent discovery in shallow Chinese waters of a fairly large oil discovery. About 7 billion barrels, I think. This new field could produce 200k barrels per day of oil for much less capital investment costs than these CTL plants.

I was in China last August and September. It seems that much local personal transport is now electric - either converted cycle-rickshaws for cargo or two wheel electric scooters for people. Busses, trains, trams and subways are electric in Beijing, Shanghai and Hong Kong.

While the personal vehicles are limited to 20-30 miles an hour, and separated from heavier vehicles on the road, the elctric rickshaw and bicycle seem a safe, efficient and cost effective solution for China. If these cheap and crude vehicles become regulated in terms of safety standards, then they will become heavy and fuel thirsty and may require an ICE.

The brand new highways around Shanghai / Suzhou area were almost empty except for busses and trucks: When a higher proportion of the population expect to go on long journeys, and want the freedom of a personal vehicle, that is when the decision for a road transport economy will pose a question for liqud fuel supply, assuming long distance personal vehicles still use liquid fuels.

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