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House Hearing Explores Potential of Coal-to-Liquids Fuels

6 September 2007

Hawkins2
Conventional oil and alternative fuel supplies under four global warming emission limitation scenarios produced by Battelle. Restrictions on greenhouse gases push the mix away from coal and more to biomass. Click to enlarge. Source: Hawkins testimony.

Members of the US House of Representatives’ Science & Technology Committee’s Subcommittee on Energy and Environment held a hearing this week considering the policy and technological measures potentially needed if the US is to move forward with Coal-to-Liquids as an element of the nation’s energy strategy.

Although two issues were foremost in the session—carbon dioxide emissions and financial viability—the witnesses touched on other issues including infrastructure improvements and water usage.

Testifying before the committee were: Dr. Robert L. Freerks, Director of Product Development, Rentech Corp.; Mr. John Ward, Vice President, Marketing and Governmental Affairs Headwaters, Inc.; Dr. James T. Bartis, Senior Policy Researcher RAND Corp.; Mr. David G. Hawkins, Director, Climate Center at Natural Resources Defense Council; Dr. Richard D. Boardman, The Secure Energy Initiative Head, Idaho National Laboratory; and Dr. Joseph Romm, former Acting Asst. Secretary at Department of Energy during the Clinton Administration, Senior Fellow, Center for American Progress and Director/Founder, Center for Energy and Climate Solutions.

The witnesses agreed on two things: that conventional CTL processes carry a very heavy carbon dioxide burden and that the industry will require federal support if it is to develop.

The proponents for CTL pointed to processes to ameliorate the carbon burden—carbon capture and sequestration (CCS) and using a coal-biomass mixture—that could bring the lifecycle emissions below that of conventional petroleum diesel.

Opponents highlighted the problems with reliance on CCS; argued that rough parity or slightly better CO2 emissions compared with petroleum fuels doesn’t address the issue of reducing carbon emissions from transportation; and pointed to better uses of coal—such as the production of electricity for plug-in hybrids via an integrated gasification combined cycle (IGCC) process with CCS.

Freerks, Rentech. Dr. Freerks noted that Rentech is focused both on the production of diesel and jet fuels via the Fischer-Tropsch process, and that the company is committed to developing and deploying technologies and processes that reduce the GHG emissions associated with both the production and use of the fuels. He also noted the future potential of biomass-to-liquids (BTL).

While coal and pet coke are the feedstock of choice today that does not forever have to be the case. As a company we are agnostic on what feedstock we use, as long as it works. Rentech is in the early stages of developing the next generation of our process—biomass-to-liquids.

...Advancing new biomass gasification technologies could be greatly expedited with federal support to attract investment. Biomass gasification works and it is our objective, moving forward, to prove technologies and processes that allow for an increasing percentage of our feedstock to come from biomass.

...Coupled with carbon sequestration this holds great potential to help move fuels production from a process that emits CO2 to one that absorbs CO2. But for a company such as Rentech, or any of the other US based F-T fuels developers and their investors, such risks are not financeable at this time.

Ward, Headwaters. Headwaters is also active as both a technology provider and a project developer in the field of coal-to-liquid fuels. Ward proposed that two types of support are needed to further develop the CTL industry in the US: commercialization incentives to speed the commercial deployment of coal-to-liquids facilities; and research support to continue to improve the efficiency and environmental performance of coal-to-liquids technologies.

Ward, whose testimony went into the most technical detail on the different CTL processes and properties of the resulting fuels, focused on the comparison of CTL with other petroleum-derived fuels.

Ward
Lifecycle CO2 emissions for diesels from different sources. Click to enlarge.

Citing a 2001 life-cycle greenhouse gas emissions inventory for indirect coal liquefaction (Fischer-Tropsch) diesel prepared for the US Department of Energy National Energy Laboratory (NETL) in June 2001, he noted that FT diesel produced with CCS yielded a lower lifecycle carbon footprint than diesel produced from several different types of crude. (See chart at right). The crude with the highest footprint was oil sands syncrude.

Headwaters certainly does not advocate abandoning America’s open and efficient financial markets for a more centralized system like China’s. But the United States should recognize that just because a technology is no longer a research project does not mean that the free market is ready to fully embrace it.

As long as oil prices remain high or climb higher, market forces will lead to the development of a coal-to-liquids infrastructure in the United States. But that development will come slowly and in measured steps. If for energy security reasons, the United States would like to speed development of a capability for making transportation fuels from our most abundant domestic energy resource, then incentives for the first coal-to-liquids project are appropriate.

Bartis, RAND. Dr. Bartis is engaged in RAND’s research directed at understanding the costs and benefits associated with alternative approaches for promoting the use of coal and other domestically abundant resources, such as oil shale and biomass.

He presented four main conclusion to the committee:

  • Successfully developing a coal-to-liquids industry in the United States would bring significant economic and national security benefits by reducing energy costs and wealth transfers to oil-exporting nations.

  • The production of petroleum substitutes from coal may cause a significant increase in carbon dioxide emissions; however, relatively low risk research opportunities exist that, if successful, could lower carbon dioxide emissions to levels well below those associated with producing and using conventional petroleum.

  • Without federal assistance, sufficient private-sector investment in coal-to-liquids production plants is unlikely to occur because of uncertainties about the future of world oil prices, the costs and performance of initial commercial plants, and the viability of carbon management options.

  • A federal program directed at reducing these uncertainties; obtaining early, but limited, commercial experience; and supporting research appears to offer the greatest strategic benefits, given both economic and national security benefits and the uncertainties associated with economic viability and environmental performance, most notably the control of greenhouse gas emissions.

While the strategic benefits of the development of a domestic coal-to-liquids industry are compelling, no less pressing is the importance of addressing the threat of global climate change.

Specifically, without measures to address carbon dioxide emissions, the use of coal-derived liquids to displace petroleum fuels for transportation will roughly double greenhouse gas emissions.

In our judgment, the high greenhouse gas emissions of F-T coal-to-liquids plants that do not manage such emissions preclude their widespread use as a means of displacing imported petroleum.

Boardman, INL. Dr. Boardman argued for the importance of providing immediate incentives to advance coal and biomass conversion to liquid transportation fuels in an environmentally acceptable manner.

The Idaho National Laboratory is working with Baard Energy on coal and biomass to liquids pilot in Ohio. The Baard project will co-feed the gasifiers with 30% biomass and 70% coal, and capture CO2 for sequestration. According to a year-long INL study, the Baard CBTL fuels will yield 46% less emissions of greenhouse gases than conventional low-sulfur diesel transportation fuels. (Earlier post.)

Boardman addressed concerns about water usage by noting that a custom-design heat recovery system for combined-cycle power generation and process water recovery, treatment, and recycle can reduce the water consumption for bituminous coal-to-liquids plants from 15 to 10.5 barrels of water per barrel of liquid hydrocarbon product.

Of that 10.5 barrels of water remaining, 8.25 of it is consumed by cooling tower loses and waste water blowdown. That water duty could be addressed, he argued, by using gas-to-gas heat exchangers could for used for steam cooling or a closed-loop heat recovery system.

I personally support efforts to convince the US to conserve energy, while moving to a new fleet of hybrid cars and electrically-driven commuter cars. I support accelerated development of wind and solar energy, as well “smart” deployment of nuclear electrical power generation. I support a movement to develop biomass as a national resource, and the associated deployment of a system to improve yield, collection, preparation, and transportation of this resource to points of efficient conversion into energy and transportation fuels.

However, I also believe the pending peaking of oil production, as well as diminishing domestic reserves of natural gas, in parallel with global energy demand projections and the acute need to address climate change point to the urgency for the United States to begin unprecedented efforts to begin building plants for transportation fuels from the nations abundant supply of coal with biomass.

Hawkins
Life-cycle greenhouse gas results of Fischer-Tropsch diesel produced from natural gas, coal and biomass (GTL=gas-to-liquids, CTL=coal-to-liquids, CCS=carbon capture and sequestration, BTL=biomass-to-liquids, F=forest; emissions include CO2, methane and N2O). Click to enlarge. Wang et al., 2007.

Hawkins, NRDC. Hawkins argued that energy security and global warming must be addressed together, and that even with CCS bringing the production element of the lifecycle more into alignment with conventional petroleum refining, the parity of the resulting fuel with petroleum fuel still produces an unsustainable greenhouse gas burden, given the need for large reductions. (See chart at right.)

The data (from an Argonne analysis) is not inconsistent with the data provided by Ward; the interpretation and perspective is different, however.

The unavoidable fact is that liquid fuel made from coal contains essentially the same amount of carbon as is in gasoline or diesel made from petroleum. Given these results, it is not surprising that a recent Battelle study found that a significant coal-to-liquids industry is not compatible with stabilizing atmospheric CO2 concentrations below twice the pre-industrial value. Battelle found that if there is no constraint on CO2 emissions conventional petroleum would be increasingly replaced with liquid coal, but that in scenarios in which CO2 concentrations are limited to 550 ppm or below, petroleum fuels are replaced with biofuels rather than liquid coal.

Proceeding with liquid coal plants now could leave those investments stranded or impose unnecessarily high abatement costs on the economy if the plants continue to operate.

If coal is to be used for transportation, Hawkins argued, it should be used to produce electricity to power a plug-in hybrid vehicle.

In fact, a ton of coal used to generate electricity used in a PHEV will displace about twice as much oil as using the same amount of coal to make liquid fuels, even using optimistic assumptions about the conversion efficiency of liquid coal plants. The difference in CO2 emissions is even more dramatic. Liquid coal produced with CCS and used in a hybrid vehicle would still result in lifecycle greenhouse gas emissions of approximately 330 grams/mile, or ten times as much as the 33 grams/mile that could be achieve[d] by a PHEV operating on electricity generated in a coal-fired power plant equipped with CCS.

Nor was Hawkins a proponent of mixing biomass with coal in the CTL process.

It is important to recognize that such a combination does not actually reduce the emissions related to using coal; rather, the biomass component of the combination actually has negative net emissions that are deducted from the coal-related emissions to obtain low net emissions from the mixture.

Hawkins also focused on the negative environmental impacts of coal mining, coal transportation and water usage.

Romm, Center for American Progress. Dr. Romm also strongly argued that there is no role for liquid coal in transportation, based on a number of factors, including water usage and CO2 emissions, even with sequestration.

More importantly, even with the capture and storage of CO2 from the Fischer-Tropsch process, the final product is diesel fuel, a carbon-intensive liquid that will release CO2 into the atmosphere once it is burned in an internal combustion engine. A great many people I have spoken to are confused about this point: They think that capturing and storing the CO2 while turning coal to diesel is as good an idea as capturing the CO2 from the integrated gasification combined cycle (IGCC) process for turning coal into electricity. No. The former process still leaves a carbon-intensive fuel, whereas the latter process yields near zero-carbon electricity.

The future of coal in a carbon-constrained world is electricity generation with carbon capture and storage, not CTL plus carbon capture and storage.

...if coal has a future as a transportation fuel, it is with plug in hybrids running on such zero-carbon coal electricity. For these reasons, accelerating the transition to such zero-carbon power is where Congress should be focusing its time and resources.

Resources:

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Comments

Well, that says it all doesn't it. I was once a staunch proponent of F-T CTL processes utilizing CCS. Now, after reading ROMM's and NRDC's comments, I'm not so sure.

Perhaps PHEVs or full EVs is the way to go after all. Battery technology/affordability is the weakest link in that chain- however.

Until the technology catches-up we'll need some manner of ICE gensets to keep vehicle ranges useful and extend battery lives.

DieselHybrid:


I agree with you that overall liquid fossil fuel consumption reduction is the key.

Current Hybrids and specially more PHEVs + BEVs would certainly help but there are many other areas to look at.

Many existing home-domestic, commercial and industrial HVAC systems use way too much energy and create huge amount of GHG and air pollution. All HVAC systems using liquid fossil fuel should be converted with very high efficiency (SEER 25) electric units and use geothermal units where possible.

The average European home consumes less than half the energy (per square feet) than in USA and Canada, and don't tell me it"s because it is colder here. Sweden, Norway, and many northern European countries are as cold if not colder than many American States.

Mass transportation systems (freight + passengers) could be electrified.

Current dirty coal fired power generating plants could be replaced with cleaner sources NOT using fossil fuel, i.e. Sun, Waves, Wind, Geothermal, Hydro, Nuclear etc.

Our cars and light trucks uses only about 30% to 40% of the liquid fossil fuel. We also have to look elsewhere.

The water usage question is a red herring, if the CTL plants use 'dry' (non-evaporative) cooling systems. The water consumed in syngas production itself (minus the water then returned from the FT reactor) is sufficiently little that it could be provided by water in the coalbeds themselves.

Maybe the inquiry procedure should be reversed
1) by how much can electricity displace liquid fuel?
2) how much liquid fuel can be supplied by biomass?
The residual would be coal, hopefully well within carbon targets.

A practical problem is how to carbon tax XTL using blends of coal and biomass feedstocks. This seems needed for jet fuel.

How to tax it?  By the ton, of course.

If we assume BEVs for 85% of the car market that would take off ~45% of oil usage. High estimates for Biomass is ~30% but higher performance is theoretically possible with hydrogenated pyrolysis which requires outside energy in the form of hydrogen hopefully made from electrolysis. If you remove oil-to-electricity (~15%) and heating oil (~25%) a fully renewable energy economy is possible only cheaper electricity would be needed, fingers crossed on printable solar panels and cheap fusion.

I wonder why algae growth and harvesting is never mentioned in regards to these CTL discussions. I know that there are still some technical problems to work out with mass farming & harvesting of algae, but these problems will be solved eventually. When they are, algae farming and harvesting can be combined with any CO2 producing facility to sequester and greatly reduce the net CO2 put out by that facility. The resulting algae biomass could be recycled as part of the feedstock to produce liquid fuels.
CTL has a place in the overall liquid fuels mix of the USA -- IMHO, best used for aviation and military supply.

To the poster that said that Europe uses less energy, and pointed out the Scandinavian nations that he thought were using less than the US, Nationmaster says otherwise. Iceland and Norway are at the top of the list of enrgy use per capita, at 26,000 and 24,000 kWh respectively. Canada, (admittedly not in Europe but it is a northern nation) Finland and Sweden follow closely behind at 15,000 kWh per capita. There aren't a lot of people there but even Luxembourg uses more energy than the US at 12,700 kWh vs. 12,300 for the average American. The more temperate nations like the UK and Germany do use about half the usage of Americans, but your example of Sweden and Norway is not supported by the facts.
The main reason for American energy consumption being as high as it is is pretty simple, we are richer than Europeans. Even our poor people have bigger homes than the average European. We have more TVs, more computers, more and larger appliances in our kitchens, we use air conditioners in the summer and Christmas lights on our houses because we like to and we can, because our energy is so cheap, partly due to the incredible abundance of coal, as dirty as it is...
The average home being built in my area houses 2-4 people and most of them have more than 2500 sq ft, or 250 sq m. It is not good for the planet, but Americans have worked long and hard to get to this level of wealth, and it will take some doing to convince them that smaller is better. A global recession brought on by skyrocketing energy costs and the unemployment and hardship that will accompany it will probably do the job quite nicely, tho.

http://www.nationmaster.com/graph/ene_ele_con_percap-energy-electricity-consumption-per-capita

@Ziv -

you're correct to point out that energy use intensity is no more homogenous in Europe than it is in the US. Indeed, one big factor is that the summer climate in many US states is unbearably hot and/or humid, making A/C a necessity.

Europeans address the problem by taking long summer vacations and in Spain, siesta. This is cheaper and uses less energy, but it does mean Europeans generally work fewer hours per year than US residents do.

That said, Americans would invest more in home insulation and migrate toward higher housing density if heating oil, natural gas and electricity were all more expensive there. Higher urban density translates directly into shorter commutes and greate viability of mass transit, both measures to reduce fuel use in the transportation sector. Only when parking becomes scarce and public transport is unattractive do you get the reverse effect.

In short, it's not so much a matter of asking US consumers to make do with less. Rather, it's about shifting their spending priorities away from instant gratification and toward investments in energy efficiency that pay off over the long term. That alone would be a major change in cultural attitudes and likely take a decade or more to achieve. Significant changes in urban architecture accumulate over 30-50 years, so conservation is no quick fix.

Looks like BTL(ethanol, biodiesel..etc) hybrids would do well.

It does not look like they consider a Peak Oil event anytime soon.

Hybrid technology will be introduced faster with political support. For instance, if there were a legal requirement for plug-in hybrids, most of the car and light truck/SUV fleet could be converted in 5 years. Without leadership, it could take a century. Reality will be somewhere in between. In short, every vehicle should be a volt concept. If we believe in this technology, shouldn't we be actively and politically supporting this technology? Supporters should have access to form letters and the physical address of every congressman and- yes- even the president's and VP's office. These letters will be stronger if they are a petition with as many constituent signatures as possible. So, does anybody have any further ideas?

CTL will probably have a short transitional life in our conversion to EV transportation. As pointed out the better use of coal (if used at all) is to produce electric which recharges PHEVs.

The greatest coal issue seems to be to get emergent nations to build state of the art plants - i.e. India, China. There is little point addressing single nation energy and GHG issues without looking at the global impact. The new industrial nations must be accountable for the same restrictions on GHG as older ones.

What about coal to methane? Seems like "peak gas" will also coming in the near future. I suspect that coal to methane will be more efficient than F-T synthesis for CTL scheme.

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