House Hearing Explores Potential of Coal-to-Liquids Fuels
6 September 2007
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.
|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, 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.
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