Sasol and Chinese Sign Second-Stage Agreements for 160K BPD Coal-to-Liquids Projects
22 June 2006
CTL development in China. |
Sasol today signed a co-operation agreement with a consortium led by China’s Shenhua Corporation for proceeding with the second stage of feasibility studies to determine the viability of an 80,000 barrels per day (bpd) potential coal-to-liquids (CTL) plant in the Shaanxi Province, about 650 kilometres west of Beijing.
Sasol yesterday signed a similar agreement for another 80,000 bpd CTL project in the Ningxia Hui Autonomous region with Shenhua Ningxia Coal Ltd. The combined capacity of the two Chinese plants are roughly equivalent to that of Sasol’s existing Secunda facility in South Africa.
Each plant is expected to cost more than US$5 billion. Should these CTL projects go ahead, they could be brought into operation as early as 2012.
Following the signing, Sasol made a presentation to Chinese Premier Wen Jiabao on the value proposition of CTL for China. The Premier is on an official visit to South Africa.
We are highly appreciative of the Chinese Government’s keen interest in the projects.
—Pat Davies, CEO Sasol
Sasol suggests that there are five key drivers required for a viable CTL project:
Access to large reserves of low-cost gasifiable coal (approximately 2-4 billion tons) at proposed location, or to stranded coal (e.g. due to quality or location) which can not be easily monetized in other ways.
The country should be a net importer of energy (crude oil and/or refined products).
Energy self-sufficiency should be of strategic importance to the Central Government and there should be willingness/ability to make necessary incentives framework available.
Site for CTL facility should preferably have infrastructure to support such a venture.
Opportunities for CO2 management.
Sasol says that the initial pre-feasibility studies confirmed that all those key drivers are in place for establishing a viable CTL business in China using Sasol’s low-temperature Fischer-Tropsch technology.
The second stage feasibility studies will go into more detail in determining capital cost, feedstock cost, water supply and market conditions and will also determine most of the major commercial and funding issues. Sasol intends to be an investor, not solely a technology provider.
In developing new CTL plants, Sasol’s objective is to design carbon-capture ready facilities, which can significantly reduce greenhouse gas emissions.
Sasol is involved in two major Gas-to-Liquids projects outside of South Africa: Oryx GTL (34,000 bpd) in Qatar, and Escravos GTL (34,000 bpd) in Nigeria. Sasol is also investigating CTL opportunities in the USA and India.
Resources:
The Chinese obviously don't do things by half once they make up their minds. 160,000 bpd would be more than all existing CTL and GTL plants in the world combined. For reference, the Shell GTL plant in Bintulu, Malaysia has a scale of about 12,000 bpd.
http://www.chemlink.com.au/gtl.htm
Note the "opportunities for CO2 management" as opposed to "actual CO2 sequestration" in the above article. In other words, the CO2 is going to go straight into the atmosphere unless domestic or outside pressures force China to take global warming seriously.
Domestic pressures are suppressed. However, CO2 is anyhow unlikely to feature among the top 10 environmental and social concerns in that country.
The Bush adminstration doesn't care one whit about global warming. Other investors don't want to jeopardize their opportunities in China. Therefore don't count on Western governments to challenge China's decision to invest in CTL.
Therefore, we can only hope that the Chinese government is far-sighted enough to realize that economic growth will be severely curtailed if and when global warming comes home to roost. So far, this has taken the form of substantial investments in hydro and solar power. Note that China has also expressed strong interest in BTL, which is similar to CTL except that it uses biomass as a feedstock (making it far more expensive).
http://www.choren.com/en/choren/latest_news/?nid=51
http://www.thestandard.com.hk/news_detail.asp?pp_cat=22&art_id=19225&sid=8082826&con_type=1
Attempts to produce biofuels more cheaply from food crops are constrained by the need to feed 1.2 billion hungry mouths. Cellulose to sugar processes are not yet proven beyond the pilot stage.
http://www.worldwatch.org/node/44
It is encouraging that China is looking to achieve this growth while avoiding conflict with the US over global energy resources as much as possible (cp. Sudan, Iran). However, the country needs to do more in terms of curbing its overall energy demand growth, especially by accelerating the shift to more fuel-efficient modes of transport and production.
Posted by: Rafael Seidl | 22 June 2006 at 10:30 AM
80,000 b/d is almost 4 million tons / year, which is 0.1 % of Worlds Oil consumption and 100 of these plants will reduce Worlds oil consumption by 10 %.
Looks like Global Warming is forgotten thing as even Europeans are looking towards Coal.
Posted by: Max Reid | 22 June 2006 at 11:05 AM
We might just have shorten their projected coal supply from 60 yrs (2 billion tons/yr, ~120 billion tons reserves), to 20 yrs. Even if they implement 80mpg requirements, and double power plant efficiency, the massive wave of the Chinese middle class striving for western consumption will deplete their fossil reserves. They may reach a screeching halt from their domestic coal in 2030, forcing them to either go green, or consume ever more energy from elsewhere. The specter of 55 ultra large bulk carriers a day, 20,100 a year is not a pleasant thought.
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____Then we have air pollution, GHGs, acid rain, heavy metals, global dimming aerosols, not to mention India and her billion plus citizens.
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____Nuke look nice, and 4th gen nuke plants are more efficient with hydrogen production possibilities. However, fuel rod reprocessing for plutonium, or usage of unenriched uranium are the long term solutions to uranium supply problems. Both are proliferation and pollution (chemical and radiological) threats since both produce plutonium. There might be a possibility for IFR /ALMR to be revived.
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____Use solar for peak power, augment with wind. Supply base loads with efficient multi-gigawatt biofuel fired plants, hydro, and cogeneration.
Posted by: allen zheng | 22 June 2006 at 11:08 AM
http://en.wikipedia.org/wiki/Integral_Fast_Reactor
Posted by: allen zheng | 22 June 2006 at 11:10 AM
China is actually looking at every energy resource out there and investing in most of them. It's easy to forget that China alone has a greater population that the entire "developed" world put together.
What is also often forgotten is that China's one-child policy will come home to roost in the 2020s. The country's population will then age far more rapidly than Japan or Europe are doing today, with all the associated strains on a system of social security and health care.
Btw: last I heard, China is planning to build about 30 nuclear plants to produce hydrogen. Avaya, a French nuclear contractor, is reportedly involved. Not my favorite energy source/carrier combo, but there it is.
Posted by: Rafael Seidl | 22 June 2006 at 03:52 PM
Off topic ... but thank goodness for the one child policy ... at least China has the guts to do something about overpopulation ... now we just have to get the birth rate down in the rest of the world. Now we just have to figure out that economies can work with declining population. (for some reason polititions think that economies have to grow). Maybe we should publish GDP as a per capita number.
Posted by: Neil | 22 June 2006 at 05:06 PM
I am constantly amazed by those who think that Solar or Wind is somehow pollution free.
Solar alters the Albedo (the ratio of incident to reflected Energy impinging on the Earth) and gets its energy from a very inefficient conversion of the solar flux frequencies to other energy; in the case of P.V. only about 10% is even theoretically possible, but 90% or so, is rejected as "heat" and once absorbed and frequency shifted, is re-radiated to space at a much reduced rate in the thermal bands. It just hangs around and warms things up. As a matter of fact that is exactly what "Green House Gases" do.
In other words its as if you picked up the Earth and moved it closer to the Sun.
Don't you think that would increase "global warming" a smidgen?
But of course you've never heard of this problem because most of the environmental community is scientifically illiterate, but nevertheless its a fact that large scale adoption will have to address because its there as a problem.
The process of Wind interruption is likewise an Albedo altering process, with another step or two added...
Posted by: Stan Peterson | 23 June 2006 at 12:38 AM
Stan:
Any web-links to publications confirming what you are saying?
Posted by: Andrey | 23 June 2006 at 01:34 AM
Stan -
renewables do have environmental costs, in terms of land use, visual clutter on the horizon and/or impact on wildlife.
In the specific case of solar, we need to distinguish between biofuel crop (plants are collectors of solar energy), photovoltaics and solar-powered heat engines. These technologies can all impact the local, regional and global climate if deployed on a sufficiently large scale. In practice, only agriculture has done so. For reference, photosynthesis is only about 2% efficient (a little more in single-cell algae).
Wrt photovoltaics, the very expensive panels used for satellites actually manage about 30% efficiency. Even on the surface, with the blocking effects of the atmosphere, conversion rates well over 10% have been demonstrated using expensive materials. New developmentes in quantum dots and low-dimensional structures promise to raise that to over 60%. My point is simply that the upper limit on conversion efficiency is defined by available technology and economics more so than physics.
http://www.nrel.gov/docs/gen/fy04/36831l.pdf
http://www.iop.org/EJ/abstract/0957-4484/11/4/342
http://www.evidenttech.com/applications/quantum-dot-solar-cells.php
Quantum physics suggests that atoms and molecules tend to simply re-emit photons with wavelengths they cannot absorb at all. High-frequency photons that coincide with upper band-gap frequencies are also often emitted at the same frequencies, though sometimes a multi-step emission at lower frequencies does occur. This is true for all materials, not just photovoltaic ones, e.g. traditional roofing materials and soils that cannot be used for agriculture. Semiconductors do have a larger number of absorption lines than isolators, but the absorption of energy compensates to some extent for the multi-step emission.
Also not that solar panels are excellent specular reflectors, so most emitted photons are reflected along short paths in the direction of outer space. Simple geometry suggests that reduces the likelihood that they interact with GHG in the atmosphere. All in all, I suspect your assertion that the large scale application of photovoltaics would produce massive shifts in net albedo may require further study.
Posted by: Rafael Seidl | 23 June 2006 at 02:07 AM
Considering that PVs could provide the world with all its energy needs while covering less than 1% of surface area albedo changes are not significant. The world has much more than that covered by asphalt.
Posted by: tom deplume | 23 June 2006 at 02:25 PM