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India Okays $8B Tata-Sasol Coal-to-Liquids Project

Financial Express. An inter-ministerial group (IMG) of the Indian government (earlier post) has cleared the $8-billion coal-to-liquids (CTL) project of the Tata group and its partner Sasol. The approval will pave the way for similar projects awaiting government clearance, including one by Reliance Industries Ltd.

The Tata/Sasol project is seeking no tax concessions or subsidies.

For the CTL plant in India, Sasol will use the Fischer Tropsch technology, which converts the syngas, extracted from coal into oil, which in turn can be refined to produce diesel, naphtha, jet fuel, LPG and lubricants. The project would save over $25 billion for the exchequer through crude import substitution.

The IMG earlier had reservations over the significant energy penalty implicit in the conversion process. Sources said a calculation circulated in the last IMG meeting showed that in financial terms, the cost of import is tilted in favour of coal at the level of prices for coal and oil prevailing in the international market in late 2007 ($80/tonne and $100 a barrel, respectively). It was pointed out in the IMG meeting that the financial advantage would remain valid even if the CIF price of oil fell to $50 a barrel and the CIF price of imported coal remained at $80 a tonne.

Comments

eric

this project is going to produce huge amounts of CO2. no sequestration or capture plans are mentioned. at this rate India may even overtake China as chief GHG emitter!

richard schumacher

All such investments will be devalued as fossil carbon taxes are enacted and ultimately lost when coal is outlawed worldwide.

Harvey D

Could be a major step backward if not done correctly.

China (has already said so) and USA (on a smaller scale) will probably follow the same path unless PHEVs and BEVs are introduced massively soon.

Wonder which process is the worse; this type or Alberta tar sands?

Reality Czech

CTL is worse. Tar sands have much lower energy overhead, and it comes mostly from natural gas.

Harvey D

Reality Czeck:

If your are correct, the US Administration would not be able to use fuel derived from coal because they recently prohibited the use of fuel from Alberta tar sands.

However, it may be easy to proof that the total pollution created by Aberta tar sand operations is unequaled depending on who is paying the study.

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