## CONSOL Energy and Synthesis Energy Systems Form JV for Coal-to-Liquids Plant to Produce Methanol and Gasoline

##### 28 July 2008
 Conceptual rendering of the Benwood CTL plant. Click to enlarge.

CONSOL Energy Inc., the US’ largest producer of bituminous coal, and Synthesis Energy Systems Inc. (SES) have formed a joint venture—Northern Appalachia Fuel LLC (NAF)—to develop their first US coal gasification and liquefaction plant to be located near Benwood, West Virginia. The two companies announced last year that they were jointly exploring coal gasification opportunities. (Earlier post.)

The plant is expected to be a “mine mouth” facility with feedstock supplied directly from CONSOL’s nearby Shoemaker complex. The feedstock will be a blend of run of mine coal and coal otherwise not recovered in the normal preparation process. Coal will be gasified to syngas utilizing SES’ U-GAS technology, licensed from the Gas Technology Institute (GTI); the syngas will be used to produce approximately 720,000 metric tons per year of methanol that can be used as a feedstock for the chemical industry. The partners also expect that the project will be capable of converting methanol production to approximately 100 million gallons/year of 87 octane gasoline.

 The GTI U-GAS gasifier.

The plant is projected to cost about $800 million, and will have a feedstock intake capacity of 2,000 tonnes/day of coal. SES expects groundbreaking in the first quarter of 2009, with commissioning in the first quarter of 2011. NAF is currently negotiating with ExxonMobil Research and Engineering to license their proprietary methanol-to-gasoline technology. (Earlier post.) As envisioned, the project will include a river terminal facility, where products will be stored in tanks for off-loading into barges for ultimate delivery. The Board of Directors of CONSOL and SES have authorized funds for development activities, including the front-end engineering design (FEED) package. Each member company will contribute equally to this phase of the project. NAF is finalizing agreements with Aker Solutions US Inc., a subsidiary of Aker Solutions ASA, to perform the FEED. The FEED will include a carbon management strategy that will focus on carbon sequestration in a deep saline aquifer. At a later date, NAF will file for environmental and other permits necessary for the construction of the plant. CONSOL and SES have signed a memorandum of understanding (MOU) with the State of West Virginia and its partner, the Regional Economic Development Partnership (RED), a private West Virginia non-profit development corporation. Under the provisions of the MOU, the State and RED will provide financing and tax incentives to the project over a 10-year period. Separately, SES and The North American Coal Corporation (NAC) are conducting a joint pre-feasibility study to explore the development of a coal-based gasification facility utilizing SES’s U-GAS technology. If constructed, the facility will produce synthetic gasoline, chemical feedstocks and/or synthetic natural gas. (Earlier post.) SES began operation of its first commercial scale coal gasification plant in Shandong Province, China in January (Hai Hua project). A second plant is under construction . We have a second plant under construction in Inner Mongolia (Golden Concord project), and a third is under development under a preliminary agreement with YIMA Coal Industry Group Co. Ltd. Resources ### Comments Ugh... "We have a second plant under construction in Inner Mongolia (Golden Concord project), and a third is under development under a preliminary agreement with YIMA Coal Industry Group Co. Ltd." -You mean "we" refers to SES. Neat technology. But wrongheaded. Politically, it's a winner! Cutting oil imports! Made in America! And, many incomes in your area are deeply linked to that coal. Yeah, it wins there. But it's still carbon. CO2 levels are still rising. Thanks, but we want GREEN energy. And we'll get it. The cost of coal is going out of sight. Reference: http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html This project will greatly increase the cost to the electric customer. Reasonable electric costs are important because many people use electric to heat and cool their homes. These low income customers may freeze of bake in their homes before too long. They probably need to get this plant well along before the next Congress takes over. The article didn't mention the source of energy to do the processing. I assume it'll burn coal with the resulting CO2 release. But why not use wind or nuclear? What are the economics? It's good to know they will capture and bury the CO2 at some unspecified future time. I'm sure they'll keep their word on that maybe do it sooner than later. The great virtue of a carbon cap is the 2-for-1 deal between CTL and petrofuels ie you can have two tanks of oil based for every one of coal based liquid. The only thing that will save us is the fact the price of coal is going up at least 50% a year world wide. @Green In Kansas: This is a great plan - I love it! It's great for West Virginia & America. Maybe they can make Diesel too. It's like finding a new American fuel reserve & getting a new refinery for America right on top it. We're not going to get green energy overnight - this is a great intermediate step in the right direction away from the thugs in the middle east. Be grateful this will improve the quality of life of our fellow countrymen & women in the great state of West Virginia. Aussie The great virtue of a carbon cap is the 2-for-1 deal between CTL and petrofuels ie you can have two tanks of oil based for every one of coal based liquid. The only thing that will save us is the fact the price of coal is going up at least 50% a year world wide. Can you suppy a link, I would like to learn more about this. Thanks! The plant is expected to be a “mine mouth” facility with feedstock supplied directly from CONSOL’s nearby Shoemaker complex. The feedstock will be a blend of run of mine coal and coal otherwise not recovered in the normal preparation process. When the breaker grades coal, the coal dust at the bottom of the sort can’t be sold; that’s waste coal. Over the years, large piles accumulate. It is good if they can burn that waste to clear the landscape, and not put price pressure on the coal market. Any coal experts have any thoughts? Axil I take it you are interested in the CTL vs petro angle not so much coal price rises. I think in truth I was one of the first to point it out and others have picked up on it. Refining + tailpipe emissions of petrol are 2.3 kg of CO2 per litre according to this auto club. A range of CO2 values from higher Fischer-Tropsch or Bergius processing are given here but in the literature range from 1.2 to 2.3 times petroleum based. If we take 1.8 X as preferred multiplier then CTL gasoline without process carbon capture creates 1.8 X 2.3 = 4.1 kg of CO2 per litre. Without going through the arithmetic a spot price of$40 per tonne of CO2 in a cap and trade scheme works out about 9c/L on oil based petrol or say 16c/L on coal based petrol. That extra 7c is minor if petrol prices are already near $2/L so I guess I exaggerated when I said a 2-for-1 deal. It's currently a marginal effect until CTL becomes dominant in which case the carbon cap will bring liquid fuel into competition with coal based electricity production. I'm a simple guy, Just tax the crap out of everything carbon. Pump the money into renewables. Oh dang .... we have a short term democracy. Opinion polls decide policy. Ahaa.... Can I convince Joe sixpack to accept this? Aussie Interesting figures 1.5 and 2.2 , Although I wasn't up to the Greenhouse commission site search. The NRMA blogsite you offer is representative but not necessarily accurate I'm sure that the later 2.2 for some F.T.process is well enough explained and stands up (If not understated by as much as 30%!). Lpg is a little different depending on source - and transport handling etc. (I feel that the figure is somewhat high), but we need to consider that for many years and in many places today this fuel is flared of or dumped in even worse ways as the handling is not as easy as the oil components and so is in he way. Lpgas has a lower energy content than petrol/gasoline but that does not translate to lower power or higher consumption IF the system is properly designed. The general perception that gas is less efficient is brought about by poor industry practice, say unsuitable engines, unsuitable control devices and unoptimised fitment. Lpg gas in a fair comparison will come out on top. Let's see, it can make 100 million gallons per year and costs$800 million. So if we needed 100 billion gallons we would need 1000 plants at a cost of \$800 billion.

I would rather use biomass gasification and FT. CO2 neutral and a revenue source for farmers and wood products companies. Of course I would rather turn the biomass to methane, put in in the pipes and refuel all cars in their garages...but that is just me.

Combining the last two posts I think a mainly-methane gas is the way to go for replacing liquid fuels in buses and trucks. LPG which is mainly propane-butane mostly from oil refining not only has higher energy density but is easier to liquify at around 8 bar room temperature IIR whereas methane dominant gases like NG need around 200 bar. Thus CNG needs heavier cylinders for less range unfortunately.

However mainly-methane gas can also be made from landfill, farm waste and pyrolised biomass. The traffic will just have to go a little slower.

@sjc:
I agree, but reflecting on ejj's comments, this could represent a crossover to cleaner technologies. The idea is not to source all of our demand through CTL, but use it to alleviate prices in the crude/gasoline market. (Therefore, 100 billion gallons of CTL capacity is unlikely/impossible).

@Aussie:
Interesting points about the CO2 emissions and prices of CTL and petrol from gasoline.

I still think liquid transportation fuels trump NG anytime, just because they are so convenient to use & have higher energy densities.

Green energy will take decades to replace fossil fuels. If the dolos who want to cut all coal, oil, gas, and non-conventional fossil fuels are willing to let us convert their bodies to biodiesel via thermolysis, perhaps we can just get by until green energy is mature enough to fill the gap. Lord knows there are enough of those fools for fuel.

Unfortunately the CTL technology they propose here is nothing new or original. Very expensive scheme to say the least. They did it in New Zealand from natural gas, but stopped when crude prices dropped. Apparently the economics even with natural gas is not so favorable.

On the other hand, why not? SASOL has been operating successfully even when oil prices were low. The crude prices are not going to drop significantly ever again. The process is flexible, it can produce chemicals for the chemical industry.

Lpgas has a lower energy content than petrol/gasoline
Lower by volume, but higher by weight.

Propane in particular has a higher octane rating than most gasoline, and LPG's high heat of vaporization would permit its use in direct-injection engines with higher compression and turbocharging.

We're not going to get green energy overnight - this is a great intermediate step in the right direction away from the thugs in the middle east.

Where does this "thugs in the middle east" rhetoric come from? Current high oil prices are being driven by geology, physics, and the economic development of Asia. If the middle east was filled with liberal democracies we would still be in the same tight spot that we are in today. Don't forget that the Saudis, who are religiously even more extreme than the Iranian Ayatollahs, are our buddies. The only reason that they are not pumping enough oil to allow us go on driving our gas guzzlers is because they are no longer physically capable of doing it.

This "thugs in the middle east" rhetoric is a distraction from the central problem facing us today. A system of production which defines economic "health" as producing and selling as much stuff as you possible can is structurally insane in a world which is pushing up against finite resource limits. The tyranny we are facing is that of our own endlessly greedy appetites and not that of the owners of the world's dwindling supplies of oil.

We're not going to get green energy overnight - this is a great intermediate step in the right direction away from the thugs in the middle east.

Where does this "thugs in the middle east" rhetoric come from? Current high oil prices are being driven by geology, physics, and the economic development of Asia. If the middle east was filled with liberal democracies we would still be in the same tight spot that we are in today. Don't forget that the Saudis, who are religiously even more extreme than the Iranian Ayatollahs, are our buddies. The only reason that they are not pumping enough oil to allow us go on driving our gas guzzlers is because they are no longer physically capable of doing it.

This "thugs in the middle east" rhetoric is a distraction from the central problem facing us today. A system of production which defines economic "health" as producing and selling as much stuff as you possible can is structurally insane in a world which is pushing up against finite resource limits. The tyranny we are facing is that of our own endlessly greedy appetites and not that of the owners of the world's dwindling supplies of oil.

Gassification to methanol to gasoline is one of the most efficient BTL processes available to us today. There's no need to use large amounts of coal, biomass can be used more efficiently.

With the past and present flaring of gas and the energy required to refine crude oil as well as the carbon released by the burning of residue oils and petroleum coke as well as the CO2 cost of transporting the oil, it is not clear that there is a lower CO2 release for fuel from petroleum or that from coal. The CTL plant can use charcoal from biomass mixed with its coal without modification. For the same amount of energy, frequently, bagged charcoal can be bought in the local grocery for less than gasoline or diesel.

Plug-in-hybrid cars would use electricity generated at high efficiency from coal directly and this would cause less and easier controlable emissions to the air than CTL fuels in ordinary cars. The energy density of methanol is high enough for all cars and trucks and should be used directly if possible. Engines with electric valves can have a compression ratio suitable to all fuels and exhaust converters can be built for all problematic gases whilst the highest efficiency is gained from the particular fuel being used. The smaller engine required for serial plug-in-hybrids is automatically more efficient.

The concept of plug-in-hybrid allows for the use of tiny highspeed turbine generators that produce low nox automatically. The single moving part of a CAPSTONE stationary turbine generator has been used in some buses and reduces the maintenance costs greatly but not quite enough to make up for the initial cost in the low production quantities.

Nuclear power is the only low cost way to reduce CO2 emissions. There is not enough biomass of any type of enough area to grow it to match large fraction of the requirements of industry or automobiles. There is not enough area for wind-turbines that never will produce even their half rated output for a week. "Wind wind stay away come again at three today!!" does not work but the burning of gas can be started in seconds and stopped faster. The only reason Denmark can have so many windmills is because they are tied to Norway that can shut off its hydroturbines in a second. Coal takes a few minutes or even hours. Solar cells have had much development, and are good for very rich people to pretend with. Honda cogeneration systems are much more price effective for homes, and Capstone turbines for buildings.

Almost no car was bought in the US for its actual energy efficiency. To misquote a long forgotten politician "You shall not crucify mankind on a cross of carbon.". ..HG..

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