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Crow Nation Signs Agreement for CTL Project in Montana

Montana Governor Brian Schweitzer, a proponent of coal-to-liquids projects, joined tribal leaders of the Crow Nation as well as executives from Australian-American Energy Company (AAEC) in announcing that the tribe and company have formed a partnership to move forward on a coal-to-liquid facility and a new mine to be located on the Crow Reservation in Montana. The project mine will be the first new coal mine in Montana in three decades.

The project, called Many Stars, is initially targeted to convert 38,000 tons of coal per day into 50,000 barrels per day of synthetic diesel, jet fuel and naphtha. Startup is expected in 2016. Crow Chairman Carl Venne noted that future plans with AAEC include expanding the CTL plant production capacity to 125,000 barrels per day.

The Crow Nation has over 10 billion tons of coal resources. We made a decision to pursue this type of clean-coal project because it provides long-term economic and social benefits for our people for many generations to come. The Many Stars Project will help us become self-sufficient.

—Crow Chairman Carl Venne

Allan Blood, chairman of AAEC and also chairman of AAEC parent Australian Energy Company Limited (AEC), said that the project design calls for capturing CO2 for geo-sequestration and supply to enhanced-oil recovery projects.

Under terms of the agreement, the Crow Nation has committed coal and water resources for the project while AAEC will provide the development capital and project management. Both the Crow Nation, through its company Apsáalooke Energy Company LLC, and AAEC will participate in the board of directors of the project company.

The documents the Crow Nation and AAEC signed today include an exploration agreement under which AAEC will spend 12 to 18 months to further evaluate the coal resources and select a final site for the mine and plant. AAEC has already completed its initial feasibility study for the coal-to-liquid fuels project and will begin the environmental permitting process later this year. Construction is expected to begin in 2012.

Australian Energy Company Limited, headquartered near Perth, Australia, was the original developer of the APEL (now Monash) CTL Project in Victoria, Australia and is currently developing a $2 billion clean-coal conversion project, the Latrobe Valley Urea Project, also in Victoria.

Governor Schweitzer was introduced to AAEC at an international coal-to-liquids conference in New York during the summer of 2007 and invited the company to more closely assess Montana’s abundant resources. His administration has worked closely with both the Crow Nation and the company in helping make this project a reality.

The partnership between the tribe and the company has been in the making for nearly a year. The Crow Reservation was chosen for the project because of the abundant coal resources that tribal leadership is willing to develop.

The economic impact of this project cannot be overstated.

—Carl Venne

Comments

ejj

At least they're not going to rely on gambling as their holy grail of economic development like American tribes!

Ziv

ejj, both the Crow Nation/Reservation and Montana are American, or did the sarcasm/irony fly right past me? Now that is possible...

arnold

We have a saying over onder that goes "eat crowe".
About as unpalatable as it gets.
I guess they gotta eat too.

Over under

Brad Godfrey

haha at least american tribes have economic development

DaveD

It's good that we're doing things to produce our own energy and get off foreign oil (yes, i know it would be better if we could all live off solar and wind power and never burn dirty, nasty fuels like oil and coal....that' a different discussion so don't gripe at me for that now).

What I'm trying to figure out is the total energy used in this whole process and whether or not this is practical. My reasoning:
Take coal and spend lots of energy/resources/etc to convert it to oil and then burn it in cars and trucks for fuel.
OR....
Burn the coal for electricity and run it in plug-in hybrid electric vehicles or pure EV's.

Seems that it would be more efficient to just produce the electricity and run the cars. And they're talking about being online by 2016....so don't tell me there won't be lots of plug-in hybrids or pure electrics by then to take advantage of it.

So the real question here is the whole CTL plan and whether it's a realistic policy/goal considering the timing???


The fact of the matter is that the clean coal Urea project at Latrobe is not proposing any sequestration - even trial till several years after start up.
So promises on an unproven and probably (in the opinion of many)unrealisable technology would not be tolerated by those charged with enforcing advertising standards.
Hail economics.
So we can say categorically --- FALSE ADVERTISING---
In any other industry,by law,
this would be prosecutable.
When it comes to energy suppliers, in the recent past it has been justification for going to war and the resultant massacre of civilian (Iraqi's) in the probable millions.
Hail economics

Nick

"Clean coal" is an oxymoron.

ToppaTom

I assume that liquids are more valuable even in 10 years - switching to electricity might be relatively easy if/when liquid demand eases.
No iraqi civilians will be harmed in this project. Quite the contrary, reduced dependence of foreign oil is the goal and is critical.

arnold

So Tom,
Whats wrong with adding he disclaimer that clean col sequestration is an unproven technology that has no guarantee of success?

ToppaTom

I'm not quite sure what you mean Arnie.
Nothing wrong with that but we would they publish doubts? They are selling.
I thought that CO2 sequestration has been reasonably well worked out, maybe on a par with knowing how much and when we must radically reduce anthropomorphic CO2.
Maybe not,.
They say " .. design calls for capturing CO2 ..."
Seems like all anyone can expect at this point.

arnold

I gotta disagree Tom.
The penalty from ccs on the 'basket of proposed'
tecnologies is ~ average 50%.
That is to say as much as half the ouput of these "applicable" power stations is used to pump down CO2. This is for the simple case of electricity generation.
There is a likely similar penalty for ctl.
The CTL product then produces CO2 when it burns in the ICE with its ~30% efficiency and 1 . x CO2 emissions which can't be sequested.

Only some power stations will be in a position to feasibly sequest the CO2 that is in the geophysical sequestration context.

The actual methods themselves - are only proposed and small trial examples are all we have by way of examples for our reassurance.
No reports of resounding sucess even there unfortunately.
Some verification of the geopphysical aspects and concept yes.

However even there (the successful aspect to be sure)
More questions than answers.
In fact the economic imperitave is brought forward as the main justification for proposed massive expenditures.

Not a great guarentee on the future sustainability of planet home.
Some would say that promotion of a product (in this case clean coal) should not exceed that wich can be reasonably verified or shown to be realistic if not to be a false representation of the facts.
I tend to agree .
Otherwise not only do the public get duped , but working with reality becomes imposssible as some scammer always has answers and solutions for half the price. If the client just signs that dotted line....
At that point.
The 'scammers' get the moneys and the clients and the realists may as well pack up and go home.
Except they have an awful sinking feeling that home has been bought and sold already.
In the interests of preserving the status quo and economic imperitave.

In your specific wording, you mention that design calls for capturing CO2, I presume that the reason is adjunct to sequesting CO2.

You ask why should the promoters state that the technology is unproven,? lets also ask why should they explain the 50% efficiency penalty (more for ctl + ccs)?

One word - Honesty.

ejj

Read my lips - no new c a s i n o s!

Herm

1.3 barrels of diesel per ton of coal, that seems kind of low..

gr

@ ejj,

Actually most recognized nation tribes in the U.S. and Canada retain a sovereign status - so technically, legally they are not American. They are First Nations whose borders are within those of the surrounding nation i.e. U.S..

The long development time is beneficial here as the entire energy picture changes. I would hope the Crow consider a sustainable component to their project. With the investment level described here - they could negotiate a biodiesel component. This would accomplish several goals:

1) limit CO2 be reusing it as algal feedstock

2) open a window to a desirable green fuel(blended B20+)

3) stretch the resource lifetime of their coal

4) give the Crow a sustainable industry far outlasting their coal.

We wish them good fortune in any case.

REalist

energy ratios are unimportant its how much your product sells for relative to feed stock cost if it takes 1.3 tons of coal at $5 a ton at the mine mouth to make 42 gallons of high grade diesel selling for 4.75 a gallon its a no brainer use the coal to make diesel. There is so much coal in the USA 1.66 Trillion tons using modern technology even if it was 5 tons of coal to 1 barrel of diesel go for it as long as the profits from the wholesale of diesel are greater than the capital depreciation, net operating costs, feedstock cost, and capital return on investment in greater than about 10% it makes economic sense to do it. the break even point is $45 a barrel for sweet crude that point was crossed and will prob never be crossed in the other way again so it is a relatively safe economic investment to move to coal to fuels. only a massive economic crash of china and India could force crude south of $45 again and even then it would only be temporary oil is going to stay in the 80-150 range for the next decade even as new supplies come online the developing nations are going to use them up as fast as they are produced it makes good national policy to have a alternative liquid fuel source using cheap domestic resources.

REalist

I know I know BEV , plug in blah blah, NOT ECONOMICALY COMPETATIVE in today’s market. No one can make a plug in that is the same cost for its ICE counterpart, and fuel costs even a $4 a gallon will not recoup the investment in the hybrid over the life of the hybrid. The batteries are the limiting thing, technology will solve the problem but not for a while and any new technology takes 15 to 30 years to penetrate the market place so even 15 years from now ICE vehicle will still be using liquid fuels. diesel trucks and trains and jets will always use liquid fuels they need energy dense liquid fuels to work, there will probably never be a plug in 18 wheeler, and electrifying the rail grid has been estimated at 3 trillion dollars not going to happen. Jets well there is no way barring nuclear powered jets that a non liquid fuel version would fly, liquid H2 jets have been tried and they are just not economical in the least ask the Russians they tried the last time.

DaveD

Herm,
That is exactly the reason I think this seems to be a bad idea. I want to get off of foreign oil very much. But I don't think this is even remotely the best way to do it.

Pretend for a minute that there is no energy used to convert the coal to oil (and this is a huge joke because it has to be bad).
You're taking one ton of coal and converting it to 1.3 barrels of oil. So that gives you
1 ton of coal (approx 21,000,000 BTUs) and converting it to 1.3 barrels of oil (approx 5,800,000 x 1.3 = 7.4million BTUs)
http://www.uwsp.edu/CNR/wcee/keep/Mod1/Whatis/energyresourcetables.htm
I would be willing to bet money that there is AT LEAST another 20% penalty in energy consumed to convert that coal to oil.

So now we have lost well over 2/3s of the energy and then we're going to put it into an ICE engine that is perhaps 30% efficient at best???
How much energy did we use to get it distributed to the pump before the car used it? Probably not that much as a % of total energy, but it's more loss.

Does anyone have a reference to how much of the total energy of coal, burned at a plant, actually makes it to the plug at your home? I'm looking for a good reference that is NOT biased by some group trying to prove a point to line their own pockets on EITHER side of the argument. It's hard to find a good, honest assessment of that figure.

My gut feeling is that we would remove more oil dependence by creating large numbers of plug-in hybrids, with at least a 40 mile range, and using that same coal to produce electricity for them rather than trying to turn it into oil and burning it in cars.


Henry Gibson

Coal is just as clean as crude oil, and it is a lot easier to deal with a coal spill on the ocean or on land. Coal sinks to the bottom in a few seconds. Coal can be burnt without the release of anything to the atmosphere.

Much money can be spent in pumping the CO2 into coal seams, oil wells or rock seams that chemically combine with the CO2 before coal's energy cost reaches half that of oil.

The least environmentally destructive and most cost effective way of keeping CO2 releases low is to use CANDU (nuclear) power plants for supplying electricity to the US. A CANDU power plant can be built in less than five years on this reservation and this can limit the operation of natural gas fired power plants and the construction of new coal-fired power plants.

This nuclear power plant can also supply heat to supply steam to the conversion process of coal to liquids and this reduces the fossil fuel input to the production of liquid fuels. The nuclear power plant can always work at full electrical output, and all power not sold into the grid can be used to produce hydrogen by high temperature electrolysis, and the hydrogen can be used in the fuel refining process. Or electric heaters can heat steam to super high temperatures to produce synthesis gas from coke from the coal. This gas is then used to make methanol that can be sold directly or made into gasoline. I will leave it to others to invent a heat pump operated by an electric motor or steam turbine that could also provide the high temperatures more efficiently. Compressing already hot steam is just one approach. Perhaps then thermochemical methods of producing hydrogen could be used.

The nuclear power plant will more than compensate for the CO2 released in the production of liquid fuels from coal and can even reduce such production of CO2 to less than that produced by shipping crude across oceans and refining it. The net CO2 release from such a combined plant will be greatly negative, since the electricity replaces that which would have been produced by burning gas or coal.

Because they buy gasoline in clean liquid form, most people who complain about coal to liquid conversion plants are ignoring the release of CO2 and other gases and dirt and contamination in the production and refining of crude oil when much of it is done out of sight and now mostly in foreign countries.
..HG..

DaveD

REalist,
I hope you're right and the numbers you site are correct and we'll be producing oil from our trillions of tons of coal....and we'll be the next Saudi Arabia by this time next year.

This has not happened yet, and hasn't even started so either it's really hard to do technically or it's much more expensive than you think.

I don't know any source of coal, with any type of energy content, that you can get for $5 a ton. I've been involved in a deal to move steam quality coal, at over 1 million metric tons per month and we were able to get a price of over $72FOB so that doesn't even cover the cost of shipping from end to end.

Then you consider the cost of the processing to go from coal to oil which I have absolutely NO experience with so I won't even attempt to guess.

But I'm willing to bet that it's quite energy and resource intensive. Look at how hard it is to process shell oil. It would be surprising if it wasn't a similar cost.

If there are real numbers out there to prove what you say, then I'd love to see them and I have some investors who want to know and invest in this quickly. I'm not kidding about that. So please point me to some resources so I can get educated.

I actually hope it's true so we can thumb our noses at the Saudis and Chavez, the Russians and all their buddies. But it really seems like something must be wrong with the logic or we'd be doing it.

And for those of you who like the conspiracy theories, give it a rest. Big oil can't buy off big coal. Different groups and they love to screw each other. I deal with both of them and I know.

arnold

I would like to wish all sovereign and determined peoples the best outcomes.
My earlier comment was unlikely to be helpful in that regard.

It is very frustrating at times trying to apply mature and sensitive reason . Again, my comment was likely not appropriate.

If we could see CCS ooperational on any useful scale, I'm sure that concerned realists would feel relieved and reassured.
The economic and technical issues and those whose work brings them in contact with hose problems are not well served by abusive bystanders and have my sympathy.
At the same time we write to an audience of ordinary common or garden variety public and consumers who like the rest of us seek knowledge and understanding of these issues that are affecting each and everyone of us.
Our interests are best served by as best and accurate communication of the issues as can be gleaned.

None of us have all the answers.
Considerd, patient consideration is not a common quality, but that isn't a good reason to act rashly.

Australian-American Energy Chairman Allan Blood said he was 90 percent certain the Crow project would be completed.

For Crow leaders, the project offers an opportunity to lift the tribe out of poverty. Up to 4,000 people would be employed during its construction. And up to 900 permanent jobs would be created with the plant and a new mine on the reservation that would supply the coal.

"Our kids will have something to look forward to," said tribal Chairman Carl Venne. "Not the six or seven or eight dollars an hour they are making now just to get by. You're looking at $70,000, $80,000 - even $100,000-a-year jobs."

But representatives of several environmental groups said they remained wary. An agreement between the tribe and Australian-American Energy calls for the Crow to commit up to 50,000 acre-feet of water annually to the project. One acre-foot is equal to nearly 326,000 gallons.

That prospect is raising flags for southeastern Montana's ranching community, which is worried the project could deplete precious water supplies.

Also, while the tribe and company have pledged to capture 95 percent of the plant's emissions of carbon dioxide - a main contributor to global warming - environmentalists said living up to that promise could be difficult.

Without capturing those emissions and storing the gas underground, coal-based liquid fuels can churn out significantly more greenhouse gases than conventional petroleum, according to the U.S. Department of Energy.

"(Coal-to-liquids) developers have been saying we'll do something about carbon, but they've been unwilling to put it into their permits. It's been a lot of empty promises," said Bruce Nilles, director of the Sierra Club's national campaign against coal plants.

Officials with Australian-American Energy said the Crow plant would be built on the assumption that Congress, in the next few years, will pass legislation compelling companies to capture carbon dioxide. Such laws do not yet exist.

Working in the project's favor are high oil prices and the idea of replacing imported oil with homegrown fuels derived from coal. Despite a recent slide, crude prices closed above $115 a barrel on Friday.

Still, industry officials said the economic downturn has reduced investors' willingness to sink cash into large projects such as the Many Stars plant. Meanwhile, costs have soared due to rising global demand for construction materials and skilled labor.

"You have the optimum oil scenario playing out with prices skyrocketing, but you have the bottom dropping out of Wall Street," said Corey Henry with the Coal-to-Liquids Coalition, a group funded by the mining industry. "It's been tough sledding to try to get the money to build these plants."

About a dozen coal-to-liquids plants are on the drawing boards in the United States. Only two such plants exist worldwide; both are in South Africa.

The biggest hurdle in the United States will be getting the first few plants built, Henry said. Once those are operational, he predicted investors would be more willing to fund similar plants.

Blood said he was not concerned, noting he initiated one coal-to-liquids project in Australia that was later sold for $5 billion. In June, he announced a second project in Australia, a $2 billion plant to convert coal into liquid fertilizer.

"You hear about the problems in the capital markets, but what people don't hear is there are dozens and dozens of projects, hundreds of projects, being funded," Blood said.

Andrew

Investing in coal to liquids is good for energy independence but just pushes environmental problems around.

Don't create another problem trying to solve a problem.

Most rational people do actually believe a move to renewable wind and solar is the answer to our environmental issues. They also recognize the economic and technical difficulty in that transition.

Is a future of clean coal and CTL really desired by the general population? I doubt it... These projects are advertised and driven by powerful vested interests. People just want low price electricity and gasoline. They are too willing to ignore the consequences or bury their heads in the sand.

I just can't give CTL the time of day. The blinkered myopia of extended coal use makes me want to vomit.

I believe in electric cars and nuclear as an acceptable bridge to a renewable sustainable future.

Andrew

BTW... There is a Hollywood fantasy picture that springs to my mind. Native Americans living in harmony with the land, propagating a lifestyle they held onto for 10,000 years. Salmon leaping deer skipping.

Now I have another ironic picture. Dirty, stinking industrial factory, belching pollution over the prairie. Chieftains counting $$ bills and smoking cigars. Coal baron with black hat and mustache taking wheelbarrow of cash to bank........ LOL

Axil

With carbon sequestration, it would take 112 days for a pebble bed reactor to pay for itself. It would also save 80% of the coal used. The coal deposit will last 4 times longer if a reactor is used to produce heat.

Assumptions:

Reference.

http://web.mit.edu/coal/The_Future_of_Coal_Summary_Report.pdf

Excerpt:

CO2 capture and pressurization (about $25/tonne) and CO2 transportation and storage
(about $5/tonne)..

Carbon sequestration cost = $30/ton of CO2

Reference.


http://www.eia.doe.gov/cneaf/coal/quarterly/co2_article/co2.html

Excerpt:

Complete combustion of 1 short ton (2,000 pounds) of this coal will generate about 5,720 pounds (2.86 short tons) of carbon dioxide.

Reference:

http://www.eia.doe.gov/cneaf/coal/quarterly/co2_article/co2.html


Assuming Sub-bituminous coal at the best case 204.3 pounds of carbon dioxide per million Btu


Reference.


http://www.epa.gov/OTAQ/climate/420f05001.htm

Excerpt:


Diesel carbon content per gallon: 2,778 grams

CO2 emissions from a gallon of diesel = 2,778 grams x 0.99 x (44/12) = 10,084 grams =

10.1 kg/gallon = 22.2 pounds/gallon

Coal consumption = 38,000 tons per day

Diesel Production = 50,000 barrels day

Reference:

http://web.mit.edu/pebble-bed/papers1_files/OilSands.pdf

$820,000,000 total reactor cost for process heat production

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