## Headwaters Inc and Axens Form Direct Coal Liquefaction Alliance

##### 21 January 2010

Headwaters Inc and Axens are forming a strategic alliance to provide a single-source solution for producing synthetic fuels by direct coal liquefaction (DCL) alone or in combination with refinery residues or biomass. The two companies will combine their technologies and licensing activities for Coal-To-Liquids (CTL) projects world-wide.

Headwaters brings its slurry catalyst technology and its extensive CTL research facilities. Axens will contribute its ebullated-bed H-Coal Process and proprietary catalyst. Both evolved from a common background and DCL technologies developed by Hydrocarbon Research, Inc. (HRI), which were commercialized with support from the US Department of Energy and industrial clients.

There are two basic approaches to converting coal to synthetic fuels: indirect liquefaction (ICL) (Fischer-Tropsch) and direct (Bergius). The indirect liquefaction pathway first gasifies the coal to produce a syngas, and then catalytically converts the syngas to linear hydrocarbons or chemicals. Direct liquefaction, by contrast, combines coal with hydrogen over a catalyst for the direct conversion to linear and ring-type hydrocarbons. (There is a hybrid process that combines the two.)

 Axens DCL process. Source: Axens. Click to enlarge.

In the US, HRI started DCL development in the early 1970s. The US government, through the US Bureau of Mines and US DOE, invested some $3.6 billion from 1975-2000 to develop DCL technology. Two reactor technologies emerged from the work: a single-stage fluidized bed reactor (H-Coal Process), and a two-stage fluidized bed reactor technology (Catalytic Two-Stage Liquefaction, or CTSL process), the basis for Headwater’s current process. Axens’s H-Coal process is also a two-stage process (two catalytic reactors). Generally, the ICL process produces high-cetane diesel and low-octane naptha; the DCL process produces on-spec diesel and high-octane naptha. (Headwaters points out the hybrid DCL/ICL process can produce premium gasoline and diesel fuel with minimal refining.) Building on decades of experiences in DCL and a database on a wide range of coals, both companies have continued to increase liquid yields, improve energy efficiency, lower production costs and reduce the environmental footprint (CO2 emissions and water consumption). Headwaters says that compared to ICL, the DCL process can result in: • 30% lower capital cost for a comparably sized plant • Up to 50% more liquid product per ton of coal • Up to 50% less plant generated CO2 (almost all of which can be captured for enhanced oil recovery) • Half the water consumption • 25% higher thermal efficiency • Balanced power—no need to generate excess power The DCL process operates on low-ash bituminous coal or sub-bituminous coal. A typical bituminous coal can yield 3 barrels of liquid fuel products (diesel and gasoline) per tonne of coal compared to 2 to 2.4 barrels per tonne of coal for indirect coal liquefaction. The thermal efficiency (energy in products divided by energy in coal x 100%) is approximately 60% compared to 48% for indirect coal liquefaction, according to Headwaters. In the Headwaters DCL Process, dry pulverized coal is mixed with recycled process liquid and hydrocracked at 435 to 460 ºC in the presence of high-pressure hydrogen (about 170 bars). Most of the coal structure—a solid organic material made up of large, complex molecules containing carbon, oxygen, hydrogen, sulfur and nitrogen—is broken down in the first-stage reactor. Liquefaction is completed in the second-stage reactor. The proprietary GelCat Catalyst is dispersed in the slurry for both stages. The intermediate coal liquids from the mild hydrogenation step can be further upgraded using conventional refining techniques to produce gasoline, jet and diesel fuels that will meet or exceed existing and future fuel specifications. Comparison of Various CTL Configurations (Source: Headwaters) DCLICL RecycleICL Once ThroughHybrid DCL/ICL Coal consumption (tonnes per day, dry basis) 23,027 29,307 34,450 23,146 Product mix (bpd) Diesel Naptha LPG Total 45,812 18,863 5,325 70,000 47,687 22,313 0 70,000 47,687 22,313 0 70,000 46,750 20,591 2,660 70,000 Net Export Power (MW) 0 399 1,139 45 Thermal efficiency (%) 60.1 48.4 47.4 58.7 Product yield (bbl/t dry coal) 3.04 2.39 2.03 3.02 Plant CO2 generation (kg CO2/bbl product)* 434 706 894 458 *Approximately 80% of the CO2 is in concentrated form ready for sequestration. (Even the lower CTL plant emissions for DCL—434 kg/barrel, or 10.3 kg/gallon—are substantially higher than conventional diesel refining. According to the California Air Resources Board, crude refining for ultra low sulfur diesel results in CO2e emissions of 11.41 g/MJ. The comparable DCL plant emissions per MJ diesel, based on the Headwaters data, would be around 75 g/MJ (10.3 kg/gallon, with 1 gallon diesel approximately equal to 137 MJ (LHV)). If 80% of that could be sequestered, that would bring the plant CO2 down to around 15 g/MJ—still higher than conventional crude refining. Total well-to-tank emissions for either petroleum-based diesel or synthetic would also need to consider recovery of crude or coal; transport; refining or production; and transport of the resulting fuel. In the ULSD pathway for ARB, that results in a total of 19.81 g/MJ.) Headwaters is licensing its technology internationally, with the first commercial plant having started up 30 December in China—a 20,000 barrel per day plant owned by the Shenhua Group, the largest coal mining company in the world. The installed capital cost of this plant is$1.5 billion (2007 dollars). The estimated break even cost is $35 – 40 per barrel selling price. Alliance DCL will market the technologies and anticipates offering project-specific services, from feedstock characterization, pilot plant evaluation, feasibility studies and engineering design through plant start-up and ongoing technical support. Axens will also provide the coal liquids upgrading technologies necessary to achieve finished fuel specifications. Both companies provided technology packages and basic engineering contributing to the successful construction and start-up of the first commercial direct coal liquefaction plant in China in December 2008. Several new DCL projects are currently in development by the alliance. Resources ### Comments "..with the first commercial plant having started up 30 December in China.." "The estimated break even cost is$35 – 40 per barrel selling price."

IF TRUE - this changes everything, unless an oil company again controls the patent..

This seems to be an improved way to tranform coal into liquid fuels and gas.

Has anybody done a total cycle (mine to tank) efficiency check including all energy and resources used to mine, transport, treat the coal feedstock + all other energy sources used to produce the hydrogen, electricity, water, machinery, roads, land, labour, etc, etc, used by all different stages of the process?

When all inputs are figured in, the NET efficiency may be a lot lower than the 60% claimed.

However, even at 40%, it could be a way to reduce oil import and oil wars.

Reducing liquid fuels consumption by 50+% could have to same results and more while redcuing associated pollution.

@Kelly "20,000 barrel per day plant...installed capital cost of this plant is $1.5 billion (2007 dollars. The oil companies would laugh at this, they can bring in dozens of times the production for the same capital outlay. I find the claimed break even ($35-$40 per barrel) suspicious; it can't have considered the capital cost spread over a reasonable lifetime of the plant. nordic, As I said, "IF TRUE".. Would oil companies laugh like Chevron did buying EV NiMH battery patents and their company? Here's an idea. Let Headwaters Inc and Axens do this without government "help". Then they will WANT to determine accurately if it is practical. They will WANT to optimize the process. We won't need any politicians deciding if$30 or $40 /BBL is breakeven.. We won't care, THEY will. Let's let profit driven, "greedy" capitalists try this on their own. We can't lose.$1.5 billion for a 20mbbl/d plant is about $75,000/bbl/day. The figures I recall for conventional tar sands are$60k/bbl/d; THAI may be a game-changer.  The CO2 emissions also argue that this technology goes against the legal climate.

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