## China’s Guizhou province proposes $11.3B coal-to-oil plant ##### 25 November 2010 Chinamining.org. Southwestern China’s Guizhou province has proposed a 75-billion yuan ($11.3-billion), 5 million tonnes-per-year (approx. 36 million barrels, depending upon output product) coal-to-oil project using domestically developed indirect coal liquefaction technology approved by the National Energy Administration earlier this year.

The NEA has agreed to include the project in China’s energy development plan for the five years ending 2015, the Guizhou Development and Reform Commission said in a report on its website.

The indirect coal-to-oil technology, developed by the Institute of Coal Chemistry under Chinese Academy of Sciences, has been applied in three pilot projects and one of them, a 160,000 tonnes-per-year plant Yitai in Inner Mongolia, passed NEA’s examination in July, the report said.

State-owned Shenhua Group Corp—the country’s largest coal miner and parent of China Shenhua Energy Co Ltd.—has begun trial operation of a 1.08 million tpy coal-to-oil plant which is based on a direct coal-to-liquids technology. Shenhua’s proposed joint venture with Sasol in the Ningxia region, which would apply Sasol’s indirect coal-to-liquids technology, has yet to be approved by Chinese government.

China's coal imports are rising fast and approaching 20 million tonnes/month @ $128/tonne =$2.6 B/month.

However, since 1 tonne of coal gives up to 5 barrels of oil, the raw material cost is a mere $128/5 =$26/barrel. The total cost is probably not over $50/barrel. It is a wonder that our free enterprises are not already on board in great numbers in USA. At the current oil price ($80/barrel) they could make a fortune by producing up to 15 million barrels/day with much lower cost local coal.

It seems like the coal industry is doing what they can to supply all of the coal fired power plants. Doubling coal production would be quite a stretch.

The coal for Coal-to-liquid factories does not need to meet as stringent requirements as the coal for power plants, and the conversion factory can be made closer to both the mine and oil pipelines. The sulphur can be mostly converted to fertilizer as is done in North Dakota where the CO2 is also shipped to Canadian oil fields.

The coal at US mines is as cheap as $10 a ton or$2 per barrel. Capital and operating costs of the factory will account for about $1.00 a gallon or less. The former JET BLUE president had a plan to protect such factories with a guaranteed price of$35 a barrel for the jet fuel produced. Ethanol gets much more, and it costs the taxpayers nothing unless the price of crude drops below $35. Obama should have authorized the loans for 100 such factories in the US on his first day in office to save the US and world economy. People can starve in the US or they can worry right now about the effect of CO2 in the distant future whilst nature puts 30 times as much CO2 in the air as humans. Carbon dioxide can be caught and used easily by such factories but it is not right now necessary because oil puts as much into the air now because of the hidden losses in the oil industry. Most people do not know that the price of coal has very little to do with the price of electricity at the power plant which may get over 2000 kWh for every ton, and this converts to$0.10 per kWh at even $200 a ton, and the actual price is more like$30 or less.

There is very little wrong with the idea of pure hydrogen being piped to most homes and buildings in new developments and then to older buildings. Larger pipes are needed, but hydrogen flows faster than any other gas. Hydrogen flows easier so the pipes dont have to be three times larger for the same energy delivered. Perhaps it is still best to deliver hydrogen after being made into methane.

Cogeneration(combined heat, power and cooling) in all homes and businesses is the fastest and most economical way of reducing CO2 releases; it actually also saves money too and much faster than wind or solar of any kind. This can be done with coal converted to methane or hydrogen if necessary. ..HG..