CTL deemed 'credible' fuel option despite drawbacks

Doris Leblond
OGJ Correspondent

PARIS, Apr. 15 -- Coal-to-liquids appears to be one of the more credible alternatives to oil "for the long-term supply of transport fuels," said Institut Francais du Petrole Pres. Olivier Appert, in a keynote address concluding the World Coal-to-Liquids Conference in Paris Apr. 3-4.

IFP was a conference sponsor along with the World Energy Council, the World Coal Institute, and the World CTL Association.

Appert was careful to mention, however, that while coal reserves are huge compared to oil or natural gas, "it is clear that we need to consider seriously the different constraints [on] coal production: [the] environmental issue and technological and financial challenges."

The conference was convened to assess the possibilities of using liquefied coal as a complement to road transport fuels because oil prices are likely to remain high. Coal-rich countries China, the US, Australia, Indonesia, India, and Germany are studying or preparing CTL ventures, and South Africa and China are already engaged in industrial production.

CTL drawbacks
The conference brought out drawbacks to CTL development, the greatest being the need to combine it with capture and storage of carbon dioxide, which the process emits. Producing diesel fuel from coal generates 850 g/mile of CO2 compared with 500 g/mile from oil and requires large quantities of water. Gasoline from coal also emits more greenhouse gases than gasoline from oil.

Cost is another drawback. Based on the experience of South Africa's Sasol, the cost of CTL was evaluated at $67-82/bbl, excluding the cost of CO2 capture.

"It is cheaper than extraheavy oil production," said Alain Quignard, who manages new projects and new motor fuel resources at IFP. He told OGJ: "From coal onwards, one finds the refining processes applied to heavy oil and deep conversion products."

Whether produced from direct liquefaction, with hydrogen added to the organic structure of coal, or from indirect liquefaction through breaking down the coal structure by gasification with steam, investment in a CTL plant costs as much as a large refinery but produces much less fuel volumes.

China's Shenshua CTL plant, due on stream this year in Inner Mongolia, is a large complex having associated coal treatment and refining operations. It will produce only 20,000 b/d of CTL but will cost several billion dollars. Shenshua is using the direct liquefaction process, while Sasol chose the indirect process.

Brian Ricketts, an International Energy Agency coal analyst, said the liquid coal market would not exceed 15% of transport fuels before 2050. And if clean technologies are included, it would not be more than 10% by then. However, use of the direct or indirect technology would accelerate after 2020-30, he said.

Coal plentiful
At the conference Poland's former Prime Minister Jerzy Buzek, a member of the European Parliament and vice-president of the European Energy Forum, described his country as having the "largest coal reserves in Europe." He said Poland is engaged "in resolving a coal conversion dilemma: whether to use coal as power for electricity or only for liquid fuels."

William Anderson, assistant secretary of the US Air Force for installations, environment, and logistics, told the conference the USAF is committed to synfuels development to reduce dependence on foreign oil. Within the USAF's "energy initiatives," Anderson plans to test certification of synfuels on the air fleet by 2011 and use a synfuels blend by 2016 for half the fuels purchased.

Meanwhile, his department is developing "a major international initiative" through ongoing talks with the UK's Royal Air Force and France's Air Force about alternative aviation fuels, greenhouse gases, and aviation fuel demand reduction. It also is "reaching to Air Forces across the world; fuel needs to be international," he said.

Closing the conference, Appert gave his own cautious view, warning, "In an uncertain environment, the industry needs to understand the constraints of financing and engineering. But, as well, the finance and engineering worlds have to understand and manage the specificities of CTL.

"Given the size of CTL commercial plants, the needs for commodities will be huge." He urged the industry to continue "studying and improving CTL, [while] keeping our eyes open to other energy routes. By doing so, I am convinced that CTL will be part of the solution to the dramatic challenges of energy and environment the world is facing."

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