Montana governor campaigns for fuels from coal

Sept. 19, 2005
Montana Gov. Brian Schweitzer is urging executives from oil companies and fuel technology companies to finance Fischer-Tropsch (FT) projects that would convert coal into gasoline and diesel.

Montana Gov. Brian Schweitzer is urging executives from oil companies and fuel technology companies to finance Fischer-Tropsch (FT) projects that would convert coal into gasoline and diesel.

“I would like to [see the US] replace the imported oil. We can be self-sufficient and self-reliant,” Schweitzer said. “It’s time to wean ourselves from sheiks, dictators, rats, and crooks.”

He also envisions FT as a way to stimulate economic development in Montana, which has an estimated 120 billion tons of coal-30% of total US coal supply and 10% of total world supply. “I am leading this country in this desire. We can do it in Montana for $1/gal,” of diesel, Schweitzer told OGJ in a Sept. 8 telephone interview from his Helena office. “This is not dissimilar to the vision people had about oil sands in Alberta 20 years ago.”

FT fuels are clean, having no sulfur, mercury, or arsenic, he said. Schweitzer estimates a 150,000 b/d unit would cost $7.5 billion. A project could be constructed in phases starting with a 22,000 b/d unit for $1.2 billion, he said.

The US imports 13 million b/d of crude oil and petroleum products.

Sen. Max Baucus, D-Mont., added tax incentives for the FT process in recently passed energy and highway bills.

Schweitzer said costs have deterred FT development, but he estimated a break-even point at $35/bbl for benchmark US light, sweet crudes on the New York Mercantile Exchange. NYMEX’s Sept. 9 average price for the October contract was $64.08/bbl.

Many analysts say oil prices are likely to hover above $40/bbl for the foreseeable future.

Industry contact

Schweitzer has met with Shell Oil Co. Pres. John Hofmeister and General Electric Co. Chairman and Chief Executive Officer Jeff Immelt. Schweitzer told OGJ that he expects to talk with representatives from South African synthetic fuel producer Sasol Ltd. in late September.

Schweitzer is not alone in US efforts to promote coal gasification and coal-to-liquids technology. Plans are under way for a coal gasification plant in Williamson County, Ill.

ConocoPhillips and Fluor Corp. are performing front-end engineering design for a coal gasification process for the Southern Illinois Clean Energy Center. The proposed project would process coal into 95 MMcfd of pipeline quality gas and generate 600 Mw of electricity (OGJ Online, Apr. 22, 2005).

When asked about clean coal-fired power, Schweitzer said transmission companies from across the US and Canada have told him they are willing to build transmission lines as soon as contracts are signed to build new power plants.

Various oil companies are working on FT projects worldwide. ExxonMobil Research & Engineering Co. granted Syntroleum Corp., Tulsa, a worldwide license under its gas-to-liquids (GTL) patents to produce and sell fuels from natural gas or coal. The agreement covers FT technology (OGJ Online, Jan. 7, 2005). Separately, Syntroleum signed a memorandum of agreement with Linc Energy Pty. Ltd., Brisbane, to jointly develop a coal-to-liquids project in Queensland, Aus. (OGJ Online, Aug. 16, 2004).

GE’s coal gasification technology is being used in a plant under construction in China’s Nanjing Chemical Industrial Park on the Yangtze River. The plant is slated for operation in 2007. More than 20 licenses for GE’s gasification technology have been signed in China since the early 1970s, GE said (OGJ Online, Apr. 15, 2005).

Sasol Synfuels International (Pty.) Ltd. and Chinese partners let contracts to Foster Wheeler Energy Ltd. and China Huanqiu Contracting & Engineering Corp. for a first-phase feasibility study of two 80,000 b/d coal-to-liquids projects in the Ningxia Autonomous Region and Shaanxi Province in western China (OGJ Online, Apr. 13, 2005).