Liquid Transportation Fuels from Coal and Biomass Technological Status, Costs, and Environmental Impacts

Americans rely heavily on imported petroleum-based fuels for transportation. However, concerns about tightening global supplies of oil, the need for supply diversity, and increasing evidence linking carbon dioxide emissions to climate change, have driven a search for alternatives to petroleum-based fuels. This report, one in a series of five reports from the National Academies’ America’s Energy Future initiative, assesses the potential for producing liquid fuels from coal and biomass (plants and waste), including considerations of technical readiness, costs, and environmental impacts. The report concludes that liquid fuels produced from coal and biomass could become an important part of a U.S. energy strategy.

he United States The nation can increase transportation sector relies energy security and potentially almost exclusively on oil, reduce greenhouse-gas emis- T sions by developing replace- using about 14 million barrels of oil per day to fuel all U.S. ments for gasoline and diesel transportation needs, 9 million made from oil. This report of which are used in light-duty concludes that liquid fuels made vehicles (e.g., cars, sport utility from biomass (plant matter and vehicles) Americans drive every wastes) and coal hold promise. day. Domestic energy sources (e.g., They are deployable over the coal, nuclear) can supply all U.S. next 10-25 years, could become electricity needs, but the United cost-competitive with petroleum, States is unable to supply sufficient and will reduce reliance on oil. oil to satisfy its transportation demands, and Their greenhouse gas emissions could be currently imports about 60 percent of the similar to or lower than those of petroleum- petroleum it uses. based fuels. However, even with abundant Reliance on oil raises two issues. The supplies of biomass and coal, the technologies first is energy security. Global demand for needed to convert them into liquid fuels and oil continues to rise, while at the same time, to capture and store carbon dioxide from the fears have arisen that oil production could conversion process, still need to be demon- peak in the next 10-20 years and then drop strated at commercial scale. off. The second issue is that greenhouse-gas Supply of Biomass emissions that result from burning petroleum products account for one-third of total To date, the primary biofuels in the United carbon dioxide emissions in the United States have been ethanol from corn grain and States and are an important contributor to biodiesel from soybean, which accounted for global climate change. less than 3 percent of U.S. transportation-fuel consumption in 2007. These fuels have raised use about 700 million tons of coal per year, which several issues. Diverting corn and soybean crops to is a 70 percent increase in coal consumption. That biofuel production induces competition between would require major increases in coal-mining and food, feed, and fuel. In addition, growing such transportation infrastructure for moving coal to the crops requires a lot of fossil fuels (e.g., fertilizer conversion plants and moving fuels to the market. and farm vehicles), making the reductions in Increased mining has numerous environmental greenhouse-gas emissions compared with petro- effects that will need to be dealt with in an envi- leum-based gasoline small at best. ronmentally acceptable way. A key question is the The next generation of biofuels is expected to availability of sufficient coal in the United States be made from cellulosic biomass—residues from to support such increased use while supporting the agricultural and forestry practices, crops grown coal-based power industry. only for conversion to fuel (dedicated energy Challenges in Converting Biomass and Coal crops), and municipal solid wastes—which offer to Liquid Fuel substantial reductions in greenhouse-gas emissions relative to petroleum-based fuels. The report Even with abundant quantities of biomass and concludes that approximately 550 million tons per coal, a commercially deployable set of conversion year of cellulosic biomass could be produced by technologies needs to be developed or demon- 2020 without any major impact on food production strated immediately and driven to commercial or the environment (see Table 1). readiness. There are two key conversion technolo- To attain the panel’s projected sustainable gies: (1) biochemical conversion, which uses 1 supply of cellulosic biomass, incentives would have enzymes to break down starch, cellulose, or 2 to be provided to farmers and developers to use a hemicellulose from biomass into sugars that are systems approach for growing and collecting the converted into ethanol, and (2) thermochemical biomass and converting it to biofuel—an approach conversion, which uses heat and steam to convert that addresses soil, water, and air quality; carbon biomass and/or coal into syngas from which liquid fuels are synthesized. sequestration; wildlife habitat; and rural develop- ment in a comprehensive manner. Biochemical Conversion Supply of Coal Cellulosic feedstocks are not yet part of our energy portfolio because converting them into The United States probably has sufficient coal ethanol is more complicated than converting corn resources to meet the nation’s needs for well over grain or soybean, and, as of 2008, no commercial- 100 years at current rates of consumption. Making scale cellulosic conversion plants were yet opera- liquid fuels from coal would result in an expansion tional. Over the next decade, process improvements of the coal-mining industry. For example, a in cellulosic-ethanol technology are expected to 50,000-barrels/day plant will use about 7 million come from evolutionary developments gained tons of coal per year, and 100 such plants would through demonstration and commercial experience and from future scientific developments. Economics Table 1. Estimated Cellulosic Feedstock that are also expected to improve as scale of production Could Potentially Be Produced for Biofuel expands to optimal size. Current Available An expanded transport and distribution infra- Fuel Product Technologies by 2020 structure will also be needed because ethanol is too (millions of tons) corrosive to be transported in pipelines used for Corn stover 76 112 petroleum. Studies should be conducted to identify Wheat and grass 15 18 the infrastructure needed to accommodate increas- straw ing volumes of ethanol and integrating these Hay 15 18 volumes into the fuel system. Research on convert- Dedicated fuel crops 104 164 ing biomass to fuels more compatible with the Woody biomass 110 124 Animal manure 6 12 1 A complex carbohydrate, (C6H10O5)n, that forms cell walls of most Municipal solid waste 90 100 plants. 2 A matrix of polysaccharides present in almost all plant cell walls with Total 416 548 cellulose. current distribution infrastructure could yield new dioxide emissions from coal-and-biomass-to-liq- technologies in the next 10-15 years. uid conversion plants are similar to that of gaso- If all conversion and distribution infrastruc- line and diesel; with carbon dioxide storage, ture is in place, 550 million dry tons of biomass/yr life-cycle emissions are close to zero. If 550 could be used to produce up to 2 million bbls/day million tons of biomass are combined with coal (30 billion gallons/yr) of ethanol. Of course, (60 percent coal and 40 percent biomass on an producing the supply depends on the availability energy basis), 4 million barrels per day (60 billion of cellulosic-ethanol plants. If the rate at which gallons/yr) of gasoline equivalent could feasibly plants are built exceeds that experienced with be produced, which is about 30 percent of the corn-grain-ethanol plants by 100 percent, cellu- amount of fuel used in U.S. transportation today. losic ethanol could be added to the fuel portfolio To make coal and biomass liquid fuels com- at up to 0.5 million barrels of gasoline equivalent mercially deployable by 2020 while meeting goals per day by 2020. By 2035, up to 1.7 million barrels for reducing carbon dioxide emissions, a program per day (gasoline equivalent) could be produced, of aggressive support of first-mover commercial representing about 15% of oil use in U.S. coal-to-liquid and coal-and-biomass-liquid fuel transportation. plants with integrated geologic carbon dioxide Thermochemical Conversion storage would have to be undertaken immediately and proven viable by 2015. Coal-and-biomass-to- Technologies for converting coal through liquid plants would probably be sited in regions thermochemical conversion are commercially near coal and biomass supplies, so buildout rates deployable today, but at life-cycle greenhouse-gas will be lower than those of cellulosic-ethanol emissions about twice those of petroleum-based plants discussed above. fuels. The ability to capture the carbon dioxide The report estimates that at a 20 percent per released during coal conversion processes and store year growth rate from 2020 until 2035, 2.5 million it deep underground (geologic storage of carbon barrels of gasoline equivalent (about 20 percent dioxide) is key to producing liquid fuels from coal of oil use for U.S. transportation) would be pro- with life-cycle greenhouse-gas emissions compa- duced per day in combined coal biomass plants. rable to gasoline and diesel. However, geologic That would consume about 300 million dry tons storage of carbon dioxide has yet to be adequately of biomass—less than the projected biomass demonstrated on a large scale in the United States. availability—and about 250 million tons of coal Liquid fuels produced from biomass are more per year. expensive than those from coal because of the higher costs of biomass feedstocks, but they can Costs, Barriers, and Deployment have carbon dioxide life-cycle emissions close to Production of alternative liquid transportation zero without carbon dioxide storage or highly fuels from coal and biomass with technology negative with effective carbon dioxide storage. To commercially deployable by 2020 can play an make such fuels competitive, the economic incen- important role in reducing U.S. oil consumption tive of reduced carbon dioxide emissions has to be and carbon dioxide emissions. The various options sufficiently high, for example, through policies that have different greenhouse-gas impacts, and the put a price on carbon dioxide emissions. choice will most likely depend on U.S. carbon Thermochemical conversion of biomass policy. The report estimates costs of cellulosic and coal together to produce liquid fuels offers ethanol, coal-to-liquid fuels with and without promise as a future U.S. strategy, because it geologic carbon dioxide storage, and coal-and-bio- allows a larger scale of operation than would be mass-to-liquid fuels with and without geologic possible with biomass only and reduces capital carbon dioxide storage using a consistent set of costs per unit of capacity. It also extends the assumptions (see Table 2). Although the estimates potential impact of limited biomass supply. do not represent predictions of prices, they allow Overall carbon dioxide life-cycle emissions are comparisons of fuel costs relative to each other. The lower than those from coal alone because the costs of cellulosic ethanol and coal-and-biomass-to- emissions from coal are countered by carbon liquid fuels with carbon dioxide storage become dioxide uptake by biomass during its growth. more attractive if a carbon dioxide emission price Without carbon dioxide storage, life-cycle carbon of $50/tonne is included. Reaching the supplies of 1.7 mil Table 2 Estimated Costs1 of Fuel Products with and without a lion barrels of cellulosic ethanol per a CO2 Equivalent Price of $50/tonne day, 2.5 million barrels of liquid Cost without Cost with CO2 fuels from coal plus biomass per day, CO2 Equivalent Equivalent Price or 3 million barrels of coal-to-liquid Price of $50/tonne fuels per day (or some combination Fuel Product ($/bbl gasoline equivalent) Gasoline at crude-oil price of $60/bbl 75 95 of the above) will require the permit- Gasoline at crude-oil price of $100/bbl 115 135 ting and construction of tens to Cellulosic ethanol 115 105 hundreds of conversion plants and Biomass-to-liquid fuels 140 130 the associated fuel transport and without carbon capture and storage delivery infrastructure. It will take Biomass-to-liquid fuels 150 115 more than a decade beyond 2020 with carbon capture and storage Coal-to-liquid fuels 65 110 for these fuels to penetrate the U.S. without carbon capture and storage market at these levels. In addition, Coal-to-liquid fuels 70 90 if investors foresee crude-oil price with carbon capture and storage fluctuations, especially towards Coal-and-biomass-to-liquid fuels 95 120 levels below these alternatives, without carbon capture and storage investments may be foregone or Coal-and-biomass-to-liquid fuels 110 100 with carbon capture and storage delayed unless some form of pro 1 These costs are estimates intended as a basis for comparing gasoline with the different tection against such fluctuations is alternative liquid fuels. put in place. a Numbers in table are rounded to nearest $5.

Panel on Alternative Liquid Transportation Fuels: Michael P. Ramage (Chair), ExxonMobil Research and Engineering Company (retired); G. David Tilman (Vice Chair), University of Minnesota; David Gray, Noblis, Inc.; Robert D. Hall, Amoco Corporation (retired); Edward A. Hiler, Texas A&M University (retired); W.S. Winston Ho, Ohio State University; Douglas L. Karlen, U.S. Department of Agriculture Agricultural Research Service and Iowa State University; James R. Katzer, ExxonMobil Research and Engineering Company (retired); Michael R. Ladisch, Purdue University and Mascoma Corporation; John A. Miranowski, Iowa State University; Michael Oppenheimer, Princeton University; Ronald F. Probstein, Massachusetts Institute of Technology; Harold H. Schobert, Pennsylvania State University; Christopher R. Somerville, Energy BioSciences Institute; Gregory Stephanopoulos, Massachusetts Institute of Technology; James L. Sweeney, Stanford University; Evonne P. Y. Tang (Study Director), National Research Council.

This report brief was prepared by the National Research Council based on the panel’s report. The National Academies appointed the above panel of experts, who volunteered their time for this activity. The committee’s report is peer-reviewed and signed off by both the committee members and the National Academies.

Reports in the National Academies’ America’s Energy Future Initiative The National Academies Summit on America’s Energy Future: Summary of a Meeting Liquid Transportation Fuels from Coal and Biomass Electricity from Renewables: Status, Prospects, and Impediments Real Prospects for Energy Efficiency in the United States America’s Energy Future: Opportunities, Risks, and Tradeoffs

For more information on this report or the America’s Energy Future initiative, contact the Board on Energy and Environmental Systems at (202) 334-3344 or visit http:// nationalacademies.org/energy. Copies of Liquid Transportation Fuels from Coal and Biomass are available from the National Academies Press, 500 Fifth Street, NW, Washington, D.C. 20001; (800) 624-6242; www.nap.edu.