OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE June 2020 Disclaimer This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference therein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed therein do not necessarily state or reflect those of the United States Government or any agency thereof. 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OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE TABLE OF CONTENTS List of Exhibits ..........................................................................................................................ii Acronyms and Abbreviations ............................................................................................... iii Executive Summary............................................................................................................... 1 1 Introduction .................................................................................................................... 2 2 Background.................................................................................................................... 3 2.1 Direct Processes....................................................................................................... 3 2.2 Indirect Processes .................................................................................................... 4 3 Early History (1913–1950) ................................................................................................ 6 3.1 The Bergius Process.................................................................................................. 6 3.2 The Karrick Process .................................................................................................. 6 4 Mid-Twentieth Century Developments (1950–2000) ..................................................... 8 4.1 International ............................................................................................................ 8 4.1.1 Sasol CTL ........................................................................................................... 8 4.1.2 MHI NEDOL Process .......................................................................................... 8 4.1.3 Shenhua DCL .................................................................................................... 9 4.2 United States............................................................................................................ 9 4.2.1 Overview........................................................................................................... 9 4.2.2 U.S. Department of Energy Coal Liquefaction Program................................. 9 4.3 Industrial CTL Development .................................................................................. 10 4.3.1 H-Coal Process ............................................................................................... 11 4.3.2 Solvent Refined Coal Process ........................................................................ 11 4.3.3 Methanol to Gasoline .................................................................................... 11 4.3.4 Chevron Coal Liquefaction Process .............................................................. 12 4.3.5 VEBA-Combi-Cracking ................................................................................... 12 5 Recent Developments, United States (2000–2020) ..................................................... 14 5.1 Energy Independence and Security Act of 2007 ................................................ 14 5.2 NETL-DOD/Air Force Collaboration—Coal/Biomass to Jet Fuel Projects (2014– 2017) . .................................................................................................................... 14 5.3 Notable Recent R&D at NETL ................................................................................ 15 5.4 Planned CTL Projects in the United States ............................................................ 16 5.5 Economics of CTL .................................................................................................. 16 5.6 Environmental Considerations of CTL ................................................................... 18 6 Current Challenges/Next Steps ................................................................................... 20 7 Summary....................................................................................................................... 21 8 References ................................................................................................................... 22 Appendix A: New CTL Plants in China................................................................................ 28 Appendix B: NETL/U.S. DOD Air Force Coal-to-Jet Fuel Projects ....................................... 29 i OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE LIST OF EXHIBITS Exhibit 2-1. Summary of various CTL methods ...................................................................... 3 Exhibit 3-1. Schematic of the Karrick process (U.S. patent no. 1,958,918) .......................... 7 Exhibit 5-1. CTL projects proposed in the U.S...................................................................... 16 Exhibit 5-2. Estimations of costs for production of liquid fuels by CTL ................................ 17 Exhibit 5-3. Estimations of CO2 lifecycle emissions in production of liquid fuels by CTL .... 19 Exhibit A-1. New CTL plants in China (2015-2020), by application and feed rate............ 28 ii OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE ACRONYMS AND ABBREVIATIONS bbl Barrel MHI Mitsubishi Heavy Industries BP British Petroleum MJ Megajoule bpd Barrels per day MM Million CAER University of Kentucky Center MSG Molten Salt Gasification for Applied Energy Research MTG Methanol-to-gasoline CCLP Chevron Coal Liquefaction MW Megawatt Process N2 Nitrogen CCS Carbon capture and storage NETL National Energy Technology CO Carbon monoxide Laboratory CO2 Carbon dioxide O2 Oxygen CPI Consumer Price Index OPEC Organization of the Petroleum CTL Coal-to-liquids Exporting Countries DCL Direct coal liquefaction PRB Powder River Basin DME Dimethyl ether psi Pounds per square inch DOD Department of Defense R&D Research and development DOE Department of Energy RIC Research and Innovation EDS Exxon Donor Solvent Center EISA Energy Independence and ROI Return on investment Security Act RSP Required Selling Price Fe5C2 Iron carbide Sasol South African Synthetic Oil FT Fischer-Tropsch Limited g Grams SRC Solvent refined coal Gal Gallon STG+ Synthesis gas to Gasoline Plus TM GHG Greenhouse gas TOGAS Topsoe Improved Gasoline Synthesis H/C Hydrogen/carbon tonne Metric ton H2 Hydrogen tpd Tonnes per day H2O Water TRIGTM Transport Integrated HRI Hydrogen Research Gasification Incorporated HTI Headwaters Inc. and U.S. United States Hydrocarbon Technologies VCC VEBA-Combi-Cracking Inc./Headwaters Technology WTI West Texas Intermediate Incorporated (crude oil) IGCC Integrated gasification $MM Million dollars combined cycle °C Degrees Celsius LPG Liquefied petroleum gas °F Degrees Fahrenheit MESA Mission Execution and Strategic Analysis iii OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE This page intentionally left blank. iv OVERVIEW OF COAL-TO-LIQUIDS: A HISTORICAL PERSPECTIVE EXECUTIVE SUMMARY This report provides an overview of the technology for synthesizing liquid fuels from coal, history of development in the 20th century up to early 21st century including the United States (U.S.) Department of Energy (DOE)- and National Energy Technology Laboratory (NETL)- supported work, its costs and environmental impacts, and current challenges and opportunities with particular reference to the United States. Coal-to-liquids (CTL) technology enables conversion of abundant coal into valuable liquid fuels such as gasoline, diesel, and jet fuel. Methods include indirect conversion (coal to syngas, which can be converted to liquid hydrocarbons) or direct conversion (by various direct coal liquefaction methods). Early 20th century development of technologies gave way to wartime use in Germany and post-war commercial implementation in South Africa. The U.S. oil crisis of the 1970s gave impetus to a sustained research and development (R&D) program for CTL—by DOE in the last quarter of the 20th century, work in industry, and collaborations, which resulted in a suite of technologies for innovative CTL technologies, some of which have been deployed commercially. NETL has been recently assessing and developing CTL technology through process feasibility, cost determinations, and lifecycle emissions studies, plus a notable collaboration with the Department of Defense (DOD)/U.S. Air Force on a set of projects in 2014–2017 aimed at technology development for reducing costs and emissions associated with synthetic jet fuel production from coal. This work has shown