93o 0 ) i syntjhetic fneis ® OIL SHALE 0 COAL 0 OIL SANDS 0 NATURAL GAS VOLUME 31 - NUMBER 1 — MARCH 1994 QUARTERLY Tell Ertl Repository Arthur Las Library Cj!orado School of Mines © THE PACE CONSULTANTS INC. ® Reg, U.S. Pot OFF. Pace Synthetic Fuels Report Is published by The Pace Consultants Inc., as a multi-client service and is intended for the sole use of the clients or organizations affiliated with clients by virtue of a relationship equivalent to 51 percent or greater ownership. Pace Synthetic Fuels Report is protected by the copyright laws of the United States; reproduction of any part of the publication requires the express permission of The Pace Con- sultants Inc. The Pace Consultants Inc., has provided energy consulting and engineering services since 1955. The company's experience includes resource evalua- tion, process development and design, systems planning, marketing studies, licensor comparisons, environmental planning, and economic analysts. The Synthetic Fuels Analysts group prepares a variety of periodic and other reports analyzing developments In the energy field. THE PACE CONSULTANTS INC. SYNTHETIC FUELS ANALYSIS MANAGING EDITOR Jerry E. Slnor Post Office Box 649 Niwot, Colorado 80544 (303) 652-2632 BUSINESS MANAGER Ronald L. Gist Post Office Box 53473 Houston, Texas 77052 (713) 669-8800 Telex: 77-4350 HIGHLIGHTS A-i I. GENERAL IGT Highlights Research Efforts in Natural Gas and Coal Conversion 1-1 GOVERNMENT Clinton Administration Releases Domestic Oil and Gas Plan 1-3 National Research Council Makes Recommendations for DOE Fossil Energy Research i-S ENERGY POLICY AND FORECASTS Battelle Forecasts Slight increase in Overall R&D Spending for 1994 i-iO United States Dependence On Oil Imports Continues to Climb 1-11 World Energy Council Foresees Big Increases in Energy Demand By 2020 1-12 Bechtel Sees Need for 100 G of New U.S. Generating Capacity in Next 10 Years 1-17 ECONOMICS Attractive Subsidies are Available for Biomass Gasification 1-20 TECHNOLOGY New Small Business Innovation Research Projects Described 1-23 INTERNATIONAL Finnish Companies Making Progress in Pressurized Gasification 1-25 Wood Gasifier Being Developed in Brazil 1-26 COMING EVENTS 1-28 H. OIL SHALE PROJECT ACTIVITIES Little Change Reported on Status of Stuart Project 2-1 Ramex Gets Financing for Further Oil Shale Gasification Work 2-2 ECONOMICS Byproduct Market Possibilities Examined for Eastern Oil Shale 2-3 TECHNOLOGY New Opportunities Seen for High-Value Chemicals From Shale 2-8 Recent Oil Shale Patents Listed 2-9 Solar Gasification of Oil Shale Proposed 210 SYNnIETIC FUELS REPORT, MARCH 1994 INTERNATIONAL Oil Shale Resources of the Pripyat Basin in Byelorussia Defined 2-12 Baltic Oil Shale Basin Reviewed 2-13 Steam Retorting and Coprocessing With Lignite Studied for Turkish Oil Shales 2-15 Estonian-Finnish Seminar Makes Recommendations for Estonian Energy Development 2-16 ENVIRONMENT Leachate From Combusted Israeli Shale Could Be Classified as Hazardous 2-18 RESOURCE Sodium Prospecting Permits Denied Because of Possible Damage to Oil Shale Resources 2-19 STATUS OF OIL SHALE PROJECTS 2-20 INDEX OF COMPANY INTERESTS 2-36 ifi. OIL SANDS PROJECT ACTIVITIES Oil Sands Production Figures Updated 3-1 Imperial Oil Defers Phases 9 and 10 at Cold Lake 3-1 Shell Canada Testing SAGD Process at Peace River 3-2 Canadians to Pool Resources for Oil Sands R&D 3-4 GOVERNMENT Oil Sands Orders and Approvals Listed 3-5 TECHNOLOGY Recent Oil Sands Patents Listed 3-7 In Situ Combustion in Canadian Heavy Oil Reservoirs Reviewed 3-8 Supercritical fluid Extraction of Oil Sand Bitumen Studied 3-11 Steam-Assisted Gravity Drainage Becoming Proven Technology for Oil Sands and Heavy Oil 3-13 INTERNATIONAL Intevep Plans Heavy Crude Processing Plant 3-17 Orimulsion Picks Up Support in Europe and Canada 3-17 RESOURCE Heavy Oil Potential in Alaska Studied 3-18 STATUS OF OIL SANDS PROJECTS 3-21 INDEX OF COMPANY INTERESTS 347 SYNTHETIC FUELS REPORT, MARCH 1994 IV. COAL PROJECT ACTIVITIES ENCOAL Plant Starts Up Again 4-1 Advances Made in Shell-Based IGCC Plant Design 4-1 Groundbreaking Set for 2-Megawatt Molten Carbonate Fuel Cell 4-4 Great Plains Project Building Scrubbers for Coal Lock Vent Gases 4-4 Mealy Clean Coal Project Hits Snag 4-5 TVA Cancels Work on Coproduction Power and Fertilizer Concept 4-5 Western Energy SynCoal Process May Find a Customer 4-5 Carbonate Fuel Cell Being Tested in Slipstream at Destec Gasification Facility 4-6 Proof-of-Concept Liquefaction Facility Dedicated at HRI 4-8 GOVERNMENT Status of Clean Coal Technology Projects Updated 4-9 ENERGY POLICY AND FORECASTS $25 Billion in Gasification Projects Already Committed 4-11 ECONOMICS MITRE Finds Direct Liquefaction More Economical Than Indirect 4-12 IGCASH Cycle Shows Promise for Intermediate Load Applications 4-14 Baseload Power Generation Technologies Compared By Black and Veatch 4-16 TECHNOLOGY History of Dispersed Catalysts in Coal Liquefaction Reviewed 4-22 Hot-Gas Particulate Removal Systems Studied for IGCC Applications 4-24 Liquid Phase Methanol Attractive for Dispatchable Energy Storage 4-26 Lignite Overburden From Clay Mining Could Be Retorted 4-29 Air-Blown Versus Oxygen-Blown PRENFLO Gasifiers Compared 4-31 Aromatic Polymer Precursors Could Provide a New Direction for Coal Chemicals 4-33. INTERNATIONAL CRE Gasifier Developed for Topping Cycle 4-35 Gasification Projects Progressing in China 4-37 Puertollano IGCC Project to Be Operational in 1996 4-38 KoBra Project Using HTW Gasifier Scheduled for Commissioning in 1996 4-40 Buggenum IGCC Plant Ready for Demonstration 4-42 ENVIRONMENT Fugitive Emissions at Cool Water Were Low 4-45 Environmental Impacts at Wabash River Gasification Project Addressed 4-46 Coal Agglomeration Process Cleans Up Tar at Gas Plant Sites 4-49 RESOURCE U.S. Coal Production and Reserves Updated 4-51 Record United States Coal Production Forecast for 1994 4-53 STATUS OF COAL PROJECTS 4-56 INDEX OF COMPANY INTERESTS 4-106 SYNTHETIC FUELS REPORT, MARCH 1994 111 V. NATURAL GAS TECHNOLOGY DOE Contractors Report Progress in Natural Gas Conversion 5-1 New Methane Conversion Process Doubles Yield of C 2 Chemicals 5-3 INTERNATIONAL China Makes Bid to Develop Coal-Bed Methane 54 RESOURCE Forty Trillion Cubic Feet of Natural Gas Identified in Hydrates on Alaskan North Slope 5-5 STATUS OF NATURAL GAS PROJECTS 5-6 SYNTHETIC FUELS REPORT, MARCH 1994 iv HIGHLIGHTS Capsule Summaries of the More Significant Articles in this Issue IGT Highlights Research Efforts In Natural Gas and Coal Conversion The Institute of Gas Technology (IGT) has described energy and environmental work in its 1993 Annual Report (see page 1-1). Various projects were discussed, including work with molten carbonate fuel cells, IMHEX technology, U-GAS coal gasification, RENUGAS biomass gasifica- tion, the MILDOAS proèess, and natural gas processing. Clinton Administration Releases Domestic Oil and Gas Plan In December, the Clinton Administration released The Domestic Natural Gas and Oil Initiative, designed to increase the energy efficiency and competitiveness of United States industry and reduce the trend toward higher oil imports. As seen in the article on page 1-3, emphasis is placed on developing natural gas resources and environmental protection. Except for developing the oil and gas potential of Naval Oil Shale Reserves, little mention is made of synthetic fuels. National Research Council Makes Recommendations for DOE Fossil Energy Research A National Research Council study on the funding of research into fossil energy, including both upstream and downstreamtechnology, is summarized on page 1-5. Heavy hydrocarbon processing, natural gas conversion, oil shale development, oil extraction from tar sands, and coal liquefaction were included. Recommendations were made for future funding priorities. World Energy Council Foresees Big Increase in Energy Demand by 2020 A World Energy Council Commission has studied world energy consumption, considering economic, technical, environmental, social and institutional factors. The Commission developed four global energy cases, with each representing different assumptions in terms of economic development, energy efficiencies, technology transfer, and the financing of development worldwide. As summarized on page 1-12, a large increase in global energy consumption is forecast, especially in the developing countries. Bechtel Sees Need for 100 GW of New U.S. Generating Capacity In Next 10 Years Bechtel has given an overview of United States electricity markets through the year 2003, as reviewed on page 1-17. Bechtel predicts a base 2.0 percent per year average increase in peak electricity demand, leading to a need for 100 gigawatts of new generating capacity by 2003. Natural gas is expected to be the preferred fuel for the near term, with coal consumption increas- ing near the end of the forecast period. Attractive Subsidies are Available for Biomass Gasification Several tax benefits and subsidies exist for the production of energy from biomass, as discussed on page 1-20. The credits, benefits, and subsidies considered include a tax credit for producing gas from biomass, credit for producing electricity from biomass, incentive payments for electricity produced from biomass, benefits for alcohol fuels, accelerated depreciation on equipment, and tax-exempt financing. A-i Finnish Companies Making Progress in Pressurized Gasification Finnish enterprises are developing pressurized gasification technology for power production from coal and biofuels, as discussed on page 1-25. Enviropower tests gasification fuels (coal and wood- based biomass) in its 15-megawatt pilot plant in Tampere, and is developing other projects as well. In addition, the A. Ahlstrom Corporation is working with Sweden's Sydkraft AB on the Varnamo pressurized biomass gasification plant. Byproduct Market Possibilities Examined for Eastern Oil Shale Both established and potential oil shale product and byproduct markets for Eastern United States oil shale are examined on page 2-3. These include trace elements, sulfur, cement, asphalt, bricks, fixed gases, specialty carbon fibers, chemicals, and chemical feedstocks.