Coal and Liquid Fuels Richard A. Bajura National Research Center for Coal and Energy Edward M. Eyring University of Utah GCEP Advanced Coal Workshop March 15-16 Provo, Utah File: zert/utah talk 1 Outline • Concerns over liquid fuels supply • Case for coal liquids • History and status of coal liquefaction • Potential DOD initiative • Closing comments 2 World Primary Energy Consumption by Fuel Type, 1970-2025 39% of 250 World’s Energy 200 Supply 150 Oil Natural Gas 100 Quadrillion Btu Coal 50 Renewables Nuclear 0 1970 1980 1990 2000 2010 2020 EIA, International Energy Outlook 2004 3 Reliable Supply of Liquid Fuel Critical Residential & Commercial Transport Industrial Electric U.S. Petroleum Uses 4 Imports Approach 70% by 2025 30 History Projections 25 20 Consumption Net Imports 70% 15 54% 10 Domestic Supply Million Barrels per Day 5 0 1970 1980 1990 2000 2010 2025 U.S. Oil Supply and Consumption (MBD) DOE/EIA AEO 2004 5 Much of World Oil Supply Located in Politically Unstable Nations Saudi Arabia Canada Iran Iraq UAE Kuwait Venezuela Russia : Libya Nigeria United States World Oil Reserves by Country China Total 1,266 Billion Barrels Mexico Qatar Algeria Norway Kazakhstan Brazil Azerbaijan "Worldwide Look at Reserves and Oman Production."Oil & Gas Journal, 12/22/03 Rest of World 0 50 100 150 200 250 300 Billion Barrels 6 World Oil Demand Increasing Sharply 35 30 Incremental Oil Demand by Sector 25 (2000-2030) 20 15 Other Sectors 10 Transport 5 0 Industry Million Barrels per Day -5 OECD Non-OECD Power Developing counties / economic recovery driving demand growth IEA World Energy Outlook: 2003 Insights 7 More Concerns: Liquid Fuel Supply • World oil depletion – Even conservative Deutsche Bank recognizes oil depletion is an issue in next few decades* • Climate change (~40% of GHG from transportation fuels) • Local air quality – Particularly in developing countries *Deutsche Bank Research, Energy Prospects after the Petroleum Age, December 2, 2004 8 Long Term Vision Fuels with • Very low or zero GHG emissions • Zero local pollutants • Improved energy Challenges source diversity • Engine/fuel interdependency • Infrastructure adaptation • Government involvement • Consumer acceptance • Economics 9 DOE’s Case for Hydrogen It’s Abundant*, Clean, Efficient, And Can Be Derived From Diverse Domestic Resources Biomass High Efficiency Transportation Hydro & Reliability Wind Solar Geothermal Distributed Nuclear Generation Zero/Near-Zero Oil Emissions Coal * (but not as H ) Natural 2 Gas With Carbon Sequestration 10 H2 Meets Vision Criteria But . • Automotive fuel cells are early on cost and experience curve • Production of H2 from renewable or low carbon sources – limited availability and costly • H2 storage and distribution need breakthroughs to be cost effective Increasing recognition that H2 “solution” is well into future 11 Implication For Mid Term • Relying on H2 economy to deliver and doing nothing else is not acceptable option 12 All Eggs in One Basket [H2] 13 What if We Are in the Wrong Basket? 14 Many Potential Options for Mid Term • Natural gas fuels –CNG – LNG • Electricity / batteries •Biofuels • Oil sands • Oil shale • Coal liquids - Today’s Talk Energy Efficiency 15 Why Coal For Liquid Fuels? U.S. Reserves / Production Ratio Years Supply at Current • Abundant domestic 300 Production reserves • Relatively low, 200 stable prices • 800 billion barrels 100 of oil equivalent 0 Coal OilCoal data: BP Statistical Gas Review, June 2004; Oil & gas data: EIA, Advance Summary U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2003 Annual Report, September 22, 2004 16 Two Approaches to Converting Coal to a Liquid Fuel Direct Indirect Break coal down to Gasify coal and maximize correct size rebuild small of molecules for molecules to liquid products desired product 17 Direct Liquefaction • Reacts coal with H2 – Usually in presence of a liquid solvent • Aggressive reaction conditions – Temperatures > 400°C – Pressures > 100 atm – Appropriate catalyst • Produces a syncrude – Can be refined to produce gasoline or diesel fuel – More conversion than indirect process 18 Indirect Liquefaction • Involves gasification of coal to produce a syngas – Mixture of CO and H2 • Syngas converted into a liquid fuel via processes such as – Fischer-Tropsch (FT) process – Mobil Methanol-to-Gasoline (MTG) process 19 Liquids Fuels Can Be Produced from Coal Germany South Africa • Had nine indirect and 18 • Developed coal liquids direct liquefaction plants industry from 1950s at end of WWII through the mid-1980s • Produced 4 MMT/yr fuels •Three coal-to-liquids • Met 90% of nation’s facilities needs • Produced 10 MMT/yr fuels at peak China • Met 60% of nation’s • Planning a 1 MMT/yr needs direct liquefaction plant for 2007 20 U.S. Had Aggressive Program from Mid 1970’s to Early 1980’s • Many pilot and process development scale coal- to-liquid facilities • U.S. Synthetic Fuels Corporation (SFC) support • Promising technologies included: – Solvent Refined Coal (Gulf Oil) – Exxon Donor Solvent – H-Coal (Hydrocarbons Technologies Incorporated) [adopted by China] 21 Cost: A Key Coal Liquefaction Challenge • Mitretek study indicate coal liquefaction should become viable if world oil price remains above $25 per barrel. – Polygeneration plant (produces liquids and electricity) • DOE studies estimate cost of producing coal liquids at $30 per barrel. – Upgrading FT coal liquids costs less than refining – crude oil 22 Status of U.S. Support for Coal Liquids Research • DOE has had modest coal liquids program since SFC days • DOE has not requested funding for liquid fuels research in recent years • Congress has continued to support projects in FE and EERE – Supports its interests through earmarked programs • Some work relevant to liquefaction continues in other DOE programs, particularly H2 23 Polygeneration coal CO Carbonylation Acetic acid methanol Methanol Gasification Clean up Water Gas Shift Synthesis Separation DME oxygen Town gas air ASU Separation Gas Turbine CC H2 Electricity enhanced resource recovery enhanced resource recovery or aquifer sequestration CO2 CO2 or aquifer sequestration • Polygeneration – Higher efficiency and more effective use of capital – Good prospects for cost-competitive production of clean energy carriers and chemicals • Polygeneration could meet most requirements for centralized production of electricity and clean fuels 24 DOE’s FutureGen Includes Liquid Fuel Capability Oxygen Gasification Gas Cleaning Fuels and Chemicals Separation O-2 e– Transportation (fuel cell vehicles) Coal H2/CO2 Separation Power H2 Process CO Heat/ 2 Steam Fuel Cell High Efficiency Turbine CO2 Sequestration By-Products Coal Seams Utilization Figure 2 Electricity Enhanced Saline Oil Recovery Reservoir 25 Coal Liquids and Greenhouse Gas Emissions • Polygeneration/FutureGen approach makes CO2 capture possible for fuel production • High quality of FT liquids enables use of higher efficiency engines • Indirect liquefaction’s use of the gasification process provides bridge to coal-to-hydrogen future 26 Coal Production by Region 1,600 History Projections Utah and other western states 1,200 Total could be well position to capitalize on the 800 Western jobs that a domestic coal-to- Eastern 400 liquids industry Million Short Tons would create 0 1970 1980 1990 2002 2015 2025 Annual Energy Outlook 2004, January 2004 27 DOD’s Interest in Liquid Fuels • Nation’s largest energy user – Uses 1% of all energy in U.S. – Probably world’s largest oil buyer • Uses five billion gallons of petroleum a year • Concern about energy security – SPR has limited supply and lifting capacity • Concern over cost of battlefield fuels ($300 per gallon for delivery of fuel for ground forces in a war theater) – Seek means of producing fuels closer to point of use 28 Under Discussion A DOD Clean Fuel Initiative Vision: Catalyze commercial industry to produce clean fuels for the military from secure domestic resources using environmentally sensitive processes that create jobs and wealth in the United States 29 Benefits of a Coal Liquefaction Initiative • Cleaner fuels reduce • Produce more jobs for NOx and particulate Americans emissions; enable use of • Improves national higher efficiency security by lessening engines reliance of foreign oil • Coupling with • Improves balance of polygeneration enables trade partial carbon capture and builds bridge to H2 economy 30 Technology Development Key To Economic Viability and Real Markets Improved Fuels Catalysts Systems Testing Integration Advanced Technologies Lower Cost Membranes Gasification Computational Chemistry 31.