Tagiev Sanan Mehman oglu

Kuzbass State Technical University, Kemerovo

COAL TO LIQUID TECHNOLOGiES IN THE WORLD AND DEVELOPMENT PROSPECTS IN AUSTRALIA

Australia has an estimated 6 % of the world’s recoverable resources of black coal, and also accounts for about six per cent of current world coal production. Much of this is exported: indeed, Australia is the world’s biggest coal exporter. In resources, it ranks sixth behind the USA (31 %), Russia (21 %), China (13 %), India (8 %) and South Africa (7 %) [1]. It is estimated that at current rates of production, Australia has enough black coal to last about 180 years [2]. Black coal represents about half of Australia’s total coal reserves: it also has about 25 % of the world’s recoverable resources of brown coal [3]. On the other hand, Australia is a net importer of crude oil and refined oil products, with domestic production of crude oil and liquefied petroleum gas (LPG) meeting only about 53 % of domestic consumption [4]. These factors, together with a desire for increased domestic energy security, and protection from economic instabilities affecting global oil prices and supply, lead to the question of whether Australia should consider developing a coal-derived transport fuel industry to meet domestic demands.

Production of liquid fuel from coal, known as coal-to-liquids (CTL) technology, involves either direct or indirect liquefaction. CTL can utilize either black or brown coal.

The direct process has not yet been commercially proven, but potentially provides a lower cost path with fewer steps and associated technologies. It involves dissolving the coal in a solvent at high temperature and pressure, followed by hydrogenation (adding hydrogen) with a catalyst, and further refining to produce high-grade clean fuel suitable for use in transport.

The indirect process first requires gasification of the coal. Though the technology is still advancing, gasification is a well-established process commonly used to improve efficiency of coal-fired power plants. The gasification is typically carried out with steam and controlled amounts of oxygen at high temperature and pressure, to produce a clean-burning fuel known as «syngas» (mostly hydrogen and carbon monoxide). Essentially all the hydrocarbons are gasified, and the remaining inorganic material forms a non-hazardous slag that can be used as road base or other building material. Ash, sulphur compounds and other contaminants are removed from the syngas stream and sulphur is isolated and recovered for safe disposal [5]. The syngas is then condensed over a catalyst in what is known as the ‘Fischer-Tropsch’ process to produce high-grade clean liquid fuel.

Current and proposed coal-to-liquids projects

Despite the high up-front capital investment costs, interest in CTL is now growing worldwide, especially in coal-rich countries. This is driven by the low cost and large reserves of coal in many of these countries; increasing oil prices; desire for energy independence and security; and the potential for co-development of CCS technology to reduce greenhouse gas emissions.

CTL technology was utilized in Germany in the 1940`s to meet much of their demand for diesel during the war when oil supplies were limited. South Africa has the only commercial CTL industry in operation today, and has been producing liquid fuels from coal since 1955 using the indirect conversion process. In the 1970`s, additional investment in CTL in South Africa was prompted by trade sanctions on oil supplies to the apartheid regime, and the industry expanded considerably. The industry was supported by government price protection, but this has been largely phased out. Today, the South African company Sasol has three CTL plants that together produce more than 160 000 barrels of liquid fuel per day from coal, which provides about 30 per cent of South Africa’s transport fuel requirements. The company manufactures over 200 fuels and chemical products from coal. Environmental standards were relatively relaxed at the time South Africa’s CTL plants were developed, and the plants have been criticized for their environmental and greenhouse gas pollution – they do not incorporate CCS, as described above. Indeed, Sasol’s three plant complex has been identified as the world’s largest single emitter of CO₂ [6].

CTL plants have been proposed in many countries, including Botswana, Germany, India, Indonesia, Mongolia, New Zealand and the Philippines. Several commercial scale demonstration plants are at advanced stages of planning in the US and China [8]. The first demonstration plant using direct liquefaction is reportedly under construction in China, due to be commissioned in 2008, and two other commercial scale CTL plants are under construction there. Key factors driving CTL development in China include the low costs of coal production, construction capital, and labour, as well as strong government support.

There are various proposals under investigation in Australia. A $2 billion project to manufacture fertilizer from brown coal in Victoria was launched on 3 June 2008. The plant is to employ CCS and is expected to come online in 2012. The chairman of the Australian Energy Company, Allan Blood, who is behind the project, was reported to have said that diesel production from coal was economically viable at a crude oil price of around $60 per barrel. Another project by Monash Energy, backed by Shell and Anglo American, proposes a $5 billion CTL plant in Victoria’s Latrobe Valley for the production of transport fuel from brown coal. This project was recently reported to have been put on hold.

Two Australian companies, Linc Energy and Carbon Energy, aim to combine underground coal gasification (UCG) with a CTL plant to produce synthetic fuel, among other products, from black coal in Queensland. UCG involves injection of oxygen into the coal seam underground and recovery of the resulting syngas stream, leaving the coal in situ. Linc Energy, which was formed in 1996 to commercialise the UCG process in Australia, has a target production capacity of 20 000 barrels per day for its planned facility at Chinchilla, Queensland, where the company has successfully trialled the UCG technology. Carbon Energy is investing $20 million in constructing a surface plant and associated facilities at its Bloodwood Creek site in Queensland, to be commissioned for UCG trials in the next few months [7].

Future prospects

Studies on the economic costs and benefits of CTL, accounting for the increasing influences of emissions-limiting policy measures, suggest that the CTL industry is likely to be restricted to niche markets except where it receives substantial government support. Referring to a recent publication reviewing the CTL industry, the IEA’s Clean Coal Centre stated, because of the high costs involved, and the environmental implications, CTL processes will only be used in the long term where there is substantial government support for strategic reasons, and also where the extra CO2 produced can be effectively sequestered. The environmental benefits arising from the production of cleaner fuels are significant, but governments are unlikely to require their use. The view expressed by the IEA in World Energy Outlook 2006 is that CTL production is likely to remain a niche activity during the period up to 2030, and the review carried out in this study confirms this.

Bibliography:

1. These are economically demonstrated resources, which are resources judged to be economically extractable under current economic conditions.

2. Geoscience Australia, Australia’s identified mineral resources 2008, Canberra, 2008, accessed on 12 December 2008.

3. Australian Coal Association, ‘The Australian Coal Industry – Coal Resources’, http://www.australiancoal.com.au/the-australian-coal-industry_coal-resources.aspx, accessed on 12 December 2008.

4. Economically demonstrated resources; Geoscience Australia, op. cit., p. 21; brown coal is a lower grade of coal with high moisture content.

5. Australian Bureau of Agricultural and Resource Economics, Energy in Australia 2008, Canberra, 2008, pp. 15, 19, accessed on 15 December 2008.

6. See, for example, G. Nagl, ‘Cleaning up gasification syngas’, http://www.environmentalexpert.com/resultEachArticle.aspx?cid=8737&codi=7347&level=7&idproducttype=6, accessed on 16 December 2008.

7. World Coal Institute, Coal: liquid fuels, 2006, p. 4, accessed on 29 September 2008.