Coal-to-liquids plant is considered

UPI ^ | 05/21/07

[nypokerface]

WASHINGTON, May 21 (UPI) -- The U.S. Department of Energy has issued a feasibility study for a commercial 50,000-barrel-a-day coal-to-liquids facility in the Illinois coal basin.

The department's National Energy Technology Laboratory said the conceptual design of the CTL plant provides a performance baseline to demonstrate how the technology could capitalize on domestic energy resources, while providing a bulwark against rising petroleum and natural gas prices.

The price of coal-derived liquid fuels has traditionally been unable to compete with the price of fuels derived from crude oil. But, as oil prices rise, domestic sources of transportation fuels are becoming more affordable.

The CTL plant design is projected to use 24,533 tons of high-sulfur bituminous coal daily to produce 27,819 barrels per day of diesel fuel that, with additives, could be delivered to end-use customers. Department of Energy scientists said such a plant could also theoretically produce 22,173 barrels per day of liquid naptha products that could eventually become a chemical feedstock.

[NewHampshireDuo]

Somewhere in this is an episode of “Dirty Jobs.”

[Obie Wan]

I’ve been saying for years WE’VE got coal right here in the US of A,let’s figure out how to use the stuff. I suspect our friends in the oil industry have had at least a small influence on why we haven’t investigated this alternative closer but when gas and oil products get high enough to cripple the economy maybe we’ll reconsider !!!

[stboz]

This is what our arabian sand...uh...dwellers fear the most.

Do it.

[plumcrazy]

Ditto. Such venture is long overdue in this country.

[plumcrazy]

Ditto. Such venture is long overdue in this country.

[granite]

Back in 1949, the Bureau of the Mines in Louisville, Missouri  put together a
demonstration plant to produce gasoline from coal.  Raw coal was first crushed to about 3/4 inch size and then pulverized in a ball-mill  to less than 60 mesh, then dried to 1 or 2 percent moisture content.  This is mixed with a small quantity of catalyst, such as iron oxide or tin oxalate, and with a heavy oil into a paste containing about 47 percent solids.  Steam-driven pumps at 10,000 psi force this paste into a radiant-type heater in which the high pressure tubing is protected by a superheated jacket.
  The plant was designed to work at 700 atmospheres or over 10,000 lb. pressure, in two major steps.  This liquefies the coal and produces gasoline and its by-products.  The output of the plant was from 300 barrels of gasoline  per day depending on the coal used and the catalyst used.  Taken from
ENCARTA 2004 by Microsoft.
 

[stboz]

As much as 400 billion barrels in the Bakken Shale and 1.3 trillion barrels in the Colorado-Utah-Wyoming shales and we’re BUYING OIL from these heathen pigs?

[bmwcyle]

Making the fuel American DEMS won’t make.

[pabianice]

*psst* ...biodiesel... US restaurants produce 28,000,000,000 gallons of used cooking oil per year... pass it on

[MinimizeGovernment]

In the 1970's, Ashland Oil Company built a coal liquifaction demonstration plant in Ashland KY, just downriver from the Ashland (now Marathon-owned) refinery. They proved the commercial viability of converting coal to a liquid, not unlike gasoline, and to a gas not unlike natural gas. Unfortunately the cost per gallon to produce it at that time was well above the cost of gasoline.

Given that the cost of gasoline today is actually on par with the inflation-adjusted price from 1980, I have to assume that coal liquifaction still doesn't make economic sense.

[granite]

Economics of Peak Oil Talk of "peak oil" and "running out of oil" concerns only cheap, high quality oil. Cheap oil may peak by 2010, that's a big reason the price has now gone up to the price of expensive oil. We have already suffered much of the economic impact of running out of cheap oil—and survivied. The world has not collapsed—billions of people are not dying. High oil prices hurt, but even at $100/barrel, the world economy would not collapse. But the current level of $70 per barrel is enough to bring lots of new resources into the market. At that price you can turn coal into gasoline.

 

 

The oil-crisis folks predict catastrophe when we pass the peak of oil production. But what matters is not total production, but how much we have per person. People need oil, "the world" does not. So per-person production matters not "world production." Since we passed the per-person peak in 1979, the Peak-Oil Crisis happened 26 years ago, and it wasn't so bad. Because OPEC and the Iraq-Iran war pushed price up too far and too fast, there was a world recession, but we came out of it and the world is richer now than it was then. The oil-geologists, who are crying wolf, deliberately ignore economics--they dislike it and think pure geology is enough. But this is a human problem and money matters. In fact, what the graph below shows is that when the crisis hit, price went up and people conserved lots of energy. In fact it looks like world oil consumption would have been double what it is today without the price increases. That's one effective conservation program.

 

 

There are two reasons wht there will be no sudden oil crisis caused by running out of oil.   1. At higher prices, lots of oil can be made from tar sand, oil shale, coal, etc. 2. Even without this, the market would prevent a sudden smashup. The supply side   First, the easy one; there's lots of fossil for gasoline. The Germans ran mostly on gasoline made from coal during WWII. We are better at converting coal to oil today. There is enough coal to last a couple of hundred years. Long before people give up cars, or starve to death, we will make gasoline from coal. Why hasn't this happened? Because the price of oil has not stayed high for long enough, and because there is still enough cheap oil. Investment in alternative sources of gasoline started back in the late 1970's when the price spiked for a while.  But it soon came down and stayed down for 25 years and killed those projects. Investors will not invest again until they are quite sure the price will stay up. But once we run out of cheap oil it will definitely stay up, and investors will build plants to convert coal to oil. Even now tar sands production in Alberta is going gang busters.  It's a bit cheaper than converting coal to oil and oil prices have been high enough long enough for that to take off. Alberta has enough recoverable oil from tar sands to equal Saudi Arabia in volume of oil. It just costs more and makes a much bigger mess. How high will the price get? Demand for gasoline responds to price, but not very quickly. If there is a sudden shortage of supply, people get desperate, are willing to pay a lot, and the price spikes. Consequently the price will bounce around from say 60% too high to 20% too low. But since gasoline can be made from coal for the equivalent of about $40 per barrel, it is unlikely that we will see prices averaging $100/barrel (in 2000 dollars) for many years to come, perhaps not for over a century.

 

The demand side   Even if there were no expensive source of gasoline, we would not run out. How is this possible? Say there were just enough oil to sustain the present level of oil consumption for 50 years, and once that was used up, there would be no more oil and no way to make any from coal, or distill it from tar sands. Wouldn't we just use it all up and run out, and the economy would collapse? Nope. People are not that dumb. The oil traders think about how fast we are running out all the time, and how to profit from it. They are greedy. The geologists are not quite so greedy, which is a good thing, but they need to learn something from the traders. Say the world was going to run out of oil in 2050. By 2049, the geologists would have this figured out. What would the traders do? They would buy all the oil they could and hold onto it until 2051. Because with the world totally out of oil except for their stash, it would be worth a fortune--probably $50,000 per barrel. People would pay just to see it, and the super rich would pay a fortune to show off driving their fancy cars when the world is out of oil. This is all a bit silly, but it shows the basic reason we can't run out. The closer we get to running out, the more the traders will hoard oil and wait for the price to go higher. Their hoarding prevents us from running out. But their hoarding causes shortages ahead of time. These shortages won't stop all oil use, just slow it down and drive the price up. When the world tries to run out of oil (remember, we're assuming no coal or tar sands), it can't run out, but the price goes up and up and up. That's really what stops our running out--the traders make it so expensive we can't afford to. Oil literally costs too much for the world to use it up. Now here's the tricky part: how fast will the price go up? Will it go up slowly till it gets to $100 and then shoot up to $1000 the next year? No, because the traders would see this coming and buy lots of oil and drive the price up before it did that. The theory of price is very circular, but that doesn't mean there is no answer. It means you have to be good at math to find the answer. The answer was found in the 1930s by Hottelling. Unfortunately, the math is calculus, but not first or second year calculus, it's third year--so I'm not going to explain it to you. But the answer is simple. All those greedy traders, who will forever watch for peak oil so they can buy the oil before the other traders do, will prevent any huge and sudden increase. There will be sudden ups and downs, but the average will increase forever at only about the rate of interest, only about 10% per year, and we will never completely run out.

 

Supply and demand together   As the price goes up, two things happen. We use less gasoline and we produce more from tar and coal. Once coal becomes economical as a source of gasoline, it will hold the price of oil down to that level. The result will be that we will run out of cheap oil because its price will not go up as it would if it were the only source of gasoline. Then we will be left with only coal, tar sands and other expensive sources. Unfortunately, both have a higher carbon content and both take more energy to produce. So we will keep using more and more energy as the population of the world grows and gets richer and CO2 will increase even faster than with good cheap oil.

[MinimizeGovernment]

There is a well-done discussion of liquifaction and gasification on Wikipedia, here

The article claims that the break-even cost is when oil reaches $35/bbl; however, it does not indicate what year that statement was made, so inflation could have an impact. Given that oil is currently nearing twice that level, the subject is certainly worth revisiting. Unfortunately coal liqifaction and gasification releases large quantities of CO2--don't tell Algore.

The long term solution to our fossil fuel and CO2 problem has to be electrical separation of hydrogen from water, powered by nuclear. We need to be producing gasoline from ANWR and the Eastern Gulf in the near term while we make a maximum effort to bring nuclear/hydrogen on-line. Our nation's future depends on it. All we need to do now is to convince the Democrats.

[VOA]

bump

[thackney]

I suspect our friends in the oil industry have had at least a small influence on why we haven’t investigated this alternative closer

I suspect, like Oil Shale, when we develop this resource, it will mostly be the oil industry making it happen.

[thackney]

-—US restaurants produce 28,000,000,000 gallons of used cooking oil per year-—

28 Billion gallons? That sounds quite high. Do you have a source for that info?

[Obie Wan]

You think so huh? Well I don’t !!!

[LeGrande]

psst* ...biodiesel... US restaurants produce 28,000,000,000 gallons of used cooking oil per year... pass it on

Source?

[thackney]

The future will tell. Oil industry was the ones that tried to make it economical before and they are the ones investing in the oil shale pilot plants that BLM is just starting to approve. Oil industry are the ones that have been investing for decades in the Oil Sands of Alberta, there are ~$100 Billion in projects starting over the next decade.

But maybe you are right. Perhaps some others investors will step up to the plate and take the risk in this highly volatile market.

[mimaw]

How much mining rights did Clinton give away to his buddy in Indonesia. Does anyone remember details?