When opponents of coal and petcoke gasification write a list of the reasons that a coal/petcoke gasification project should be stopped, there are two false statements that are commonly cited.

One of the most common false statements is that the technology is experimental. The technology is actually very old and tested. Dow Chemical announced that the technology was commercial in 1979. That’s 20 years ago. Sasol has been operating coal gasification plants for many decades. The Great Plains Synfuels Plant in Beulah, ND has been in operation since 1984.

The second most common false statement is that the technology is more expensive than other sources. When the facility in question will not be completed and started up for 4 to 5 years, it’s difficult to impossible for someone that doesn’t have access to the economic to make that determination. It’s more logical to believe that the developer that has worked on the project for a year or longer is better equipped to make the decision. The logical conclusion is that the statement is false. When carbon capture and sequestration is included with the project scope of work, the cost is almost always less expensive than alternative technologies.

Both of these arguments highlight weak defenses by the opponents of coal/petcoke gasification projects.

The value of the U.S. movie industry is $10 billion which roughly equates to only two coal-to-liquid plants. During the Oscar’s I learned that the movie industry is a $10 billion industry. $10 billion? Yes, $10 billion. The revenue potential for all the wealthy producers, the creative directors, the imaginative writers, the costume persons, the hard working stage hands and the talented actors and actresses and the entire U.S. movie industry is only $10 billion.

Yet, the industry seems to be everywhere and immense in scope and size. I confirmed that the domestic movie industry is $10 billion on the Motion Picture Association website. I decided to also check rottentomatoes.com to see what the gross revenue was for some of the top films.

I was surprised to find that Slumdog Millionaire, the year’s Best Movie, has only grossed $8.4 million revenue. So what is the point?

The point is that a commercial scale coal/petcoke gasification plant with an air separation unit and a Fischer-Tropsch or Methanol-to-Gasoline unit would cost roughly $4 to $5 billion based upon several published reports. Wow! The entire U.S. movie industry is only equivalent to the cost of two Coal-To-Liquids plants.

Anyone that is in the petrochemical/coal gasification/engineering and construction business is aware of the formidable capital investment required to construct a Coal-To-Liquids plant, but this really puts the cost into perspective for folks that are not in the industry.

The general public thinks that making a movie is a huge investment. The average cost to make a movie is $106 million. This is a very, very low investment compared to the cost to construct a Coal-To-Liquids plant.

This is why the U.S. government needs to provide mechanisms to reduce risk for the developers, owners and financial institutions. The government should provide risk mitigation mechanisms such as loan guarantees, outright loans, tax credits and other instruments for developers and owners. There is a good chance this will be done. President Obama stated in his address to Congress that there will be legisislation to stimulate the energy sector and included “clean coal” in his remarks.

The Big Stone II coal fired power plant project is providing fresh fodder for environmentalists to use to continue to confuse the general public regarding the use of coal. There are articles all over the internet with headlines that say the Obama administration is signaling that it is opposed to the use of coal.

On January 15, 2009, the Minnesota Public Utility Commission approved construction of power lines for the Big Stone II project that are needed by the Big Stone II power plant to distribute generated electricity to the people in the state. On January 22, 2009, the new EPA administration sent a letter to the State of South Dakota’s Public Utility Commission stating that it opposed the issue of the air permit for the construction of the Big Stone II power plant. The EPA letter lists the reasons for the opposition to the issue of the air permit.

The Big Stone II power plant is an expansion project at an existing power plant and is based on super critical pulverized coal technology. Pulverized coal technology is a coal burning technology and the smoke produced is vented to atmosphere. Coal gasification technology is different; it produces a syngas stream that is not vented to atmosphere and can be ciriculated through equipment and cleaned much the way a refinery processes petroleum products. Environmental groups will not go out of their way to clear the air regarding the differences between pulverized technology and gasification technology. It’s in their favor that all coal technologies get lumped into a single pile. They can continue posting pictures of out-dated technology with smokestacks and billows of white smoke in the sky.

The only problem is that this is not a correct depiction of coal gasification technology. The United States has always been a world leader in technology and science. Eventually the facts of the technology will win out. Coal gasification with carbon sequestration or enhanced oil recovery is an environmentally responsible approach for producing power and fuel.

The Obama administration supports clean coal technology. The whitehouse.gov website states on the energy and environment page that the Obama/Biden administration will “develop and deploy clean coal technology”.

This articles sports a picture of the Tampa Electric Company (TECO) power plant that is based on coal gasification technology and is representative of a coal gasification plant. There are no plumes of smoke and, in fact, no large smokestacks. Interested parties know that the issue is not cleaning the syngas stream, but what to do with the CO2 after it’s removed. The Department of Energy (DOE) and the National Energy Laboratory and Technology (NETL) have the answers and the science cannot be blurred by special interest groups forever.

Courtesy Lawrence Berkeley National Laboratory

While at the Lawrence Berkely National Laboratory, Dr. Chu supported research into alternative energy sources as a method to reduce green house gas emissions associated with global warming. Dr. Chu will be positive influence for coal and petcoke gasification in his new position as Energy Secretary.

Coal-to-Liquids is coal processing technology that does not release emissions into the air the way the existing coal power plants do. Skeptical? I don’t blame you. But, consider this. Refineries don’t BURN crude . . . they CONVERT into other useful products. The same is true of Coal-to-Liquids plants. CTL plants don’t BURN coal . . . they CONVERT it into other useful products much the same as a refinery. Just as a refinery creates gasoline, diesel and jet fuel from crude oil, a CTL plant creates the same products gasoline, diesel and jet fuel from coal. That’s not a typo. It’s correct and coal-to-liquids technology is tested, in service and proven.

If you have seen some “Clean Coal” commercials on television, this is the technology. It’s commonly referred to as clean coal technology, because the coal is converted in a closed loop system of pipes and equipment just like a refinery. In a closed loop system, the synthetic products can be recirculated through specialized equipment until the contaminants are removed. In fact, gasoline, diesel fuel and jet fuel are actually considered to be cleaner that the petroleum derived products.

So Why Doesn’t The U.S. Have These CTL Plants?

1. The oil industry lobby is powerful.

2. The CTL plants are very expensive and government loans or loan guarantees are needed.

3. The environmentalists are against anything that has the word “coal” in it. We all are interested in protecting the environment, but this technology is not any more dirty than a refinery when the CO2 is sequestered or used for enhanced oil recovery.

The benefits of coal-to-liquids plants for the U.S. are staggering. The U.S. has more proven coal reserves than any other country in the world including Russia and China and they are much larger land masses. The U.S. is the Middle East of coal. With an energy policy that supports both coal and petroleum, a coal-to-liquids industry in the U.S. can quickly achieve T. Boone Pickens dream of this county becoming energy independent and no longer dependent on foreign crude oil. This is actually a strategic objective of the Air Force. The gasoline, diesel and jet fuel products can be transported by truck or pipeline to where they are needed. In addition to long term prosperity and security, the construction of these plants will provide jobs for engineering companies, construction workers and equipment manufacturers.

Why it’s important now.

Up to now, the past administrations have taken the position that the Federal government shouldn’t be assisting private industry. Finally in 2008, the Department of Energy offered to provide $8 Billion in loan guarantees for coal-to-liquid plants. Each plant costs from $2 B to $5 Billion so this is a paltry amount especially when one considers that now the Federal government is spending more than $700 billion on bailouts.

The Economic Recovery Plan should include substantial loan funding and loan guarantee programs for the fledgling U.S. coal-to-liquids industry. This is the kind of Federal government support that the country needs to strengthen the economy.

Coal-to-Liquids is proven technology. The U.S. does not have many coal gasification plants, because we’re a capitalist society. Our plants are built for profit by private for-profit companies. This means that as long as it is more profitable to use crude oil for energy, private for-profit companies will do so. But, this does not necessarily mean that this strategy is the best long term energy policy for the United States.

The best long term strategy for a domestic energy policy may not be utilization of whatever energy source is cheapest today. T. Boone Pickens hits a nerve with the American public with his television advertisements that the U.S. is going broke purchasing crude oil for its oil based energy.

The Chinese government refuses to be dependent upon foreign import crude oil and is building coal gasification plants to provide electricity, diesel, gasoline, jet fuel, substitute natural gas, fertilizer, hydrogen and other chemicals. South Africa used it’s coal reserves to develop energy through the operations of SASOL.

It’s reasonable to consider that the current U.S. energy policy based on purchasing foreign crude oil could bankrupt the county in the future. Most people still remember President Reagan’s famous speech towards the end of the Cold War with Russia, “Mr. Gorbachev knock down this wall.” The primary reason that the U.S. won the Cold War is that Russia went bankrupt. The specter of the U.S. going bankrupt by continuing to import foreign crude oil shoud be considered a national security risk.

The United States should develop coal-to-liquids energy projects as one component of a comprehensive energy policy designed to relieve national dependence on imports of foreign crude oil. These projects will cost between and $4 and $8 billion and Federal loan support is needed to get this industry jump started. The Federal government should provide loan guarantees for 50% of the cost of the projects.

Develop and Deploy Clean Coal Technology.
“Obama’s Department of Energy will enter into public private partnerships to develop five “first-of-a-kind” commercial scale coal-fired plants with clean carbon capture and sequestration technology. “

The new administration is laying the groundwork for the first 120 days of the Obama presidency. Now is the time to write your Congressman and Senator and tell them that you support clean coal and coal-to-liquids projects. Our Congressman and Senators aren’t experts about coal gasification, the technologies, the processes and techniques for cleaning the syngas, and the efficient CO2 cleanup. This is a critical time for the U.S. solids gasification industry and an opportunity to shape the course of the nation’s new ‘green’ energy policy. Be sure to take a moment to write this week.

With this amount of coal reserves and proven CTL process, the U.S. can reduce it’s dependence on foreign oil by 50% or more. This is the most practical path for the U.S. to achieve independence from reliance on foreign oil. China has been in the spot light since the Olympics have been on television. Many Americans may be surprised that this is exactly how China plans to provide power for it’s billions of people without relying on imported foreign oil. The Chinese have more than 30 coal gasification and CTL projects underway and will be producing by some estimates approximately 1 million barrels per day of ultra-clean diesel, gasoline and jet fuel from coal by the year within 10 years.

Ironically, China only has about 1/2 the coal reserves of the United States. The United States has literally right under it’s feet the answer to it’s power, fuel and chemical needs . . . and yet does not move forward with development. U.S. coal consumption has not increased significantly in the last 5 years.

There are issues associated with building CTL plants, but both have answers and viable solutions can be developed.

The first issue is the cost of the building a CTL. The cost is approximately $1 to $4 billion depending upon the process units involved and the scale of the plant. The Federal government needs to step up to the plate and provide loan guarantees. Let’s face it, this is more important than providing bailouts for home owners that purchased homes with adjustable rate mortgages (ARMs).

Second, CO2 is now considered by most people to be a green house gas (GHG) that contributes to the warming of the atmosphere so this cannot be ignored and there must be an environmental solution to rmitigate this effect. The general public must be informed about the differences between pulverized coal power plants and coal gasification plants. Both produce about the same amount of CO2, but it is much easier and cheaper to collect the CO2 stream with coal gasification. (And, of course, you can make liquid fuels with the gasification process.) The U.S. projects will be environmentally responsible as opposed to the Chinese projects that emit the CO2. There are solutions for CO2: food grade for use in carbonated drinks, enhanced oil recovery, and sequestration. There is more than enough sequestration capacity and enhanced oil recovery capacity for off take of the CO2 from U.S. CTL projects. Each project must consider these CO2 options individually.

Coal gasification is very different from the old process called ‘pulverized coal’ that has been used at coal power projects for decades. The pulverized coal process burns pulverized coal in a large furnace. The process creates smoke and the hazardous substances are contained in the smoke. Many people incorrectly show pictures of pulverized coal plants spewing smoke when writing about coal gasification plants. It’s difficult and expensive to remove the hazardous substances from the smoke created by pulverized coal plants, because you only have one shot at it before it goes up the stack and into the atmosphere. With the pulverized coal process, the heat from burning the coal is used to generate steam and power steam turbines to generate electricity.

Coal gasification is much different. The coal gasification process operates in a closed system of equipment and piping and at a much higher temperature. The coal is gasified instead of burned which means that it is converted to a gas stream. The gas stream is called synthetic gas (syngas), because it’s man-made from the coal. The syngas is never released up a smoke stack. Instead, it’s processed in a closed system of piping and equipment the way a refinery processes crude oil. The syngas can be cleaned of hazardous substances within the closed loop system. This means there is little or no danger of the uncleaned (raw) syngas escaping to the atmosphere the way smoke can go up a smoke stack.

The syngas can be processed (cleaned) to remove particulates, mercury, sulfur, CO2 and other hazardous substances. After cleaning, the syngas can be used power gas turbines to produce electricity. In addition, the syngas can be processed further to convert it to many useful chemicals like ammonia for fertilizer or hydrogen to be used for refineries to remove sulfur from crude oil products. The syngas can also be further processed further to produce ultra-clean diesel fuel, jet fuel and gasoline.

There are many benefits of using the clean coal process in the United States. The United States has the largest coal reserves of any country in the world including China. The syngas can be used to generate electricity, produce fertilizer, hydrogen removing sulfur from gasoline and diesel fuel, CO2 to be used for improving crude oil production and to produce ultra-clean diesel, jet fuel and gasoline.

China is passing the United States at warp speed when it comes to developing coal gasification plants. China is particularly agressive with construction of coal gasification plants. China is building coal gasification plants for generating electricity, diesel, gasoline, methanol, ammonia, urea, UAN, and other chemicals.

We have added the video to our website and invite you to watch it. It’s interesting and eye opening.