TransGas Development Systems announced that it has filed an application for a permit with the West Virginia Department of Environmental Protection, Division of Air Quality, to construct a coal-to-liquids gasification plant in Mingo County, West Virginia. The Transgas coal-to-liquids project will produce gasoline.

The site is near Wharncliffe, WV in Mingo County about 80 miles south of Charlston, West Virginia. The facility is planned to convert 3 million tons of coal per year to syngas using the Uhde proprietary Prenflo gasification process using 2 – 1000 MWth gasifiers with direct quench. The facility will convert the syngas using a catalytic process to produce 6.5 million barrels per year of gasoline.

Financing has been difficult for most project developers/owners to arrange. Most developers/owners plan to finance their projects with debt. Transgas plans to issue an IPO and finance the project with investor equity from the sale of the stock.

This facility will provide high paying jobs and produce fewer emissions than traditional coal plants and improve the local economy.

Elkton Energy Research Quandrangle (EERQ) plans to establish a research facility in the Town of Elkton, Virginia to research clean coal technology. The facility will be named the quadrangle because it will located between four major universities in Virginia: the University of Virginia, Virginia Tech University, George Mason University and James Madison University. This concept is patterned after the successful and prestigious North Carolina Research Triangle located between North Carolina University, Duke and North Carolina State University.

Medicine Bow Fuel and Power LLC (MBFP) is a subsidiary of DKRW Advanced Fuels LLC and is planning to build a Coal-To-Liquid gasification plant in Medicine Bow, Wyoming. DKRW Energy LLC is the parent company. MBFP has received its industrial siting permit from the Wyoming Department of Environmental Quality. The plant is expected to be online in 2013 and will produce 15,000 to 20,000 BPD ultra-pure gasoline.

The plant will be a mine mouth facility. Arch Coal will supply the coal feedstock from underground reserves at the Carbon Basin Saddleback Hills mine. Arch Coal has a 25% equity interest in DKRW Advanced Fuels.

The Medicine Bow Fuel and Power plant will convert coal to gasoline using the GE Gasification process and the ExxonMobil Methanol-to-Gasoline (MTG) process. The coal will be converted to syngas using GE gasification technology. The syngas will be cleaned and converted to methanol using the Davy Technology Methanol Technology. The methanol will be converted to gasoline using ExxonMobil MTG technology. All of the technologies planned for this project are proven technology.

The plant will use proven technology to remove the CO2. The CO2 will be used in the Powder River basin oilfields for enhanced oil recovery (EOR).

Transgas Development Systems LLC announced it’s plans to build a coal-to-liquids plant in Mingo County, at Roanoke, West Virginia. The project is expected to cost $3 Billion and is scheduled to be completed in 2013. When complete, the plant will convert 3 million tons per day of coal to 6.5 million barrels per day of ultra clean gasoline.

Transgas has selected Uhde’s proprietary PRENFLO gasification technology. Transgas has signed a license agreement with Uhde Corporation of America. The plant will have two 1,000 MWth PRENFLO (TM) gasifiers in the Direct Quench version. The syngas will be converted to gasoline.

The project will meet or exceed the EPA standards and requirements for regulated pollutants. The facility will be carbon capture ready. It’s unknown if the project plans to sequester the CO2, transport the CO2 to oilfields for use in enhanced oil recovery operations or release the CO2 to the atmosphere.

Transgas is considering financing options other than the traditional solicitation of private, non-recourse financing for the project. It’s reported that one option Transgas is considering raising equity with a stock offering to raise funds to construct the project.

The deadline for submitting Phase 1 applications to the DOE for loan guarantees for coal gasification projects has passed. The application deadline was December 22, 2008. Developers worked furiously in November and December to complete their DOE loan guarantee applications and turn them in by the deadline of December 22, 2008. It will be interesting to find out how many applications the DOE received.

The DOE will now review and quantify the applications based on the rating system that is discussed in the application instructions. An application will be evaluated based on three factors:

1. Creditworthiness of the project – 50%

2. Program factors

Construction factors – 15%
Legal and regulatory factors – 10%

3. Technical review

Technical merit – 5%
Technical approach – 10%
Environmental benefits – 10%

TOTAL 100%

Developers and owners must wait to find out if their project made the short list. The developers of projects that are short listed will be invited to prepare the more detailed Phase 2 applications. The deadline for submitting Phase 2 applications is March 22, 2009. Based on the March 22 deadline, it’s expected that the DOE will review applications during January and notify the applicants that are short listed in early February 2009.

The DOE loan guarantee program is of vital importance to the coal gasification industry and the U.S. We wrote in August 2008 in this column that a loan guarantee program for coal gasification was needed.

Rio Tinto is the leading international mining company headquartered in the UK. It combines Rio Tinto plc, a London public listed company, with Rio Tinto Limited, a company listed on the Australian stock exchange. The Rio Tinto company finds, mines and processes the earth’s mineral resources. The focus is on metals and minerals that are essential for making thousands of everyday products. The major products include aluminum, copper, diamonds, coal, gold, uranium, iron ore and other products.

Rio Tinto has recognized the important opportunity for sustainable development through the gasification of coal for energy and liquid products. Tom Albanese, Chief Investment Officer for Rio Tinto, said “Coal is a key part of Rio Tinto’s energy business and we believe it has an essential role in generating clean power in the future.” Rio Tinto has joined with BP to form Hydrogen Energy for the purpose of accomplishing the goal of developing coal gasification plants and creating clean power. Rio Tinto made a cash investment of $32 million towards the joint venture.

The new venture, Hydrogen Energy, will be headquartered in Weybridge. Both companies will provide employees for staffing the company. The initial headcount is expected to be approximately 75 employees.

Environmentalists frequently comment that coal gasification technology is not proven when they are citing reasons to be against coal gasification technology. The implication is that it’s not known if the technology works. This is a false statement. The technology is well proven. These type of statements are an injustice to Americans. A U.S. energy policy that continues to rely heavily on importing crude oil could pose a security risk to the country.

The best known reference for proven technology is SASOL is South Africa. SASOL has been operating coal-to-liquids plants for many years . . . even decades. While SASOL has many years of continuous operating experience, China has far exceeded this experience with the quantity of different coal gasification plant processes that have been built and are in the construction phase. China has many built coal gasification plants that produce many different products. The technology works and that is not disputable.




Below is a list of the gasification projects in China.

Name	Product	Gasifier	Status	Feed	Start
Zhenhai Ammonia Plant	Ammonia	GE	Oper.	Vis. Resid	1983
Urumqi Ammonia Plant	Ammonia	GE	Oper.	Vis. Resid	1985
Daqing Oxochemicals Plant	Oxo.	GE	Oper.	Vis. Resid	1986
Shaanxi Ammonia Plant	Ammonia	S-L	Oper.	Anthracite	1987
Zibu Methanol/Oxochemicals	Meth. Oxo.	Shell	Oper.	Vac. residue	1987
Ningxia Syngas Plant	Gases	GE	Oper.	Vis. Resid	1988
Fushun Oxochemicals Plant	Oxo.	Shell	Oper.	Vac. residue	1991
Lu Nan Ammonia Plant	Ammonia	GE	Oper.	Bit. coal	1993
Wujing Gas Plant No. 2	Fuel gas	U-GAS	Oper.	Bit. coal	1994
Beijing Oxochemicals Plant	Oxo.	GE	Oper.	Heavy oil	1995
Shanghai Coking & Chemical	Methanol	GE	Oper.	Anthracite	1995
Dalian Ammonia Plant	Ammonia	GE	Oper.	Vis. Resid	1996
Shaanxi Ammonia Plant	Ammonia	GE	Oper.	Coal	1996
Hohhot Ammonia Plant	Ammonia	Shell	Oper.	Vac. residue	1996
Juijiang Ammonia Plant	Ammonia	Shell	Oper.	Vac. residue	1996
Gas Plant No. 2	Methanol	GE	Oper.	Coal	1997
Lanzhou Ammonia Plant	Ammonia	Shell	Oper.	Natural Gas	1998
Puyang Ammonia Plant	Ammonia	S-L	Oper.	Anthracite	2000
Hefei City Ammonia Plant	Ammonia	GE	Oper.	Coal	2000
Zhong Yuan Dahua Group Ltd.	Unk.	S-L	Oper.		2000
Nanjing Ammonia Plant	Ammonia	GE	Oper.	Vis. Resid	2002
Jilin Ammonia Plant	Ammonia	GE	Oper.	Vis. Resid	2003
China 1	Methanol	GE	Oper.	Coal	2004
Haolianghe Ammonia Plant	Ammonia	GE	Oper.	Coal	2004
Sinopec, Zhijiang	Unk.	Shell	Oper.	Coal	2005
Liuzhou Chemical Industry	Ammonia	Shell	Oper.	Coal	2005
China 2	Methanol	GE	Oper.	Coal	2005
Jinling	Ammonia	GE	Oper.	Coal	2005
China 4	Amm, Urea	GE	Oper.	Coal, Pet.	2005
China 3	Amm., H2	GE	Oper.	Coal, Pet.	2005
Shaanxi Shenmu Chemical Plant	Unk.	GE	Oper.		2005
Dong Ting Ammonia Plant	Ammonia	Shell	Startup	Coal	2006
Hubei Ammonia Plant	Ammonia	Shell	Startup	Coal	2006
Shuanghuan Chemical	Unk.	Shell	Oper.	Coal	2006
Sinopec, Yueyang	Unk.	Shell	Oper.	Coal	2006
Sinopec	Ammonia	Shell	Startup	Coal	2006
China 5	Methanol	GE	Oper.	Coal	2006
Sinopec Wuhan, Hubei	Unk.	Shell	Startup		2006
Weihe Chemical	Unk.	GE	Startup		2006
Dahua Chemicals	Methanol	Shell	Startup	Coal	2007
Yuntianhua Chemicals	Ammonia	Shell	Startup	Coal	2007
Yunzhanhua Chemicals	Ammonia	Shell	Startup	Coal	2007
Yongcheng Chemicals	Methanol	Shell	Eng.	Coal	2007
Fujian Refinery Ethylene Project	Unk.	Shell	Const.		2007
Shenhua	H2	Shell	Const.	Coal	2008
Kaixiang Chemical Plant	Unk.	Shell	Const.		2008
Yongcheng Shell Plant	Unk.	Shell	Const.		2008
Puyang Plant	Unk.	Shell	Const.		2008
Tianjin Chemical Plant	Unk.	Shell	Devel.		2010
Guizhou Chemical Plant	Unk.	Shell	Devel.		2010
Inner Mongolia Chemical Plant	Unk.	Shell	Devel.		2011
Legend:
S-L = Sasol Lurgi
GE = General Electric
Vis. Resid = Visbreaker residue
Vac. Residue = vacuum residue
Oxo. = Oxochemicals
Meth. = methanol
Amm. = ammonia
Pet. = petcoke
Oper. = operating
Eng. = engineering
Const. = construction
Devel. = development

Kentucky is aggressively pursuing coal gasification projects with a comprehensive offering.  Kentucky has taken an innovative and progressive approach to developing coal gasification plants in the state.  The state is a coal state and realizes the importance of using coal as an energy source. This knowledge and understanding of the importance of coal derived energy as one piece of a national energy policy is demonstrated by the permit process.

Kentucky offers an attractive incentive package to developers that are looking for a site for a coal gasification project. The state will tailor a package that provides long term financial incentives for a project that relies on long term financing. The states economic development agency has a explanation of the benefits available, “Incentives for Energy Independence Act“.

The state is proactively evaluating possible sites for development. Kentucky has engaged a consultant to assist with locating possible sites for coal gasification projects. This process took over two years and identified 42 sites fit for the intended purpose. This means that these sites are essentially “pre-approved” by the state.

Kentucky understands the economics and the necessity of using coal for generating electricity. More than 90% of the states electricity is generated with coal. The Governor recognizes the importance of finding solutions for the sequestration of CO2 and is moving to forward with facillitating the development of CO2 solutions in the state.

The infrastructure necessary to support a commercial scale coal gasification plant is existing. The state has an extensive network of rail lines. The rivers can be used for barge transportation. There is a well developed network of pipelines for transporting SNG, liquid fuels, and CO2.

Consider Kentucky for siting a coal gasification plant.

Clean coal is a term used to describe a process called ‘coal gasification’ and it’s totally different from the coal burning plants of your parents and grandparents generation. The clean coal advertisements and the excitement from the private industry, government agencies and the U.S. Air Force is for coal gasification. Currently, there are only seven clean coal plants in the U.S. employing coal gasification technology.

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.

Southern California Edison (SCE) is evaluating coal gasification technology to produce syngas for a 600 Mw gas turbine power plant. The study will cost $50 million and be complete in two years. The California Public Utilities Commission approved the project. SCE will share the data with interested parties.

SCE’s plans include utilizing technology to remove sulfur, mercury and carbon dioxide. The project will
include sequestration of CO2 in deep underground geological formations or use the CO2 in enhanced oil recovery operations. The carbon capture and sequestration will remove 90% of the carbon in the coal.

This project continues in the company’s tradition of innovation and advanced technology engineering and applications. The DOE recognizes SCE as a pioneer in coal gasification technology when the company built the 110 Mw Cool Water experimental coal gasification plant in the mid-1980′s.