WVU expert: Coal-based liquid fuels can still compete with oil

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October 22, 2008 by NRCCE News

Morgantown, W.Va. — Even with oil at around $70 per barrel, coal-based liquid transportation fuels are still economical. “Coal liquefaction can compete with a selling price of oil in the $45 to $70 per barrel,” Richard Bajura told an audience at the American Coal Council’s 2008 Coal Market Strategies Conference held earlier this month.

Bajura, director of the National Research Center for Coal and Energy at West Virginia University, presented a report on the status of the technologies for converting coal to alternative transportation fuel. “An Update on Coal to Liquid Fuels” [.pdf – 2.5 mb].

“Oil’s dominance in the transportation sector will decline slowly,” he said. Oil production is declining in 54 of the 65 most important oil producing countries and 70 percent of that production is in politically unstable countries, while demand for transportation fuel is predicted to increase by 33 percent over the next 25 years.

Bajura noted that alternative fuel options include conservation, greater vehicle fuel efficiency, tar sands, natural gas, biofuels such as ethanol and biodiesel, electricity, and hydrogen.

Greenhouse Gas emissions from CTL

Greenhouse Gas emissions from CTL

“For the U.S., converting 5 percent of our coal reserves to so-called Fischer Tropsch liquids would double our oil reserves,” he said. The U.S. holds the largest amount of coal reserves in the world followed by Russia and China. Worldwide, coal reserves are estimated to be 1,000 billion tons, or a 150 year supply at current rates of use, he said.

The U.S. military’s need for a secure supply of fuel is spurring interest in establishing coal-to-liquids plants in the U.S., Bajura reported. But the high cost of building plants coupled with price volatility and potential legislation to curb carbon dioxide emissions are dampening investor interest.

While coal-based fuels produce about double the carbon dioxide emissions on a life-cycle basis, carbon capture and storage technologies can eliminate 90 percent of emissions at the plant. This would make coal-based fuels identical to the life-cycle emissions from petroleum-based fuels. Add 10 percent biomass into the coal conversion process with 85 percent carbon capture and storage and the net carbon dioxide emissions are 30 percent less than oil, Bajura reported.

“Plants must be capable of capturing and storing carbon and government incentives may be needed to get the first-of-a-kind plants out of the starting gate,” he said. Congressional authorization for the U.S. military to purchase coal-based fuels through a long term contract would be one such incentive.

Polygeneration concepts, the idea of building plants to produce fuels along with chemicals and generate electricity simultaneously, are gaining attention, he said.

Governors of coal-rich states continue to advocate for coal-to-liquids plants. Nationwide, 16 plants are either in the planning or engineering stages in 11 states.

Proposed CTL plants

Proposed CTL plants

“Yet technical, economic, environmental and social hurdles remain,” he said, calling for investments in research to reduce costs, improve conversion efficiency, reduce the environmental footprint, and facilitate market acceptance of the fuels.

NRCCE