ERDOS (China), June 4: With oil prices at historic highs, China is moving full steam ahead with a controversial process to turn its vast coal reserves into barrels of oil.

Known as coal-to-liquid (CTL), the process is reviled by environmentalists who say it causes excessive greenhouse gases.

Yet the possibility of obtaining oil from coal and being fuel self-sufficient is enticing to coal-rich countries seeking to secure their energy supply in an age of increased debate about how long the world’s oil reserves can continue to meet demand.

The United States, Australia and India are among those countries looking at CTL technology but are constrained by environmental concerns associated with the process which releases excessive amounts of carbon gases into the atmosphere and consumes huge amounts of water.


“Those countries with large coal reserves, like South Africa, China or the United States, are very keen on CTL as it helps ensure energy security,” said Yuichiro Shimura at Mitsubishi Research Institute Inc (MRI) in Tokyo.

“However, the problem is that it creates a lot of carbon dioxide. Also you need a huge amount of energy for liquefaction, which means you end up wasting quite a lot of energy,” the chief consultant at MRI in charge of energy told Reuters.

In Erdos, Inner Mongolia, about 10,000 workers are putting the final touches to a CTL plant that will be run by state-owned Shenhua Group, China’s biggest coal mine.

The plant will be the biggest outside of South Africa, which adopted CTL technology due to international embargoes on fuel during the apartheid years.

“We cannot fail,” Zhang Jiming, deputy general manager at Shenhua Coal Liquefaction, told Reuters. “If things go smoothly, we will start with the expansion next year,” he said.

The plant will start operating later this year and is expected to convert 3.5 million tons of coal per year into 1 million tons of oil products such as diesel for cars.

That’s the equivalent of about 20,000 barrels a day, a tiny percentage of China’s oil needs as oil consumption in China is around 7.2 million barrels a day.

That would be about 286,000 barrels a day, or about four percent of China’s energy needs based on current consumption.

CTL is also being considered by a number of coal-rich countries such as the United States, which has the world’s largest coal reserves.

The relatively low cost of CTL produced oil given current oil prices, plus the chance to be more energy self-sufficient is a powerful incentive.

DRKW Advanced Fuels plans to start construction on a plant in Wyoming next year in partnership with Arch Coal Inc and with technologies licensed by General Electric and Exxon Mobil. The defence department is experimenting with CTL in an effort to cut reliance on fuel from countries unfriendly to the United States.

But CTL is highly controversial. Experts say the whole lifecycle releases about twice as much carbon dioxide, the most common greenhouse gas, as fossil fuel. Liquefying coal also requires large amounts of energy and drains water supplies.

The fuel produced through this method has a shelf life of up to 15 years, unlike other motor fuels which is attractive to the military and to governments keen to ensure fuel security.

Though CTL technology was developed about 100 years ago, it has been little used, except in Nazi Germany and apartheid South Africa, which had difficulty accessing then-inexpensive oil.

Oil prices, which have more than quadrupled this decade to above $130 a barrel, have reignited interest in CTL.

The Oil and Gas Journal in April suggested it costs $67 to $82 a barrel to produce CTL fuel, based on the experiences of South Africa’s Sansol. Exact prices would depend on a range of factors including coal and water prices and of course it is very expensive to build CTL plants.

Shenhua will be the first to use direct CTL technology on a large scale. It is different from indirect CTL, proven in Nazi Germany and by South Africa’s Sasol, and converts coal directly into liquid fuel, skipping gasifying coal into syngas.

“CTL happened only twice in world history, and both times it’s been in nations facing some kind of state of emergency with respect to energy. It should sound an alarm bell,” said Gary Kendall, from the WWF conservation group.

“There are two defining issues in the 21st century: one is carbon dioxide and one is water ... And the (CTL) process is horrifically carbon intensive. It is also very water intensive.”

The “holy grail” for CTL enthusiasts is to find a way to turn coal into liquid without releasing carbons into the air.

The idea is that the carbon dioxide, the main global warming gas, would be captured and stored deep under ground.

Carbon capture and storage, which is still the subject of much research, would alleviate the environmental impact of carbon dioxide being released into the environment, the main argument against CTL by critics. This could spur CTL development in the United States and other western countries.

“If there is no good solution for CO2, the (CTL) industry will not flourish,” Chen Linming, executive vice president at Sasol China, told a conference last month, urging the government to support carbon capture and storage technology.

http://www.dawn.com/2008/06/05/welcome.htm

May be Pakistan can take advantage from it in Sindh.

“If you turn coal into electricity at high efficiency, and charge electric vehicles, you can get three times as many kilometres per unit of coal.”--Reuters

Pakistan has 180 billion tons of coal, putting it at second largest coal reserves in the world. Coal makes up the majority of electricity generation in nearly every country in the world, yet it remains a puny part of our overall generation. By using coal we could easily overcome the energy shortage.

Trust me, our leadership will find ways and excuses to screw this one too... We got the coal reserves served on a silver platter... CTL sounds very promising though.

I can tell you that if Pakistan had oil and gas we wouldnt be in any better shape than we are in now probably we would be in a worse state.

Took the words right out of my mouth. Our leadership always has its unique ways to cock up things. I do hope that Pakistan starts taking the exploitation of the coal reserves seriously. We should benefit from the riches we have.

Ghardari oh sorry I meant Zardari has already offered to sell the reserves to India......

I understand the need for energy and all. But we have to understand the effect this might have on our nations atmosphere. I mean its dusty and polluted enough in certain parts of Pakistan. We already have a poor health situation as it is, without adding all that toxicity in our air. We need to pursue those dams.

This must be uneconomic and more expensive and still damaging to the environment. Its vital the world switches empasis to solar and battery cars.

British Petroleum puts it as 3.05 billion tons(2006-07).

http://www.bp.com/liveassets/bp_internet/g...rkbook_2007.xls


The US Government sets the figure as 3.36 billion tons(June 2007).

http://www.eia.doe.gov/emeu/iea/res.html

There are different classes of reserves, but i am unsure of exact divisions between them, for example, proven; potential or expected etc.. The immidiately accessiable are indeed the same as above.
However, the overall reserves are expected to be even north of 200 billion tons. This does include very recent finds.

Unfortunately, the reason why its not seen a lot of attention in Pakistan is for 3 reasons.

1 - The environmental BS as is the case currently with Bindal & Budo island developments
2 - According to some estimates, extracting these reserves may be as expansive as the Oil Sands in Canada

at the very least a pakistani team should study the development of the chinese plant in china

QUOTE(bojangles @ Jun 5 2008, 07:08 PM)
Pakistan has 180 billion tons of coal, putting it at second largest coal reserves in the world. Coal makes up the majority of electricity generation in nearly every country in the world, yet it remains a puny part of our overall generation. By using coal we could easily overcome the energy shortage.


Trust me, our leadership will find ways and excuses to screw this one too... We got the coal reserves served on a silver platter... CTL sounds very promising though.

& people say the previous govt. could not develop the coal reserves !! Our internal fight never ends !

http://www.thenews.com.pk/daily_detail.asp?id=116980

Thar coal turning into another Kalabagh Dam



Friday, June 06, 2008
By Ansar Abbasi

ISLAMABAD: Another controversy like the Kalabagh Dam is in the making as mistrust between the federal government and Sindh grows with every passing day on the development of Thar coal, the greatest national wealth and energy resource worth US$6 trillion.

At a time when the Federal Ministry of Petroleum and Natural Resources is seeking expression of interest from international companies for the development of a test-pit of 1/2km x 1/2km for preparation of a bankable feasibility document for coalmine development, based on the Thar Coalfield Block-II, the Sindh government finds it as a federal government's move to take over the provincial resources.

The petroleum ministry requested for expression of interest on June 3 through advertisements in national newspapers but Sindh authorities decided to resist this move. Sources in the petroleum ministry strongly deny that the federal government has any intention to take over the provincial resources, insisting that Islamabad is helping the province to develop the Thar coal as the province could not do it because of financial constraints.

Referring to the Question-Hour in the National Assembly on Wednesday, a senior Sindh government official told this correspondent that the minister in-charge for Petroleum and Natural Resources, while admitting that the coal resources belonged to the province, kept on pressing that the Thar Coal Mining Company was functioning with the consent of Sindh. "This is contrary to what the Government of Sindh had been telling the petroleum ministry," the official said.

The Ministry of Petroleum and Natural Resources had issued a National Mineral Policy in 1995 in which the mineral resources had been termed as a provincial subject. The idea of the Thar Coal Company by the federal government was conceived in 2007, in which Sindh government was 20% partner as compared to 80% of the federal government. The fact, however, remains that the company never got acceptance in the province. The Arbab government kept on opposing it and no work could be done on ground due to opposition by the provincial government.

The present Sindh government also actively opposed what Sindh believes attempts to take over the control of the Thar coal resources by the federal government in the name of the Thar Coal Mining Company (TCMC). In a meeting of the federal cabinet last month, the federal ministers belonging to Sindh also opposed this "federal takeover" and were able to unanimously decide that the Sindh government would be handling the development of coalmines by inviting investors while the federal ministries would not interfere, the source said, adding that the proposal by the Planning Commission to form the Pakistan Coal Board was rejected too.

"The decision by the prime minister in the cabinet meeting not to interfere in this provincial subject went well and the Government of Sindh started actively working on Thar project," the Sindh government source said, adding, "Advertisements appeared last month, calling for proposals from international mining companies but all of a sudden the Petroleum ministry came up with its own advertisement."

"It would create a new row between the province and the federation," the source said, warning that the people of Pakistan might see another energy dream being frustrated due to mishandling by bureaucracy.

The Sindh authorities shift all the blame on the federal government for the non-development of the Thar Coalfield. Last time, it is argued, it was Wapda and Nepra that had scared away the Shenhua Group of China. The government of Sindh and the Chinese company, sources said, spent two years and billions of rupees and were ready to start work when the Chinese were turned back on the issue of tariff.

Federal government sources, however, insist that Islamabad is only assisting Sindh to develop the Thar Coalfield, which could not be developed in the past on account of the financial constraints faced by the provincial government. A petroleum ministry official said that out of 9,000 square kilometers of Thar coal reserves, hardly six blocks, each of 50 square kilometers, had been developed for coal production. This was done by the Geological Survey of Pakistan, a federal entity.

In 2002 a bankable feasibility of Thar coal mining was conducted by Rehien Brauan Engineering of Germany at the cost of Rs 198 million, financed by the federal government. However, this feasibility report was sold to an American company by the Sindh Coal Authority for US$50,000 instead of developing the mines. "We are only helping them out and have no intention to take over the deposits," a source said, adding that all the federal government entities were working in the provinces for their benefit.

Very well said.
At least start to study, because in Pakistan it will take years of studies to come to conclusion, so better start now so that next generation can be benefited.
Pollution or no pollution, this is not an issue for third world country.

Pollution is not an issue, the issue is the cost of a barrel of CTL oil compared to the cost of a regular barrel of oil that we import.

What might be beneficial to us is to use the coal to meet our electrical needs in the short term, whilst we build dams etc and become able to fill our electrical needs using renewable sources (sources that will not run out, like water, or sunlight or wind).

Also we need to shift a lot more commuting in our country to electricity, buses, trains and subways, as well as using trains for shipping of good across the country. Why, because these means can also be run by electricity which we can make from coal in the meanwhile and replace by renewable sources in the long term.

CTL should be on the back burner, the focus should be on reducing the use of oil and gas in travel replacing electricity as a means of transport and using coal for energy until we can replace it with renewable sources.

We need minimum 2 nuclear power plants in Balauchistan and NWFP each.
We need 3 plants for Sindh and another 3-4 for Punjab, hence a minimum of 10 plants, which will have a shelf life of 30-35 years, renewable for another 5 years.

Conservatively, if cut the amount by half, we need around 5 plants with a minimum life of 35 years.
Time to develop and errect them, let's say 5 years?

Smaller dams can be built within 1-2 years, and coal mines can be developed under a year, with a coal fired plant constructed simultaneously.
They have a shelf life of 35-40 years, renewable to a maximum of 45 years.

We have the resources and capability, with varried options to serve our needs for the next 90 years.
Our politicians go for glamour, and waste funds on 'decorating' airports, etc.

For Karachi Airport, they could have used the older terminal buildings (there were 3), yet kick-backs made them build from scratch, same with Lahore's.
Marble was imported from Italy, when Balauchistan produces the finest marbles and granite.
Earlier we sold new DC-10's to buy crappy B-747's, just to say our fleet has Jumbo's.

We are a poor nation, and our goals and needs are not realistic, we waste precious funds to the point of no return.
If we had built at-least 2 plants in the last 10 years, and 2 plants in previous governments, our needs today would be just 4 more plants, not so much of a burden as compared to building 8 plants at once.

Only if our leaders were visionaries, with respected education, we'd be a much better nation today.

This is from Geological Survey of Pakistan website:

http://www.gsp.gov.pk/resources/seminars2.htm



The most important figures here is:

PROVEN/measured reserves: 3.3 billions out of which 2 billion tonnes can be extracted ( the rest 1.3 billions or about 40% will be lost in the mining process). % loss in mining depends on the mining process, losses in underground mines are substantially more than surface mines)



The figure of 11 billion INDICATED reserve means that based on the 3.3 billion proven reserve figure, an additional 11 billion tonnes MAY be there ( notice the emphasis on MAY ).

The rest of the figure 180/185 billon tonnes is purely vaporware, what counts is PROVEN reserves and INDICATED reserves.

we produce relatively low levels of pollutions, but even with pollution we we will have electricity and the oil to us to power economy so we can still eat
also other nations have cities close together, we could build these plants along the coast line and use water from the sea (puriified of course) and build these plants

but getting on the bandwagon and starting to study a major option for our energy security is a must

on water, an ancietn sri lankian king said not a drop shuld go to the ocean before humans can utilize it, and so they hae lots of resoviors and now they do'thave to worry about water and farming