China Leads the Way Coal-to-Liquid Production - 12/02/06

The super power countries like China and the U.S. wanting energy security are aggressively searching for alternative fuels.  China and the U.S. hold 40% of the worlds coal reserves.  Other countries with large coal reserves include India, Russia, Ukraine, Germany, Poland, South Africa and Australia.   These coal reserves should last 100 to 200 years. 

Oil has hit records above $70.00 a barrel on supplies that may last only 40 years. 

China is leading the way by signing an agreement with Sasol in South Africa to build two coal-to-liquid fuel plants in China.  These plants will cost $3 billion each and will both produce 60 mm tons of liquid fuel a year.  The projected cost of production is $15.00 a barrel.   As long as oil stays below $30.00 a barrel it will be cost effective to produce liquid coal.  Oil is currently double that.

The Sasol technology is an advanced form of the Fischer Tropsch process developed in Germany in World War II.  Steam and oxygen are passed over coke at high temperatures and pressure producing hydrogen and carbon monoxide which are then liquefied.  During the process sulphur, ash and carbon dioxide are removed.  The sulphur is sold as a by product and the carbon dioxide can be injected under ground.  The liquid coal produced is high grade fuel which will meet the future lean diesel required by the U.S.

These new Chinese plants will be four times larger than the existing Sasol plants.  If the larger Sasol plants can produce $15.00 a barrel liquid coal this technology can help all nations.    

Shenhua Group Corp one of China’s largest coal producers plans to start production at its first coal-to-liquid plant the end of 2007.  The annual output will be one million tones of oil. 

The U.S. is building numerous new coal power plants but only a few will gasify coal and only half will be able to capture greenhouse gases.  If the U.S. converts only 5% of the US coal reserves to liquid coal is would equal to 29 billion barrels.

More About Liquid Coal:
Liquid Coal as Transportation Fuel
Liquid Coal a Petroleum Substitute
Can Liquid Coal from Alaska Help the U.S.

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