China considers discontinuing coal-to-liquids projects

A recent study from the Carnegie Mellon Electricity Industry Center (CEIC) in the U.S. concludes that while enacting policies to subsidize the production of coal-to-liquids (CTL) transportation fuel would enhance national security by lowering oil imports, encouraging plug-in hybrids powered by coal-generated electricity is a less costly policy that also reduces oil imports and does more to lower greenhouse gas (GHG) emissions.

China, which is rich in coal but poor in petroleum and gas, has been on the forefront of experimenting with CTL fuels, but may put an early end to these projects, an official with the country's top economic planning agency has said (precisely because of some the reasons summed up in the CEIC's and similar studies).

The consideration came at a seminar hosted by Chinese Academy of Engineering, which looked at alternative fuels, in particular biofuels, and their role in the country's long-term energy security. Denmark-based Novozymes, the world's leader in enzymes and microorganisms used for the production of biofuels, was present.

After an evaluation of the nation's limited energy resources and its environmental status, a deputy director of the industry department of the National Development and Reform Commission (NDRC) told the seminar held in Beijing that "liquefied coal projects consume a lot of energy, though the successful industrialization of liquefied coal could help reduce the country's dependence on petroleum."

The liquefaction of coal is not only energy intensive but also results in a large amount of GHGs. The CEIC full life-cycle analysis of gasoline obtained from coal shows that the fuel results in complete 'well-to-wheel' emissions of 360 pounds CO2 equivalent per MMBtu of gasoline in the worst-case scenario and 220 pounds CO2 equivalent per MMBtu of gasoline in the best-case scenario (converted into annual CTL gasoline emissions: 1.18 lbs/mile (536.7 g/mi) in the worst case; 0.72 lbs/mile (325 g/mi) in the best case). This compares negativey with the well-to-wheel emissions of 264.6 g/mile for the conventional coal-generated electricity used in plug-in hybrids; 105.8 g/mile for the scenario with plug-in hybrids using electricity from advanced Integrated Gasification Combined Cycle (IGCC) plants with carbon capture and storage (CCS). The baseline for conventional gasoline was 344 g/mile (graph, click to enlarge).

In short, converting coal into liquid fuels is not a particularly sensitive thing for a country that is set to become the world's largest emittor of GHG's. The Chinese government said earlier it would invest more in developing alternative energy resources including biomass fuel and liquefied coal to substitute petroleum during the 11th Five-Year Program (2006-2010) period, amid concerns over the country's growing dependence on petroleum. But criticism in China over CTL-plans has been growing steadily (here):
energy :: sustainability :: ethanol :: biodiesel :: renewable :: biomass :: bioenergy :: biofuels :: greenhouse gas emissions :: coal :: coal-to-liquids :: China ::

China, the world's second-largest energy consumer, imported 162.87 million tons of oil in 2006, driving the country's reliance on imported oil up 4.1 percentage points from a year earlier to reach 47 percent, official statistics show.

The country is also confronted with huge capital demand and higher consumption of water and coal in producing the liquefied coal, the official said. A project in north China's Inner Mongolia Autonomous Region with a designed capacity of 1.08 million tons would need more than 50 billion yuan (US$6.58 billion) of investment, according to the NDRC's deputy director for industry.

He said the country had begun the coal-liquefying projects without trial industrialization operation, and the technologies involved were not sophisticated yet. And both coal and petroleum are non-renewable energy resources, he added. However, the country has never slackened its efforts to find substitutes for petroleum.

China said last week it had successfully excavated methane hydrates (also known as natural gas ice) from below the floor of the South China Sea after nine years of research in this field. Recovering these gas hydrates remains risky and requires much more research before being commercialised on any scale.

Meanwhile, China wants to meet its growing energy needs while reducing fossil fuel consumption as much as possible. The Chinese government therefor recently announced, in its first climate plan, it upheld the development of renewable resources as an important national strategy, and would continue to boost the development of biomass fuels and biogas, hydro-power, solar and wind power.

An ambitious biofuel project announced earlier this year consists of the establishment of a biomass forest the size of England (13 million hectares) in the province of Yunnan from which the China National Petroleum Corp (CNPC) will extract an estimated three-quarters of a million barrels per day of liquid biofuels.

Multinationals like South-Africa's Sasol, a pioneer in coal-to-liquids technolgy, has partnered with Chinese companies on a CTL project in the country, as has Royal Dutch Shell.

More information:
Xinhua: China may halt production of liquefied coal - June 10, 2007.

Paulina Jaramillo and Constantine Samaras, "For energy security and greenhouse gas reductions, plugin hybrids a more sensible pathway than coal-to-liquids gasoline", Carnegie Mellon Electricity Industry Center, April 2007.