Energy security is a recognised global concern that can only become more acute in the future, as population growth and rising living standards create higher demand. Security of supply of transportation fuels is just one element of the energy security picture.
Political unrest, supply disruptions, and other actions, such as the recent hijacking by pirates of the Sirius Star crude oil carrier (with its two million barrels of oil) increases the concerns of nations dependent on oil imports to meet a substantial part of their transport fuel requirements.
This is just one factor contributing to the possible development of alternative transport fuel sources. Coal is one of these alternative sources.
Coal, it seems, could be part of the answer to the energy security dilemma. Some of the countries which have to import to meet transportation fuel demand also have significant coal resources, such as China, India and the US.
Foster Wheeler took some time out of late to speak exclusively to gas
world, discussing coal as one of the potential alternative sources of transportation fuel. The company boasts a long track record in both coal-to-liquids (CTL) and gas-to-liquids (GTL) projects, and sees coal as a potential piece in the jigsaw.
“Coal is not the single answer, but it is likely to play a role in the future energy mix,” explained Don Harris, Global Director of Upstream Oil & Gas, LNG/Midstream for Foster Wheeler.Shifting landscape
The recent economic woes have certainly dented investor confidence, as both the demand for oil and the supply of capital have retracted significantly from their recent highs.
Nonetheless, transportation fuel demand continues to grow, especially in developing economies, and security of supply concerns remain.
Harris told gas
world, “We believe that CTL can play its part in supplying the world’s fuels need. In addition to the security of supply benefits, indirect coal liquefaction products have excellent blend characteristics which can help countries meet increasingly stringent fuels specifications, in particular those related to sulphur and aromatics.”
“Economies of scale suggest that CTL plants will be typically greater than 50,000 barrels per day (bbl/d), although there may be smaller niche applications,” he added.
This belief in coal as a promising future feedstock for transportation fuels is supported by the views of the Energy Information Association, which reports that in its high crude oil price scenario of $119 per bbl (2006 dollars) by 2030, around 1.2 million bpd of transportation fuels in the US could be derived from CTL.Where and why?
So if coal is such a viable option in the years to come and we can expect to see more CTL plants emerging, where exactly might we see these projects located?
“The countries in which we are most likely to see CTL facilities going ahead, and I’d probably put China and South Africa at the top of my list, have several common features: significant low-cost coal resources, robust domestic demand for transportation fuels, and a significant requirement to import oil products to meet this demand.$quot;
$quot;Generally, if the coal resources are remote from populated areas and therefore have little or no value for other uses, then the CTL route is even more attractive. This latter point is certainly true of some of China’s coal reserves,” explained Andy Hemingway, Manager of Business Solutions for Foster Wheeler.
“Through our UK and Chinese operations, Foster Wheeler has recently been selected to execute study services for CTL projects in China and South Africa. The first project is a feasibility study for an 80,000 bbl/d CTL plant in the coal-rich western part of the People’s Republic of China. The other is Project Mafutha which is a study for a similar sized facility in South Africa.”
With its vast coal resources and an ever-growing internal transportation fuel demand, gas
world suggests China clearly represents a prime opportunity to embrace CTL technologies both now and in the future. Foster Wheeler would appear to agree.
“Yes, we see China as a real opportunity for CTL,” said Hemingway. “The Chinese government has recently restricted the number of projects it will support through the development phases, but we see these projects as pioneering.”
Furthermore, countries such as the US, Australia, India and Indonesia offer potential, as they have large coal deposits and are net importers of oil, which increases the strategic importance of coal as a fuel source.
CO2 emissions remain a significant barrier to CTL uptake, and the synergy of increasing oil recovery through implementing an integrated CTL and carbon capture and storage solution, may yet be the longer-term key to unlocking the value of CTL facilities.
And with a probable more widespread use of CTL technology in the years to come, we ask, surely this will therefore provide increased demand for the industrial gas business?
“To the degree required to support the facility. For example, the economies of scale push air separation unit vendors to provide larger capacity units, whilst maintaining high availability,” replied Hemingway.
As the adoption of coal to meet countries’ strategic liquid fuels requirements seems to offer great potential, Foster Wheeler itself will be more than ready to cater for such a demand.
The company already has a long track record in both CTL and GTL projects and has specialists who work with clients at the early development of these projects, addressing not only the technical aspects CTL, but also CO2 management, both through sequestration options and efficiency improvements.
The world may face energy security concerns, but we can rest assured that there are many people working on a very wide range of different solutions to address these issues.