Medicine Bow Coal-to-Liquids Project Moves Ahead

The United States first private coal-to-liquids project moved one step further ahead with the announcement on August 14 by Medicine Bow Fuel & Power LLC (MBF&P), a wholly owned subsidiary of DKRW Advanced Fuels LLC (DKRW), SNC-Lavalin GDS Inc., and SNC-Lavalin Constructors Inc. that they have formed an alliance to develop, design and construct a number of coal-to-liquids fuel projects that are valued in excess of a billion dollars.

MBF&P has awarded SNC-Lavalin GDS Inc. and SNC-Lavalin Constructors a contract to execute the feasibility study and to be its engineer and EPC contractor for the future FEED and turnkey portions of the Medicine Bow, Wyoming coal-to-liquids facility project commencing in the 4th Quarter 2006.

This selection now enables us to move forward with the design and permitting of the facility said Robert Kelly, Executive Officer of DKRW and MBF&P. DKRW had previously announced that construction was to begin in 2006, with initial operations to begin in the 2008-2010 timeframe.

The Project will transport diesel and other fuels via pipeline to major energy companies in the region. During the initial phase, it is anticipated that power (45 MW) not utilized in the CTL project will be sold to regional electricity providers. Carbon dioxide will be stripped, sold via pipeline and sequestered in regional enhanced oil recovery operations. Sulfur will be removed from the process, solidified, and sold into the agricultural market.  The Medicine Bow project’s power will be produced in gas turbines in combined cycle mode from the synthetic gas and by steam turbines using the steam generated by the gasification and the FT processes. The end result is that the Project's power is produced with very low carbon dioxide and SOx emissions.

In previous announcements, MBF&P announced it has selected GE (NYSE:GE) to provide its coal gasification technology and Rentech, Inc. (AMEX:RTK) to provide their proprietary Fischer-Tropsch technology for the project that will initially make about 11,000 bbl/day of transport diesel and other fuels using high Btu, low sulfur coal of the Carbon Basin Coal Reserve from a mine being developed and operated by Arch Coal (NYSE:ACI). Diesel and other transport fuels will be sold to regional customers and the power, carbon dioxide and other products will be sold from the Project.

DKRW Advanced Fuels LLC, a wholly owned subsidiary of DKRW Energy LLC, is engaged in developing, managing, and owning projects that utilize coal gasification technology, utilizing coal-to-liquids, methanation and integrated coal gasification combined cycle (IGCC) technologies. The Medicine Bow Project employs coal gasification, coal-to-liquids and IGCC technologies.

SNC-Lavalin (TSX: SNC) is one of the leading groups of engineering and construction companies in the world, a global leader in the ownership of infrastructure, and in operations and maintenance services.

Comments

[George]

Can someone knowledgeable speak to the environmental aspects of CTL? Obviously, the coal has to be mined, but what about the downstream process? What happens to all the junk in the coal? (heavy metals, etc) How much water is used?

Can the liquid fuel can be sold profitably at current prices?

[Lepus]

This is the best data on the subject I know of.

http://governor.mt.gov/hottopics/faqsynthetic.asp

[Jim from The Energy Blog]

For all practical purposes all of the environmental impact of a CTL occurs in the gasification step, so the emissions are the same, per unit of coal burned, as in an IGCC power plant. SOx, NOx and mercury removal from the gas are standard in these plants, to the level required in permitting the plant. Methods are available for even lower values and these will eventually be incorporated into standards. The sulfur and mercury are recovered as byproducts.

Airborn particulates, from the fly ash are also limited. Other noncombustibles in the coal are renoved with the fly ash. The fly ash is fairly inert, as far as I know, because it can be disposed of as a means of controlling dust on gravel roads; another use is as an additive to concrete.

Gasification processes provide the easiest means of carbon collection and storage (CCS), which is one of the main reasons that they are being developed, anticipating requirments for CCS at some time in the future. The CO2 is relatively easily seperated from the other gases, primarily methane, in the syngas. There are very few instances where the collection actually takes place on a large scale. The Dakota gasifacation plant has been doing it for a few decades, with the CO2 being used for experimental enhanced oil recovery (EOR). BP is developing a plant in California, using coke as a fuel,that will be the first large scale plant to use CCS. Since there are no regulations requiring CCS it is not going to be used to a significant extent. It is sort of in limbo because regulators cannot point to sufficient demonstrated technology.

Water usage is the same as would be in a IGCC power plant 700-900 gallons per MWh, using an evaporative cooling tower. (this is about 70% lesss than a pulverized coal plant, roughly proportional to the efficiency of the plants) This corresponds to 5-7 gallons of water per gallon of product liquids. As in a power plant, the majority of water is used for water make up in the cooling tower.

[Paul Dietz]

As in a power plant, the majority of water is used for water make up in the cooling tower.

There is at least one coal-fired powerplant in Wyoming that uses 'dry' cooling (direct transfer of heat to air via a fan-driven heat exchanger) instead of evaporative cooling. This dramatically decreases the water consumption of the plant, but is somewhat more expensive. It helps that Wyoming can be quite cold in the winter.

[Jim from The Energy Blog]

Indirect ("dry") heat exchangers certainly can be used and are used occasionally. In addition to adding to the capital cost they significantly decrease the efficiency of the process, so their use is usually limited to locations that have very limited water supplies or a climate such that their impact on efficiency is minimal. One of the main criteria for locating a plant is the availability of sufficient cooling water. For comparison purposes the 'normal' situation, with a cooling tower, was used for my comparison.

[Jeff Olney]

maximum capacity of an air-cooled generator is much less than its water-cooled counterpart when the temperature rises above 90 degrees, when max production is usually needed.

[Bert Pittman]

On his program yesterday, Glenn Beck interviewed the CEO of JetBlue who is advocating a Senate bill to insure a planned coal gasification industry incase the price of oil ever falls below $38 a barrel To hear the interview go to GlennBeck.com and look at the "heard on the Show" box in the upper right

[Doug]

Yeah, Glenn is entertaining, but he's going for the easy option here. Make no mistake, using coal is going to generate a lot of CO2 per unit of energy delivered. Delivering to our existing fleet of inefficient ICE-baed vehicles is wasteful. If we must use coal, coal-to-electicity-to-plugin-hybid is a better way to go.

[Invent Horsepower]

Doug I am big on plug-in hybrids too and it does seem extreme to do what they are suggesting - turning coal to gas and then to a liquid fuel. Hopefully we won't get so desperate that we couldn't find another use for the "manufactured gas". Which would free up another fuel so that it could be used in IC engines. Or for that matter convert the engine so it could run on the "manufactured gas". It does sound like there is an opportunity to sequestere some of the CO2 during the gasification processes and then basicly bury it in the process of oil recovery, an example already mentioned. So in the hybrid that uses both electricty from coal and a fluid fuel from coal; which would be producing the most power per pound of CO2 emitted to the atmosphere? I am also curious to know how much this phase change of the coal would cost the coal reserves in in terms of energy losses.

This lengthy, to too long post, makes me think we are forcing ourselves to make choices we shouldn't have to make if we would make a concerted effort to conserve. Higher fuel prices will help motivate us to do just that. I don't like to complain about the price of fuel, I have thought it was too low for too long. Don't reduce fuel taxes now! Raise them if anything and subsidize hybrids or some other conservation project.

[Paul Dietz]

So in the hybrid that uses both electricty from coal and a fluid fuel from coal; which would be producing the most power per pound of CO2 emitted to the atmosphere?

EPRI is looking into a technology (with Alstom) that could significantly reduce the cost of capturing and pressurizing CO2 from flue gas. The process, based on absorption in chilled ammonia, has significant advantages over amine-based systems.

I've seen a figure as low as $15/tonne for capturing CO2 using this technology, which might increase the cost of power by as little as 10%. At that cost, it's far cheaper (by an order of magnitude) to avoid a tonne of CO2 emission by retrofitting this technology to existing coal plants than it would be to reduce emissions from cars burning liquid hydrocarbons.

This points up that vehicles are not the 'low hanging fruit' for CO2 emission control; coal-burning powerplants are.

[Invent Horsepower]

But its not all about CO2 emissions per gallon of fuel. Its also about miles driven and MPG (And not all of that MPG is dependent on car manufactures. Examples of course are: Idle time, general maintenance, and driving habits) I guess this is a place to promote a page on my web site: http://www.inventhp.com/Reducing_Demand_for_Crude_Oil_2.html]

Anyway how hard would it be to consider a four day work week?
Or have Corporate employee buses placed in an area that would reduce the average employees drive distances by two thirds?
Or replace the "SUV" fleet we have with something more sensible.

A combination of these and a few more "political solutions" would reduce CO2 emissions AND Crude imports.

I have been relieved lately to here something that suggests future options for transportation besides hydrogen. Electrifying the transportation sector would be rather quick, heck plug in hybrids is a start to this process and they are here already. And there will be improvements made in batteries if only moderate. Anyway most people have more than one car so why should every car be design with the same range(I don't think that last paragraph was lifted but it does seem as though I have read this some where else).

Anyway this does underscore the need for clean electricity generation.

I doubt what you are promoting is the Algae cleaning process. At first glance that seemed to me to be far fetched - but now I wonder if that could prove to be helpful in the correct situation.

[coal to liquids]

CTL is the generic term used to describe the process of converting a gas into a liquid hydrocarbon product. This technology has already been tested and proven by numerous companies including major oil companies. The combination of UCG and CTL is subsequently called Coal to Liquids (CTL), as the initial energy source is coal.