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AAAS Policy Brief: Coal-to-Liquid Technology
Issue Summary | Resources
High oil prices and the desire to reduce energy dependence in
the United States have broughtcoal-to-liquid (CTL) technology to
the forefront of the discussion about alternative fuel
sources.Nearly 100 years old, CTL processes have long been used by
countries lacking access to oil,most notably Germany, where
production peaked during the 1940s; South Africa, which hasbeen
using CTL technology for fuel since the 1950s; and, more recently,
China, where theShenhua Group LLC began trial operation of the
worlds first direct CTL facility in December2008, and intends to
eventually produce 1 million tons of coal-based liquid fuel a year.
The U.S.Government promoted the development of CTL technologies
following the oil shocks of the1970s, but shelved the projects
after the price of oil fell during the 1980s. In the current
economic and political environment of the United States, with
oil prices surpassing $100 perbarrel in summer 2008 and generally
projected to rise in the long term, synthetic fuel derivedfrom coal
may once again become economically viable, and several projects are
in the initialdesign phase around the country. From an
environmental standpoint, however, the carbondioxide (CO2)
emissions produced throughout the lifecycle of coal-based liquid
fuel make it aless desirable option.
Turning Coal into Liquid FuelCostsAdvantages of Coal-Based
Liquid FuelDisadvantages of Coal-Based Liquid Fuel
Research Needs
Turning Coal into Liquid Fuel
Coal can be converted into liquid fuel using several
liquefaction processes; these processes canbe divided into two
general categories. The first category, indirect liquefaction, is a
multi-stepprocedure that first requires the gasification of coal to
produce a "syngas." This syngas is thenconverted to liquid fuel via
two methods: the Fischer-Tropsch process or the Mobil process.
Inthe Fischer-Tropsch process, which is much more common, the
syngas is then cleansed ofimpurities and subjected to further
chemical refinement to produce a sulfur-free diesel orgasolinei.
The initial syngas can be derived from coal alone, or from a coal /
biomass mixture.
The process is the same when biomass is included, but the amount
of CO 2 emitted during theprocess decreases as the proportion of
biomass increases. In the less-common Mobil process, thesyngas can
be converted to methanol, which is subsequently converted to
gasoline via adehydration sequence. Indirect liquefaction of coal
during Fischer Tropsch produces a significantamount of CO2 that is
removed from the fuel as a necessary step during the final stages
of theprocess. However, recent research has suggested a modified
Fischer-Tropsch method that couldsignificantly reduce CO2 emissions
during liquefaction.ii
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The second category, direct liquefaction, requires creating a
chemical reaction at hightemperatures and then using hydrogen gas
and a catalyst to produce a liquid fuel. Directliquefaction usually
produces low-quality liquid fuel that is expensive to make
compliant withU.S. standards for purity. Therefore, although the
process is used in China, it is not a viableoption for meeting the
United States' liquid fuel requirements and will not be discussed
for the
remainder of this brief.
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Costs
In terms of economics, coal-based liquid fuel becomes viable
when the per-barrel price of oilexceeds the $45-50 range, according
to separate studies. This is because of high front-endexpendituresa
10,000 barrel-a-day plant could cost $600-700 million or more to
construct. Alltold, the refinement process is three to four times
more expensive than refining an equivalentamount of oil. When
biomass is mixed with coal, the process becomes even more
expensive, and
is only viable with oil prices above $90 per barrel, according
to theDepartment of Energy.
Not included in the above estimate is the cost of sequestrating
the captured CO2, which wouldincrease the price of the end product
by a projected $5 a barrel. The imposition of a strict carboncap
and trade regime would also raise the cost of fuel produced with
CTL technology, because ofthe CO2 emissions associated with it.
While there is significant uncertainty, the recent RANDstudy
estimated that CTL production plus carbon storage could produce
fuel at a cost ofanywhere from $1.40 to $2.20 per gallon or more by
2025iii.With current oil prices hoveringaround $50 per barrel, it
is debatable whether CTL is currently an economically
attractivealternative, but this could easily change with a
consistent rise in oil prices.
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Advantages of Coal-Based Liquid Fuel
Proponents of using coal-based liquid fuel for the
transportation industry say that it would helpthe United States
achieve energy independence. Currently, the United States consumes
nearly 14million barrels of liquid fuels for transportation each
day and imports more than 55 percent of itsoil. The more than 270
billion tons of recoverable coal the country has in its reserves
couldreplace up to 800 billion barrels of oil per year, or over 2
million barrels per day, according toindustry analyses. Other
benefits of fuel made from liquefied coal cited by proponents are
that itcan be used in gasoline engines and that plants designed for
indirect CTL processes can easily be
converted to hydrogen fuel cell production plants, once fuel
cell technology becomes moreviable.
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Disadvantages of Coal-Based Liquid Fuel
http://www.aaas.org/spp/cstc/briefs/coaltoliquid/#tophttp://www.netl.doe.gov/energy-analyses/pubs/CBTL%20Final%20Report.pdfhttp://www.netl.doe.gov/energy-analyses/pubs/CBTL%20Final%20Report.pdfhttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#iiihttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#tophttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#tophttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#tophttp://www.netl.doe.gov/energy-analyses/pubs/CBTL%20Final%20Report.pdfhttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#iiihttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#tophttp://www.aaas.org/spp/cstc/briefs/coaltoliquid/#top
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Opponents of CTL technology note that the lifecycle of synthetic
fuel derived from coalproduces large amounts of greenhouse gas. If
the CO2 removed from the fuel during therefinement process is not
sequestered, the quantity of CO2 released by extracting, refining
andburning coal-based liquid fuel is more than twice the amount
emitted by conventionalhydrocarbons. Even with carbon
sequestration, the emissions benefits over conventional fuel
appear negligible at best, though there is significant debate
over the true impact. While somestudies have found CTL produces
greater emissions than conventional fuel even withsequestration,
the recent RAND study found no difference between CTL and
petroleumemissions, and a Department of Energy study found that CTL
emissions with sequestration wereactually 5-12% lower.ivA similar
debate accompanies emissions from coal-to-biomass mixtures,though
mixtures certainly offer an emissions advantage compared with pure
coal. In addition tothe emissions debate, reliance on coal as a
transportation fuel would increase the otherenvironment stresses
associated with coal mining in the United States and potentially
affect otherenergy markets. The MIT study estimates that an
additional 250 million tons of coal, equivalentto 25 percent of the
United States current annual production, would have to be mined
each yearto replace 10 percent of the country's present consumption
of liquid transportation fuel.vThe
RAND study puts the estimate at closer to 400 million tons of
coal annually.
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Research Needs
Coal-to-liquid technology is a well established process that
does not necessitate future researchto successfully produce liquid
transportation fuels. However, making the greenhouse gasemissions
of synthetic fuels derived from coal comparable to those of oil
requires furtherresearch into emissions from CTL and CBTL
production and large-scale carbon sequestration.Although
sequestering massive amounts of CO2 is possible in theory,
questions still remain about
the length of time the sequestered CO2 would remain in place,
the long-term ecological impactsof sequestration, the costs of
constructing a CO2 storage facility, the geologic formations
thatmake the best storage sites, monitoring leaks, and general
commercial viability. Because of theUnited States' heavy dependence
on coal as an energy source, however, these research steps
willlikely be taken regardless of whether CTL technology becomes
widespread.
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Updated April 10, 2009
iFranz Fischer and Hans Tropsch, U.S. Patent 1,746,464. Feb. 11,
1930.ii
Diane Hildebrandt, David Glasser, Brendon Hausberger, Bilal
Patel, and Benjamin J. Glasser,Producing Transportation Fuels with
Less Work, Science 2009 (323): 1680.iii RAND Technical Report,
Unconventional Fossil-Based Fuels Economic and
EnvironmentalTrade-Offs, sponsored by the National Commission on
Energy Policy, 2008.ivDOE National Energy Technology Laboratory
Report, Affordable, Low-Carbon Diesel Fuelfrom Domestic Coal and
Biomass, January 2009vMIT Interdisciplinary Study, The Future of
Coal, 2007.
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