Synthetic Natural Gas (SNG): Technology, Environmental

SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

MunishChandelEricWilliamsClimateChangePolicyPartnershipDukeUniversityJanuary2009


ClimateChangePolicyPartnership 2

ContentsAbstract ....................................................................................................................................................... 3

1.Introduction............................................................................................................................................. 3

2.Coal‐to‐SNGTechnology .......................................................................................................................... 4

2.1.BriefDescription ............................................................................................................................... 4

2.1.1.Steam‐oxygengasification ......................................................................................................... 4

2.1.2.Hydrogasification ....................................................................................................................... 6

2.1.3.Catalyticsteamgasification ....................................................................................................... 6

2.2.ThermalEfficiencyofSNGPlants...................................................................................................... 7

2.3.GreatPlainsSynfuelsPlant:AnExistingSNGPlant........................................................................... 7

2.4.RecentDevelopmentsinSNG ........................................................................................................... 8

2.4.1.ResearchanddevelopmentinSNG ........................................................................................... 8

2.4.2.CommercialSNGplantsplannedintheU.S. .............................................................................. 9

2.5.UseofBiomassforSNG .................................................................................................................. 10

3.EnvironmentalImplicationsandEconomicsofSNG.............................................................................. 11

3.1.EnvironmentalImplicationsofSNG ................................................................................................ 11

CO2Emissions .................................................................................................................................... 12

3.2.EconomicsofSNG........................................................................................................................... 13

3.2.1.CostofSNG .............................................................................................................................. 14

3.2.2.Effectofcoaltypeandcoalprice............................................................................................. 15

3.2.3.EffectofcarbonpriceallowancesandCO2sequestrationonSNGcost .................................. 15

3.2.4.Costofbio‐SNG........................................................................................................................ 17

3.2.5.Effectofbiomassprice ............................................................................................................ 18

4.Conclusions............................................................................................................................................ 19

5.References ............................................................................................................................................. 19



Abstract

Increasingdemandfornaturalgasandhighnaturalgaspricesintherecentpasthasledmanytopursueunconventionalmethodsofnaturalgasproduction.Naturalgasthatcanbeproducedfromcoalorbiomassisknownas“syntheticnaturalgas”or“substitutenaturalgas”(SNG).Thispaperexaminesthe

differenttechnologiesforSNGgeneration,thecost,andtheenvironmentalimpactsofSNG.ThepaperidentifiestheconditionsunderwhichSNGproductioncouldbeeconomicallyviable.Thedifferentpollutantscanbebettercontrolledintheprocess.Thesulfurisemittedashydrogensulfide(H2S)and

canberemovedintheacidgasremoval(AGR)system.CO2isabyproductofthecoaltoSNGprocess.Inalow‐carboneconomy,thedevelopmentofthecarboncaptureandstoragewouldbeoneofthecriticalfactorsinthefuturedevelopmentofSNG.Intheabsenceofcarboncaptureandstorageandwithcarbon

allowancepriceinfuture,theSNGcouldbeexpensiveandmaynotbeeconomicallyviable.HighernaturalgaspriceandsellingofCO2toenhancedoilrecoverycouldmaketheSNGeconomicallyviable.

1.Introduction

Energydemandisincreasingacrosstheglobe.Fossilfuels,primarilycoalandnaturalgas,arethemajorsourcesofenergyworldwide.TheUnitedStateshasabundantcoalresources:itcontains25%ofthe

world’scoalreserves,andtheenergycontentofthosereservesexceedstheenergycontentoftheworld’sknownrecoverableoil(DOE2008).Still,increasingconsumption—andtheresultantincreasingprice—ofnaturalgasareaconcern.AccordingtoDOE(2008),90%ofnewU.S.powerplantswillbe

naturalgas–firedplants.Theeverincreasingdemandandhighpriceofnaturalgasinrecentpasthasledresearcherstoconsideralternatemethodsofnaturalgasgeneration.ConvertingcoaltonaturalgascouldsatisfythedemandfornaturalgaswhileutilizingtheUnitedStates’abundantcoalresources.

“Syntheticnaturalgas”or“substitutenaturalgas”(SNG)isanartificiallyproducedversionofnaturalgas.SNGcanbeproducedfromcoal,biomass,petroleumcoke,orsolidwaste.Thecarbon‐containingmasscanbegasified;theresultingsyngascanthenbeconvertedtomethane,themajorcomponentofnatural

gas.ThereareseveraladvantagesassociatedwithproducingSNGfromcoal.SNGcouldbeamajordriverfor

energysecurity.SNGproductioncoulddiversifyenergyoptionsandreducenaturalgasimports,thushelpingtostabilizefuelprices.SNGcanbetransportedanddistributedusingexistingnaturalgas

infrastructureandutilizedinexistingnaturalgas–firedpowerplants.Andascoalisabundantandevenlydistributedgloballyascomparedtooilandnaturalgas,SNGcouldstabilizetheglobalenergymarket.

ThebiomasscanalsobeusedalongwithcoaltoproduceSNG.Theuseofbiomasswouldreducethegreenhousegasemissions,asbiomassisacarbon‐neutralfuel.Inaddition,thedevelopmentofSNGtechnologywouldalsoboosttheothergasification‐basedtechnologiessuchashydrogengeneration,

integratedgasificationcombinedcycle(IGCC),orcoal‐to‐liquidtechnologiesasSNGshareatleastthegasificationprocesswiththeseprocesses.



TherearemanydifferentissuesassociatedwiththedeploymentofSNG.InterestindevelopingSNG

datesbacktothe1970s,whentheenergycrisisledresearchersandpolicymakerstoconsiderwaystoconvertcoalintogaseousandliquidfuels.However,thelaterstabilizationofthefuelmarketandincreasedavailabilityoflow‐costfuelsledtotheabandonmentofmostofcoal‐to‐SNGprojects.Another

problemwithproducingSNGfromcoalistheadditionalCO2createdbytheprocess.ThispaperanalyzesSNGgenerationtechnologyandthecurrentstateofSNGdevelopmentanddiscusseshowcarboncaptureandsequestration(CCS)technologycouldaffectSNG.Itexaminesthetechnology’seconomic

andenvironmentalimplicationstodetermineunderwhatconditionsSNGproductionbecomeseconomicallyviable.

2.CoaltoSNGTechnology

2.1.BriefDescription

Steam‐oxygengasification,hydrogasification,andcatalyticsteamgasificationarethethreegasificationprocessesusedincoal‐to‐SNG.Theprovenandcommercializedmethodofgasificationforthecoal‐to‐

SNGprocess,however,isthesteam‐oxygengasificationprocess.

2.1.1.Steam‐oxygengasification

Inthesteam‐oxygenprocessofconvertingcoaltoSNG,coalisgasifiedwithsteamandoxygen.Thegasificationprocessproducescarbonmonoxide(CO),hydrogen(H2),carbondioxide(CO2),methane(CH4),andhigherhydrocarbonssuchasethaneandpropane.Thegascompositiondependsuponthe

gasifierconditions,i.e.,temperatureandpressure.Athighertemperaturesandpressures,themajorproductsareCOandH2.ThreemolesofH2arerequiredtoreactwitheachmoleofCOtoproduceonemoleofCH4.TheconcentrationofH2insyngasisincreasedbyastepcalledthewater‐gasshiftreaction,

whichisfollowedbyagascleaning.Thecleanedgas,consistingprimarilyofCOandH2,reactsinthemethanationreactorinthepresenceofacatalysttoproduceCH4andH2O.Theresultinggas,afterH2Ocondensationandpolishing,ifrequired,issyntheticnaturalgas(SNG).Figure1showstheflowdiagram

ofsteam‐oxygengasification.Theessentialcomponentsoftheprocessaretheairseparationunit,thegasifier,thewater‐gasshiftreactor,syngascleanup,andthemethanationreactor.Eachcomponentisdescribedbelow.

AirSeparationUnitOxygenrequiredinthegasifieriseithersuppliedbyvendorsorgeneratedon‐siteusinganairseparation

unit(ASU).CryogenicairseparationisthetechnologygenerallyusedintheASU.

GasifierThemostimportantandbasiccomponentofthecoal‐to‐SNGprocessisthegasifier.Thegasifierconvertscoalintosyngas(primarilyCOandH2)usingsteamandoxygen(O2),generallyatahigh

temperatureandunderhighpressure.



Asanexample,theGE/Texacogasifiertemperatureoperatesat42barsand2,500°F.Thedifferenttypesofgasifiersare:entrainedflow,fluidizedbed,movingbed,andtransportreactor(Stiegel2007).CommercialgasifiervendorsincludeConocoPhillips,GEEnergy(Chevron‐Texaco),Shell‐SCGP,Siemens

(GSP/Noell),KBRTransport,andLurgi.Water‐GasShiftReactor

TheconcentrationofH2isincreasedbythewater‐gasshiftreaction.Inthewater‐gasshiftreaction,COandH2OareconvertedtoCO2andH2inafixed‐bedcatalyticconverter.Thereactionisexothermicandcanbecompletedeitherbeforeoraftertheacidgasremoval.Thecatalystcompositionvariesforboth

typesofshiftreactions(NETL2007).SyngasCleanup

Thesyngascleanupisdoneintwosteps.First,thesyngasfromthegasifierisquenchedandcooled,andthedustandtarcarriedbythegasareremoved.Afterpassingthroughthewater‐gasshiftreactor,thesyngasiscleanedasecondtimetoremovetheacidgasesH2SandCO2.Theacidgascleanupsystemcan

useeithertheSelexolorRectisolprocess.Bothprocessesarebasedonphysicalabsorption,whichmakesthemmoreeconomicalthantheamineprocessusedforCO2separationinpowerplants,whichisbasedonchemicalabsorption.Theprocessescanbeusedinaselectivemannertoproduceseparate

streamsofH2SandCO2.TheH2ScanbefurtherutilizedinaClausplanttogeneratesulfur.IntheSelexolprocess,amixtureofdimethylethersofpolyethyleneglycolisusedasanabsorbent.The

Selexolsolventabsorbstheacidgasesfromthesyngasatrelativelyhighpressure,usually20to138bars.Theacidgasesarereleasedusingapressureswingorsteamstripping.TheSelexolprocessismorethan

35yearsoldandthereareatleast55commercialunitsinservice(UOP2008).IntheRectisolprocess,coldmethanolisusedasanabsorbentwhichabsorbstheacidgasatapressureof27.6to68.9barsandatatemperatureof100°F.TheGreatPlainsSynfuelsPlantusestheRectisolprocess.

MethanationInthemethanationreactor,COandH2areconvertedtoCH4andH2Oinafixed‐bedcatalyticreactor.

Sincemethanationisahighlyexothermicreaction,theincreaseintemperatureiscontrolledbyrecycling

Air Air

N2 N2

O2 O2

ASU ASU

Steam

CO2 CO2

Methanation

SNG

SNG

Gasifier Gasifier

Coal

Gas

cleaning

Gascleaning

Gas

cleaning

Gas

cleaning

Syngas

CO,H2

Compressionandsequestration(optional)

CompressionandSequestration

(Optional)

Steam

H2,CO,

CO2H2,CO,CO2

Water‐gasshift

Water‐GasShift

Particulate,tarremoval

Ash

Figure1.Steam‐oxygengasificationprocessdiagram



theproductgasorbyusingaseriesofreactors.Steamisaddedtothereactiontoavoidcokeformationinthereactor.Afterthesteamisremovedfromtheproductgasesbycondensation,SNGisreadyfor

commercialapplications.

2.1.2.Hydrogasification

Asthenameimplies,thehydrogasificationprocessusesH2togasifycoal.H2reactswithcoaltoproduceCH4.Thehydrogasificationprocessisexothermicinnature.H2requiredforthegasificationiseither

providedbyanexternalsourceorbyusingamethanesteamreformer.AportionoftheCH4generatedinthehydrogasificationreactorisconvertedintoCOandH2inthemethanesteamreformer(Figure2).

Thehydrogasificationprocessisintheresearchstageandisnotyetcommercialized,althoughafewstudiesontheprocesswereconductedfromthe1970stothe1990s.Rubyetal.(2008)haveproposedahydrogasificationprocesswhichconsistsofahydrogasificationreactor,desulfurizationandcarbonizer

reactorsforCO2removal,andamethanationreactor.Theadvantagesofhydrogasificationwillbediscussedinthefollowingsectiononcatalyticsteamgasification.

2.1.3.Catalyticsteamgasification

Catalyticsteamgasificationisconsideredtobemoreenergy‐efficientthansteam‐oxygengasification.However,theprocessisstillunderdevelopment.Inthisprocess,gasificationandmethanationoccurinthesamereactorinthepresenceofacatalyst(Figure3).Theenergyrequiredforthegasification

reactionissuppliedbytheexothermicmethanationreaction.CH4isseparatedfromCO2andsyngas(COandH2);thesyngasisthenrecycledtothegasifier.Thecatalyticreactioncantakeplaceatalowertemperature(typically650°–750°C).TheprocesswasinitiallydevelopedbyExxoninthe1970susing

potassiumcarbonate(K2CO3)asacatalyst,buttheprocesswasnotcommercialized.

Theadvantagesofhydrogasificationandcatalyticsteamgasificationarethattheydonotrequireairseparationunit;hencethereislessenergypenaltyfortheprocess.Furthermore,thecostsarelower,as

Steam

Steam

CO2CO2

CH4(SNG)

CH4(SNG)

Hydro‐gasifier

Hydro‐gasifier

Coal

Coal Water‐gas

shift

Water‐gas

shift

Gas

separator

Gas

separator

CH4,H2CO

CH4,H2,

CO

Compressionandsequestration(optional)

Ash

Ash

CH4,H2CO2

CH4,H2,

CO2Methanesteam

reformer

Methanesteamreformer

CH4

CH4

Steam

Steam

H2

H2 CO,H2

CO,H2

CO,H2

CO,H2

Gascleaning

Gascleaning

SNG

SNG

Particulate,tarremoval

Figure2.Hydrogasificationprocessdiagram



thegasificationandmethanationoccuratalowertemperature.Thedisadvantagesofcatalyticsteamgasificationaretheseparationofcatalystfromash/slagandthelossofreactivityofthecatalyst.

2.2.ThermalEfficiencyofSNGPlants

ThethermalefficiencyofanSNGplantemployingthesteam‐oxygengasificationprocessvariesinthe

rangeof59%to61%.ADOEstudyreportedplantefficienciesof60.4%forIllinois#6(bituminous)coaland59.4%forPowderRiverBasin(PRB)(sub‐bituminous)coal(NETL2007).AUniversityofKentuckystudycalculatedtheefficiencyofanSNGplantusingbituminousKentuckycoaltobe60.1%withoutCO2

captureand58.9%withCO2capture(Grayetal.2007).Thehydrogasificationandcatalyticgasificationprocessesarethoughttobemoreefficientthanthe

steam‐oxygengasificationprocess.Thetheoreticalefficiencyoftheseprocessesisestimatedtobeashighas79.6%forhydrogasificationand72.7%forcatalyticgasification(Steinberg2005).Rubyetal.(2008)haveestimatedathermalefficiencyof64.7%forthehydrogasificationprocessusinglow‐ranked

western(sub‐bituminous)coal.ThethermalefficiencyofGreatPointEnergy’scatalyticgasification–basedplantisreportedtobe65%(GreatPointenergy2008a).

2.3.GreatPlainsSynfuelsPlant:AnExistingSNGPlant

TheGreatPlainsSynfuelsPlantinBeulah,NorthDakota,istheonlycommercialplantintheUnited

StatesproducingSNGfromcoal.Theplant,whichisownedandoperatedbytheDakotaGasificationCompany,asubsidiaryofBasinElectricPowerCooperative,hasbeeninoperationsince1984.ThekeyfiguresoftheplantarelistedinTable1.Theplantproducesmorethan54billionstandardcubicfeetof

naturalgasannuallyusing6milliontonsoflignitecoal.Theannualplantcapacityfactoris90%–92%.The

Particulate,tarremovalParticulates,tarremoval

Compressionand

sequestration(optional)

Catalyticcoalmethanation

Catalyticcoalmethanation

Coal+make‐upcatalystCoal+make‐upcatalyst

Steam

Steam Gascleaning

Gascleaning

SNG

SNG

CO2

CO2Gas

separator

CH4

separation

Ash‐catalystseparation

Ash‐catalystseparation

Ash

Ash

Catalyst

H2,CO

Figure3.Catalyticsteamgasificationprocessdiagram



plantalsodemonstratesCO2captureandsequestration.Since2000,asmuchas95millionstandardcubicfeetperdayofCO2hasbeentransportedfromtheplantviaa205‐milepipelinetotheWeyburnOil

FieldinsouthwesternSaskatchewan,Canada,forenhancedoilrecovery(EOR)(PerryandEliason2004).TheCO2productioncapacityismorethan200millionstandardcubicfeetperday(DakotaGasificationCompany2008).Inaddition,theplantalsoproducesfertilizers,solvents,phenols,andotherchemicals.

TheDakotagasificationplantuses14LurgiMarkIVGasifiersoperatingat1,204°C.Eachgasifierhasaheightof12.2metersandaninternaldiameterof4.0meters.TheRectisolprocessisusedtoremoveH2S

andCO2,andanickel‐basedcatalystisusedinthemethanationprocess.Thefinalgasisfurthercooled,cleaned,dried,compressed,andsuppliedtoconsumersthroughapipeline.

Table1.KeyfiguresofNorthDakotaGasificationPlant

GreatPlainsSynfuelsPlant‐KeyFigures

Coaltype Lignitecoal

Inoperationsince 1984

Annualcoalconsumption(milliontons) 6

AnnualSNGproduction(billionstandardcubicfeet) 54

CO2emissionsfromtheSNGplant(tons/day) 6,080

Annualplantcapacityfactor(%) 90–92

2.4.RecentDevelopmentsinSNG

2.4.1.ResearchanddevelopmentinSNG

Recently,theenergyindustryhasshownconsiderableinterestinthecoal‐to‐SNGconcept.GeneralElectricEnergyisworkingwiththeUniversityofWyomingtobuilda$100millionadvancedcoal

gasificationresearchandtechnologycenterinWyomingwhichwillfocusonthedifferentaspectsofconvertingPowderRiverBasin(PRB)coaltoSNG.Theproposedresearchcenterwouldbuildascaled‐downcommercialpowerplant,whichcouldbeoperationalby2010(Farquhar2008).TheArizonaPublic

ServiceCompany(APS)alongwiththeDepartmentofEnergyandotherpartnersaredevelopingahydrogasificationprocesstoco‐produceSNGandelectricityfromwesterncoals.Theobjectiveofthe$12.9millionprojectistodevelopanddemonstrateanengineering‐scalehydrogasificationprocess

whichcanproduceSNGatacostoflessthan$5/MMBtuandcanutilizelow‐rankedwesterncoal(NETL2008).TheWesternResearchInstitute(WRI)isworkingonthedevelopmentofagasificationprocesswhichusescounter‐currentcyclonicmethodsinauniquesequencethatcausesactivatedcarboncharto

reactwithsynthesisgas,bothderivedfromcoal.Themethoddoesnotrequirepureoxygentoproducethesynthesisgas(WRI2008).

ThecatalyticsteamgasificationprocessdevelopedbyGreatPointEnergyInc.isconsideredtobeagreatadvancementinSNGtechnology.Theprocessinvolvesasinglereactorusingaproprietary,recyclablecatalystdevelopedin‐houseandmadefromabundantlow‐costmetals.Thecatalystwasdevelopedwith



thehelpofSouthernIllinoisUniversity,theUniversityofToronto,andtheUniversityofTennessee(Fairley2007).Theheatreleasedinthesyngas‐to‐methanestepissufficienttosustainthegasification,

eliminatingtheneedtofireupthereactionswithpurifiedoxygen.Theprocesswasdemonstratedwithaweek‐longpilotruninNovember2007.Thepilotplantfortheprocessisa60‐foot‐highgasifierwithaninternaldiameterof14inches.Aproposedlargepre‐commercialplantisexpectedtobeoperationalby

2009.Thepriceofpipeline‐qualitygasbyGreatPointEnergy’sprocesscouldbelessthan$3perMMBtu(Fairley2007).GreatPointEnergyInc.andPeabodyareworkingtogethertocommercializethetechnologywiththegoalofdevelopingacoal‐to‐SNGplantatornearWyoming’sPowderRiverBasin

area(GreatPointEnergy2008b).

2.4.2.CommercialSNGplantsplannedintheU.S.

Table2showsthatthereareatleast15coal‐to‐SNGplantsproposedinU.S.,allindifferentstagesofdevelopment.Someoftheseplantsarealsoconsideringcarboncaptureandstorage.Forexample,the

jointConocoPhillips/PeabodyEnergyprojectintheMidwestisconsideringCO2captureandstorageforitsmine‐mouthfacility(ConocoPhillips2007).AnIndianaGasificationLLCplantinsouthwestIndianawoulddemonstrategeologicCO2sequestration(IndianaCoaltoSNG2008).SecureEnergyInc.’splantin

Illinoiswoulduse10%biomassforSNGgeneration.

Table2.Proposedcommercial‐scalecoal‐to‐SNGprojectsintheU.S.

ProjectName/Owner Location Status Capacity(BCF/yr)

CapitalCost

Yearofcompletion

Remarks

SecureEnergyInc. Illinois Front‐EndEngineering

andDesign(FEED)

20 $250million

2009 Thegasifieris10%

biomass‐ready

PeabodyEnergyandArclightCapital

Illinois Proposed 35

PowerHoldingsofIllinoisLLC

Illinois Pre‐FEED 50 $1billion 2009

TaylorvilleEnergyCenter

(IGCC/SNG)

Illinois Feasibility

Study

$2billion 50%ofCO2

tobecaptured

GlobalEnergy Indiana Proposed

GreatPointEnergy’sPilot

Project

Massachusetts Pre‐FEED



OswegoSNGProject–TransGas

NewYork Planned $2billion 2010

SouthHeartCoal

GasificationProject(GreatNorthernPower

Development,L.P.andAlliedSyngasCorporation)

NorthDakota Feasibility

study

36.5 $1.4

billion

2012 1CO2would

becapturedandusedfor

EnhancedOilRecovery

(EOR)applications

infuture

SES/ConsolCoal‐to‐SNG

Project WestVirginia Planned

Peabody/

GreatPointSNGProject

Location

undecided

Planned

ConocoPhillips/

PeabodyEnergy

Midwest Feasibility

Study

50–70

LockwoodProject Texas Conceptual

Design

65.7 2011 CO2willbe

capturedandutilized

forEOR–fuelwillbe

petcokeandbiomass

Tondu’sNuecesSyngasPlant

Texas Planned

PeabodyEnergy Wyoming Proposed

2.5.UseofBiomassforSNG

TheuseofbiomasstogenerateSNGcouldbethemostinterestingscenario.SNGproductionfrom

biomass—alsoreferredtoas“bio‐SNG”—hasadvantagesbecausebiomassiscarbon‐neutral,andaboveall,CO2capturewouldgeneratenegativecarbonemissions.Thechallengesofusingbiomassinsteadofcoalariseduetothechemicalcompositionofbiomass,thelowercalorificvalueperunitofbiomass

comparedwithcoal,andthehighermoisturecontentofbiomass.Oneoftheissuesassociatedwithbiomassgasificationistarformation.Theseasonalvariationinthebiomasssupplyandmoisturecontentcouldrequirelargestorageanddryingcapacitiesforcommercial‐scalebiomassgasificationunits.

Anotherpossiblewayofutilizingbiomasswouldbeinacoal‐biomassco‐gasificationprocess.Co‐gasificationcouldmakeitpossibletoinstalllarge‐scalegasificationcapacity,whichcouldbemorecommerciallyviable.

1IndustrialCommissionofNorthDakota,2007.GreatNorthernPowerDevelopmentandIndustrialCommissionAnnounceCoalGasificationProjectatSouthHeart.http://www.gasification.org/Docs/News/2007/ ‌‌South ‌% ‌20Heart%20statewide.pdf.



Theconceptofbiomass‐to‐SNGisrelativelynew.Theprocesscomponentsforcoalandbiomassshouldbesimilar,althoughtheremaybeslightdifferencesinthegasificationandtarremovalprocesses.The

fluidized‐bedgasifiermaybebettersuitedforbiomassgasificationasitcanhandlevariationsinsize,density,moisture,andtarformation.

TheEnergyResearchCentreoftheNetherlands(ECN)hasdemonstratedSNGgenerationfrombiomass(Mozaffarianetal.2003,2004).Inthisprocess,indirectgasificationisused,andbothgasificationandmethanationarecarriedoutatatmosphericpressure.Thebiomassisgasifiedintheriserofacirculating

fluidizedbed(CFB)andtheremainingchariscirculatedtothecombustor(downcomerofCFB).Inthisprocess,theheatrequiredforgasificationissuppliedbycharcombustioninthecombustor.Steamisusedforgasificationandairisusedforcharcombustion.Thelab‐scalegasifier,developedin2004,hasa

biomasscapacityof5kg/handoperatesattemperaturesof750°to900°C(Zwartetal.2006).Directgasificationwasalsotested,whichusesoxygenandsteamforgasification(bubblingfluidizedbed)andoperatesat850°C.Thegastreatmentintheintegratedbio‐SNGsystemconsistsoftarremovalwith

organicscrubbingliquidtechnology,andsulfurandHClremovalwithadsorbents.Basedontheexperiments,anSNGsystemwasoptimizedwhichconsistsofanindirectgasifier,atar

removalsystemwhichrecyclestartothegasifier,agascleaningreactorandshift,andamethanationcombinedreactor.Theindirectgasifierworkingat850°Cproducesnearlynitrogen‐freesyngasandahighamountofmethane.Thetarsarerecycledtothegasifierinordertoincreaseefficiency,whereas

thetarfreesyngasiscleanedfromothercontaminants(e.g.,sulfurandchlorine).Thecleansyngasisfedtoacombinedshiftandmethanationprocess,convertingthesyngasintoSNG.Aftermethanation,

furtherupgrading(e.g.,CO2andH2Oremoval)isrequiredinordertocomplywiththedesiredSNGspecifications.Theoverallnetthermalefficiencyisreportedas70%LowHeatValue(LHV)(approximately64%HighHeatValue[HHV]).Fortypercentofthecarbonofthebiomassbecomespart

oftheSNGandanequalamountofcarboniscapturedasCO2.Theremaining20%ofthecarboninbiomassbecomesasfluegasfromtheprocess(Zwart,2008).Thecostofthebio‐SNGproductionproposedbytheECNanditssensitivitytobiomasspriceareanalyzedinsections3.2.4.and3.2.5.

3.EnvironmentalImplicationsandEconomicsofSNG

Asdescribedearlier,steam‐oxygengasificationistheonlycommercializedandoperationaltechnology.

Henceforth,theenvironmentalimpactsandcostsofSNGrefertosteam‐oxygengasification.However,itshouldbenotedthatthehigheraplant’sthermalefficiency,theloweritsCO2emissionswillbe.Therefore,CO2emissionsfromthehydrogasificationandsteamcatalyticgasificationprocessesshould

belowerthanthoseofthesteam‐oxygengasificationprocess.

3.1.EnvironmentalImplicationsofSNG

Thecoal‐to‐SNGprocessiscapableofachievingverylowsulfuremissions.Thesulfurisemittedashydrogensulfide(H2S)andcanberemovedbytheacidgasremoval(AGR)system.Theacidgas(CO2andH2S)canbeseparatedintheSelexolorRectisolprocessinaSNGplant.TheH2ScanbeutilizedinaClaus



planttogenerateelementalsulfur.Mercurycanberemovedinthewaterquenchduringthesyngascleaning.Theremovallevelshouldbesufficienttomeetthepermittedemissionslevel.However,if

required,acarbonbedcouldbeusedforadditionalmercuryremoval.NOxemissionsfromtheprocesswouldbeverylow;theonlyNOxemissionswouldbefromtheboilerusedtogeneratesteamandpowerfortheprocess.ConsideringthatthesulfurisremovedbyClausplant,thecoal‐to‐SNGshouldbe

consideredacleancoaltechnology.

CO2Emissions

CO2andH2Sareemittedfromtheacidgasremovalplant.SeparatestreamsofCO2andH2ScanbeobtainedfromtheAGRprocess.CO2iseithercapturedorreleasedintotheatmosphere.Approximately

two‐thirdsofthecarboncontentofthecoalisconvertedintoCO2intheSNGprocessandtheremainingcarbonbecomesacomponentofSNG.CO2emissionswoulddependuponthetypeofthecoalandtheprocessused.CO2emissionscalculatedfromaDOEstudyareapproximately175lbs./MMBtufor

bituminousIllinoiscoal#6and210lbs./MMBtuforsub‐bituminousPowderRiverBasincoal.WhencomparingtheCO2emissionscausedbyconvertingcoalintoSNGwiththeemissionscausedby

utilizingcoaldirectlyforpowergeneration,itisassumedthattheSNGisutilizedinanaturalgascombinedcycle(NGCC)powerplantforpowergeneration.Figure4comparestheCO2emissionsperMWhofasupercriticalPCboiler,anIGCCplant,andacoal‐SNG‐NGCCsystemusingIllinois#6coal.Itis

assumedthatthenetthermalefficiencyoftheNGCCpowerplantis50.8%.ThefigureshowsthatCO2emissionsarehighestfromthecoal‐SNG‐NGCCpowersystem.However,itisinterestingtoconsiderthatCO2fromtheSNGplantisabyproductoftheprocessandthatthereisnoadditionalcostassociatedwith

CO2separation.Moreover,theCO2fromthisprocessisobtainedathighpressure.IftheCO2emittedfromtheSNGplantissequestered,CO2emissionsfromthecoal‐SNG‐powercyclecanbebroughttotheleveloftheNGCCplant.Inthatcase,CO2emissionswouldbeapproximately45%oftheemissionsofthe

IGCCorsupercriticalPCplants.Nonetheless,thethermalefficiencyofthecoal‐SNG‐NGCCsystemislowerthanthatofcoal‐basedpowerplants(PCandIGCC).



Figure4.CO2emissionsfromdifferentpowerplantoptionsusingIllinois#6coal(CO2emissionsforsupercriticalPCboiler,IGCC,andNGCCarefromNETL2007b)

3.2.EconomicsofSNG

TheDOEandtheUniversityofKentuckyreportthecostsoftheindividualcomponentsandtheoperationandmaintenance(O&M)ofanSNGplant.Figure5showsthepercentagedistributionofthe

equipmentcapitalcostforthecomponentsofanSNGplant(Grayetal.2007).ThecostliestpartoftheSNGsystemisthegasifier,whichcorrespondstoabout21%ofthetotalequipmentcost,followedbythesyngascleanupsystem,whichaccountsfor15.8%.Theairseparationandcompressioncomponentscost

11.3%,andthemethanationreactorcosts11%.SNGcouldbegeneratedinco‐productionwithelectricity,IGCC,orhydrogen.However,forthepresenteconomicanalysis,itisassumedthattheplantonlyproducesSNG.



Figure5.DistributionofthecapitalequipmentcostsoftheindividualcomponentsofanSNGplant

3.2.1.CostofSNG

WecalculatedthelevelizedcostofSNGonthebasisofthecapitalandO&McostsreportedbyDOE

(NETL,2007).AcashflowmodelisusedtocalculatethecostofSNG.ThedifferentassumptionsinthemodelareprovidedinTable3.Thecapitalcostisupdatedto2008usingthechemicalengineeringplantcostindex.Accordingtotheindex,thecosthasincreasedbyafactorof1.173since2005(CEPCI2008).

Thelevelizedcostisforanindustrial‐scaleSNGplantusingIllinois#6andPRBcoal.

Table3.AssumptionsforthecostevaluationofSNG

Parameter Value

Interestrate(%) 8.0

Expectedreturntoequityinvestor(%) 12

Debtfraction(%) 60

Taxrate(%) 40

Debtterm(years) 10

Plantlife(years) 30

Constructionperiod(years) 3

Depreciationschedule(years,accelerated) 15

Debtrepaymentrate(%) 15

Capacityfactor(%) 90



3.2.2.Effectofcoaltypeandcoalprice

AssumingthatCO2isnotcapturedintheprocess,thelevelizedcostofSNGis$8.42/MMBtuusingIllinois#6coaland$9.53/MMBtuusingPRBcoal.Thecoalpricesare$1.34/MMBtuforIllinois#6coaland

$0.95/MMBtuforPRBcoal.NotethatalthoughPRBcoalislessexpensivethanIllinois#6coal,thecostofSNGusingPRBcoalishigher.ThisisbecauseIllinois#6isabituminouscoal,whilePRBisasub‐bituminouscoalwhichgeneratesmoreslagintheSNGprocessandthereforerequiresmorecostlyslag‐

handlingequipment.Anotherfactormaybethelowerefficiencyatwhichthegasifieroperateswithlowerrankedsub‐bituminouscoal.

Figure6showstheeffectoftheincreaseincoalpriceonthelevelizedcostofSNG.Forexample,anincreaseinthecoalpriceby100%increasesthecostofSNG(withoutCO2capture)by18.8%and12.5%usingIllinoiscoalandPRBcoal,respectively.

Figure6.EffectofcoalpriceonSNGcost

3.2.3.EffectofcarbonpriceallowancesandCO2sequestrationonSNGcost

IfthefutureclimatepolicyintheUnitedStatesrestrictstheCO2emissionsfromtheindustries,therewouldbecarbonallowancesfortheCO2emissions.Thecarbonpriceallowancewouldincreasethe

levelizedcostofSNG.Figure7showsthelevelizedcostofSNGwithdifferentcarbonallowanceprice.Higherthecarbonallowanceprice,lesseconomicallyviableSNGis.Since,CO2isabyproductoftheSNGprocess,itwouldbeeconomicfortheSNGproducerstosequesterCO2ratherthanpayingthecarbon

allowanceprice.AdditionalcostinsequestratingCO2incomparisontoventingCO2wouldbeincompressingCO2tothehighpressureandlossofasmallportionoftheenergyduetotheprocess



modification.ItshouldbenotedthattheenergypenaltyforcompressingCO2isnotashighasinthecaseofpost‐combustionCO2captureinpowerplantsbecauseCO2releasedfromtheprocessisalreadyata

highpressure.

Carbonallowancepricelevel

abovewhichCO2

sequestrationiseconomic

Carbon

allowancepricelevelabove

whichCO2sequestra

tioniseconomic

Figure7.EffectofcarbonallowancesonthecostofSNG



Figure8.EffectofCO2priceonSNGcosts

SNGcostswouldbecome$9.15/MMBtuforIllinoiscoaland$10.55/MMBtuforPRBcoalwithCO2

sequestration.ThecostofCO2transportandsequestrationwasassumedtobe5$/Mt.ItwasassumedthattheSNGfacilitywouldbeneartheCO2sequestrationsite.Figure7showsthatinthecaseofcarbonallowanceshigherthan$9.5/MtCO2forIllinoiscoaland$10.5/MtCO2forPRBcoal,CO2sequestrationis

amoreeconomicoptionthanpayingcarbonallowances.IfCO2issuppliedforenhancedoilrecovery(EOR),thentheSNGproducerpaysnosequestrationcosts.

Figure8showstheeffectofCO2priceonthelevelizedcostofSNGHigheristheCO2price,moreeconomicallyviablewouldbetheSNG.

3.2.4.Costofbio‐SNG

Therearenocommercialbio‐SNGplants.ECNhasestimatedthecostofbio‐SNGonthebasisoftheirresearchfacility(Zwartetal.2006).Thesizeoftheplant,operatingpressure,andbiomasscostwould

decidethecostofthebio‐SNG.Thecostofbio‐SNGdecreaseswithhigherpressuresystemandlargerfacilities.Theresultshaveshownthattheplantoperatingat7barpressurewascosteffectivecompared

totheplantoperatingatatmosphericpressure.However,inallthecases,thecostofbio‐SNGwashigherthanthemarketpriceofnaturalgas.



3.2.5.Effectofbiomassprice

Itshouldbenotedthatthecostofbiomassvariesgreatlywithgeographicalfactors.WehaveevaluatedtheeffectofbiomasspriceoncostofSNG.A341.21MMBtu/hplantoperatingat7barpressurewas

chosenfortheanalysis.ThecapitalcostoftheplantandtheoperatingandmaintenancecostwasassumedtobethesameasdescribedbyECN(Zwartetal.2006).Thecostwasupdatedfortheyear2008usingchemicalengineeringplantcostindex(CEPCI2008).OneEurowasassumedtobeequalto

1.42US$.Theassumptionstoevaluatethecostofbio‐SNGwerethesameasthosedescribedinTable3.Figure9showsthecostofbio‐SNGatdifferentbiomassprices.Sincebiomassiscarbon‐neutral,ifCO2is

sequestered,carboncreditscouldgenerateadditionrevenue.ThesellingofCO2toEORcouldgenerateadditionalrevenue.TheadditionalrevenuefromcarboncreditsorsellingCO2forEORwouldreducethepriceofbio‐SNG.Animportantresultofthisanalysisisthatforthebio‐SNGpricetobelessthan

$12/MMBtu,thebiomasspriceshouldnotexceed$2.2/MMBtu.Forthesamepriceofcoalandbiomassthelevelizedcostofbio‐SNGis$11.2/MMBtucomparedto$8.42/MMBtuusingbituminouscoal.ThedifferencebetweenthecostswillbereducedifweconsiderthecostofCO2creditsduetocarbon‐

neutralbiomass.

Figure9.Effectofbiomasspriceonthecostofbio‐SNG



4.Conclusions

Steam‐oxygengasification,hydrogasification,andcatalytic‐steamgasificationarethedifferentprocessesthatcouldbeusedtoconvertcoaltosyntheticnaturalgas.Steam‐oxygengasificationistheonlyproventechnology,whilehydrogasificationandcatalyticsteamgasificationarethoughttobemoreenergy‐

efficientmethodswhosedevelopmentcoulddecreasethecostofSNG.Thereareatleast15SNGprojectsplannedintheUnitedStatesundervariousstagesofthedevelopment.BiomasscouldalsobeutilizedforSNGproduction.

TheprocessofconvertingcoaltoSNGproducesCO2asabyproduct.Coal‐to‐SNGpowerplantswouldproducemoreCO2thanwouldbeproducedbydirectlyusingthecoalinpowerplants.IfCO2iscaptured

fromthecoal‐to‐SNGprocess,however,theCO2emissionsfromcoal‐to‐SNGpowerplantscouldbeequaltothosefromnaturalgaspowerplants.

ThelevelizedcostofSNGis$8.42/MMBtuforplantsusingbituminouscoaland$9.53/MMBtuforthoseusingsub‐bituminouscoal.WithCO2sequestration,SNGcostswouldincreaseto$9.15/MMBtuforbituminouscoaland$10.55/MMBtuforsub‐bituminouscoal.Itwouldbemoreeconomical,however,to

sequestertheCO2thantopaycarbonpriceallowancesintheeventofafuturecarbon‐pricingscheme.SellingCO2forenhancedoilrecoverywouldmakecoal‐to‐SNGmoreeconomicallyviable.Bio‐SNGisaninterestingexampleofusingcarbon‐neutralfuelforthegenerationofSNG.However,forthebio‐SNG

pricetobelessthan$12/MMBtu,thebiomasspriceshouldnotexceed$2.2/MMBtu.

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Documents

Synthetic Natural Gas (SNG): Technology, Environmental