What kind of oil is produced from coal?

Coal-to-oil: China’s overall energy profile is characterized by abundant coal, limited oil reserves, and available gas. In 2003, China’s total energy consumption reached 1.1783 billion tons of oil equivalent, of which coal accounted for 67.86%, oil for 23.35%, natural gas for 2.5%, hydroelectric power for 5.43%, and nuclear energy for 0.83%. Our country has abundant coal resources; the proven reserves during the period 2000–2003 were all 114.5 billion tons. The reserve-to-extraction ratio decreased from 116 years in 2000–2001 to 82 years in 2002 and 69 years in 2003. In 2003, the proven oil reserves were 3.2 billion tons, with a reserve-to-production ratio of 19.1 years. For a long period of time, China’s crude oil production could only remain at the level of 160–170 million tons per year. Due to its large reserves and relatively stable price, coal has become the preferred fuel for power generation in China. In the first 50 years of this century, coal will still play a dominant role in China’s primary energy mix. It is estimated that the share of coal in primary energy will drop from 67.8% in 1999, 63.8% in 2000, and 67.8% in 2003, to around 50% by 2005. China burns about 30 million tons of heavy oil each year, and the shortage of oil resources has once again put coal as a substitute for oil on the agenda; converting coal into oil has become an important trend in China’s energy strategy. 　　Coal indirect liquefaction technology: The process of producing syngas through coal gasification and then using the F-T synthesis to produce synthetic oil is known as coal indirect liquefaction technology. “The “indirect coal liquefaction” method was industrialized in South Africa long ago. South Africa is also a country rich in coal but short of oil; it has coal reserves amounting to 55.33 billion tons, with a reserve-to-extraction ratio of 247 years. Coal accounts for 75.6% of its primary energy supply. Since 1955, South Africa has been using coal gasification technology and the Fischer-Tropsch synthesis process to produce petroleum and petrochemical products such as gasoline, kerosene, diesel, synthetic waxes, ammonia, ethylene, propylene, and alpha-olefins. South Africa’s Fischer-Tropsch synthesis technology has now developed modern Synthol slurry bed reactors. Sasol operates two units for \"indirect coal liquefaction,\" with an annual production of over 7 million tons of liquid hydrocarbon products (320,000 tons per year at Sasolburg and 6.75 million tons per year at Secunda); of this amount, 5 million tons are synthetic oils. The company consumes 49.5 million tons of coal each year. The cumulative $7 billion in investment has long been recouped. The current annual output value is 4 billion dollars, with annual profits of nearly 1.2 billion dollars. 　　Since the 1980s, the Shanxi Institute of Coal Chemistry under the Chinese Academy of Sciences has been conducting research and engineering development on coal indirect liquefaction technologies using Fe-based and Co-based catalysts for Fischer-Tropsch synthesis of oil. An industrial-scale experiment for coal-based synthetic oil with a capacity of 2,000 tons per year was completed, showing that 1 ton of refined oil can be produced from 5 tons of coal. According to the project plan, a 10,000-ton capacity \"coal-to-oil\" facility is expected to be established in Shanxi, a major coal-producing province in China, within the next 3 years. The Chinese Academy of Sciences also plans to establish a large-scale coal-based synthetic oil plant with an annual production capacity of millions of tons by 2008; a major coal \"refinery\" will be built in the area around Datong and Shuozhou in Shanxi Province. Recently, the 5 million tons per year coal-based synthetic oil project of Shuozhou Lianshun Energy Company, with a total investment of $10 billion, has entered the substantive development phase, with completion and operation scheduled for 2005. The products will include nearly 500 chemical-derived products such as synthetic gasoline and synthetic diesel with an octane rating of at least 90 and free of sulfur and nitrogen. 　　China is rich in coal resources. To ensure **energy security and meet the urgent demand for indirect liquefaction technology in its energy strategy, in 2001, the ”863” program of the **Ministry of Science and Technology” and the Chinese Academy of Sciences jointly launched a major scientific and technological project on \"coal-to-oil conversion\". Two years later, the Institute of Coal Chemistry in Shanxi, affiliated with the Chinese Academy of Sciences and responsible for this project, had made a series of important advancements. High-quality diesel derived from coal is completely different from the diesel we are accustomed to seeing; it is clear and transparent, with almost no taste. It contains extremely low levels of pollutants such as sulfur and nitrogen, and its cetane number is over 75, giving it high performance and reducing pollution. Compared to gasoline, this high-quality diesel reduces fuel consumption by 30% per 100 kilometers. The sulfur content in this fuel is less than 0.5×10‑6, which is 10 times higher than the Euro V standard and 20 times higher than the Euro IV standard; it thus constitutes an excellent environmentally friendly clean fuel. 　　The Shanxi Coal Chemistry Research Institute has been conducting research on \"coal to oil\" conversion for 20 years. The pilot plant with a capacity of thousands of tons carried out its first trial operation in September 2002, producing the first batch of crude oil; by the end of 2003, dozens of tons of synthetic crude oil had been produced in total. At the end of 2003, high-quality colorless and transparent diesel was produced from crude oil. Currently, the pilot plant at the Shanxi Coal Chemical Research Institute is preparing for its 5th operation cycle, with a planned runtime of around 6 months. Currently, only a few countries such as South Africa in the world are able to produce high-quality diesel through the \"coal-to-oil\" technology. The emergence of high-quality clean diesel produced by the Shanxi Coal Chemical Research Institute signifies that China now possesses the capability to develop and provide advanced, integrated industrial technologies of its own, making it one of the few countries in the world that holds the complete set of technologies needed to convert coal into highly clean diesel. It is reported that the institute plans to build a demonstration plant with an annual production capacity of 100,000 tons in coal mining areas in 2005, with an estimated investment of 1.2 to 1.4 billion yuan. Under the guarantee of mature technology, this will help to establish the basics for the industrialization of \"coal-to-oil\" production. 　　It is predicted that by 2020, China will face a shortage of around 200 million tons of oil products. Of this amount, 120 million tons will need to be imported, while the \"coal-to-oil\" technology can cover a shortfall of 60 to 80 million tons. The investment required for this technology is around 500 billion yuan, with an annual output value of 300 to 400 billion yuan. Indirect liquefaction methods can produce more than 200 million tons of oil, requiring an investment of around 160 billion yuan and yielding an annual output value of about 100 billion yuan. From an economic perspective, for a \"coal-to-oil\" production facility with a capacity of 500,000 tons per year, assuming an oil price of at least $25 per barrel, the internal rate of return can range from 8% to 12%, while the price of diesel products can be kept below 2,000 yuan per ton. An investment of around 4.5 billion yuan is required for a project of this scale. 　　Currently, seven organizations, including the Shanxi Coal Chemistry Institute, have formed an alliance to share data in experiments comparing \"coal-to-oil\" conversion ； Soon, 1.2 tons of high-clean diesel will be shipped to Germany for on-site sports car testing ； In 2005, vehicles provided by manufacturers such as Mercedes-Benz and Volkswagen were used to conduct long-distance tests from Shanghai to Beijing, using high-purity diesel as fuel; these tests aimed to comprehensively evaluate the compatibility between the vehicles and the fuel, as well as their combustion efficiency and environmental impact. At present, the preliminary design work for the industrial demonstration plant for \"coal-to-oil\" conversion is in progress, with large-scale production expected to begin by 2010. 　　Our country and South Africa signed a memorandum of understanding on cooperation on September 28, 2004. Under this memorandum, two major coal enterprises in our country, Shenhua Group Co., Ltd. and Ningxia Coal Industry Group Co., Ltd., will cooperate with South African company Sovco to build two coal indirect liquefaction plants in Shaanxi and Ningxia respectively. The initial construction capacity of each of the two indirect liquefaction plants is 3 million tons of oil products per year, with total investment amountsing to around 30 billion yuan each. By introducing technology and forming joint ventures with foreign parties, coal indirect liquefaction projects can fill the gap in China and are of great significance for the reliable development of coal-to-oil demonstration projects. Sasol is currently the only company in the world that possesses a coal liquefaction plant. It has been 50 years since the first coal indirect liquefaction plant was built in 1955; to date, 3 such plants have been constructed. These plants process 46 million tons of coal per year, producing over 7.6 million tons of various oils and chemical products annually, thereby meeting 40% of South Africa’s domestic oil demand. 　　The signing of an agreement between the Chinese Academy of Sciences and Shenhua Group regarding the \"iron-based slurry-bed synthetic fuel technology\" indicates that the industrialization of this technology is just around the corner. The iron-based slurry bed fuel synthesis technology is a major innovation project of the Chinese Academy of Sciences during the 10th Five-Year Plan period, as well as a project under the 863 Program; it has received support from the relevant authorities, Shanxi Province, and various enterprises. After more than two years of effort, technologies with independent intellectual property rights have been developed, including highly active and stable iron-based catalysts, as well as slurry-bed reaction processes and equipment on a thousand-ton scale. As of October 2004, 1,500 hours of pilot operation had been completed, and data was being collected for the basic design of an industrial demonstration plant with a capacity of 100,000 tons per year; integrated innovation achievements with independent intellectual property rights in China have been largely developed. The cooperation with Shenhua Group will play a positive role in promoting the development of coal-based indirect synthetic oil technology in our country. 　　Shell (China) Co., Ltd., Shenhua Group, and Ningxia Coal Industry Group signed a memorandum of understanding in November 2004 to jointly develop clean coal-to-oil products. Under the memorandum of understanding, during the 6 to 9-month pre-feasibility study phase, the three parties will investigate the feasibility of applying Shell’s coal-to-oil (indirect liquefaction) technology in China. This includes market analysis, evaluation of economic indicators, examination of technical solutions and relevant regulations, as well as the identification of a suitable site for the project. It is understood that Shenhua Group and Ningxia Coal Industry Group will build one coal indirect liquefaction plant each in Shaanxi and Ningxia respectively. The initial construction capacity of each of the two planned indirect liquefaction plants is 3 million tons of oil products per year, with an estimated total investment of around 30 billion yuan for each plant. 　　Yunnan Kaiyuan Jiehua Group Co., Ltd. will take advantage of the resources of Xiaolongtan lignite to build projects for the production of 300,000 tons of methanol and 100,000 tons of dimethyl ether per year, as well as projects for the production of 500,000 tons or 1,000,000 tons of coal-based synthetic oil per year; it will also use indirect liquefaction technology based on lignite to produce gasoline. The company plans to complete the methanol and dimethyl ether project in 2006, with the products being primarily used as methanol fuel and dimethyl ether for household liquefied gas. Due to the high investment requirements and complex technical aspects involved, Jiehua Group plans to implement the coal-to-synthetic oil project in two stages: by 2005, an industrial demonstration facility with an annual production capacity of 10,000 tons of coal-derived oil will be built ； In 2008, a coal-to-synthetic oil plant with an annual production capacity of 500,000 tons or 1 million tons was built. At present, the industrial demonstration project for coal-to-oil production with an annual capacity of 20,000 tons has completed its conceptual tests and the project feasibility study report. The project will require an investment of 79.52 million yuan, and upon completion it will serve as a model for large-scale coal-to-oil production in enterprises as well as for the coal-to-oil industry in Yunnan Province. 　　New processes for producing chemicals from coal gasification are being developed in the United States. Air Products Liquid Phase Conversion Company (a partnership between Air Products and Chemicals and Eastman Chemical) has successfully completed an 11-year research project funded by the U.S. Department of Energy at a cost of $213 million; this project demonstrated advanced methods for producing methanol from coal. Such systems enable the conversion of coal into chemical products without any emissions, generating hydrogen and other chemicals while also being used for power generation. Starting in April 1997, this liquid-phase methanol process (referred to as LP MEOH) was put into industrial-scale operation at Eastman’s Kingsport facility, which is used for producing chemicals from coal. The plant’s operational rate was 97.5%, and tests showed that the maximum production capacity of methanol could exceed 300 tons per day, which is 10% higher than the original design. It differs from conventional methanol reactors, which use fixed-bed granular catalysts and operate in the gas phase, whereas the LP MEOH process employs a slurry bubble column reactor (SBCR) designed by Air Products and Chemicals. When syngas enters the SBCR, it reacts with a catalyst (a powdered catalyst dispersed in inert mineral oil) to produce methanol. The methanol vapor exiting the reactor is condensed and distilled, and then used as a raw material for producing a wide range of products. The LP MEOH process treats syngas from coal gasifiers, recovering 25%~50% of the heat from the syngas, without the need to remove CO2 at the upstream stage (whereas conventional technologies require CO2 removal). The resulting methanol concentration is greater than 97%, and when high-CO2 feedstocks are used, the water content is only 1%. In comparison, the raw materials required for conventional vapor-phase processes should be in a chemical equivalent ratio of CO to H2, and the methanol product produced typically contains 4% to 20% water. When new technologies are combined with gasification combined cycle power generation units, and since a stoichiometric feed is not required, costs can be saved by 0.04 to 0.11 dollars per gallon. Methanol produced from coal can be used directly as fuel in cars, gas turbines, and diesel generators, with little to no loss in fuel efficiency. If methanol is used as a hydrogen source for phosphoric acid fuel cells, it needs to be purified. 　　Coal direct liquefaction technology: As early as the 1930s, the first generation of coal direct liquefaction technology—the direct hydrogenation coal liquefaction process—was industrialized in Germany. However, the coal liquefaction conditions at that time were quite stringent, with a reaction temperature of 470°C and a reaction pressure of 70 MPa. The 1973 world oil crisis led to a renewed focus on the research and development of direct coal liquefaction processes. Various second-generation coal direct liquefaction processes have been developed, such as the hydrogen-coal method (H-Coal) in the United States, the solvent-refined coal methods (SRC-Ⅰ, SRC-Ⅱ), and the hydrogen-supplied solvent method (EDS). These processes have undergone large-scale pilot tests and are technically ready for commercial implementation; however, they have not yet been put into industrial use due to high construction costs and elevated production expenses for coal liquefied oil. Currently, several major industrial countries are continuing to research and develop the third-generation direct coal liquefaction process, which features mild reaction conditions, high oil yield, and relatively low oil prices. The typical coal direct liquefaction processes currently used in the world include the two-stage catalytic liquefaction process developed by the German company IGOR and the American company Hydrocarbon Research (HTI), among others. Since resuming research on direct coal liquefaction technology in 1980, the Beijing Institute of Coal Chemistry under the China National Coal Science Research Institute has established laboratories for direct coal liquefaction and oil product upgrading. Through direct coal liquefaction tests on hundreds of coal varieties in China, 15 coal types suitable for liquefaction were identified, with a liquefaction yield of over 50%. Process conditions for the direct liquefaction of four coal types were studied, and catalysts for direct coal liquefaction were developed. The Coal Science Academy also signed an agreement for the feasibility study project of the Yunnan Pioneer Coal Liquefaction Plant with German companies RUR and DMT, and completed the feasibility study report for the Yunnan Coal Liquefaction Plant. The proposed Yunnan Pioneer Coal Liquefaction Plant will process 2.57 million tons of lignite per year for liquefaction, and it will use 2.53 million tons of bituminous coal for gasification to produce hydrogen (including power generation of 170,000 KW); in total, 5.1 million tons of bituminous coal will be used. Once completed, the liquefaction plant will be able to produce 353,400 tons of gasoline per year, 530,400 tons of diesel, 67,500 tons of liquefied petroleum gas, 39,000 tons of synthetic ammonia, 25,300 tons of sulfur, and 8,800 tons of benzene per year. 　　The feasibility study for China’s first large-scale Shenhua coal direct liquefaction project has entered the field assessment phase. The three recommended site locations are Shangwan, Majiata, and Songding Huoluo, all located in Ordos City, Inner Mongolia Autonomous Region. The Shenhua coal liquefaction project was a feasibility study project approved by the State Council in March 2001. It represents an important strategic measure for adjusting the energy structure, and it offers a new way to convert China’s abundant coal resources into the more scarce oil resources. This project adopts the core coal liquefaction technology from an American hydrocarbon technology company, enabling the conversion of Shenhua’s high-quality coal reserves into qualified gasoline, diesel, and naphtha using conventional domestic processes. This project can process 15 million tons of raw coal, creating a new industrial chain; its profitability is 20 times higher than that of selling raw coal directly. Its related products will extend to downstream items such as sulfur, urea, polyethylene, paraffin, and gas. A major feature of this project is its large-scale installations; those for coal liquefaction, hydrogen production from natural gas, hydrogen production from coal, and air separation are all the largest of their kind in the world. The annual sales volume is expected to reach 6 billion yuan, with after-tax net profit of 1.57 billion yuan; the investment can be recovered within 11 years. 　　Significant progress has been made in the coal blending liquefaction testing technology independently developed by the Coal Conversion Center of the Gansu Coalfield Geology Institute. Since the oil yield of coal blending liquefaction technology is higher than that of single-coal liquefaction, it is estimated that the cost of producing gasoline and diesel using this technology is around 1,500 yuan per ton, resulting in significant economic and social benefits. Previously, coal liquefaction involved the use of only one type of coal. The Gansu Coal Conversion Center was the first in the world to employ a mixed-coal approach, combining coal from Dàyǒu and Tiānzhù in Gansu, which differed slightly in their composition, in a 6:4 ratio. The reaction was carried out at a temperature of 440°C for 60 seconds; hence this method is referred to as \"mixed-coal liquefaction\". Tests have shown that this technology can achieve a coal conversion rate of 95.89% and an oil yield of 69.66%; less amount of conventional catalyst is required compared to single coal liquefaction, and the reaction conditions are relatively mild. 　　The direct liquefaction technology for high-sulfur coal blending in the central Gansu region has undergone laboratory research by the Gansu Coalfield Geology Institute, and after evaluation by experts, it has reached an internationally advanced level. At the same time, Tengda Northwest Ferroalloy Company and Gansu Coalfield Geology Institute also signed an investment agreement, taking a substantial step forward in the industrialization of \"coal-to-oil\" conversion. To provide resource support for the upgrading of \"coal-to-oil\" products in Gansu Province, the province, together with the Gansu Coalfield Geology Institute, has carried out preliminary research and development on the industrialization of \"coal-to-oil\" processes using high-sulfur coal from the central part of the province. According to expert assessments, the oil yield can generally reach 64.63%, while it can reach 69.66% when coal is used as a component. Once implemented, this project will provide valuable experience for the conversion of coal and the expansion of industrial chains in mining areas such as Huating, Jingyuan, and Yaojie in Gansu Province. 　　The industrial-scale direct liquefaction plant for \"coal-to-oil\" production by Shenhua Group was officially put into operation at the end of August 2004 in Ordos City, Inner Mongolia Autonomous Region. This industrial facility for the direct liquefaction of coal into oil, known as \"coal-to-oil\", is the first of its kind to be built worldwide. The total construction scale of Shenhua’s coal direct liquefaction project is 5 million tons of oil products per year, with the project being developed in two phases. The first phase has a capacity of 3.2 million tons of oil products per year and consists of three main production lines, including 14 key manufacturing units for tasks such as coal liquefaction, coal-to-hydrogen conversion, solvent hydrogenation, hydroprocessing, and catalyst production. The main plant area of the first phase covers 186 hectares, while the areas for projects outside the plant total 177 hectares. The total investment amounts to 24.5 billion yuan. Once operational, it will consume 9.7 million tons of coal per year and be capable of producing 3.2 million tons of various petroleum products, including 500,000 tons of gasoline, 2.15 million tons of diesel, 310,000 tons of liquefied gas, and 240,000 tons of benzene and mixed xylene. To effectively avoid and reduce risks, the project adopts a phased implementation approach: one production line is built first, and once it is operating smoothly, additional production lines are constructed. The first production line was established in July 2007, and two production lines were set up around 2010. In 2003, Shenhua Group Co., Ltd. produced and sold over 100 million tons of coal, becoming the largest coal production and operation enterprise in China. It is said that coal liquefaction technology will be competitive if oil prices are above $22 per barrel. 　　Shenhua Group will strive to develop into a large-scale energy enterprise group based on coal, with coal, electricity, and oil (chemicals) as its main products. By 2010, Shenhua Group’s coal production will exceed 200 million tons ； The installed capacity of self-operated and controlled power generation facilities will reach 20 million kilowatts ； The capacity for coal liquefaction to produce petroleum products and coal chemical products is 10 million tons per year ； The production capacity for olefins from methanol has reached 100 million tons per year. In 2020, its coal production will exceed 300 million tons ； The installed capacity of power plants has reached 40 million kilowatts ； The capacity for coal liquefaction to produce petroleum products and coal chemical products is 30 million tons per year. 　　At present, there are no industrial-scale production facilities for the direct liquefaction of coal worldwide; once completed, the Shenhua liquefaction project will be the world’s first commercial demonstration facility for coal direct liquefaction. For coal indirect liquefaction as well, only one company in South Africa possesses industrial-scale production facilities. The United States is building a demonstration plant for coal indirect liquefaction with a capacity to produce 5,000 barrels of oil per day. 　　Yunnan Province will also vigorously develop the coal chemical industry and actively implement coal liquefaction projects. The pre-feasibility study report for Yunnan Pioneer Coal Direct Liquefaction Project was approved by experts in May 2004. After the project is implemented, the \"Yunnan-made\" gasoline and diesel will not only be supplied within Yunnan province but also exported to markets outside the province as well as internationally. This will also make Yunnan the second-largest province in China to convert coal into oil, after Inner Mongolia. The Yunnan Province Pioneer Coal Liquefaction Project is one of the first projects in China to utilize the relatively mature foreign coal direct liquefaction technology. Yunnan’s coal-to-oil technology will be first implemented in the Xianfeng mining area, and after successful experience is gained, it will be further promoted in other locations. The upcoming Yunnan coal liquefaction plant is estimated to require a total investment of 10.3 billion yuan. The construction period is expected to be 4 years, and once completed, it will generate annual sales revenue of 3.4 billion yuan, annual operating costs of 790 million yuan, and annual profits of 1.38 billion yuan. Yunnan Province has relatively abundant coal resources, but it is severely short of oil and natural gas. Pioneer lignite is the most suitable coal type for direct liquefaction. Among the 14 coal types across the country suitable for direct liquefaction, as tested by the China Coal Research Institute, Pioneer lignite exhibits the best activity, the lowest inert components, and the highest conversion rate. Liquefaction is a breakthrough for making effective use of Yunnan’s abundant lignite resources, while clean coal technology represents the direction for development and is in line with **’s industrial policies. ”\"Coal to oil\" transformation will transform Yunnan Province’s coal resource advantage into an economic advantage. Once the \"coal to oil\" project can be rolled out across the province, the 15 billion tons of coal available there can be converted into 3 billion tons of gasoline or diesel, generating a value of over 10 trillion yuan. 　　Conclusion The development and application of clean coal technologies are on the rise. China should increase efforts in developing and implementing coal gasification technologies, indirect coal liquefaction technologies, and direct coal liquefaction technologies. It should also introduce, adapt, and refine advanced foreign technologies in order to raise the level of clean coal technology and its applications in the country, thereby making new contributions to the sustainable development of China’s energy industry. 　　Why don’t developed countries pursue coal-to-oil conversion? 　　It is understood that South Africa currently has a coal-to-oil plant with an annual production capacity of 8 million tons of oil products; it is the only large-scale commercial coal-to-oil plant in the world, and it supplies 60% of the country’s transportation fuels. In fact, developed countries such as the United States, Germany, and Japan also possess advanced technologies, but why haven’t they put them to use in industrial production? 　　It is said that as early as the late 1930s, due to a shortage of oil, Germany began researching coal-to-oil technology. Before World War II, Germany had built 17 factories that produced over 4.2 million tons of gasoline and diesel. By the late 1940s and early 1950s, with the exploitation of large oil fields in the Middle East, large quantities of low-cost oil flooded the market at prices of $2 to $10 per barrel. Under these circumstances, it is economically unviable to proceed with coal-to-oil conversion. It was not until 1973, when an oil embargo was imposed in the Middle East and oil prices soared to over $30 per barrel (equivalent to over $80 at current prices), that large-scale research into coal-to-oil conversion resumed. The United States, Japan, and Germany all invested heavily in such research and built experimental plants. However, among these**, coal-to-oil conversion has never truly been put into commercial operation. Why is this? 　　According to experts’ calculations, when crude oil prices are above $28, converting coal into oil is economically viable ； Below this price, coal-to-oil is not cost-effective. Therefore, from the mid-1980s to the mid-1990s, international oil prices remained low, so coal-to-oil technology naturally did not receive much attention. However, the technologies in various countries are already quite mature; it can be said that they are ready for use, and large-scale industrialization can be carried out as soon as there is market demand. Only in the past two years, as international oil prices have continued to rise, coal-to-oil production has once again been put on the agenda by various countries. The United States resumed indirect liquefaction last year, and France and Italy have also started collaborating on research and development. However, it takes at least 5 years of preparation from the project’s initiation to its actual construction, and due to the frequent fluctuations in oil prices, which rise and fall constantly, people often react slowly, leading to indecisive decision-making. 　　China has advantages in converting coal into oil, but this will not become the main focus of oil production. Experts believe that China holds significant advantages in this area. Our country is rich in coal but short of oil. In recent years, with economic development, imports of crude oil have been rising year by year; over the 10-year period from 1993 to 2003, the annual increase rate was over 15%, resulting in an increasingly high degree of dependence on imports. Over the past 10 years, China’s imports of crude oil have increased by 9.18 times, costing a large amount of foreign exchange each year. Due to rising oil prices, in 2004 China spent 55 billion yuan more on imported crude oil than the previous year. Therefore, experts believe that from the strategic perspective of China’s energy security, efforts should also be made to find solutions based on diversification in order to ensure a long-term and reliable supply of energy, and coal-to-oil conversion is one of the viable approaches. 　　At the same time, China is a major coal-producing country, and the cost of coal production in the western region (especially coal at the mine site) is relatively low. Zhang Yuzhuo, vice general manager of Shenhua Group and chairman of Shenhua Coal-to-Oil Company, gave reporters some figures: the cost of extracting coal is 20.5 dollars per ton in the United States, while in Shenhua’s Shendong mining area it is less than 100 yuan per ton. Clearly, Shenhua’s coal has a significant advantage. 　　Furthermore, China has relatively low investment and labor costs. It is estimated that a production line with an annual output of 2.5 million tons of diesel and gasoline would require an investment of $3.2 billion in the United States, whereas in China it would only need $2 billion. 　　It is estimated that the Shenhua coal-to-oil project remains highly competitive when international crude oil prices are between $22 and $30 per barrel. Currently, international crude oil prices remain above $50 per barrel for an extended period. 　　Yankuang’s coal mining costs are relatively high; is it worthwhile for it to convert coal into oil? According to Zhang Minglin, deputy general manager of Yankuang Group and general manager of the Coal Chemicals Company, the cost of coal mining at Yankuang’s mines is around 100 yuan per ton, and this makes it competitive as long as international oil prices remain above 23 dollars per barrel. 　　To date, Shenhua has invested billions of yuan in coal-to-oil production. Zhang Yuzhuo revealed that Shenhua is also planning to cooperate with South Africa to produce coal-to-oil via indirect liquefaction, with diesel being the main product and gasoline serving as a secondary product. Over the next five to six years, Shenhua will invest hundreds of billions of yuan in coal-to-oil production, and in 10 years, coal and oil will play an equal role at Shenhua. It can be seen that Shenhua is ambitious in its coal-to-oil projects. 　　Yankuang has invested a total of 130 million yuan, yet its industrialization project has not yet been launched. Yankuang is targeting the gasoline market; this year it plans to invest over 100 million yuan in pilot-scale research on high-temperature synthesis technology, so that gasoline accounts for 70% and diesel for 25% of the final products. 　　Currently, the industrialization of coal-to-oil conversion is accelerating. However, experts believe that not all coal is suitable for conversion into diesel and gasoline; in particular, direct liquefaction requires very specific coal types, and only coal from a few regions in China is suitable for this process. Indirect liquefaction, on the other hand, has a broader range of compatible coal types. Therefore, coal-to-oil production will develop to a certain extent in our country, but it cannot become the main approach for oil production. 　　**On September 4, the National Development and Reform Commission posted on its official website: “At present, coal-to-oil production in China is still in the stage of pilot project construction, and it is not appropriate to rush into it and implement it on a large scale.” With the exception of the Shenhua Group’s direct coal liquefaction project and the Ningdong coal indirect liquefaction project in Ningxia, all other coal-to-oil projects shall be halted. Coal-to-oil projects are capital- and technology-intensive, carrying high investment risks. At present, there are many uncertainties in various aspects, including product orientation, process routes, technical equipment, as well as operation management and economic benefits. At present, coal-to-oil production in our country is still in the stage of demonstration project construction, and it cannot be rushed into full-scale implementation. It is necessary to adhere to the development of coal-to-oil demonstration projects, conduct comprehensive analysis and evaluation, determine the appropriate development path for coal-to-oil technology suited to China’s national conditions, and then decide on the next steps based on the successful experiences gained. ”

Coal-to-oil processes produce finished fuels, mainly gasoline and diesel. In direct liquefaction, coal is first converted into a fine coal slurry, which is then directly hydrogenated to produce oil. In indirect liquefaction, coal is gasified first; an appropriate ratio of hydrogen to carbon monoxide is established, and oil is produced through the Fischer-Tropsch synthesis using a suitable catalyst

The purpose of coal-to-oil conversion is to produce various commercial oils such as gasoline, diesel, and kerosene. The oil obtained through the direct liquefaction of coal is similar to crude oil, which then needs to undergo further processing to be turned into high-quality oils

It is gasoline, diesel, and jet fuel. This post was last edited by free1111 on 2009-2-12 17:03.]

Coal-to-oil refers to the coal liquefaction technology that converts coal into liquid fuels such as gasoline, diesel, and liquefied petroleum gas; from a technical perspective, it can be divided into two types: \"direct liquefaction\" and \"indirect liquefaction\".