Coal-to-oil: Strategic significance outweighs economic benefits
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This post was last edited by jordan569 on 2013-1-6 at 21:12: http://www.ccin.com.cn/ccin/news/2010/08/24/140827.shtml. In consideration of energy strategic security, **approval was given for four coal-to-oil projects: Shenhua’s million-ton-per-year direct coal liquefaction project, Yankuang’s 1 million tons per year indirect coal liquefaction project, and Lu’an and Yitai’s 160,000 tons per year each of indirect coal liquefaction projects. However, the prospects for the aforementioned coal-to-oil projects are not optimistic. Operation and costs fail to meet design targets. In the products obtained from direct coal liquefaction, 50%~60% is medium-grade oil, 10%~20% is heavy oil, and about 7% is aromatics; these cannot be used directly as gasoline or diesel. They can only be utilized after hydroprocessing or blending, and therefore their economic viability can only be compared with that of crude oil. The theoretical profit of direct coal liquefaction is 800–1,000 yuan/ton higher than that of oil refining. But in practice, it is not the case. Taking Shenhua’s million-ton-level coal direct liquefaction project as an example, although the project completed the entire production process by the end of 2008 and was able to produce diesel and naphtha products successfully, it has yet to reach its designed capacity for various reasons, and its production costs are **higher than the theoretical values. So, what is the economic viability of indirect coal-to-oil conversion? On July 31, Li Dapeng, chairman of Beijing Petrochemical Engineering Company who had just returned from a visit to Sasol in South Africa, told reporters that Sasol’s coal-to-oil plant is operating very successfully on a commercial level, with annual profits ranging from $1.4 billion to $1.6 billion. However, there are five prerequisites for its high efficiency: first, the cost of coal used is less than 20 dollars per ton; water resources require almost no cost, and the electricity price is only one-third of that in domestic areas ； Second, the funds for the construction of early-stage projects were covered by ** ； Third, the company has developed a complete set of mature process technologies and supporting equipment, particularly capable of industrially producing catalyst products with four different requirements ； Fourth, the products include nearly 20 varieties such as gasoline, diesel, and aromatics, thereby maximizing the potential of the facility ； Fifth, the device operation rate is as high as 95%. Domestic companies do not possess these conditions. To date, China’s technical support system for coal-to-oil conversion is not yet fully developed. In particular, significant efforts are still needed to develop efficient catalysts for slurry-phase reactions; key aspects such as the coupling between synthesis and hydrogenation catalysis have not yet been fully mastered, and there is a lack of experience in industrial-scale operation. All these factors contribute to an increased frequency of starting up and shutting down the facilities. At the same time, the costs associated with environmental management for domestic enterprises will also continue to rise. The coal-to-oil process emits 6 to 8 tons of carbon dioxide per ton of oil produced; if carbon capture and recovery are implemented, the cost of the product increases by at least another 15%. Ni Weidou, an academician of the Chinese Academy of Engineering, believes that the strategic significance of coal-to-oil conversion outweighs its practical significance. He suggested, \"Once methanol fuel is widely adopted, it will deal a severe blow to coal-to-oil production.\" Because, whether in terms of coal conversion rate, energy utilization efficiency, cost-effectiveness, or the environmental friendliness of the product life cycle, coal-to-oil is inferior to coal-to-methanol fuel. ” The Dilemma of the Yulin Version of Coal-to-Oil Production According to You Xiti, deputy general manager of Shaanxi Coal and Chemical Industry Group, the process used in the Yulin version of coal-to-oil production involves first separating the high-calorific value carbon in coal from the low-calorific value hydrocarbons and light components, with the high-calorific value carbon being used as high-quality fuel for smelting and power plants ； Hydrocracking of hydrocarbons and light components yields high-quality fuel oils, paraffins, benzene, aromatics, and other chemical products; as a result, these products have a higher added value and greater competitiveness. At present, Shaanxi Coal and Chemical Industry Group has mastered this technology and holds complete independent intellectual property rights. The experience of operating the 500,000 tons per year coal tar hydrogenation unit at its subsidiary, Shenmu Tianyuan Chemical Co., Ltd., for nearly 5 months shows that this process features mild operating conditions, high operational flexibility, low energy consumption, and a good cost-benefit ratio. Compared with coal-to-oil production of the same scale, either directly or indirectly, its investment cost is only 1/5 of that of the latter, its water consumption is only 1/4, its overall energy consumption is reduced by 23%–27%, and 48,000 tons of carbon dioxide are reduced per 10,000 tons of oil products produced. The low-water-consumption precision processing mode deserves to be promoted. Experts such as Hu Yongkang, an academician of the Chinese Academy of Engineering, He Yongde, honorary president of the Shaanxi Chemical Industry Society, and Hu Haifeng, president of the Shaanxi Petrochemical Association, also agreed that compared with traditional and new coal chemical processes, which consume tens or even hundreds of tons of water per ton of product, the Yulin-based coal-to-oil process uses only 5 tons of water per ton of product, with no emissions of waste materials of any kind. It is thus highly suitable for adoption in western regions where coal is abundant but water is scarce. Mao Shiqiang, chairman of Shenmu Tianyuan Chemical Company, told reporters that based on current prices for coal, coke, and fuel oil, just coke alone is sufficient to cover all production costs. In this way, the fuel oil obtained from the lightening of coal tar becomes the company’s net profit. The 106-day operation of Tianyuan Company’s 500,000 tons per year coal tar hydrogenation unit shows that for each ton of coal processed in this Yulin-based coal-to-oil process, a profit of over 700 yuan can be achieved, indicating that its competitiveness is on par with that of oil refineries in the Middle East. More importantly, since the Yulin version of coal-to-oil production yields both fuel oil and coke as products, if coal prices rise in the future, coke prices will also increase, allowing companies to pass on the pressure resulting from rising raw material costs smoothly. . Note $ # , $ $
This post was last edited by fossil-zhang on 2010-8-25 at 18:23. There are a few points mentioned in the above news with which I disagree. First, **when was approval given for Yankuang’s 1 million-ton indirect liquefaction project to start? Not yet, right? Secondly, it is argued that neither direct liquefaction nor indirect liquefaction offers economic benefits. These facilities have only been in operation for a short time; almost all of them are not yet functioning properly. Rome wasn’t built in a day. Although the history of coal-to-oil conversion is long, and research on this topic in China has also lasted for some time, large-scale industrialization remains a new concept for China (not counting the synthetic oil production in Jinzhou right after the country’s liberation, as there was too much time in between). Some time is needed for further development and improvement. While Sasol has reached its current level thanks to various factors specific to China that make it impossible to replicate, it still took them nearly 60 years to achieve such results. No new technology can be perfect from the start; it always needs to develop and improve. To say that such technologies have no future or economic value just because they don’t perform well in the initial stages is too hasty. Saying it can’t be compared to South Africa’s Sasol – of course it can’t, after all, how many years has that company been in operation? Just seeing others eating abalones and shark fins every day – have you ever seen them eating bran and pickled vegetables? Why can’t we give domestic coal-to-oil production some time and space to develop? There are indeed still many issues with coal-to-oil production in the country, but aren’t they being resolved gradually? Shell’s synthetic oils used to explode as well (it was common for Sasol’s plants to catch fire back then); now they have overcome those difficulties and are making profits. We shouldn’t just focus on others’ profits, but also on how they managed to go from losses to profits. Third is methanol fuel, as, in terms of coal conversion efficiency, energy utilization rate, cost-effectiveness, and the environmental cleanliness over the product’s life cycle, coal-to-methanol fuel is superior to coal-to-oil. It was actually an academic who said such things; I was speechless. Promoting methanol fuel doesn’t have to undermine one’s status as an academic to that extent. How is the entire life cycle of coal-to-methanol followed by methanol fuel combustion cleaner and more environmentally friendly than coal-to-oil? Words alone are not enough; show the data. Whenever it comes to the chemical utilization of coal, no one should expect anything that is particularly clean or environmentally friendly – neither the first nor the second approach is truly clean. Fourth, the so-called Yulin version of coal-to-oil conversion is essentially a combination of coal tar hydrogenation and staged liquefaction of coal; it can also be regarded as an alternative form of direct coal liquefaction. Such technology does indeed improve the carbon utilization rate of low-grade coal, but it’s not worth exaggerating its capabilities. Compared to traditional and new coal chemical processes, which consume tens or even hundreds of tons of water per ton of product, the Yulin-based coal-to-oil process requires only 5 tons of water per ton of product, and it generates no waste materials, making it highly suitable for adoption in western regions where coal is abundant but water is scarce. That’s nonsense again. It’s well known which stage of coal liquefaction consumes the most water and generates the most waste. During the gasification phase of coal, neither direct nor indirect liquefaction methods require dozens of tons of water per ton of product produced And this so-called Yulin version of coal-to-oil technology may seem promising, but where does the hydrogen used for hydrogenation come from? It still comes from water-gas shift, doesn’t it? Doesn’t that consume a lot of water? No waste emissions? Where did all those “wastes” in the coal go? Were they taken home by these experts and stored there? Also, does the initial separation of coal require energy? Is water consumption required? Should waste emissions be allowed? It seems like these experts are talking as if they were in a dream when they speak. Sigh, no wonder many things don’t get done well in the country.
Don’t rush to draw qualitative conclusions at this time. First, the cost of coal used is less than 20 dollars per ton; there is almost no cost associated with water resources, and the electricity price is only one-third of that in domestic markets ； In China, the companies that develop coal-to-oil and coal chemical industries are all large coal enterprises; coal costs are not an issue at all – 20 dollars per ton is entirely feasible. The key lies in how these companies coordinate the profit distribution among those involved in coal chemistry, oil production, and coal mining. I think the same is true in South Africa as well. Regarding electricity prices, the rates for the captive power plants of domestic coal chemical and oil refining companies are also much lower than the market rates; therefore, electricity prices are not an issue. Water resources are a bottleneck restricting the development of China’s coal chemical and oil refining industries. Second, the funds for the construction of early-stage projects were covered by ** ； Third, the company has developed a complete set of mature process technologies and supporting equipment, particularly capable of industrially producing catalyst products with four different requirements ； Technology itself follows its own laws of emergence, development, and maturation; it is entirely possible to surpass South Africa by taking advantage of the advantages that come with being a latecomer, but this will take time. Fourth, the products include nearly 20 varieties such as gasoline, diesel, and aromatics, thereby maximizing the potential of the facility ； This takes time; fifthly, the device has an operating rate of up to 95%. This takes time
In China these days, it’s interest groups that speak out, and this is even more true for academicians
I’m waiting to see... I think the most important thing at the moment is to integrate the talents from the oil refining and coal chemical industries, to build on each other’s strengths and utilize their respective resources to foster the development of coal chemistry. The senior advisory teams of local authorities or large enterprises should have a holistic perspective; they need to take into account the trend toward lower quality crude oil and coal in the future, and choose technical directions with a long-term vision – they can no longer act in a short-sighted manner ! !
This post was last edited by HaiNaChuan on 2010-8-27 at 18:06. Those in business and those in technology all want to become politicians – let the deception continue!
The price of coal has been rising over the past two years; it’s not clear whether it’s still profitable.
I would like to ask: In the case of Yulin board’s \"coal-to-oil\" process, is all of the coal tar subjected to hydrogenation after it is produced, or is only a small portion of the light components treated with hydrogenation?
Reply to 8# catsina: The Yulin version of the coal-to-oil process involves first separating the high-calorific value carbon in coal from the low-calorific value hydrocarbons and light components, with the high-calorific value carbon being used as high-quality fuel for smelting and power plants； Hydrocracking of hydrocarbons and light components yields high-quality fuel oils, paraffins, benzene, aromatics, and other chemical products; therefore, it should not be just the light components that are hydrogenated, but rather most of the coal tar as well.
I haven’t heard either that Sasol is dealing with CO2! Why is this amount added when calculating costs? !