What do these experts think about coal-to-gas?

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Why are there ongoing controversies behind the hype around coal-to-natural gas? Author/Source: Date: 2016-05-23 Clicks: 14 Jin Yong Academician of the Chinese Academy of Engineering, Professor in the Department of Chemical Engineering at Tsinghua University The development of modern coal chemical industry should aim at the clean and efficient conversion of coal, focus on the transformation of coal from a fuel to a raw material, and pursue the differentiated and graded utilization of coal. Develop coal-to-olefins, coal-to-aromatics, and coal-to-ethylene glycol on a large scale; develop coal-to-gas cautiously; and strictly restrict coal-to-oil production. 　　This is because, compared to oil and gas, under current technological conditions, no matter how coal is transformed, it cannot be made cleaner or more energy-efficient than petrochemical processes. 　　For coal-to-natural gas, the principle of importing as much as possible when feasible and pursuing development cautiously should be adhered to. Although, in terms of energy conversion efficiency alone, coal-to-gas is relatively high among the various modern coal chemical pathways, there are significant uncertainties regarding its market demand and the economic viability of such projects. For example, using coal-to-natural gas in industrial furnaces and the retrofitting of small coal-fired boilers can significantly reduce air pollution caused by coal burning. The energy efficiency of this process is also high, and it is possible to obtain a good price and favorable returns. In our country, hundreds of millions of tons of coal are still used for direct burning, which constitutes a major source of coal-related pollution. Areas at the edge of cities and towns, as well as small and medium-sized towns, should be given priority in efforts to prevent coal-related pollution. If coal-based gas is used for residential gas in the aforementioned sectors, coal pollution will **be reduced, with price control being the key. Its high price will be difficult for ordinary people (603883) to accept; when used for power generation, coal-to-natural gas has lower energy efficiency and inferior overall benefits in terms of economy and environmental protection compared to using imported natural gas for power generation, and it is even not as good as generating power by directly burning coal. Currently, global natural gas prices are on a downward trend; the price of domestically produced natural gas has now fallen below that of imported gas. The risks associated with coal-based natural gas are increasing, and these new trends in the market should alert investors. 　　Moreover, the coal-to-natural gas projects that are already in operation or planned to be built in China largely follow the syngas methanization technology (i.e., the two-step process) used in the gasification plants on the U.S. Great Plains. The weakness of this technical approach is that, in order to obtain more methane from the gasified gas, coal-to-gas companies generally use Ruhr-type furnaces. The biggest problem with the Luchi furnace is that it generates large amounts of wastewater containing pollutants such as phenols and tar, which are highly toxic and difficult to treat. This has become a major bottleneck restricting the normal operation and profitability of coal-to-gas projects. It is recommended that new projects take a long-term perspective and adopt advanced, environmentally friendly technologies wherever possible. 　　Liu Zhongmin, Academician of the Chinese Academy of Engineering and Deputy Director of the Dalian Institute of Chemical Physics, Chinese Academy of Sciences: From the perspective of energy security, having the necessary technical capabilities and industrial demonstration projects for coal-to-oil and gas production is undoubtedly beneficial for our country. However, the several coal-to-natural gas plants that have been built or are under construction currently all use foreign technology, with no substantial technological breakthroughs or innovations; it is better to avoid following the old path of importing, digesting, and absorbing such technology. 　　Ni Weidou, Academician of the Chinese Academy of Engineering and President of the China Energy Society. Relying entirely on natural gas poses problems with maritime transportation and has a significant impact on energy security. Additionally, it is necessary to coordinate relations with neighboring countries, as wars could lead to the bombing and destruction of transportation pipelines; therefore, the introduction of natural gas should be done in moderation. By winter, there might not be enough natural gas, and many people want to start using large amounts of coal-to-gas production; I’m not in favor of that. Coal is used chemically to produce natural gas, but natural gas contains less carbon; much of the carbon is wasted and released as carbon dioxide. Everyone takes pride in using natural gas, so many companies are engaged in producing gas from coal; **many projects were approved, but few were actually carried out, and those that were completed often suffered losses due to excessively high costs. 　　Li Junfeng 　Director of the Academic Committee at the Energy Research Institute of the National Development and Reform Commission 　Without subsidies, the economic cost of coal-to-gas production is basically unacceptable for users. Therefore, the coal-to-natural gas projects that are being rushed into implementation across various regions are all aimed at obtaining subsidies; without such subsidies, no one is willing to undertake them. That’s basically the situation at present. 　　I agree with the statement that developing coal-to-natural gas is intended to make up for the shortage of natural gas supply; however, I disagree with the idea of expanding the sources of natural gas. 　　Developing coal-to-gas should be a temporary measure, not a **strategy**. As a temporary measure, we can still support the development of coal-to-natural gas. China’s current utilization rate of natural gas is very low, showing a significant gap compared to the global average of 27% to 28%. If China increases its natural gas supply by another 50-60 billion cubic meters, the problem of heating boilers in our cities will be completely resolved. From this perspective, the production of gas from coal can be developed to an appropriate extent. 　　However, coal-to-natural gas production should not take place in areas with severe water shortages, especially in the northwest, as well as in Inner Mongolia, Gansu, Ningxia, Qinghai, and Xinjiang – these places are not suitable for such development. These areas need water even more, as they serve as China’s ecological barriers. 　　Zhou Xueshuang, Director of the Petrochemical, Textiles and Light Industry Assessment Department at the Environmental Engineering Assessment Center of the Ministry of Environmental Protection. From the perspectives of energy security and improving air quality, it is undeniable that coal-to-gas production should be developed. However, in the production of coal-based gas and coal chemical products, if the location is chosen improperly, the layout is not scientific, and the treatment of \"three wastes\" is inadequate, many ecological and environmental problems can arise, and the overall energy efficiency may also be reduced. 　　Coal-to-gas should be used to replace coal-fired industries and regions with high pollution levels, thereby significantly reducing pollution and improving the efficiency of coal utilization. Replacing decentralized coal use in household applications with coal gas can yield significant environmental benefits, making it a wise choice. Alternative areas should be prioritized in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, as well as cities and regions where air quality is severely compromised and where high coal consumption occurs. Therefore, the development of coal-to-gas technology is driven not by industrial needs, but by environmental protection requirements. 　　Regarding the layout of coal-to-gas and coal chemical industries, the traditional approach is to build plants at the mine sites or where the end-users are located. Choosing the mine sites means that coal resources are readily available and transportation costs are low, but water resources and the ecological environment are not suitable. Choosing locations near the end-users, such as in the eastern regions, provides relatively abundant water resources, but there is a limit on environmental capacity; transportation costs for the products are low, while the distance for transporting coal is long and the associated costs are high. Based on years of practice, both of these site-selection methods may have some irreconcilable contradictions. Especially in the western coal resource areas, the contradictions related to the ecological environment are particularly prominent. This objectively requires us to change our existing way of thinking; we can no longer rely solely on coal resources as the deciding factor for site selection. Instead, the environment, the destination of waste emissions, and water resources should be taken as the determining factors. 　　It is recommended to broaden one’s perspective and adopt the idea of choosing a “third location” – that is, a place with abundant water resources, a relatively relaxed environment, and few constraints. The priority criteria for site selection and layout are factors such as environmental capacity, water, and coal resources, with the importance of these factors decreasing in order from first to last. Developing coal-to-gas production in areas with sufficient water and coal resources, as well as spaces for discharging pollutants such as wastewater and waste residues, would likely be the best approach. 　　Tang Hongqing – Chief Expert at Zhongke Synthetic Oil Engineering Co., Ltd., Professor-level Senior Engineer. Few people have studied the nature of enterprises involved in coal-to-natural gas production; most consider it to be a commercial project, similar to coal-to-olefins projects. Many economists, when discussing coal-to-gas projects, focus solely on economic considerations; the core of their analysis is whether such projects can be profitable. They consider issues such as the cost of coal and the cost of producing gas, and then determine whether a profit can be achieved and what the break-even point is in terms of years. As a result, some suggest that such projects should not be undertaken, and instead, more effort should be put into developing coal-to-olefins projects, as these can generate substantial profits. In fact, this is one-sided. 　　The coal-to-gas project is a project that **must be carried out; it is not a commercial project but rather a public welfare initiative aimed at improving people’s lives, and at most it can achieve only minimal profits. The construction of coal-to-gas plants serves as a complement to the domestic development and introduction of natural gas resources, rather than a substitute for them. Therefore, it is necessary to first improve the model plant and gain experience before carrying out appropriate expansion. 　　Yang Qiren, Energy and Environmental Policy Expert at Duke University in the United States. When promoting this technology, proponents of coal-to-gas production in China often cite the experience of the Great Plains project in the United States as an example. However, there are many misunderstandings regarding the historical experience of the United States in developing coal-to-natural gas projects on the Great Plains. Coal-based synthetic natural gas is a technology with very limited experience of use and low maturity worldwide; its practical application can have significant environmental impacts, such as water consumption, carbon dioxide emissions, pollution from waste materials, and damage caused by coal mining at the upstream stage. Planning for the development of energy infrastructure requires a long-term perspective; one should not focus only on the next few years, but rather take **all long-term factors into consideration. In China, coal-to-gas projects often continue to operate after going bankrupt, thanks to subsidies. It is an industry that causes high levels of pollution; as a result, pollution will continue. If China wants to pursue a cleaner path in the future, it will no longer be able to do so – this is a problem with long-term consequences.