Comparing liquid transportation fuels production from coal gasification to fuels from traditional production methods is a difficult undertaking because of the vastly diverse configuration options available for gasification processing. Traditionally, fuels like gasoline and diesel are refined from crude oil, a (comparatively) more uniform feedstock than coal —or, for that matter, biomass, petcoke, refinery waste, etc. Each potential feedstock, even between different coal ranks, has variable characteristics that can necessitate design changes (ash content, sulfur concentration, feed handling issues, etc.). Additionally, as a relatively new approach to producing liquid fuels, gasification has not had years of refinement to develop a "best," most productive or cost-efficient approach, in part, due to the aforementioned flexibility in choosing feedstock, product, synthesis gas (syngas) cleaning and conditioning units. In fact, besides multiple gasifier options and configurations, the liquid fuel synthesis component itself can be approached multiple ways: methanol-to-gasoline or Fischer-Tropsch (FT) synthesis, to name the two most important. Essentially, comparing petroleum-refinery produced transportation fuels and gasification-derived fuels requires design assumptions and limiting the scope of the comparison in order to arrive at meaningful conclusions.
Fischer-Tropsch Diesel from Domestic Coal
NETL has issued several reports evaluating diesel fuel production via gasification and FT synthesis of coal and biomass. One of the more recent studies is "Production of Zero Sulfur Diesel Fuel from Domestic Coal: Configurational Options to Reduce Environmental Impact" released in 2011. This study evaluated the economic viability and environmental impact of producing diesel fuel via FT synthesis from coal or coal supplemented with biomass in the form of switchgrass (which can be grown on marginal land unsuitable for food crops), and considered two facility design approaches: 1) fuels production only and 2) the co-production of fuels and electricity. The commercial-scale plant assumed in this evaluation would produce 50,000 barrels per day fuels (700 million gallons per year) using commercially available technologies. Study results indicate that diesel fuel can be produced from coal that has a lower life-cycle greenhouse gas (GHG) emissions profile than conventional petroleum-derived diesel fuel on a well-to-wheels basis, assuming that CO2 produced at the facility is sequestered, and possibly requiring methane mitigation practices in the case of certain bituminous coals which are particularly high in methane content. The coal-derived diesel will be economically viable when crude oil prices are as low as $94 per barrel, corresponding to a petroleum-derived diesel price of $2.70 per gallon.
If sufficient biomass resources are available to co-convert with the coal, the GHG emissions profile of the diesel fuel can be significantly reduced at a minimal increase in cost. For example, replacing 15 percent of the coal feedstock with switchgrass will result in diesel fuel which produces up to 34% less life-cycle GHG emissions than petroleum-derived diesel. Such a facility would be economically viable at crude oil prices as low as $104 per barrel, increasing the diesel fuel price by $0.26 to $0.46 per gallon.
The co-production of fuels and electricity has the potential to produce less overall GHG emissions than conventional pathways, but these benefits are highly sensitive to the methodology utilized to evaluate emissions. The economic viability is somewhat sensitive to the price at which electricity can be sold – a 10% change in the electric sale price results in a 1% change in the required selling price of the fuel.
Study results show that FT synthesis is a near-term technology pathway which could be leveraged to produce large volumes of transportation fuels from domestic coal and biomass at reasonable cost. This pathway enables improvement of America’s energy security, and at the same time addresses climate change concerns.
Market Potential for Coal-based Liquid Fuels
While coal to liquid fuels technology has been commercialized in South Africa (by Sasol) for decades, a market for coal-based F-T liquid fuels in the United States would probably only successfully emerge in the case of concurrent and sustained high oil prices and high natural gas prices. Although high crude oil prices have made production of gasoline and diesel fuel from coal more economical, because natural gas is also a suitable feedstock for liquid fuels synthesis, natural gas prices would have to reach a certain threshold (considerably higher than current natural gas prices in the United States) before coal-based fuels synthesis would be economically competitive. Also, while gasification can currently meet all environmental standards, carbon capture may need to be more fully implemented to ease public concerns about greenhouse gas emissions in the context of large-scale implementation of liquid fuels production from coal.