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Production of gaseous fuels from carbonaceous-fuel sources includes not only hydrogen (H2), but synthetic natural gas (SNG). SNG is equivalent to natural gas, which is mostly methane, and can be substituted for it in all the same applications.
Market
Hydrogen production is already a large industry, with most of the produced H2 used in refineries for hydrocracking—in which H2 is reacted with heavy petroleum products to form lighter, more useable hydrocarbons—and in the production of ammonia (for use as a fertilizer). In 2021, global hydrogen demand was 94 million metric tons.1 In recent years, the United States alone has been producing and consuming around 10-11 million metric tons per year. In the United States in 2015, 60% of H2 was used by oil refineries, 30% for ammonia synthesis, and the remainder for synthetic hydrocarbons. Worldwide, H2 demand is about 44% for oil refineries, 50% for chemical production (three quarters of that for ammonia, on quarter to methanol) and 6% for steelmaking.
Expansion of the hydrogen market would be facilitated by the availability and affordability of clean hydrogen. It is estimated that certain end use sectors including metals refining, biofuels, synthetic hydrocarbons, natural gas supplementation (e.g. blending hydrogen into natural gas pipelines), seasonal energy storage for the electric grid, and transportation/vehicle usage have a large latent demand in the United States, that could support a hydrogen market about 10 times the current market size.2
SNG has a large potential market: essentially any application that uses natural gas could use SNG or possibly mixtures of hydrogen and SNG. Gasification could be used on-site for industrial applications to produce SNG and possibly co-produce electricity, allowing continued operation of natural gas equipment but from solid fuel sources. The Department of Energy's Energy Information Administration (DOE/EIA) reports in the Annual Energy Outlook 2022 that in 2020, United States industrial use of natural gas was about 44% of the total domestic disposition plus net exports, a significant fraction of total NG usage. A 2007 NETL study [ZIP] looked at the feasibility of on-site gasifiers in industrial facilities for the production of SNG and found that many industrial sites could benefit from the use of relatively small gasifier systems to produce SNG, power, H2, or syngas.
For example, an interesting case to consider in this context is the glass industry. Currently the glass industry is heavily dependent on natural gas as fuel to create process temperatures high enough to melt glass. Decarbonization of such industries is difficult given inherent process constraints. An alternative would be to employ gasification to convert solid fuels (including biomass) with capture to produce SNG and hydrogen, enabling a substantial degree of decarbonization. For a detailed look at the economics of this gasification application, see Potential Application of Coal-Derived Fuel Gases for the Glass Industry: A Scoping Analysis [PDF].
Advantages
Gasification-based hydrogen and SNG production could help increase fuel diversity, protecting against an over-reliance on a single energy source. As SNG in use is identical to natural gas, the existing natural gas infrastructure can still be utilized. Hydrogen blending into pipelined natural gas could provide an increment of decarbonization while retaining use of this infrastructure and natural gas-fueled systems, many of which can accommodate some fraction of hydrogen in their fuel feed without significant issues.
When fuel cell technology matures for transportation or electricity, these same advantages in fuel diversity will apply towards gasification of solid feedstocks-to-H2. A hydrogen-based transportation system would be extremely clean, with most emissions stemming from the production of the hydrogen itself. The actual generation of electricity using hydrogen fuel cells produces only water as a byproduct. Gasification has the potential to cleanly produce H2, using pre-combustion capture of harmful emissions.
Additionally, production of SNG and H2 is well-suited to co-generation within an integrated gasification combined cycle (IGCC) plant or other syngas application. Gasification plants could divert syngas from electricity generating turbines during off-peak periods to produce SNG or H2. The Great Plains Synfuels Plant, for example, was originally configured for SNG production only, but added an ammonia production unit, capacity of which has been increased and which resulted in record level ammonia production in 2022,3 reflecting the higher value/economics of ammonia/fertilizer in the current market. This very situation had been predicted by an NETL study of 2011, which had evaluated the baseline performance of SNG and SNG/ammonia coproduction plants using coal feedstocks, and found that ammonia co-production would provide better cost performance.
Similarly, refineries can benefit from the gasification of a variety of low-value fuels (refinery bottoms, biomass or solid wastes) to produce various products required for plant operations. As noted above, hydrogen is used in large quantities for the hydrocracking of heavy hydrocarbons and other unit operations in petroleum refining. Electricity generated by a gasification system can offset utility costs for the refinery. And finally, excess steam produced by the system can be used throughout the facility in multiple unit operations demanding process steam.
Challenges
The 2011 NETL study on coal to SNG and ammonia plants concluded that reduced costs would be required to improve competitiveness of coal-to-SNG processes (carbon constrained or not), and having assumed regulatory constraints of that time, and at a time when natural gas prices were volatile and higher (at least $4/MMBtu) compared to the 2020 average of about $2/MMBtu. At current low natural gas prices, such plants would be even more economically challenged.
In a 2007 NETL study, potential industrial customers of coal-to-SNG gasification for onsite use in natural gas applications indicated that reliability (and hence, availability) is important and needs to be near 100%, either through increased performance or redundancy. Some applications are able to also fire oil, allowing for onsite storage of backup fuel. Availability may still be an issue for gasification processes at novel scales, using mixed feedstocks, etc., although with experience gasification plants are capable of high availability. The Great Plains Synfuels Plant, for example, has consistently produced 90 to 92% of its rated output capacity.
Producing SNG from coal is more expensive than the natural gas it would replace4. For this reason, the aforementioned 2007 NETL study focused on locations and applications where the gasifier could be integrated with an industrial process that uses natural gas. This would help economics and would allow the facility to guard against fluctuating natural gas prices. Also, the most likely applications would possess well-developed coal transport infrastructure tied with access to both abundant and relatively inexpensive coal.
Another challenge to solid fuel-to-H2 or SNG gasification is in transporting a gaseous fuel, which can be difficult because of the gases' low densities. SNG must be cooled and then compressed for transport through a close-to-capacity pipeline infrastructure. In addition, pipelines are restricted by geographical features like oceans, for example. Otherwise, it can be liquefied (called Liquefied Natural Gas or LNG) for transport by ships or tanker trucks.
Hydrogen is even more difficult to transport. In fact, even liquefied H2 is four times less dense than liquid gasoline and just to reach a liquid state it must be cryogenically cooled and greatly compressed. Current hydrogen-powered test vehicles store compressed hydrogen at 700 bar (over 10,000 psi; almost 700 times atmospheric pressure). Transporting H2 through pipelines is also difficult because of its low density and high flammability. Finding a way to economically store and transport hydrogen is a major challenge to deployment of H2 as a gaseous fuel.
More general challenges to gasification are discussed in the Introduction to Gasification.
References/Further Reading
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1. China alone has 1/3 of world ammonia production capacity, demanding large amounts of hydrogen production capacity.
2. In 2005 and 2008, when Henry Hub natural gas prices were often above $7/MMBtu and peaking in the $10-15 range, SNG had a price advantage over natural gas, as evidenced by the interest at that time of developing new SNG plants (SNG cost is estimated at ~$7/MMBtu). However, since 2009, the available supply of natural gas (greatly enhanced by recent shale gas discoveries and development) has increased the supply to record levels and forced the price of United States NG to low levels, which are expected to persist.
Hydrogen
