SyntheticNaturalGas(SNG):Technology, EnvironmentalImplications,andEconomics

MunishChandel EricWilliams ClimateChangePolicyPartnership DukeUniversity January2009

SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

Contents
Abstract ....................................................................................................................................................... 3 1.Introduction ............................................................................................................................................. 3 2.CoaltoSNGTechnology .......................................................................................................................... 4 2.1.BriefDescription ............................................................................................................................... 4 2.1.1.Steamoxygengasification ......................................................................................................... 4 2.1.2.Hydrogasification ....................................................................................................................... 6 2.1.3.Catalyticsteamgasification ....................................................................................................... 6 2.2.ThermalEfficiencyofSNGPlants...................................................................................................... 7 2.3.GreatPlainsSynfuelsPlant:AnExistingSNGPlant........................................................................... 7 2.4.RecentDevelopmentsinSNG ........................................................................................................... 8 2.4.1.ResearchanddevelopmentinSNG ........................................................................................... 8 2.4.2.CommercialSNGplantsplannedintheU.S............................................................................... 9 2.5.UseofBiomassforSNG .................................................................................................................. 10 3.EnvironmentalImplicationsandEconomicsofSNG .............................................................................. 11 3.1.EnvironmentalImplicationsofSNG ................................................................................................ 11 CO2Emissions .................................................................................................................................... 12 3.2.EconomicsofSNG ........................................................................................................................... 13 3.2.1.CostofSNG .............................................................................................................................. 14 3.2.2.Effectofcoaltypeandcoalprice............................................................................................. 15 3.2.3.EffectofcarbonpriceallowancesandCO2sequestrationonSNGcost .................................. 15 3.2.4.CostofbioSNG........................................................................................................................ 17 3.2.5.Effectofbiomassprice ............................................................................................................ 18 4.Conclusions ............................................................................................................................................ 19 5.References ............................................................................................................................................. 19

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

Abstract
Increasingdemandfornaturalgasandhighnaturalgaspricesintherecentpasthasledmanytopursue unconventionalmethodsofnaturalgasproduction.Naturalgasthatcanbeproducedfromcoalor biomassisknownassyntheticnaturalgasorsubstitutenaturalgas(SNG).Thispaperexaminesthe differenttechnologiesforSNGgeneration,thecost,andtheenvironmentalimpactsofSNG.Thepaper identifiestheconditionsunderwhichSNGproductioncouldbeeconomicallyviable.Thedifferent pollutantscanbebettercontrolledintheprocess.Thesulfurisemittedashydrogensulfide(H2S)and canberemovedintheacidgasremoval(AGR)system.CO2isabyproductofthecoaltoSNGprocess.In alowcarboneconomy,thedevelopmentofthecarboncaptureandstoragewouldbeoneofthecritical factorsinthefuturedevelopmentofSNG.Intheabsenceofcarboncaptureandstorageandwithcarbon allowancepriceinfuture,theSNGcouldbeexpensiveandmaynotbeeconomicallyviable.Higher naturalgaspriceandsellingofCO2toenhancedoilrecoverycouldmaketheSNGeconomicallyviable.

1.Introduction
Energydemandisincreasingacrosstheglobe.Fossilfuels,primarilycoalandnaturalgas,arethemajor sourcesofenergyworldwide.TheUnitedStateshasabundantcoalresources:itcontains25%ofthe worldscoalreserves,andtheenergycontentofthosereservesexceedstheenergycontentofthe worldsknownrecoverableoil(DOE2008).Still,increasingconsumptionandtheresultantincreasing priceofnaturalgasareaconcern.AccordingtoDOE(2008),90%ofnewU.S.powerplantswillbe naturalgasfiredplants.Theeverincreasingdemandandhighpriceofnaturalgasinrecentpasthasled researcherstoconsideralternatemethodsofnaturalgasgeneration.Convertingcoaltonaturalgas couldsatisfythedemandfornaturalgaswhileutilizingtheUnitedStatesabundantcoalresources. Syntheticnaturalgasorsubstitutenaturalgas(SNG)isanartificiallyproducedversionofnaturalgas. SNGcanbeproducedfromcoal,biomass,petroleumcoke,orsolidwaste.Thecarboncontainingmass canbegasified;theresultingsyngascanthenbeconvertedtomethane,themajorcomponentofnatural gas. ThereareseveraladvantagesassociatedwithproducingSNGfromcoal.SNGcouldbeamajordriverfor energysecurity.SNGproductioncoulddiversifyenergyoptionsandreducenaturalgasimports,thus helpingtostabilizefuelprices.SNGcanbetransportedanddistributedusingexistingnaturalgas infrastructureandutilizedinexistingnaturalgasfiredpowerplants.Andascoalisabundantandevenly distributedgloballyascomparedtooilandnaturalgas,SNGcouldstabilizetheglobalenergymarket. ThebiomasscanalsobeusedalongwithcoaltoproduceSNG.Theuseofbiomasswouldreducethe greenhousegasemissions,asbiomassisacarbonneutralfuel.Inaddition,thedevelopmentofSNG technologywouldalsoboosttheothergasificationbasedtechnologiessuchashydrogengeneration, integratedgasificationcombinedcycle(IGCC),orcoaltoliquidtechnologiesasSNGshareatleastthe gasificationprocesswiththeseprocesses.

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

TherearemanydifferentissuesassociatedwiththedeploymentofSNG.InterestindevelopingSNG datesbacktothe1970s,whentheenergycrisisledresearchersandpolicymakerstoconsiderwaysto convertcoalintogaseousandliquidfuels.However,thelaterstabilizationofthefuelmarketand increasedavailabilityoflowcostfuelsledtotheabandonmentofmostofcoaltoSNGprojects.Another problemwithproducingSNGfromcoalistheadditionalCO2createdbytheprocess.Thispaperanalyzes SNGgenerationtechnologyandthecurrentstateofSNGdevelopmentanddiscusseshowcarbon captureandsequestration(CCS)technologycouldaffectSNG.Itexaminesthetechnologyseconomic andenvironmentalimplicationstodetermineunderwhatconditionsSNGproductionbecomes economicallyviable.

2.CoaltoSNGTechnology
2.1.BriefDescription Steamoxygengasification,hydrogasification,andcatalyticsteamgasificationarethethreegasification processesusedincoaltoSNG.Theprovenandcommercializedmethodofgasificationforthecoalto SNGprocess,however,isthesteamoxygengasificationprocess. 2.1.1.Steamoxygengasification InthesteamoxygenprocessofconvertingcoaltoSNG,coalisgasifiedwithsteamandoxygen.The gasificationprocessproducescarbonmonoxide(CO),hydrogen(H2),carbondioxide(CO2),methane (CH4),andhigherhydrocarbonssuchasethaneandpropane.Thegascompositiondependsuponthe gasifierconditions,i.e.,temperatureandpressure.Athighertemperaturesandpressures,themajor productsareCOandH2.ThreemolesofH2arerequiredtoreactwitheachmoleofCOtoproduceone moleofCH4.TheconcentrationofH2insyngasisincreasedbyastepcalledthewatergasshiftreaction, whichisfollowedbyagascleaning.Thecleanedgas,consistingprimarilyofCOandH2,reactsinthe methanationreactorinthepresenceofacatalysttoproduceCH4andH2O.Theresultinggas,afterH2O condensationandpolishing,ifrequired,issyntheticnaturalgas(SNG).Figure1showstheflowdiagram ofsteamoxygengasification.Theessentialcomponentsoftheprocessaretheairseparationunit,the gasifier,thewatergasshiftreactor,syngascleanup,andthemethanationreactor.Eachcomponentis describedbelow. AirSeparationUnit Oxygenrequiredinthegasifieriseithersuppliedbyvendorsorgeneratedonsiteusinganairseparation unit(ASU).CryogenicairseparationisthetechnologygenerallyusedintheASU. Gasifier ThemostimportantandbasiccomponentofthecoaltoSNGprocessisthegasifier.Thegasifier convertscoalintosyngas(primarilyCOandH2)usingsteamandoxygen(O2),generallyatahigh temperatureandunderhighpressure. ClimateChangePolicyPartnership 4

SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

N2

N2 Air ASU O2

Coal

Particulate, tarremoval

CO2

Syngas Gas cleaning

CO2

Compressionand sequestration (optional)

Compressionand Sequestration CO, (Optional) Methanation SNG H2

Air

ASU

O2

Gasifier

Water gas shift

Gasifier Steam Ash

Asanexample,theGE/Texacogasifiertemperatureoperatesat42barsand2,500F.Thedifferenttypes ofgasifiersare:entrainedflow,fluidizedbed,movingbed,andtransportreactor(Stiegel2007). CommercialgasifiervendorsincludeConocoPhillips,GEEnergy(ChevronTexaco),ShellSCGP,Siemens (GSP/Noell),KBRTransport,andLurgi. WaterGasShiftReactor TheconcentrationofH2isincreasedbythewatergasshiftreaction.Inthewatergasshiftreaction,CO andH2OareconvertedtoCO2andH2inafixedbedcatalyticconverter.Thereactionisexothermicand canbecompletedeitherbeforeoraftertheacidgasremoval.Thecatalystcompositionvariesforboth typesofshiftreactions(NETL2007). SyngasCleanup Thesyngascleanupisdoneintwosteps.First,thesyngasfromthegasifierisquenchedandcooled,and thedustandtarcarriedbythegasareremoved.Afterpassingthroughthewatergasshiftreactor,the syngasiscleanedasecondtimetoremovetheacidgasesH2SandCO2.Theacidgascleanupsystemcan useeithertheSelexolorRectisolprocess.Bothprocessesarebasedonphysicalabsorption,which makesthemmoreeconomicalthantheamineprocessusedforCO2separationinpowerplants,whichis basedonchemicalabsorption.Theprocessescanbeusedinaselectivemannertoproduceseparate streamsofH2SandCO2.TheH2ScanbefurtherutilizedinaClausplanttogeneratesulfur. IntheSelexolprocess,amixtureofdimethylethersofpolyethyleneglycolisusedasanabsorbent.The Selexolsolventabsorbstheacidgasesfromthesyngasatrelativelyhighpressure,usually20to138bars. Theacidgasesarereleasedusingapressureswingorsteamstripping.TheSelexolprocessismorethan 35yearsoldandthereareatleast55commercialunitsinservice(UOP2008).IntheRectisolprocess, coldmethanolisusedasanabsorbentwhichabsorbstheacidgasatapressureof27.6to68.9barsand atatemperatureof100F.TheGreatPlainsSynfuelsPlantusestheRectisolprocess. Methanation Inthemethanationreactor,COandH2areconvertedtoCH4andH2Oinafixedbedcatalyticreactor. Sincemethanationisahighlyexothermicreaction,theincreaseintemperatureiscontrolledbyrecycling ClimateChangePolicyPartnership 5

Water Gas Gas Steam Gas cleaning cleaning Shift Figure1.Steamoxygengasificationprocessdiagram

H2,CO, CO2 H2,CO, CO2

Gas cleaning

SNG

SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

theproductgasorbyusingaseriesofreactors.Steamisaddedtothereactiontoavoidcokeformation inthereactor.Afterthesteamisremovedfromtheproductgasesbycondensation,SNGisreadyfor commercialapplications. 2.1.2.Hydrogasification Asthenameimplies,thehydrogasificationprocessusesH2togasifycoal.H2reactswithcoaltoproduce CH4.Thehydrogasificationprocessisexothermicinnature.H2requiredforthegasificationiseither providedbyanexternalsourceorbyusingamethanesteamreformer.AportionoftheCH4generatedin thehydrogasificationreactorisconvertedintoCOandH2inthemethanesteamreformer(Figure2). Thehydrogasificationprocessisintheresearchstageandisnotyetcommercialized,althoughafew studiesontheprocesswereconductedfromthe1970stothe1990s.Rubyetal.(2008)haveproposeda hydrogasificationprocesswhichconsistsofahydrogasificationreactor,desulfurizationandcarbonizer reactorsforCO2removal,andamethanationreactor.Theadvantagesofhydrogasificationwillbe discussedinthefollowingsectiononcatalyticsteamgasification.
Particulate, tarremoval Steam CO2 Compressionand sequestration(optional)

Coal

Coal Hydro
gasifier

Hydro gasifier Ash

Gas CH4,H2 cleaning CO

Steam Watergas
shift

CH4,H2, CO

Watergas shift

CH4,H2 CO2

Gas CH4 separator (SNG) H 2

CO2

SNG

CH4,H2, CO2

Gas Gas CH4 separator cleaning (SNG) steam Steam H2 CO,H CO,H2 2 Ash reformer Steam CO,H2 Figure2.HydrogasificationprocessdiagramCO,H2 Methan esteam reformer 2.1.3.Catalyticsteamgasification Catalyticsteamgasificationisconsideredtobemoreenergyefficientthansteamoxygengasification. However,theprocessisstillunderdevelopment.Inthisprocess,gasificationandmethanationoccurin thesamereactorinthepresenceofacatalyst(Figure3).Theenergyrequiredforthegasification reactionissuppliedbytheexothermicmethanationreaction.CH4isseparatedfromCO2andsyngas(CO andH2);thesyngasisthenrecycledtothegasifier.Thecatalyticreactioncantakeplaceatalower temperature(typically650750C).TheprocesswasinitiallydevelopedbyExxoninthe1970susing potassiumcarbonate(K2CO3)asacatalyst,buttheprocesswasnotcommercialized. Theadvantagesofhydrogasificationandcatalyticsteamgasificationarethattheydonotrequireair separationunit;hencethereislessenergypenaltyfortheprocess.Furthermore,thecostsarelower,as

SNG CH4 CH4 Methane

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

thegasificationandmethanationoccuratalowertemperature.Thedisadvantagesofcatalyticsteam gasificationaretheseparationofcatalystfromash/slagandthelossofreactivityofthecatalyst.
Particulate, tarremoval CO2 Compressionand sequestration(optional) SNG

Steam Coal+makeup catalyst

Steam Catalyticcoal
methanation

Particulates,tar removal
Gas cleaning

Coal+make Catalyst upcatalyst

Gas separator

CO2

Catalyticcoal Ashcatalyst methanation separation Ashcatalyst Ash separation Ash

Gas H2,CO cleaning

CH4 separation

SNG

Figure3.Catalyticsteamgasificationprocessdiagram

2.2.ThermalEfficiencyofSNGPlants ThethermalefficiencyofanSNGplantemployingthesteamoxygengasificationprocessvariesinthe rangeof59%to61%.ADOEstudyreportedplantefficienciesof60.4%forIllinois#6(bituminous)coal and59.4%forPowderRiverBasin(PRB)(subbituminous)coal(NETL2007).AUniversityofKentucky studycalculatedtheefficiencyofanSNGplantusingbituminousKentuckycoaltobe60.1%withoutCO2 captureand58.9%withCO2capture(Grayetal.2007). Thehydrogasificationandcatalyticgasificationprocessesarethoughttobemoreefficientthanthe steamoxygengasificationprocess.Thetheoreticalefficiencyoftheseprocessesisestimatedtobeas highas79.6%forhydrogasificationand72.7%forcatalyticgasification(Steinberg2005).Rubyetal. (2008)haveestimatedathermalefficiencyof64.7%forthehydrogasificationprocessusinglowranked western(subbituminous)coal.ThethermalefficiencyofGreatPointEnergyscatalyticgasification basedplantisreportedtobe65%(GreatPointenergy2008a). 2.3.GreatPlainsSynfuelsPlant:AnExistingSNGPlant TheGreatPlainsSynfuelsPlantinBeulah,NorthDakota,istheonlycommercialplantintheUnited StatesproducingSNGfromcoal.Theplant,whichisownedandoperatedbytheDakotaGasification Company,asubsidiaryofBasinElectricPowerCooperative,hasbeeninoperationsince1984.Thekey figuresoftheplantarelistedinTable1.Theplantproducesmorethan54billionstandardcubicfeetof naturalgasannuallyusing6milliontonsoflignitecoal.Theannualplantcapacityfactoris90%92%.The

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plantalsodemonstratesCO2captureandsequestration.Since2000,asmuchas95millionstandard cubicfeetperdayofCO2hasbeentransportedfromtheplantviaa205milepipelinetotheWeyburnOil FieldinsouthwesternSaskatchewan,Canada,forenhancedoilrecovery(EOR)(PerryandEliason2004). TheCO2productioncapacityismorethan200millionstandardcubicfeetperday(DakotaGasification Company2008).Inaddition,theplantalsoproducesfertilizers,solvents,phenols,andotherchemicals. TheDakotagasificationplantuses14LurgiMarkIVGasifiersoperatingat1,204C.Eachgasifierhasa heightof12.2metersandaninternaldiameterof4.0meters.TheRectisolprocessisusedtoremoveH2S andCO2,andanickelbasedcatalystisusedinthemethanationprocess.Thefinalgasisfurthercooled, cleaned,dried,compressed,andsuppliedtoconsumersthroughapipeline.

Table1.KeyfiguresofNorthDakotaGasificationPlant GreatPlainsSynfuelsPlantKeyFigures Coaltype Lignitecoal Inoperationsince 1984 Annualcoalconsumption(milliontons) 6 AnnualSNGproduction(billionstandardcubic feet) 54 CO2emissionsfromtheSNGplant(tons/day) 6,080 Annualplantcapacityfactor(%) 9092

2.4.RecentDevelopmentsinSNG 2.4.1.ResearchanddevelopmentinSNG Recently,theenergyindustryhasshownconsiderableinterestinthecoaltoSNGconcept.General ElectricEnergyisworkingwiththeUniversityofWyomingtobuilda$100millionadvancedcoal gasificationresearchandtechnologycenterinWyomingwhichwillfocusonthedifferentaspectsof convertingPowderRiverBasin(PRB)coaltoSNG.Theproposedresearchcenterwouldbuildascaled downcommercialpowerplant,whichcouldbeoperationalby2010(Farquhar2008).TheArizonaPublic ServiceCompany(APS)alongwiththeDepartmentofEnergyandotherpartnersaredevelopinga hydrogasificationprocesstocoproduceSNGandelectricityfromwesterncoals.Theobjectiveofthe $12.9millionprojectistodevelopanddemonstrateanengineeringscalehydrogasificationprocess whichcanproduceSNGatacostoflessthan$5/MMBtuandcanutilizelowrankedwesterncoal(NETL 2008).TheWesternResearchInstitute(WRI)isworkingonthedevelopmentofagasificationprocess whichusescountercurrentcyclonicmethodsinauniquesequencethatcausesactivatedcarboncharto reactwithsynthesisgas,bothderivedfromcoal.Themethoddoesnotrequirepureoxygentoproduce thesynthesisgas(WRI2008). ThecatalyticsteamgasificationprocessdevelopedbyGreatPointEnergyInc.isconsideredtobeagreat advancementinSNGtechnology.Theprocessinvolvesasinglereactorusingaproprietary,recyclable catalystdevelopedinhouseandmadefromabundantlowcostmetals.Thecatalystwasdevelopedwith

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics

thehelpofSouthernIllinoisUniversity,theUniversityofToronto,andtheUniversityofTennessee (Fairley2007).Theheatreleasedinthesyngastomethanestepissufficienttosustainthegasification, eliminatingtheneedtofireupthereactionswithpurifiedoxygen.Theprocesswasdemonstratedwitha weeklongpilotruninNovember2007.Thepilotplantfortheprocessisa60foothighgasifierwithan internaldiameterof14inches.Aproposedlargeprecommercialplantisexpectedtobeoperationalby 2009.ThepriceofpipelinequalitygasbyGreatPointEnergysprocesscouldbelessthan$3perMMBtu (Fairley2007).GreatPointEnergyInc.andPeabodyareworkingtogethertocommercializethe technologywiththegoalofdevelopingacoaltoSNGplantatornearWyomingsPowderRiverBasin area(GreatPointEnergy2008b). 2.4.2.CommercialSNGplantsplannedintheU.S. Table2showsthatthereareatleast15coaltoSNGplantsproposedinU.S.,allindifferentstagesof development.Someoftheseplantsarealsoconsideringcarboncaptureandstorage.Forexample,the jointConocoPhillips/PeabodyEnergyprojectintheMidwestisconsideringCO2captureandstoragefor itsminemouthfacility(ConocoPhillips2007).AnIndianaGasificationLLCplantinsouthwestIndiana woulddemonstrategeologicCO2sequestration(IndianaCoaltoSNG2008).SecureEnergyInc.splantin Illinoiswoulduse10%biomassforSNGgeneration.
Table2.ProposedcommercialscalecoaltoSNGprojectsintheU.S. ProjectName/Owner Location Status Capacity Capital Yearof (BCF/yr) Cost completion SecureEnergyInc. Illinois FrontEnd 20 $250 2009 Engineering million andDesign (FEED) PeabodyEnergyand Illinois Proposed 35 ArclightCapital PowerHoldingsofIllinois Illinois PreFEED 50 $1billion 2009 LLC TaylorvilleEnergyCenter Illinois Feasibility $2billion (IGCC/SNG) Study GlobalEnergy GreatPointEnergysPilot Project Indiana Massachusetts Proposed PreFEED Remarks Thegasifier is10% biomass ready 50%ofCO2 tobe captured

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics OswegoSNGProject TransGas SouthHeartCoal GasificationProject(Great NorthernPower Development,L.P.and AlliedSyngasCorporation) NewYork NorthDakota Planned Feasibility study 36.5 $2billion $1.4 billion 2010 2012
1

SES/ConsolCoaltoSNG Project Peabody/ GreatPointSNGProject ConocoPhillips/ PeabodyEnergy LockwoodProject

CO2would becaptured andusedfor EnhancedOil Recovery (EOR) applications infuture CO2willbe captured andutilized forEOR fuelwillbe petcokeand biomass

WestVirginia Location undecided Midwest Texas

Planned Planned Feasibility Study Conceptual Design

5070 65.7

2011

TondusNuecesSyngas Plant PeabodyEnergy

Texas Wyoming

Planned Proposed

2.5.UseofBiomassforSNG TheuseofbiomasstogenerateSNGcouldbethemostinterestingscenario.SNGproductionfrom biomassalsoreferredtoasbioSNGhasadvantagesbecausebiomassiscarbonneutral,andabove all,CO2capturewouldgeneratenegativecarbonemissions.Thechallengesofusingbiomassinsteadof coalariseduetothechemicalcompositionofbiomass,thelowercalorificvalueperunitofbiomass comparedwithcoal,andthehighermoisturecontentofbiomass.Oneoftheissuesassociatedwith biomassgasificationistarformation.Theseasonalvariationinthebiomasssupplyandmoisturecontent couldrequirelargestorageanddryingcapacitiesforcommercialscalebiomassgasificationunits. Anotherpossiblewayofutilizingbiomasswouldbeinacoalbiomasscogasificationprocess.Co gasificationcouldmakeitpossibletoinstalllargescalegasificationcapacity,whichcouldbemore commerciallyviable.
1

IndustrialCommissionofNorthDakota,2007.GreatNorthernPowerDevelopmentandIndustrialCommission AnnounceCoalGasificationProjectatSouthHeart. http://www.gasification.org/Docs/News/2007/South%20Heart%20statewide.pdf.

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TheconceptofbiomasstoSNGisrelativelynew.Theprocesscomponentsforcoalandbiomassshould besimilar,althoughtheremaybeslightdifferencesinthegasificationandtarremovalprocesses.The fluidizedbedgasifiermaybebettersuitedforbiomassgasificationasitcanhandlevariationsinsize, density,moisture,andtarformation. TheEnergyResearchCentreoftheNetherlands(ECN)hasdemonstratedSNGgenerationfrombiomass (Mozaffarianetal.2003,2004).Inthisprocess,indirectgasificationisused,andbothgasificationand methanationarecarriedoutatatmosphericpressure.Thebiomassisgasifiedintheriserofacirculating fluidizedbed(CFB)andtheremainingchariscirculatedtothecombustor(downcomerofCFB).Inthis process,theheatrequiredforgasificationissuppliedbycharcombustioninthecombustor.Steamis usedforgasificationandairisusedforcharcombustion.Thelabscalegasifier,developedin2004,hasa biomasscapacityof5kg/handoperatesattemperaturesof750to900C(Zwartetal.2006).Direct gasificationwasalsotested,whichusesoxygenandsteamforgasification(bubblingfluidizedbed)and operatesat850C.ThegastreatmentintheintegratedbioSNGsystemconsistsoftarremovalwith organicscrubbingliquidtechnology,andsulfurandHClremovalwithadsorbents. Basedontheexperiments,anSNGsystemwasoptimizedwhichconsistsofanindirectgasifier,atar removalsystemwhichrecyclestartothegasifier,agascleaningreactorandshift,andamethanation combinedreactor.Theindirectgasifierworkingat850Cproducesnearlynitrogenfreesyngasanda highamountofmethane.Thetarsarerecycledtothegasifierinordertoincreaseefficiency,whereas thetarfreesyngasiscleanedfromothercontaminants(e.g.,sulfurandchlorine).Thecleansyngasisfed toacombinedshiftandmethanationprocess,convertingthesyngasintoSNG.Aftermethanation, furtherupgrading(e.g.,CO2andH2Oremoval)isrequiredinordertocomplywiththedesiredSNG specifications.Theoverallnetthermalefficiencyisreportedas70%LowHeatValue(LHV) (approximately64%HighHeatValue[HHV]).Fortypercentofthecarbonofthebiomassbecomespart oftheSNGandanequalamountofcarboniscapturedasCO2.Theremaining20%ofthecarbonin biomassbecomesasfluegasfromtheprocess(Zwart,2008).ThecostofthebioSNGproduction proposedbytheECNanditssensitivitytobiomasspriceareanalyzedinsections3.2.4.and3.2.5.

3.EnvironmentalImplicationsandEconomicsofSNG
Asdescribedearlier,steamoxygengasificationistheonlycommercializedandoperationaltechnology. Henceforth,theenvironmentalimpactsandcostsofSNGrefertosteamoxygengasification.However,it shouldbenotedthatthehigheraplantsthermalefficiency,theloweritsCO2emissionswillbe. Therefore,CO2emissionsfromthehydrogasificationandsteamcatalyticgasificationprocessesshould belowerthanthoseofthesteamoxygengasificationprocess. 3.1.EnvironmentalImplicationsofSNG ThecoaltoSNGprocessiscapableofachievingverylowsulfuremissions.Thesulfurisemittedas hydrogensulfide(H2S)andcanberemovedbytheacidgasremoval(AGR)system.Theacidgas(CO2and H2S)canbeseparatedintheSelexolorRectisolprocessinaSNGplant.TheH2ScanbeutilizedinaClaus

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planttogenerateelementalsulfur.Mercurycanberemovedinthewaterquenchduringthesyngas cleaning.Theremovallevelshouldbesufficienttomeetthepermittedemissionslevel.However,if required,acarbonbedcouldbeusedforadditionalmercuryremoval.NOxemissionsfromtheprocess wouldbeverylow;theonlyNOxemissionswouldbefromtheboilerusedtogeneratesteamandpower fortheprocess.ConsideringthatthesulfurisremovedbyClausplant,thecoaltoSNGshouldbe consideredacleancoaltechnology. CO2Emissions CO2andH2Sareemittedfromtheacidgasremovalplant.SeparatestreamsofCO2andH2Scanbe obtainedfromtheAGRprocess.CO2iseithercapturedorreleasedintotheatmosphere.Approximately twothirdsofthecarboncontentofthecoalisconvertedintoCO2intheSNGprocessandtheremaining carbonbecomesacomponentofSNG.CO2emissionswoulddependuponthetypeofthecoalandthe processused.CO2emissionscalculatedfromaDOEstudyareapproximately175lbs./MMBtufor bituminousIllinoiscoal#6and210lbs./MMBtuforsubbituminousPowderRiverBasincoal. WhencomparingtheCO2emissionscausedbyconvertingcoalintoSNGwiththeemissionscausedby utilizingcoaldirectlyforpowergeneration,itisassumedthattheSNGisutilizedinanaturalgas combinedcycle(NGCC)powerplantforpowergeneration.Figure4comparestheCO2emissionsper MWhofasupercriticalPCboiler,anIGCCplant,andacoalSNGNGCCsystemusingIllinois#6coal.Itis assumedthatthenetthermalefficiencyoftheNGCCpowerplantis50.8%.ThefigureshowsthatCO2 emissionsarehighestfromthecoalSNGNGCCpowersystem.However,itisinterestingtoconsiderthat CO2fromtheSNGplantisabyproductoftheprocessandthatthereisnoadditionalcostassociatedwith CO2separation.Moreover,theCO2fromthisprocessisobtainedathighpressure.IftheCO2emitted fromtheSNGplantissequestered,CO2emissionsfromthecoalSNGpowercyclecanbebroughttothe leveloftheNGCCplant.Inthatcase,CO2emissionswouldbeapproximately45%oftheemissionsofthe IGCCorsupercriticalPCplants.Nonetheless,thethermalefficiencyofthecoalSNGNGCCsystemis lowerthanthatofcoalbasedpowerplants(PCandIGCC).

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SyntheticNaturalGas(SNG):Technology,EnvironmentalImplications,andEconomics Figure4.CO2emissionsfromdifferentpowerplantoptionsusingIllinois#6coal(CO2emissionsforsupercritical PCboiler,IGCC,andNGCCarefromNETL2007b)

3.2.EconomicsofSNG TheDOEandtheUniversityofKentuckyreportthecostsoftheindividualcomponentsandthe operationandmaintenance(O&M)ofanSNGplant.Figure5showsthepercentagedistributionofthe equipmentcapitalcostforthecomponentsofanSNGplant(Grayetal.2007).Thecostliestpartofthe SNGsystemisthegasifier,whichcorrespondstoabout21%ofthetotalequipmentcost,followedbythe syngascleanupsystem,whichaccountsfor15.8%.Theairseparationandcompressioncomponentscost 11.3%,andthemethanationreactorcosts11%.SNGcouldbegeneratedincoproductionwith electricity,IGCC,orhydrogen.However,forthepresenteconomicanalysis,itisassumedthattheplant onlyproducesSNG.

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Figure5.DistributionofthecapitalequipmentcostsoftheindividualcomponentsofanSNGplant

3.2.1.CostofSNG WecalculatedthelevelizedcostofSNGonthebasisofthecapitalandO&McostsreportedbyDOE (NETL,2007).AcashflowmodelisusedtocalculatethecostofSNG.Thedifferentassumptionsinthe modelareprovidedinTable3.Thecapitalcostisupdatedto2008usingthechemicalengineeringplant costindex.Accordingtotheindex,thecosthasincreasedbyafactorof1.173since2005(CEPCI2008). ThelevelizedcostisforanindustrialscaleSNGplantusingIllinois#6andPRBcoal.

Table3.AssumptionsforthecostevaluationofSNG Parameter Interestrate(%) Expectedreturntoequityinvestor(%) Debtfraction(%) Taxrate(%) Debtterm(years) Plantlife(years) Constructionperiod(years) Depreciationschedule(years,accelerated) Debtrepaymentrate(%) Capacityfactor(%) Value 8.0 12 60 40 10 30 3 15 15 90

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3.2.2.Effectofcoaltypeandcoalprice AssumingthatCO2isnotcapturedintheprocess,thelevelizedcostofSNGis$8.42/MMBtuusingIllinois #6coaland$9.53/MMBtuusingPRBcoal.Thecoalpricesare$1.34/MMBtuforIllinois#6coaland $0.95/MMBtuforPRBcoal.NotethatalthoughPRBcoalislessexpensivethanIllinois#6coal,thecostof SNGusingPRBcoalishigher.ThisisbecauseIllinois#6isabituminouscoal,whilePRBisasub bituminouscoalwhichgeneratesmoreslagintheSNGprocessandthereforerequiresmorecostlyslag handlingequipment.Anotherfactormaybethelowerefficiencyatwhichthegasifieroperateswith lowerrankedsubbituminouscoal. Figure6showstheeffectoftheincreaseincoalpriceonthelevelizedcostofSNG.Forexample,an increaseinthecoalpriceby100%increasesthecostofSNG(withoutCO2capture)by18.8%and12.5% usingIllinoiscoalandPRBcoal,respectively.

Figure6.EffectofcoalpriceonSNGcost

3.2.3.EffectofcarbonpriceallowancesandCO2sequestrationonSNGcost IfthefutureclimatepolicyintheUnitedStatesrestrictstheCO2emissionsfromtheindustries,there wouldbecarbonallowancesfortheCO2emissions.Thecarbonpriceallowancewouldincreasethe levelizedcostofSNG.Figure7showsthelevelizedcostofSNGwithdifferentcarbonallowanceprice. Higherthecarbonallowanceprice,lesseconomicallyviableSNGis.Since,CO2isabyproductoftheSNG process,itwouldbeeconomicfortheSNGproducerstosequesterCO2ratherthanpayingthecarbon allowanceprice.AdditionalcostinsequestratingCO2incomparisontoventingCO2wouldbein compressingCO2tothehighpressureandlossofasmallportionoftheenergyduetotheprocess ClimateChangePolicyPartnership 15

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modification.ItshouldbenotedthattheenergypenaltyforcompressingCO2isnotashighasinthecase ofpostcombustionCO2captureinpowerplantsbecauseCO2releasedfromtheprocessisalreadyata highpressure.

Carbon allowance pricelevel above which CO2 sequestra tionis economic Carbon allowance pricelevel above which CO2 sequestra Figure7.EffectofcarbonallowancesonthecostofSNG tionis economic

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Figure8.EffectofCO2priceonSNGcosts

SNGcostswouldbecome$9.15/MMBtuforIllinoiscoaland$10.55/MMBtuforPRBcoalwithCO2 sequestration.ThecostofCO2transportandsequestrationwasassumedtobe5$/Mt.Itwasassumed thattheSNGfacilitywouldbeneartheCO2sequestrationsite.Figure7showsthatinthecaseofcarbon allowanceshigherthan$9.5/MtCO2forIllinoiscoaland$10.5/MtCO2forPRBcoal,CO2sequestrationis amoreeconomicoptionthanpayingcarbonallowances. IfCO2issuppliedforenhancedoilrecovery(EOR),thentheSNGproducerpaysnosequestrationcosts. Figure8showstheeffectofCO2priceonthelevelizedcostofSNGHigheristheCO2price,more economicallyviablewouldbetheSNG. 3.2.4.CostofbioSNG TherearenocommercialbioSNGplants.ECNhasestimatedthecostofbioSNGonthebasisoftheir researchfacility(Zwartetal.2006).Thesizeoftheplant,operatingpressure,andbiomasscostwould decidethecostofthebioSNG.ThecostofbioSNGdecreaseswithhigherpressuresystemandlarger facilities.Theresultshaveshownthattheplantoperatingat7barpressurewascosteffectivecompared totheplantoperatingatatmosphericpressure.However,inallthecases,thecostofbioSNGwashigher thanthemarketpriceofnaturalgas.

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3.2.5.Effectofbiomassprice Itshouldbenotedthatthecostofbiomassvariesgreatlywithgeographicalfactors.Wehaveevaluated theeffectofbiomasspriceoncostofSNG.A341.21MMBtu/hplantoperatingat7barpressurewas chosenfortheanalysis.Thecapitalcostoftheplantandtheoperatingandmaintenancecostwas assumedtobethesameasdescribedbyECN(Zwartetal.2006).Thecostwasupdatedfortheyear 2008usingchemicalengineeringplantcostindex(CEPCI2008).OneEurowasassumedtobeequalto 1.42US$.TheassumptionstoevaluatethecostofbioSNGwerethesameasthosedescribedinTable3. Figure9showsthecostofbioSNGatdifferentbiomassprices.Sincebiomassiscarbonneutral,ifCO2is sequestered,carboncreditscouldgenerateadditionrevenue.ThesellingofCO2toEORcouldgenerate additionalrevenue.TheadditionalrevenuefromcarboncreditsorsellingCO2forEORwouldreducethe priceofbioSNG.AnimportantresultofthisanalysisisthatforthebioSNGpricetobelessthan $12/MMBtu,thebiomasspriceshouldnotexceed$2.2/MMBtu.Forthesamepriceofcoalandbiomass thelevelizedcostofbioSNGis$11.2/MMBtucomparedto$8.42/MMBtuusingbituminouscoal.The differencebetweenthecostswillbereducedifweconsiderthecostofCO2creditsduetocarbon neutralbiomass.

Figure9.EffectofbiomasspriceonthecostofbioSNG

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4.Conclusions
Steamoxygengasification,hydrogasification,andcatalyticsteamgasificationarethedifferentprocesses thatcouldbeusedtoconvertcoaltosyntheticnaturalgas.Steamoxygengasificationistheonlyproven technology,whilehydrogasificationandcatalyticsteamgasificationarethoughttobemoreenergy efficientmethodswhosedevelopmentcoulddecreasethecostofSNG.Thereareatleast15SNG projectsplannedintheUnitedStatesundervariousstagesofthedevelopment.Biomasscouldalsobe utilizedforSNGproduction. TheprocessofconvertingcoaltoSNGproducesCO2asabyproduct.CoaltoSNGpowerplantswould producemoreCO2thanwouldbeproducedbydirectlyusingthecoalinpowerplants.IfCO2iscaptured fromthecoaltoSNGprocess,however,theCO2emissionsfromcoaltoSNGpowerplantscouldbe equaltothosefromnaturalgaspowerplants. ThelevelizedcostofSNGis$8.42/MMBtuforplantsusingbituminouscoaland$9.53/MMBtuforthose usingsubbituminouscoal.WithCO2sequestration,SNGcostswouldincreaseto$9.15/MMBtufor bituminouscoaland$10.55/MMBtuforsubbituminouscoal.Itwouldbemoreeconomical,however,to sequestertheCO2thantopaycarbonpriceallowancesintheeventofafuturecarbonpricingscheme. SellingCO2forenhancedoilrecoverywouldmakecoaltoSNGmoreeconomicallyviable.BioSNGisan interestingexampleofusingcarbonneutralfuelforthegenerationofSNG.However,forthebioSNG pricetobelessthan$12/MMBtu,thebiomasspriceshouldnotexceed$2.2/MMBtu.

5.References
ChemicalEngineeringPlantCostIndex(CEPCI),2008.ChemicalEngineering.http://www.che.com/pci. ConocoPhillips,2007.PeabodyandConocoPhillipsenterintoagreementtoexploredevelopmentof Midwestcoaltosubstitutenaturalgasfacility. http://www.conocophillips.com/newsroom/news_releases/2007news/07232007.htm. DakotaGasificationCompany,2008.AboutDakotaGasificationCompanyandtheGreatPlainsSynfuels Plant.http://www.dakotagas.com. DOE,2008.Coal.http://www.energy.gov/energysources/coal.htm. EIA,2008.NaturalGasPrices.EnergyInformationAdministration.http://www.eia.doe.gov. Fairley,P.,2007.CheaperNaturalGasfromCoal.http://www.technologyreview.com/Biztech/18119. Farquhar,B.,2008.GEandUWjoinforcesoncoalgasificationresearchcenter. http://wyofile.com/GE_and_UW_join_forces_on_coal_gasification_research_center.htm. Gray,D.,Challman,D.,Geertsema,A.,Drake,D.,Andrews,R.,2007.Technologiesforproducing transportationfuels,chemicals,syntheticnaturalgasandelectricityfromtheGasificationof Kentuckycoal.July2007,UniversityofKentucky,Kentucky,USA. GreatPointenergy,2008a.http://www.greatpointenergy.com.

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GreatPointEnergy,2008b.GreatPointEnergyannouncescoalsupplypartnershipwithPeabodyEnergy andentersintoagreementtobuildnaturalgasmanufacturingfacilitiesinPowderRiverBasin. http://www.greatpointenergy.com/GPEPeabody12508.pdf. IHS,2008.NorthAmericanPowerGenerationConstructionCostsRise27Percentin12MonthstoNew High:IHS/CERAPowerCapitalCostsIndex.http://energy.ihs.com. IndianaCoaltoSNG,2008.http://www.purdue.edu/dp/energy/pdf/CCTR120606JClark.pdf. IndustrialCommissionofNorthDakota,2007.GreatNorthernPowerDevelopmentandIndustrial CommissionannounceCoalGasificationProjectatSouthHeart. http://www.gasification.org/Docs/News/2007/South%20Heart%20statewide.pdf. KleinA.,2007.TECO,NuoncancellationsunderscoresIGCCswoes.EmergingEnergyResearch. http://www.emergingenergy.com. Mozaffarian,M.,Zwart,R.W.R.,2003.Feasibilityofbiomass/wasterelatedSNGproductiontechnologies. http://www.ecn.nl/publications. Mozaffarian,M.,Zwart,R.W.R.,Boerrigter,H.,Deurwaarder,E.P.,Kersten,S.R.A.,2004.GreenGasas SNG(syntheticnaturalgas)Arenewablefuelwithconventionalquality. http://www.ecn.nl/publications. NETL,2007.Industrialsizegasificationforsyngas,substitutenaturalgasandpowerproduction.Report No.DOE/NETL401/040607. http://www.netl.doe.gov/technologies/coalpower/gasification/pubs/systems_analyses.html. NETL,2007b.Costandperformancebaselineforfossilenergyplantsvolume1:Bituminouscoaland naturalgastoelectricity.ReportNo.DOE/NETL2007/1281.http://www.netl.doe.gov/energy analyses/pubs/Bituminous%20Baseline_Final%20Report.pdf. NETL,2008.GasificationTechnologies,Developmentofahydrogasificationprocessforcoproductionof substitutenaturalgas(SNG)andelectricpowerfromWesternCoalsdescription,9/06. http://www.netl.doe.gov/publications/factsheets/project/Proj410.pdf. PerryM.,Eliason,D.,2004.CO2RecoveryandSequestrationatDakotaGasificationCompany. http://www.gasification.org/Docs/2004_Papers/11ELIA_Paper.pdf. Ruby,J.,Kramer,S.,Hobbs,R.,BryanB.,2008.SubstituteNaturalGasfromCoalCoProductionProject aStatusReport.http://www.nexant.com/docs/Service/energy_technology/SNG.pdf. Steinberg,M.,2005.Conversionofcoaltosubstitutenaturalgas(SNG). http://www.hceco.com/HCEI105001.pdf. Stiegel,G.J.,2007.Gasificationversatilesolutions:DOEsgasificationprogramoverview. http://www.netl.doe.gov/technologies/coalpower/gasification/index.html. UOP,2008.SelexolProcess.http://www.uop.com/objects/97%20Selexol.pdf. WRI,2008,SubstituteNaturalGasfromCoal,WesternResearchInstitute.Laramie,WY,USA. http://www.westernresearch.org/business.aspx?ekfrm=204. Zwart,R.W.R.,Boerrigter,H.,Deurwaarder,E.P.,VanderMeijdenC.M.,VanPaasen.S.V.B.,2006. Productionofsyntheticnaturalgas(SNG)frombiomass. http://www.ecn.nl/docs/library/report/2006/e06018.pdf. Zwart,R.W.R.,2008.EnergyResearchCentersoftheNetherlands.Personalcommunication.

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