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CHINA'S COAL TO LIQUID PROJECTS BUFFERED - 05 APRIL 2009
HOHHOT, April 5 (Xinhua) -- Chinese coal enterprises have made strides in coal to liquids (CTL) projects, using both direct and indirect methods, despite difficulties in the market and policy environments.
The pressures they face include sharply lower oil prices and a surge in coal prices, which together can change the economics of many projects, and policy changes at the national level.
The latest success story took place in North China's Inner Mongolia. On March 23, Yitai Group announced a successful test run with its 160,000-tonne indirect CTL facility, producing quality diesel oil and naphtha.
Based in Jungar Banner, Inner Mongolia, Yitai Group has an annual output of 100 million tonnes of coal. Its CTL project was approved by the central government in 2005 and began construction in 2006, with an investment of nearly 2.7 billion yuan (395 million U.S. dollars).
"The Yitai facility is China's first industrial-scale CTL line and it means China has made substantial progress in independent industrialization of coal to oil using the indirect method," said Li Yongwang, chief scientist of the coal-to-oil task force of the Shanxi Coal Chemical Research Institute (SCCRI), under the Chinese Academy of Sciences (CAS).
Direct coal-to-oil production involves mixing heavy oil with coal to produce coal slurry and converting that mix into diesel oil and other products via hydrocracking. China's Shenhua Group was the first in the world to achieve industrial-scale direct production.
The indirect technique requires gasifying and purifying the coal, then adding activators to synthesize diesel oil and naphtha. Yitai uses this type of technology, as does Lu'an Mining Group.
Before Yitai's project took off, Shenhua -- China's top coal producer -- conducted trial operations of a 1 million-tonne direct CTL production line on Dec. 31, producing quality diesel, naphtha and oil. This trial run made China the only country in the world to have achieved key technologies for 1 million-tonne-scale direct CTL production.
The trial ended after 300 hours, but Shenhua is making improvements so it can conduct a 1,000-hour trial next month.
As a key component of the national energy strategy, the Shenhua direct CTL project, also based in coal-rich Inner Mongolia, officially kicked off in May 2005.
Also, on Dec. 22, north China's Shanxi Lu'an Mining Group successfully experimented with a small-scale indirect CTL facility, developed by SCCRI. It will conduct a trial of its 160,000-tonne indirect CTL facility in the near future.
NEW LIQUID ENERGY SOURCES
Coal accounts for more than 70 percent of the energy mix in China, which has abundant coal reserves but poor oil and natural gas resources.
Over the past five decades, China has tapped several large oilfields, such as Daqing and Shengli. But discoveries and production can't keep up with demand. With rapid economic growth, China became a net oil importer in 1992 and has increased oil imports every year since.
According to Liu Keyu, vice president of the China Petroleum Economy and Technology Research Institute, China's oil consumption reached 389.3 million tonnes in 2008, up 5.1 percent from the previous year. But during 2008, net oil imports approached 200 million tonnes, up 9.2 percent.
Thus, a little more than one half of oil consumed had to be imported.
Liu warned that China, which was expected to continue raising its oil imports, would meet increasingly tough energy-security challenges.
High and volatile prices are among those challenges. During the four years before the financial crisis erupted with full force in late 2008, world crude prices soared. Prices reached a record high of 147.27 U.S. dollars per barrel on July 11, 2008. These high prices meant that many areas of the country lacked enough oil.
Price changes affect the economic viability of CTL projects, but the issue of energy security persists.
In 2003, when world oil prices were high and supply was tight, Chinese companies crowded into CTL projects. The central government called for a series of pilot CTL projects during the 11th Five-Year Plan period (2006-2010) to lay the foundation for industrial-scale production.
"It is very important to promote industrial-scale coal liquefaction," said Zhao Shuanglian, vice-chairman of the Inner Mongolia Autonomous Region. With CTL projects, "we can turn coal mines into oil fields to ensure energy security for China."
Take the Shenhua direct CTL facility. The project, which will have an annual capacity of 5 million tonnes, will be implemented in two stages.
In the first stage, there will be three production lines with combined annual capacity of 3.2 million tonnes. The first pilot production line, which proved successful in the December trial, will be able to convert 3.5 million tonnes of coal annually to 1.08 million tonnes of diesel oil and naphtha, equivalent to a 100million-tonne oilfield in annual output.
According to Zhang Xiwu, board chairman of Shenhua Group, if everything goes smoothly with the first 1 million-tonne pilot production line, the business will build two more lines of about the same size, for a planned total of 3.2 million tonnes.
SPEED UP INDUSTRIAL-SCALE OUTPUT
Li Yongwang said technology and demand in China had matured enough to support CTL projects. The country had also independently developed direct and indirect CTL technologies.
Li Shuangwang, board chairman of Yitai Group, said the business would continue to run trials and make improvements, given the success of its trial run.
"We'll work to get the production operating stably in September. After that, we will officially turn it into a fully-loaded operation. We will upgrade the equipment and apply new-generation liquefaction technology to lift output to 600,000 tonnes a year.
"If it goes smoothly, we will expand the coal-to-oil base to an annual output of 5 million tonnes in three stages," said Li.
He said the Yitai Group also planned to extend the industrial chain by cracking naphtha from the CTL facility into ethylene, which was a higher value-added product.
The other CTL projects are also moving ahead. Lu'an plans to expand its 160,000-tonne indirect CTL facility into a 3 million-tonne project, if it conducts a successful trial in the near future. Ultimately, it intends to develop a coal-to-oil base with a gross annual output of 15 million tonnes by 2020.
Yanzhou Mining Group and Xuzhou Mining Group, in eastern China, also plan CTL projects.
Yanzhou began work on a 1 million-tonne indirect CTL plant in February 2006 in Yulin City, Shaanxi Province. It has conducted environmental reviews and is awaiting approval from the National Development and Reform, China's top planning agency. The Yanzhou project would have two stages, each with annual output of 5 million tonnes, the group said.
Also, about 10 provinces or autonomous regions, including Xinjiang, Shandong, Shaanxi, Guizhou and Ningxia, are planning CTL projects.
Taking all these plans into account, industry analysts estimate China will have an annual CTL capacity of 30 million tonnes to 50 million tonnes in 2020.
WORLD CONDITIONS CHANGE
However, oil prices are far off their mid-2008 highs, hovering at about 50 U.S. dollars per barrel now, and lower prices can change the economics of these capital-intensive projects.
To reduce the risk of having excessive, uneconomic capacity, the NDRC announced policies as early as 2006, banning projects with annual output below 3 million tonnes. In September 2008, the NDRC followed up with a circular, ordering a halt to almost all projects except for the Shenhua Group's direct CTL project and an indirect CTL plant proposed in northwest China's Ningxia.
The directive, combined with the impact of the global financial crisis, cooled enthusiasm for many CTL projects in China. However, Yitai Group and Lu'an managed to keep their projects on the list.
NEW ECONOMIC REALITIES
According to Li Yongwang, it takes 3.5 tonnes of coal to produce 1 tonne of oil under the direct process and 4.02 tonnes under the indirect process, at least in the pilot projects.
However, it's not just oil prices that have changed. Domestic coal prices have doubled since some of the pilot programs got under way, meaning that CTL project costs have also surged. Li said the higher coal price would make it tough for many CTL projects to be profitable.
Based on current coal prices, the costs of an indirect CTL plant would be about 50 U.S. dollars per barrel. Larger production scales and better technology could, in time, help reduce the volume of coal needed. In that case, the cost might fall closer to 40 U.S. dollars per barrel, said Li.
DOWNTURN WON'T LAST
Zhao said he still believed in the future of the CTL industry.
"It is widely acknowledged that oil prices will rise again in the long term, because oil is a strategic resource," said Zhao.
He added: "Chinese companies building coal-to-oil projects are strong, with large coal reserves, and they can be competitive. If they can increase their economies of scale and extend their production chains to produce higher value-added products such as ethylene, the coal-to-oil projects have a good chance to be profitable."
The pressures they face include sharply lower oil prices and a surge in coal prices, which together can change the economics of many projects, and policy changes at the national level.
The latest success story took place in North China's Inner Mongolia. On March 23, Yitai Group announced a successful test run with its 160,000-tonne indirect CTL facility, producing quality diesel oil and naphtha.
Based in Jungar Banner, Inner Mongolia, Yitai Group has an annual output of 100 million tonnes of coal. Its CTL project was approved by the central government in 2005 and began construction in 2006, with an investment of nearly 2.7 billion yuan (395 million U.S. dollars).
"The Yitai facility is China's first industrial-scale CTL line and it means China has made substantial progress in independent industrialization of coal to oil using the indirect method," said Li Yongwang, chief scientist of the coal-to-oil task force of the Shanxi Coal Chemical Research Institute (SCCRI), under the Chinese Academy of Sciences (CAS).
Direct coal-to-oil production involves mixing heavy oil with coal to produce coal slurry and converting that mix into diesel oil and other products via hydrocracking. China's Shenhua Group was the first in the world to achieve industrial-scale direct production.
The indirect technique requires gasifying and purifying the coal, then adding activators to synthesize diesel oil and naphtha. Yitai uses this type of technology, as does Lu'an Mining Group.
Before Yitai's project took off, Shenhua -- China's top coal producer -- conducted trial operations of a 1 million-tonne direct CTL production line on Dec. 31, producing quality diesel, naphtha and oil. This trial run made China the only country in the world to have achieved key technologies for 1 million-tonne-scale direct CTL production.
The trial ended after 300 hours, but Shenhua is making improvements so it can conduct a 1,000-hour trial next month.
As a key component of the national energy strategy, the Shenhua direct CTL project, also based in coal-rich Inner Mongolia, officially kicked off in May 2005.
Also, on Dec. 22, north China's Shanxi Lu'an Mining Group successfully experimented with a small-scale indirect CTL facility, developed by SCCRI. It will conduct a trial of its 160,000-tonne indirect CTL facility in the near future.
NEW LIQUID ENERGY SOURCES
Coal accounts for more than 70 percent of the energy mix in China, which has abundant coal reserves but poor oil and natural gas resources.
Over the past five decades, China has tapped several large oilfields, such as Daqing and Shengli. But discoveries and production can't keep up with demand. With rapid economic growth, China became a net oil importer in 1992 and has increased oil imports every year since.
According to Liu Keyu, vice president of the China Petroleum Economy and Technology Research Institute, China's oil consumption reached 389.3 million tonnes in 2008, up 5.1 percent from the previous year. But during 2008, net oil imports approached 200 million tonnes, up 9.2 percent.
Thus, a little more than one half of oil consumed had to be imported.
Liu warned that China, which was expected to continue raising its oil imports, would meet increasingly tough energy-security challenges.
High and volatile prices are among those challenges. During the four years before the financial crisis erupted with full force in late 2008, world crude prices soared. Prices reached a record high of 147.27 U.S. dollars per barrel on July 11, 2008. These high prices meant that many areas of the country lacked enough oil.
Price changes affect the economic viability of CTL projects, but the issue of energy security persists.
In 2003, when world oil prices were high and supply was tight, Chinese companies crowded into CTL projects. The central government called for a series of pilot CTL projects during the 11th Five-Year Plan period (2006-2010) to lay the foundation for industrial-scale production.
"It is very important to promote industrial-scale coal liquefaction," said Zhao Shuanglian, vice-chairman of the Inner Mongolia Autonomous Region. With CTL projects, "we can turn coal mines into oil fields to ensure energy security for China."
Take the Shenhua direct CTL facility. The project, which will have an annual capacity of 5 million tonnes, will be implemented in two stages.
In the first stage, there will be three production lines with combined annual capacity of 3.2 million tonnes. The first pilot production line, which proved successful in the December trial, will be able to convert 3.5 million tonnes of coal annually to 1.08 million tonnes of diesel oil and naphtha, equivalent to a 100million-tonne oilfield in annual output.
According to Zhang Xiwu, board chairman of Shenhua Group, if everything goes smoothly with the first 1 million-tonne pilot production line, the business will build two more lines of about the same size, for a planned total of 3.2 million tonnes.
SPEED UP INDUSTRIAL-SCALE OUTPUT
Li Yongwang said technology and demand in China had matured enough to support CTL projects. The country had also independently developed direct and indirect CTL technologies.
Li Shuangwang, board chairman of Yitai Group, said the business would continue to run trials and make improvements, given the success of its trial run.
"We'll work to get the production operating stably in September. After that, we will officially turn it into a fully-loaded operation. We will upgrade the equipment and apply new-generation liquefaction technology to lift output to 600,000 tonnes a year.
"If it goes smoothly, we will expand the coal-to-oil base to an annual output of 5 million tonnes in three stages," said Li.
He said the Yitai Group also planned to extend the industrial chain by cracking naphtha from the CTL facility into ethylene, which was a higher value-added product.
The other CTL projects are also moving ahead. Lu'an plans to expand its 160,000-tonne indirect CTL facility into a 3 million-tonne project, if it conducts a successful trial in the near future. Ultimately, it intends to develop a coal-to-oil base with a gross annual output of 15 million tonnes by 2020.
Yanzhou Mining Group and Xuzhou Mining Group, in eastern China, also plan CTL projects.
Yanzhou began work on a 1 million-tonne indirect CTL plant in February 2006 in Yulin City, Shaanxi Province. It has conducted environmental reviews and is awaiting approval from the National Development and Reform, China's top planning agency. The Yanzhou project would have two stages, each with annual output of 5 million tonnes, the group said.
Also, about 10 provinces or autonomous regions, including Xinjiang, Shandong, Shaanxi, Guizhou and Ningxia, are planning CTL projects.
Taking all these plans into account, industry analysts estimate China will have an annual CTL capacity of 30 million tonnes to 50 million tonnes in 2020.
WORLD CONDITIONS CHANGE
However, oil prices are far off their mid-2008 highs, hovering at about 50 U.S. dollars per barrel now, and lower prices can change the economics of these capital-intensive projects.
To reduce the risk of having excessive, uneconomic capacity, the NDRC announced policies as early as 2006, banning projects with annual output below 3 million tonnes. In September 2008, the NDRC followed up with a circular, ordering a halt to almost all projects except for the Shenhua Group's direct CTL project and an indirect CTL plant proposed in northwest China's Ningxia.
The directive, combined with the impact of the global financial crisis, cooled enthusiasm for many CTL projects in China. However, Yitai Group and Lu'an managed to keep their projects on the list.
NEW ECONOMIC REALITIES
According to Li Yongwang, it takes 3.5 tonnes of coal to produce 1 tonne of oil under the direct process and 4.02 tonnes under the indirect process, at least in the pilot projects.
However, it's not just oil prices that have changed. Domestic coal prices have doubled since some of the pilot programs got under way, meaning that CTL project costs have also surged. Li said the higher coal price would make it tough for many CTL projects to be profitable.
Based on current coal prices, the costs of an indirect CTL plant would be about 50 U.S. dollars per barrel. Larger production scales and better technology could, in time, help reduce the volume of coal needed. In that case, the cost might fall closer to 40 U.S. dollars per barrel, said Li.
DOWNTURN WON'T LAST
Zhao said he still believed in the future of the CTL industry.
"It is widely acknowledged that oil prices will rise again in the long term, because oil is a strategic resource," said Zhao.
He added: "Chinese companies building coal-to-oil projects are strong, with large coal reserves, and they can be competitive. If they can increase their economies of scale and extend their production chains to produce higher value-added products such as ethylene, the coal-to-oil projects have a good chance to be profitable."
PARLIAMENTARY ANSWER RE OIL SAND POLLUTION - 1 APRIL 2009
Gillian Merron (Parliamentary Under-Secretary, Foreign & Commonwealth Office; Lincoln, Labour)
holding answer 31 March 2009
We have received reports that First Nation groups are concerned that contamination and water drainage associated with extracting oil from the oil sands could damage the Athabasca/Peace River area. First Nations also dispute, in some cases, the leasing of the land where oil sands are located, arguing the provincial government should consult with them before it grants leases to companies.
We have received reports that the current production processes used in the oil sands contribute up to three times the greenhouse gas (GHG) emissions (primarily carbon dioxide) compared with conventional oil production (based on figures contained in the Pembina Institute's Report Oil Sands Fever November 2005).
The Alberta oil sands currently account for approximately 5 per cent. of Canada's GHG emissions, though this level is estimated to rise to 16 per cent. by 2020 (based on figures contained in the Canadian Government's Turning the Corner Update March 2008).
In December 2008 Canada and the UK signed a Joint Statement on Carbon Capture and Storage, agreeing to work closely to develop and promote carbon capture technologies as a means to reducing GHG emissions.
holding answer 31 March 2009
We have received reports that First Nation groups are concerned that contamination and water drainage associated with extracting oil from the oil sands could damage the Athabasca/Peace River area. First Nations also dispute, in some cases, the leasing of the land where oil sands are located, arguing the provincial government should consult with them before it grants leases to companies.
We have received reports that the current production processes used in the oil sands contribute up to three times the greenhouse gas (GHG) emissions (primarily carbon dioxide) compared with conventional oil production (based on figures contained in the Pembina Institute's Report Oil Sands Fever November 2005).
The Alberta oil sands currently account for approximately 5 per cent. of Canada's GHG emissions, though this level is estimated to rise to 16 per cent. by 2020 (based on figures contained in the Canadian Government's Turning the Corner Update March 2008).
In December 2008 Canada and the UK signed a Joint Statement on Carbon Capture and Storage, agreeing to work closely to develop and promote carbon capture technologies as a means to reducing GHG emissions.
UK COAL CONSUMPTION 1990 TO 2007 - 31 MARCH 2009
Mike O'Brien (Minister of State, Department for Energy and Climate Change; North Warwickshire, Labour) The tonnage of coal consumed in the UK between 1990 and 2007 is given in the table. Figures for 2008 will be published on 30 July 2009.
1990 108,256
1991 107,513
1992 100,580
1993 86,757
1994 81,767
1995 76,942
1996 71,400
1997 63,080
1998 63,152
1999 55,724
2000 59,931
2001 63,850
2002 58,554
2003 63,023
2004 60,450
2005 61,832
2006 67,388
2007 62,886
Source:Digest of UK Energy Statistics 2008 (Internet version). Chapter 2: Solid fuel and derived gases, Long Term Trends.
JOB VACANCY > PEOPLE'S CHARTER FOR CHANGE - 29 MARCH
People’s Charter for Change
Campaign Manager
Job Title: Campaign Manager for the People’s Charter for Change
Responsible to: To John Hendy QC and Imran Khan on behalf of the five ‘officers’ of the People’s Charter Commission
(Officially responsible to JH QC and IK)
Purpose of Job: To organise the People’s Charter Movement nationally through helping to set up rallies and other regional and local initiatives by organising publicity, leaflets, media involvement; to organise and maintain the central register of supporters of the Charter; to organise, minute and prepare meetings of the Commission and other national meetings of the People’s Charter movement as required by the Commission or its officers; to organise for any national initiatives of the People’s Charter movement as required above; to maintain a day-to-day monitoring of the finances of the People’s Charter movement, report on them and organise financial initiatives as required by the above.
Salary: equivalent of £25,000 p.a.
Job share: Would suit two people job sharing.
Appointment: funding is already secured for first 3 months and is anticipated to be secured shortly for first 6 months. By that time it is hoped that indefinite funding will have been raised, part of the responsibility for which will rest with the Campaign Manager.
Office: will be at the Charter office 28A Museum Street, London WC 1A 1LH
Person Specification: A politically committed, enthusiastic, energetic and creative person, who understands that they are part of a wider team and who works in an open, accountable and inclusive way.
Good administrator essential
Good communication skills essential
Self motivating and self starting essential
Can manage word processing, databases, Email, Publisher (or other programme for preparing leaflets, circulars etc) essential
Prepared to help organise on the ground essential
Can manage an office essential
Can work to deadlines essential
Can maintain financial records essential
Can manage fund raising and budgets essential
Politically committed to the charter essential
Working knowledge of the TUs desirable
Working knowledge of MPs desirable
Working knowledge of ethnic and community group organisation
desirable
Can work flexible hours/weekends desirable
Good meeting skills desirable
Applications: by Monday 20th April 2009 to info@thepeoplescharter.com.
The Peoples’ Charter for Change,
London Civil rights and Arts Centre
28A Museum Street,
London
WC1A 1LH
IK/JH 25030
PARLIAMENTARY QUESTION > NATURAL GAS - 27 MARCH 2009
Greg Clark: To ask the Secretary of State for Energy and ClimateChange what proportion of natural gas used in the UK in 2008 came from(a) UK Continental Shelf production, (b) imports from Norway, (c)imports from the Russian Federation and (d) other sources.Mr. Mike O'Brien: Provisional data for 2008 show that the UK’s grossdemand (including exports) for natural gas was sourced as follows: (a)Net production of natural gas from the UK Continental Shelf, 65 percent., (b) from Norway, 25 per cent., (c) from the Russian Federation,negligible, and (d) from other sources, 10 per cent. (8 per cent. fromthe Netherlands).Monthly imports and exports of natural gas by country are published inEnergy Trends Table 4.3 on the DECC/BERR website at this addresshttp://www.berr.gov.uk/whatwedo/energy/statistics/source/gas/page18525.html.
Industrial Action
The National Union of Mineworkers expresses its support for fellow trade unionists in the Public Sector who today are having to resort to withdrawing their labour (a fundamental right of any worker) and take strike action against these unfair cuts to their pensions and terms and conditions.
T
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Funeral of Gerry Gibson
It is with deep regret that the NUM (Yorkshire Area) announce the Funeral Service details for Gerry Gibson who tragically lost his life at Kellingley Colliery on Tuesday 27th September 2011.The Service in dedication to Gerry a much respected member,work mate & fellow miner will be held in
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Statement from Gerry's Family
We are all truly devastated by Gerry's sudden and tragic death.
We would like to pay tribute to everyone involved in attempts to rescue Gerry - all work colleagues; Kellingley rescue team; the air ambulance team and all other medics who were on site. Their tireless efforts were not i
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Fatality at Kellingley Colliery
it is with deep regret that the national union of mineworkers has to confirm that as a result of a tragic accident at kellingley colliery one of our members has lost his life.
the whole workforce at the colliery are devastated at the loss of a friend and colleague as a result of a roof fall on 502s
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