Mingo County Coal Conversion Project Randall Harris Project Status Briefing for VIRGINIA COAL TO LIQUIDS INTEREST GROUP Mingo County Redevelopment Authority www.mcrda.org
building a brighter future
Where is the site?
Primary Project Site
Mingo County Redevelopment Authority www.mcrda.org
MCRA Asked Some Questions
Background – Slide 3
Is it economically feasible to convert coal into one or more high grade liquid products? – Yes • • • • •
Technology available Market prices favorable Availability of feed stock (coal & water) Access to market Capital available
If so, is it possible to find a site in Central Appalachia that would support such a plant? – Yes • Coal with 20-25% ash • Large mine pools • Local need for liquid products Mingo County Redevelopment Authority www.mcrda.org
CAP Diesel Vulnerability
Products – Slide 4
We almost shut down CAP coal production
Mingo County Redevelopment Authority www.mcrda.org
Allegro Group http://www.pipeline101.com/reports/Notes.pdf
Mingo Coal Conversion Products
Products – Slide 5
840,000 gpd
ULSD 680,000 gpd Naphtha 120,000 gpd LPG
10,000 tpd 35MW
34,000 gpd 80 tpd Sulfur
Mingo County Redevelopment Authority www.mcrda.org
Randall Harris Ltd/WVU
Why Aren't There More CTL Plants?
Business – Slide 6
Uncertainty in future oil prices… The breakeven price for a barrel of CTL fuel depends upon whom you ask. Some analysts put it at $20-22/barrel. John Sichinga, manager of CTL development at Sasol Synfuels International, is more conservative and puts the breakeven figure at $40/barrel in a low capital cost environment with good quality coal, or $50/barrel where there are high capital costs and poor quality coal. MCRA/Rentech model estimate $45 in 2011 w/15% IRR Mingo County Redevelopment Authority www.mcrda.org
Platt's Economist Dec 2006 Randall Harris/WVU
Inflation Adjusted Crude Oil Prices
Business – Slide 7
Dec 2006 Annual Moving Average$65.88
Adjust to June 2006 Dollars
Nominal Dollars
Mingo County Redevelopment Authority www.mcrda.org
Source: www.ioga.com and www.bls.gov
NYMEX Dec 2011 Price Trends
Business – Slide 8
Mingo County Redevelopment Authority www.mcrda.org
NYMEX
Recent NYMEX Dec 2011 Prices
Mingo County Redevelopment Authority www.mcrda.org
Business – Slide 9
US Production
Business – Slide 10
Permian Basin Production
Production rates have fallen as fields are lifted Mingo County Redevelopment Authority www.mcrda.org
Richard Nehring, Oil & Gas Journal, April 17, 2006
Hubbert’s Oil Peak
Business – Slide 11
Mingo County Redevelopment Authority www.mcrda.org
Source M Hubbert, from Energy and Power, A Scientific American Book, 1971, pg 39
Business – Slide 12
Base Case Income Model ~50% ULSD ~340,000 gpd long-term mine delivery contracts linked to coal price
~340,000 gpd
120,000 gpd 100 % Naphtha 34,000 gpd 100 % LPG
10,000 tpd* *320 days/yr
Open Market
840,000 gpd
~50 % ULSD
35MW
80 tpd Sulfur
Mingo County Redevelopment Authority www.mcrda.org
Harris/Ltd/WVU
Active Mines in Central Appalachia
Business – Slide 13
Approximately 5 million barrels of diesel is consumed each year by mines within 150 miles of the Mingo County
Mingo County Redevelopment Authority www.mcrda.org
Randall Harris Ltd/WVU
WV Diesel Consumption
Business – Slide 14
WV used 2.4 million gal of diesel per day in 2006 875 million gal/yr
Coal mining largest consumer – 664 million gallons per year 2.8 gal per ton shipped 150 million tons = 420 million gal/yr Coal trucks 4.6 mpg = 244 million gal/yr
School buses use more than 75,000 gal per day 180 school days 13.5 million gal/yr
Over 10,000 tractor trailers + 30,000 other diesel trucks Plus rail and barges Mingo County Redevelopment Authority www.mcrda.org
Randall Harris
CTL Started with a Paperclip The United States Bureau of Mines employed seven German synthetic fuel scientists in a pilot FischerTropsch chemical plant in Missouri Louisiana in 1946
Technology – Slide 15
Operation Paperclip Team
Group moved to BOM station on WVU in Morgantown in late 50’s
Mingo County Redevelopment Authority www.mcrda.org
Technology – Slide 16
Plant Emissions
Coal, water and air go in Two aqueous streams, one gaseous stream, one solid stream come out Condensed Condensed Raw SynGas Solids from water from water from FT gasifier gasifier reactor Separate water from oils for upgrading or gasifier
Recovery of oxygenated compounds for sale
Steam strip w/volatiles to gasifier
Organic acids with storm water to anaerobic digester w/sludge to gasifier
Phenol recovery to blending
Scrubbed to remove CO2 and H2S H2S oxides to recover sulfur for sale Particulates returned to gasifier
Sulfur recovery for sale
Distillation with solids to gasifier
Mercury captured in activated carbon
Ammonia recovery for sale
Clean water to boil feed
Tail gas cut to turbine w/ emission = gas turbine
Distillation with solids to gasifier Clean water to boil feed
Slag sold as construction material or land applied a sand
SynGas from FT recycled to extinction
Mingo County Redevelopment Authority www.mcrda.org
Randall Harris Ltd/WVU
Technology – Slide 17
FTS Processes REACTOR TYPE
CATALYST
STATUS
ISSUES Only large GTL plants Limited licensing
EXXON
Slurry
SHELL
Slurry Fixed
Cobalt
Commercial
Only large GTL plants No licensing Potential patent issues
SASOL
Fixed Fluidized Slurry
Iron Iron Cobalt
Commercial Commercial Commercial
Potential patent issues Limited licensing
CONOCO
Slurry
Cobalt
Demo
Only large GTL plants Potential patent issues
SYNTROLEUM
Fixed bed Moving bed
Cobalt
Pilot
Air blown GTL Exxon Licence
Iron
Small Commercial
Small plants
RENTECH
Slurry
Cobalt
Demo
Mingo County Redevelopment Authority www.mcrda.org
Randall Harris Ltd/WVU
Mingo County WV
Technology – Slide 18
Mingo County JDA • 2006 – JDA
Mingo County Redevelopment Authority www.mcrda.org
Rentech
Critical Path Issues Common to all projects CO2 – Legal issues – Localized Geology
Price Stability FEED Funding DOE Loan Program
CAP Regional Partnership Mingo County Redevelopment Authority www.mcrda.org
