pally because 50 to 70 percent of the feed coal remains as a low-volatile-content char that must be used as a fuel or feedstock. Pyrolysis as a source of liquid fuels has been commercially practiced only under wartime conditions in Germany between 1935 and 1945 based on the Lurgi sweep gas carbonization process. Current efforts have focused on using the char as a boiler fuel or in the production of form coke. The characteristics of the char and the resulting price paid for it have prevented this approach from being economical. DOE has no further plans to use the Illinois Mild Gasification Facility following completion of ongoing development activities. No additional funding for the facility has been requested for FY 1995.

A stand-alone facility for producing finished liquid fuels from coal must necessarily be large to achieve economies of scale and will thus be very expensive. As discussed in Chapter 6, recent systems studies have projected equivalent crude prices of $30 to $35/bbl for stand-alone production of high-quality gasoline and distillate fuels. This cost, combined with the uncertainty in crude oil prices over the operating life of the liquefaction plant, are strong disincentives for demonstration and commercialization projects. However, coproduct systems combining F-T (Fischer-Tropsch) synthesis of coal liquids and electric power generation have the potential to reduce the equivalent crude cost of coal liquids by approximately $5 to $7/bbl (see Chapter 6, Gray, 1994; Tam et al., 1993).1

The above results, together with oil price projections for 2010 (EIA, 1994), indicate that demonstration and early deployment of liquefaction technology in coproduct systems may become economically attractive within the mid-term (2006-2020), that is, in approximately the same timeframe as installation of advanced IGCC power generation facilities. Nevertheless, the price projections from the studies assume "nth plant" costs. As for advanced power generation technologies, first-of-a-kind or pioneer plant demonstrations are likely to be significantly more expensive than fully commercial systems. Thus, the committee anticipates that some federal cost sharing of early demonstration plants, similar to that in the CCT program, will be necessary to stimulate industry participation, and ultimate adoption, of coproduct systems to produce coal liquids and electric power.

FINDINGS

  1. Demonstration of advanced coal-based technologies at a commercial scale, as in the FE R&D and CCT programs, is an important step in the development of commercially available technologies. The demonstrations being supported by the FE R&D and CCT programs appear, for the most part, to be well directed toward advancing power generation technologies that have the potential

1  

In the studies cited the economic return on electric power production was assumed to be constant, with the savings applied to the liquid products.



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