Q&A (Updated as of 24 October, 2008)

Please do not hesitate to ask new questions at info@world-ctl2009.com

A1 - What are the reasons of the growing interest on CTL?
A2 - Is CTL commercially operated today?
A3 - What are the world reserves of oil, gas and coal?
A4 - Where are the reserves of oil, gas and coal located?
A5 - Where are CTL projects developing?
A6 - Why are not there more CTL plants in operation?
B1 - What is the competitiveness of CTL?
B2 - What is the investment cost of a CTL plant?
B3 - What CTL technologies are available?
B4 - What is the difference between CTL and coal gasification?
C1 - What is the environmental footprint of CTL?
C2 - What is a Well to Wheels (WTW) analysis?

A1 - What are the reasons of the growing interest on CTL?

Energy has become a sensitive subject, with several interconnected features including:

• the extremely volatile price of crude oil;
• the growing energy needs of developing countries;
• geopolitical uncertainties in several parts of the world, particularly in some oil producing countries;
• the large coal reserves in countries with high energy needs;
• several alerts on the decreasing reserves of oil, while coal reserves are abundant.

This subject will be addressed in the first plenary session (26 March) of the Conference.

A2 - Is CTL commercially operated today?

As of October, 2008, CTL is only operated by Sasol in South Africa, where it covers around 30% of the needs of liquid fuels and petrochemicals.
China Shenhua is presently commissioning a 20,000 barrels per day unit.
More than 30 projects exist in the world, generally at a feasibility study stage.
World CTL 2009 program includes presentations of Sasol and China Shenhua’s executives.

A3 - What are the world reserves of oil, gas and coal?

Reserves can be simply expressed in “number of years” resulting from the division of proved reserves as of December 31, 2007 by the 2007 consumption. Two sets of statistics are available:

For the 2007 BP statistics published in 2008, fossil reserves* represent:

• Oil: 42 years
  
• Gas: 60 years
  
• Coal: 133 years.

The German BGR 2007 Status includes reserves and resources**:

• Oil: 42 years of reserves plus 21 years of resources
• Gas: 61 years of reserves plus 69 years of resources
• Hard coal: 129 years of reserves plus 2,680 years of resources.
• Lignite: 284 years of reserves plus 4,260 years of resources.

*Reserves are the volumes which can be profitably recovered using current technology.
**Resources are geologically indicated quantities or demonstrated ones which at present are not economically recoverable.

A4 - Where are the reserves of oil, gas and coal located?

According to the BP 2007 statistics published in 2008,

• The oil reserves are mostly located in the Middle East and to a lesser degree in Russia, Venezuela, Kazakhstan, Libya and Nigeria, which collectively account for 84% of the world reserves;
• The gas reserves are mostly located in the Middle East and Russia, which collectively account for 66% of the world reserves;
• The coal reserves are mostly located in the USA, Russia, China, India, Australia and South Africa which collectively account for 82% of the world reserves.
  
  

A5 - Where are CTL projects developing

Around eighteen projects are located in the USA, a few of them are at the design stage.
Around eighteen are in China, with one plant being commissioned.
Other projects exist in a number of other countries including South Africa, Australia, India, the Philippines and Indonesia.

A6 - Why are not there more CTL plants in operation?

The lead time (time between decision and the plant start-up) of CTL projects is more than five years. Given that capital expenditure accounts for several billion dollars or euros, investment decisions can only be taken after serious consideration.

Environmental issues, greenhouse gas emissions in particular, are considered important by the community, with various consequences on the feasibility and the economics of CTL plants

Other parameters in CTL investment decisions include:

• the volatility of crude oil price;
• the level and volatility of coal market price;
• the evolution of fiscal policies;
• the environmental regulations and their evolution (mainly on CO2 emissions management).
  
  

B1 - What is the competitiveness of CTL?

Economics depend on the production costs and revenues from CTL outputs. Costs vary with several parameters such as construction costs and the price of coal, as well as local specificities.

Revenues depend mainly on the price of crude oil, from which are produced comparable products.
The cost of Carbon Capture and Storage will also impact the economics of CTL.

The notion of “crude barrel equivalent price” is commonly used to measure the competitiveness of CTL with crude oil for producing given outputs. Litterature mentions “crude barrel equivalent prices” varying from $35/bbl to $90/bbl.

CTL competitiveness will be addressed in the workshops (25 March) as well as in the plenary sessions of 26 and 27 March.

B2 - What is the investment cost of a CTL plant?

Capital expenditure amounts to several billion dollars for a 20 000 barril per day plant. The greater the capacity, the lower the cost per unit produced.
The US Department of Energy quoted estimates of invetsment costs from $70,000 to $90,000 per bpd if the capacity is in the range of 50,000 bpd (March, 2007).

B3 - What CTL technologies are available?

Two main technologies are proposed commercially:

• The “Indirect Coal Liquefaction” route: coal is first gasified to a synthetic gas (mainly carbon monoxide and hydrogen); this gas, after purification, can be converted to liquid products under several processes, including the “Fisher-Tropsch” and the “Methanol-To-Gasoline” processes;
• The “Direct Coal Liquefaction” route: pulverized coal is dissolved in a slurry coming out of a recycled process, and, together with the addition of hydrogen, produces liquid products.

More about technologies during the Technology Workshop (25 March) and the Technology Plenary Session (26 March).

B4 - What is the difference between coal gasification and CTL?

• “Coal gasification” means the conversion of coal to a synthetic gas, predominantly carbon monoxide and hydrogen. This “syngas” can have several uses, notably power production with a better global yield than combustion, or the first stage of the indirect CTL (see question B3);
• “CTL”, the conversion of coal to liquid hydrocarbons, can be made through different processes, notably the “indirect route”, the first step of which is Coal gasification.

Coal gasification can be used for CTL and other applications; CTL can use gasification and other processes.

Today, most CTL projects are based on the indirect route, therefore Coal gasification.

C1 - What is the environmental footprint of CTL?

CTL is a process industry with similarities to refining. As such, water consumption, effluent emissions and waste management need to be carefully handled.

Focus is mostly on CO2 emissions, CO2 being one of the most important greenhouse gases (GHG). Multiple studies are being conducted on emission reduction and Carbon Capture and Storage (CCS), which should play a key role in CTL.

On another hand, liquid fuels produced by CTL contain less impurities than conventional fuels, which reduces pollutant emissions where the fuels are consumed.

These analyses will be detailed during the Environment Plenary Session (27 March).

C2 - What is a Well to Wheels (WTW) analysis?

For a given energy source, the Well to Wheels analysis corresponds to the calculation of the total environmental footprint, from primary energy extraction up to the final use by the consumer (“from the well to the wheels of a vehicle”). WTW analyses can compare any energy footprint to others, including biofuels, in a meaningful way.

WTW will be used during the Technology and Environment Plenary Sessions (26 and 27 March).