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Tenth Annual WV-IOF Symposium. Gasification – Or is Our Industrial Sector’s Economic Future Fully Dependent on Natural Gas Availability and Price? Michael L. Eastman, NETL Strategic Center for Coal November 8, 2006. National Energy Technology Laboratory. NETL Mission.

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tenth annual wv iof symposium

Tenth Annual WV-IOF Symposium

Gasification – Or is Our Industrial Sector’s Economic Future Fully Dependent on Natural Gas Availability and Price?

Michael L. Eastman, NETL

Strategic Center for Coal

November 8, 2006

National Energy Technology Laboratory

netl mission
NETL Mission
  • Implement a research, development, and demonstration program to resolve environmental, supply, and reliability constraints of producing and using fossil resources
netl s investment in west virginia
NETL’s Investment in West Virginia

Impacting Economy Through On-Site Operations

  • Contribute $51M annually through Federal and contractor payroll, small purchases, and conferences
  • Draw over 2,000 visitors to Morgantown area per year

Impacting Economy Through R&D

  • $370M total value of agreements and contracts
  • Obligated $82M in FY05 generating 3,280 job-years in WV
    • Small businesses - total value of $70M with $21M obligated annually
    • Colleges/universities - total value of $170M with $12M obligated annually

FY 2005

forecasting dependence on energy imports reference case

Decreasing Dependence On Energy Imports

Forecasting Dependence on Energy Imports (Reference Case)

“I urge Congress to pass legislation that makes America more secure and less dependent on foreign energy.”

President G. W. Bush

State of the Union Address, February 2, 2005

AEO’05

AEO’04

19.5%loweredimports

AEO’03

Total Import Percent of Total Consumption

AEO’02

AEO’06

Annual Energy Outlook

Publication Year

2025

10.6 Quads (19.5%) Lower Imports in AEO’06 Forecast (2025)

More Reliance on Domestic Resources; 4.6% Lower Consumption (2025)

Reference: EIA Annual Energy Outlook 2002, 2003, 2004, 2005, 2006

increasing trend in natural gas price forecasts

Dallas Federal Reserve formula applied to oil forecast(reference case low sulfur light crude oil)

$1.33 yearly average price underestimation to 2030 (26%) using AEO’06 reference oil price

Actual

Annual Energy Outlook

Publication Year

Increasing Trend in Natural Gas Price Forecasts

$/Mcf (Wellhead)

’06

’05

’05

’04

’04

’03

’03

’02

’02

’01

’01

’00

’00

’99

’99

Natural Gas Price May Remain Substantially Underestimated in AEO’06

EIA, Annual Energy Outlook 1999, 2000, 2001, 2002, 2003, 2004, 2005 and 2006

(as reported, varied yearly dollars)

u s economy a frog in pot or opportunity for coal other domestic energy resources
U.S. EconomyA Frog in Pot or Opportunity for Coal & Other Domestic Energy Resources?
  • Growing dependence on imported energy resources
  • LNG is Not natural gas
  • U.S. competitiveness driven by:
    • Innovation
    • Productivity
    • Affordable/Competitive energy-is our edge disappearing?

U.S. economy’s reliance on natural gas makes us vulnerable to increasing prices beyond our control and issues of supply

key components of u s economy
Key Components of U.S. Economy

Manufacturing remains leading component of U.S. GDP

References: Bureau of Economic Analysis real State GDP (year 2000 $’s), 10/26/06includes Private Industry GDP, excludes Government based GDP

key components of wv economy
Key Components of WV Economy

Manufacturing remains leading component of WV GDP

References: Bureau of Economic Analysis real State GDP (year 2000 $’s), 10/26/06includes Private Industry GDP, excludes Government based GDP

key components of wv manufacturing
Key Components of WV Manufacturing

Chemical Manufacturing Primary Contributor to WV Manufacturing GDP Decline

References: Bureau of Economic Analysis real State GDP (year 2000 $’s), 10/26/06includes Private Industry GDP, excludes Government based GDP

key components of chemical manufacturing energy consumption
Key Components of Chemical Manufacturing Energy Consumption

Chemical Manufacturing Industry Consumption of Energy 2002(Trillion Btus)

Natural Gas and Natural Gas Liquids 82% of Total

References: EIA - 2002 Energy Consumption by Manufacturers

potential and issues significant substitution for natural gas
Potential and Issues Significant Substitution for Natural Gas
  • Challenge — Make a material difference
  • Target — replace of 35% of NG used by Industrial sector thereby reducing price pressures on total US economy
  • Opportunity for gasification technology
    • Technology Identification and Evaluation
      • Build New, Current, and Past System Studies
    • Technology Roadmap
    • Deployment Pathways/Options
      • R&DD, Clean Coal Technologies, Tax Credits and Loan Programs
what is gasification

Extreme Conditions:

  • 1,000 psig or more
  • 2,600 Deg F
  • Corrosive slag and H2S gas

Oxygen

Products (Syngas)

CO (Carbon Monoxide)

H2(Hydrogen)

[CO/H2 ratio can be adjusted]

By-products

H2S (Hydrogen Sulfide)

CO2(Carbon Dioxide)

Slag (Minerals from Coal)

Gas

Clean-Up

Before

Product

Use

Water

Coal

What is Gasification?

&

Carbon Feeds

netl s systems studies as building blocks
NETL’s Systems Studies as Building Blocks
  • Situational Analysis-Industrial Sector Applications of Gasification Technologies (Phase 1 screening complete/Phase 2 detailed assessments underway)—Jointly Sponsored by DOE’s EERE-ITP and FE Programs
  • Several industrial large and small-scale Case Studies (completed/underway)
  • Coal-SNG Large-Scale Industrial Park (on-going)
  • Marshall County, WV Industry-Cluster Study (scoping efforts underway)-740MWe (equivalent)
situational analysis for industrial gasification
Situational Analysis for Industrial Gasification

Situational analysis based upon 2/28/06 workshop with 94+ attendees, 10+ turned away

  • Industrial Sector uses 1/3 of US Natural Gas
  • High NG prices are tied to job losses and demand destruction
  • Industrial Outlook
    • Gasification as affordable substitute for natural gas
    • Needs active partnership with Federal Government
      • Identify technological opportunities
      • Developing a research pipeline
      • Assist with opportunities for demonstrating technology
      • Accelerate technology deployment and broadening application of gasification in Industrial sector
slide15
Natural Gas Price Increases Have A Dramatic Impact On IndustryGasification Can Be A Large Part of Solution
addressing technical obstacles for large systems requires a focused effort
Addressing Technical ObstaclesFor Large Systems Requires A Focused Effort
  • Efficiency improvements in a variety of system components*
  • Means to distribute syngas from central facility to remote users
  • Improved process automation and control systems
  • Understanding of syngas composition variability and associate impact on existing processes/equipment*
  • Gas composition enhancements and contaminant removal*
  • Availability improvements and operational optimization*
  • Carbon sequestration methods
  • Fuel flexibility through increased co-firing or fuel switching*
  • Improvements on reliability, especially with respect to number of gasifiers and nature of application
  • Air system and membrane separation improvements
  • Solid material handling issues

* Common to large and small scale systems

addressing technical obstacles for small systems requires a focused effort
Addressing Technical ObstaclesFor Small Systems Requires A Focused Effort
  • Efficiency improvements*
  • Understanding of syngas composition variability and associate impact on existing processes/equipment*
  • Gas composition enhancements and contaminant removal*
  • Availability improvements and operational optimization*
  • Fuel flexibility through increased co-firing or fuel switching*
  • Identification of components and subsystems that inhibit cost-effective scaling
  • Development of modular designs to reduce design challenges and costs
  • Multi-fuel compatible gasifier
  • Novel designs and process flow improvements to enable use of lower heating value fuels
  • Cooperation with other DOE offices and federal agencies to apply basic science efforts to industrial gasification

* Common to large and small scale systems

slide18

Beluga Coal Gasification Feasibility Study

Phase 1 – Agrium Fertilizer Plant

  • Problem:
    • currently based on NG feed
    • facing shut-downs from decreasing NG supply
  • Solution: coal to replace NG
  • Gasification Products – H2, N2, & CO2 for fertilizer, electric power
  • Near largest remaining undeveloped coal field on tide water in US
  • Estimate 4 million tons/yr of coal to meet plant needs

Agrium Use

slide19

Beluga -- Feasibility Study Results/ Risks

  • $1.6B investment yields 11.1% ROI
  • Capital cost strongest determiner of ROI
  • Cyclical product price is critical to ROI
  • 85% availability
  • By-products given no value
  • EOR has potential needs
  • Agrium plant employs 200+ and supports 600+ regional jobs
cedar lane coal fired flue gas recirculating fluidized bed boiler
Cedar Lane Coal-Fired Flue Gas Recirculating Fluidized Bed Boiler
  • Unit achieved ~7 months of continuous computer control operation
  • 96.9% availability over 193 day heating season
  • $200,000+ Saved over Natural Gas this season (2 of 5 Acres)
  • 20% reduction in coal usage compared to old under-grate stokers
  • 2 types of computer controlled operation demonstrated; demand and slumping
  • Only 2 man-hours of labor required daily
  • Unit up to 40,000,000 Btu Input Available

Cedar Lane

Farms

Wooster, Ohio

9,000,000 Btu FGC- FBB Demonstration

netl usda study beltsville national farm coal biomass hybrid gasification
NETL/USDA Study-Beltsville National FarmCoal/Biomass Hybrid Gasification
  • 6-9 month joint study (began 10/06)
  • Coal/Biomass system to provide syngas for routine operations (24/7)
  • Pathway to reduce USDA Research Center annual operating costs (back-out natural gas)
  • Affordable system (~$5million capital)
  • High Reliability/Low Manpower
  • Use readily available biomass energy resources (Maryland)
  • 60/40 bio/coal thermal input
closing comments
Closing Comments
  • Energy security will become an increasing important objective as required to sustain healthy U.S. economy
  • Energy security will come in two forms (fuels and power)
  • Coal provides leverage for making use of lower energy-density domestic energy resources (e.g. biomass)
  • Bio/Coal systems may offer lower environmental and CO2 footprints
  • R&D will be needed to address environmental and economic performance requirements — doable!

Rev. 061404

visit our websites
Visit Our Websites

Fossil Energy website:www.fe.doe.gov

NETL website:www.netl.doe.gov

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