Historical Discontinuities within Coal Gasification ... · Copyright © - Sasol-Lurgi Technology...

Copyright © - Sasol-Lurgi Technology Company 2005

Historical Discontinuities within Coal Gasification Technology as

Precursors for Future Developments

PS BaumannSasol-Lurgi Technology Company (Pty) Ltd.

Gasification Technologies CouncilSan Francisco October 2005


Presentation overview…

Introduction

Theoretical Framework

Assessing a ‘coal revival’

Conclusion


An energy landscape in flux…


Transitions anticipated…

Marchetti, C. 2000. From Carbon to Hydrogen: An Ecological Breakthrough via Large Energy Infrastructure. Austria: International Institute for Applied Systems Analysis.


Coal has many applications…..


Questions…..

Is the apparent global revival in coal reflected in the dynamics of coal gasification technology?

Is the technology relevant?

What were the drivers for historical discontinuities within the adoption of the technology?

Ephemeral or sustainable?

Are these drivers present in current developments?Where are the current markets?

Where are the next developments expected to originate from?

Where are the future opportunities?



Introduction



Conclusion


The history of coal….

Coal used in China as early as 1500 BCWood shortages in England & France enabled first transition

Increased demand fueled mining developmentMining required improved haulageAdvent of steam engine

Coal fueled industrial revolution – Century of “King Coal”Introduction of crude oil & natural gas

Internal combustion engine annexes transportation marketNatural gas becomes dominant space heating fuel

Coal today has only two primary marketsElectricity productionSteel Industry

DAEMEN, J.J.K. 2004. History of Coal Industry. Elsevier Encyclopedia of Energy vol. 1.


History of Gasification…

Cryogenic Air Separation

1920

Sasol I

1952

Sasol II

1973

London Town Gas

1812 1980’s

Cheap Oil

First pressurized gasification patent

1887

Sasol III

1978Higman, C. & Van der Burgt, M. 2003 Gasification. United States of America: Elsevier.


Assessing a ‘coal revival’…

Sassin, W., Hoffmann, M. & Sadnicki, M. 1977. Medium-term Aspect of a Coal revival: Two Case Studies. Laxenberg: International Institute of Applied Systems Analysis.


t0

2. Technology Trends

Time

Assessments model….

Raw material trends

Consumption trends

Technology Trends

S-curve analysis

Identify discontinuities

Historical driver assessment

Extended IIASA model

Forward looking assessment

Case Studies:

‘Emerging China’

‘Lumbering India’

Key Drivers

t0

3. Historical Driver Assessment1. Raw Material Trends

Time

1. Raw Material Trends

Time

Key Drivers

t0

4. Forward-looking Assessment



Introduction



Conclusion


Extended IIASA model….



Introduction



Conclusion


Results…feedstock trendsCoal consumption

Global Coal Consumption, 1970 - 2025

0

2000

4000

6000

8000

10000

1990 2000 2001 2005 2010 2015 2020 2025

Year

Mill

ion

Shor

t Ton

s

Reference case High growth Low growth

Energy Information Administration (EIA): Office of Integrated Analysis and Forecasting U.S. Department of Energy. 2003. International Energy Outlook 2003. Washington DC, USA.


Global Gasification Technology Activities

050

100150200250300350400450500550600650700750800850

1925

1938

1942

1946

1952

1955

1958

1961

1964

1967

1970

1973

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

Year

Num

ber o

f Pr

ojec

tsResults…technology trend

Coal gasification


• Isolation during ‘Apartheid years’• Nuclear as alternative precluded due to political pressure• Government provided incentives to establish Sasol as

strategic objective

5. Government incentives in support energy security and energy self-sufficiency

•Fourth largest exporter of coal•Government investment in Eskom coal infrastructure•Well established mining and road / rail industry

4. Existence of established coal infrastructure

•Major reserves in Mpumalanga, 150km from Gauteng •Gauteng is economic centre of South Africa•In excess of 500 kilometers from coastal port

3. Location advantage – close proximity to market

•World’s seventh largest coal producer•P/R coal ~ 225 years•P/R oil ~ 2.3 years•P/R gas < 0 years•High ash content coal •Very low cost coal producer

2. Access to large reserves of low cost, low quality coal.

•Historical GDP growth ~ 2%•Energy intensive economy ~ 1.14% of global energy

consumption•Produce only 42% of own daily energy requirements

1. Region should be a net importer of energy

South AfricaKey Driver

Key Drivers from the South African Experience

Results…historical drivers


Results…historical driversLessons from South Africa

5. Government incentives in support energy security and energy self-sufficiency.

Socio-political drivers3

2. Access to large reserves of low cost, low quality coal. 3. Location advantage – close proximity to market.4. Existence of established coal infrastructure

‘Attraction Potential’ of coal2

1. Region should be a net importer of energy‘Energy Gap’1

Key Driver / EnablerExtended IIASA FrameworkNo

Key Drivers for Coal Based Energy System from the South African Perspective


Results…current developments

•Energy security is top priority in current 15 year energy plan•Governments seeks to protect coal industry as major employer •Proven case studies of tax incentives to coal based ventures


•Coal accounts for more than 44% of GDP•Thousands of mines•Benefit of large scale, strategic infrastructure investment by

government in major coal producing areas


•Major reserves in North & West China•North & West are targeted for major economic upliftment•In excess of 500 kilometers from coastal port


•World’s largest coal producer•P/R coal ~ 111 years•P/R oil ~ 20 years•P/R gas ~ 46 years•High ash content coal •Natural gas more expensive than coal-derived gas


•Became net importer of oil in 1993.•Requires equivalent imports of 5.56 mil bbl/day•Expected to rise to more than 9.4 mil bbl/day by 2025


ChinaKey Driver

Case Study 1: Assessment of Key Drivers in Chinese Context

Source: United States DO E: China Brief (2004:1)

Econom ic Developm ent M ajor Coal Reserves


Results…forward looking perspective

•New Singh administration has adopted strategy to pursue energy security

•Regional politics put external supplies at risk•Governments seeks to protect coal industry is major employer


•Coal in industry already meets 66% of country’s energy needs•Established rail and road infrastructure •Benefit of former colonial investment by Brittan


•Most large reserves are inland in Bihar, West Bengal & Madhya Pradesh•Major economic centers of New Delhi and Hyderabad are in close

proximity


•World’s 3rd largest producer of coal•P/R coal ~ 236 years•P/R oil ~ 18 years•P/R gas ~ 30 years•High ash content, low calorific vale coal already importing higher quality

coal


•All indigenous oil supplies due to be exhausted by 2012 without new discoveries

•Current imports 1.4 mil bbl/day•Oil imports projected to be 3.5 mil bbl/ day by 2020


IndiaKey Driver

Case Study 2: Assessment of Key Drivers in Indian Context


Current Sasol-Lurgi Activities….

ChinaUSA

South Africa

Germany

Current SLTCActivities

Coal Beneficiation

Liquid Fuels & Chemicals

Liquid Fuels & Chemicals

IGCCSNG

Reduction Gas

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