CO2 to fuels processes - II

Recently Carbon Sciences, featured in an earlier article on this blog revealed the source of hydrogen for their CO₂ to fuels process.
"Dr. Naveed Aslam, inventor of the company's technology and chief technology advisor, commented: "Unlike other CO2 to fuel approaches, Carbon Sciences' technology does not use molecular hydrogen (H2) because the creation and reaction of H₂ is very energy intensive. Rather, the company's approach is based on a low energy biocatalytic hydrolysis process where water molecules (H₂O) are split into hydrogen atoms (H) and hydroxide ions (OH) using a biocatalyst. The hydrogen atoms (H) are immediately used in the production of hydrocarbons and the free electrons in OH are used to power the various biocatalytic processes." "Our technology is not based on photosynthetic plants where sun light is used to drive biofuel production reactions, such as in algae. Instead, it is based on natural organic chemistry processes that occur in all living organisms where carbon atoms, extracted from CO₂, and hydrogen atoms extracted from H₂O, are combined to create hydrocarbon molecules using biocatalysts and small amounts of energy. Our innovative technology allows this process to occur on a very large industrial scale through advance nano-engineering of the biocatalysts and highly efficient process design," concluded Dr. Aslam."
My opinions given below:
Understandably Carbon Sciences is justified in not fully revealing the details . However, the splitting of water to produce protons (H⁺) and hydroxide ions (OH^-) still consumes energy. All the biocatalyst does is to speed up this transformation. It cannot influence the thermodynamics (feasibility) of this reaction. Judging by what the release says, I think that there is a sacrificial oxidant (something which gets oxidized, ex: simple sugars, providing the energy to drive the splitting of water) involved.

Related links:
Opinion: CO2 to fuels processes
Carbon Sciences Announces Prototype Plan for CO2-to-Fuel Technology

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PBS Frontline: Heat

Global Warming, can we roll it back?
Image courtesy of PBS.org

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Analysis: Algae for carbon dioxide (CO2) capture

Summary
This post describes a simplified economic analysis of an algal biofuel technology that converts carbon dioxide (CO₂) from cement plants into (potentially) useful algal oil. I examined various key factors such as CO₂ offset price, price of algal oil, and productivity that affect the profitability of such a process.

Based on my analysis I conclude that the single most important factor that affects the economics of CO₂ capture is the algal biomass yield (mass produced/unit area). Doubling the productivity (and the CO₂ offset) per hectare decreases the payback time by 50 % (15 years to 7 years).

Disclaimer: This is not a critique of the specific algal biofuels process proposed. CO₂ mitigation using algae is one of the answers to our grand energy challenges, and we must continue to address these issues.

Assumptions:
The Holcim plant in Jerez likely produces a fraction of the total 5.1 million tonnes of cement per annum (5.1 MTPA). (A cement plant in India I worked at produced 2.6 MTPA, and it was the largest in Asia at that time. Not having first-hand data for this specific facility, lets assume that this plant is 1 MTPA, for the sake of comparison. The exact production does not alter the results significantly).

Cost of algal oil: 4 $/gal
Price of carbon offsets: 15 Euros/T CO₂ (20 USD/T CO₂)
(A high-cost scenario for algal oil and carbon offsets would be 6$/gal, 50 $/T CO₂. This is also addressed in the analysis.)

Data:
Each lb of cement produces 1.0 lb of CO₂ (U.S. average, pg.10).
Total CO₂ to be mitigated annually by 2011: 50,000 T in 100 ha (0.05 MTPA CO₂ in 100 ha) .
Algal biofuel production: 1.3 million gallons/year

Calculations:
Total CO₂ production: 1 MTPA
By 2011, the 100 ha. facility would mitigate 50,000 T of CO₂ (0.05 MTPA CO₂). This would be 5% of the CO₂ emissions (if the Jarez facility production is 1 MTPA)
Average CO₂ use of algae: 0.0005 MTPA/ha.
Revenues from algal biofuel: 5.2 million $/year
Revenues from carbon offsets: 1 million $/year
Total revenues: ~6 million $/year

Results
Capital cost of algal facility: $ 92 million/0.05 MTPA CO₂.
Area needed for 5% of the cement plant's CO₂ output (assuming 1 MTPA production): 543 U.S. football fields (5.4 football fields = 1 ha.)

Payback on investment: 92/6 =~ 15 years. In comparison, typical payback for a new chemical plant is ~ 7 years.

Higher CO₂ prices (50 $/T CO₂), decrease the payback period by ~ 3 years. Higher algal oil prices (6 $/gal) and 20 $/T CO₂ prices will result in a payback period of approximately 11 years.

Higher oil and higher CO₂ prices will lower this period (11 yrs) by an additional ~2 years. However, doubling the productivity (and the CO₂ offset) per hectare decreases the payback time by 50 % (15 years to 7 years).

The revenues from algal biodiesel + carbon offsets will be partly offset by the parasitic losses from the power plant to run the system. I don't have a feel for how much these utility costs would be. Any comments, anybody?

Bottomline The single most important factor that affects the economics is the productivity of algal biomass/unit area. Doubling the productivity (and the CO₂ offset) per hectare decreases the payback time by 50 % (15 years to 7 years).

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Synfuels (CTL, OTL, GTL, BTL, XTL) Round-Up

Given below is a compilation of the latest news, analyses and resources on synthetic fuels from hydrocarbons (coal-to-liquids, biomass-to-liquids, gas-to-liquids, oil sands-to-liquids)
Analyses

The Impacts of Synfuels (CTL,GTL, BTL, OTL) on World Petroleum Supply

RAND Study Concludes Oil Sands Synthetic Crude Can Be Cost-Competitive with Conventional Petroleum Even Over a Wide Range of CO2 Prices

New Life-Cycle Analysis Concludes Neither GTL or CTL a “Reasonable Path” for Energy Security With Reduced GHG Emissions

Study Suggests “Flexible Carbon to Liquid” Fuel Process Could Displace 15-20% of Transportation Fuels in the US

The tale of two synthetic fuels & Using champagne to make beer

News

Australia:
Linc Energy Begins Producing GTL Liquids from Underground Gasification Syngas

South Africa:
Biofuels singled out as 'best option' for alternative fuels in SA

USA:
Synfuels Converts Natural Gas to Gasoline to Cash

New Route to Hydrocarbon Biofuels: A simple catalytic process converts plant sugars into gasoline, diesel, and jet fuel.

Synthesis Energy Systems Options Up to 15 Methanol-to-Gasoline Technology Licenses for Coal-to-Gasoline Projects

Researchers Propose Dual-Bed Configuration to Increase Efficiency and Reduce Emissions from Coal Gasification

China:
Shenhua Ningxia Coal Group boosts CTL project with Sasol

Is it the end of the line for coal-to-oil in China?

India:
Sasol mulls dlrs 8bn India CTL plant

UK:
Small Scale FT Contract with Thai National Oil Company

Resources:

Diesel Fuel from Bolivian Natural Gas by Fischer-Tropsch Synthesis using Nitrogen-rich Syngas

DOE Releases Feasibility Study for Small-Scale Conceptual Coal-to-Liquids Facility in Appalachian Basin : Technical and Economic Assessment of Small-Scale Fischer-Tropsch Liquids Facilities

An Engineering-Economic Analysis of Syngas Storage

Small-Scale Fischer-Tropsch

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News: Cleaner technologies for coal at Penn State

Structural representation of a South African intertinite-rich Highveld coal. Carbon atoms are green, oxygen atoms are red, and sulfur atoms yellow. Courtesy of Daniel van Niekirk / Jonathan Mathews

Research at Penn State (RPS) recently did an extensive article on current clean-coal research at Penn State. Featured were the following:

• Direct liquefaction of coal to produce jet fuels (JP-900).
  
• Better molecular models for coal, CO₂ sequestration in coal seams.
• Understanding coal reactions using femtochemistry.
• Adapting existing refineries for coal conversion.
• Making more comprehensive use of coal, producing value-added compounds.
• Molecular-basket adsorbents to capture CO₂ from flue gas streams.

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The tale of two synthetic fuels & Using champagne to make beer

I provide a brief description of two processes to produce synthetic fuels, coal-to-liquids (CTL) processes and synthetic crude oil (SCO) from tar/oil sands. The economics behind SCO and CTL production are briefly discussed. One of the critical factors influencing lifecycle CO₂ emissions from and economics of the CTL and SCO processes is the C/H ratio of the original fuel source (tar sands/coal). The findings of a recent RAND report (Unconventional Fossil-Based Fuels Economic and Environmental Trade-Offs) are discussed from this perspective.

Overview of the process economics of SCO from oil sands:
Canada has the world's second largest reserves (179 billion barrels) of proven oil, of which >95% comprise oil sands. About 80% of Canada's oil sands deposits are too deep below the surface to use open-pit mining. These deep deposits have to be processed in situ using techniques such as steam-assisted gravity drainage (SAGD). The rest can be accessed via open-pit mining techniques.
Surface (open-pit) mining is a material-intensive operation, with 1.6 T of tar sands to be handled per barrel of SCO produced. The water requirements are also high. It is also fairly energy-intensive, consuming 1 barrel of natural gas equivalent of energy to produce 8 barrels of SCO. For both in situ as well as surface processes, the overall energy requirements (including mining, extraction, coking, and hydrotreating) are approximately 40-45 % of the calorific value of the syncrude. This heat is mainly supplied by natural gas. The price/unit of energy for crude oil is much higher than that for natural gas, and this price differential drives the economics of the process for extracting and upgrading the bitumen from tar/oil sands. During a conversation I had with a person working in underground coal gasification, it was mentioned that using natural gas to supply heat and steam for extracting bitumen from oil sands was similar to using champagne to make beer.

Overview of the CTL process:
A brief introduction to CTL technology is given in my earlier post on Indian CTL projects. CTL processes produce high quality synthetic liquid fuels (primarily diesel), using coal, oxygen and/or water as raw materials. The best example of a commercial CTL process is the one by Sasol, which produced 7.4 million T of synthetic fuels last year (approximately equivalent to 60 million barrels of oil equivalents, MMBOE). The CTL processes are characterized by high initial capital costs (1-3 billion $ for new plants), large scales (50-100,000 bbl/d plants), and high CO₂ emissions. In fact, the Sasol Secunda facility is the largest single-point-source of CO₂ emissions in the world. Both direct liquefaction (reacting coal with hydrogen or a hydrogen carrier) as well as indirect liquefaction (generating syngas followed by water-gas shift and Fischer-Tropsch reactions to produce liquid fuels) are possible. The choice is determined by the type of coal, ash content, water availability and other constraints.

The conclusions from the RAND report are given below:

1. Basic production costs for SCO are likely to be cost-competitive with conventional petroleum fuels.
2. While basic production costs for CTL also appear to be competitive with conventional petroleum fuels across a range of crude-oil prices, CTL competitiveness is more sensitive to technology costs and to oil prices.
3. Higher oil prices or significant energy-security premiums increase the economic desirability of SCO and CTL.
4. Even with future policy constraints on CO₂ emissions and their associated costs, SCO seems likely to be cost-competitive with conventional petroleum; the main potential constraint on SCO production is its local and regional impacts.
5. The cost-competitiveness of CTL is more dependent than that of SCO on the costs of CO₂ emissions and CCS.
6. Unconventional fossil fuels do not, in themselves, offer a path to greatly reduced CO₂ emissions, though there are additional possibilities for limiting emissions.
7. Relationships among the uncertainties surrounding oil prices, energy security, CCS costs, and CO₂-control stringency have important policy and investment implications for CTL.

Analysis:
The C/H ratio of a particular fuel primarily determines the extent of CO₂ emissions resulting from producing liquid fuels for transportation (with a generic formula CH₂). As shown in the figure (data from "Synthetic Fuels" by Probstein & Hicks), fuels such as bituminous coal with a C/H atomic ratio of 1.2 (or an approximate molecular formula of CH_0.8) will need more hydrogen to be added (or more carbon to be eliminated) to make liquid fuels (CH₂) compared to heavy crude oil and bitumen (both having C/H ratios of ~0.7).

The disadvantage in extracting bitumen from the oil sands is that it does not flow very well and has to be hydro-treated (with H₂) to make it more suitable for processing. As mentioned earlier, the higher CO₂ emissions from SCO processes are due to the physical characteristics of the tar sands and not due to the C/H ratio of the raw fuel. This is why the RAND report mentions that SCO processes are likely to be competitive with conventional petroleum, especially in a high-oil price scenario. Moreover, the CO₂ emissions from SCO processing is only 25% greater than that for conventional crude oil.

On the other hand, the CTL processes need to have higher quantities of hydrogen (or reject higher amounts of carbon as CO₂ to make the hydrogen) compared to SCO and conventional crude oil. These higher emissions are the reason why the economic feasibility of CTL processes has a greater dependence on the costs for mitigating CO₂ emissions, compared to SCO.

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Penn State My 20 Challenge Week

From the Penn State newswire:

Penn State wants to know, 'What's your 20?'

Penn State is challenging its faculty, staff and students, to reduce electrical consumption by 2 percent during the My 20 Challenge Week of Oct. 19-25. The goal is to reduce the University's energy use by 20 percent and show Penn Staters how it's easy to be environmentally conscious.
Penn Staters are encouraged to find out their carbon footprint though a carbon footprint calculator found at http://www.my20.psu.edu online.
Read the full story on Live: http://live.psu.edu/story/35226/nw63

Saving energy at home saves money on utility bills.
Related posts: Save energy, save money: Online videos

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Economic Value of Nature, Forests

A recent study by Deutsche Bank economist(s) [study leader: Pavan Sukdev] places an economic value on forests based on the benefits they provide like providing clean water and carbon dioxide (CO₂) absorption. The EU-commissioned study puts the annual cost of forest loss at between $2 trillion and $5 trillion.

An interesting point of trivia here is that, "Pavan" in hindi/sanskrit refers to the "Wind God".

The study, headed by the Deutsche Bank economist, parallels the Stern Review into the economics of climate change.

The study echoes the understanding among some proponents of sustainability that being in harmony with nature is paramount to the survival of species. What this study has done is that it has put an economic value, which provides at least provides a floor to the (much higher) intrinsic value of nature. This is my personal opinion that the intrinsic value of nature is higher than the quoted numbers. If a part of nature were irreparably damaged, then the human economy has to provide them instead, either by carbon dioxide sequestration/conversion, or agricultural production of food and products that were previously naturally produced by forests. A excerpt from the study on the numbers involved compares it to the (smaller) scale of the current economic crisis:

"So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year."

While you are reading about "natural capital", let me add a note about a book on my wish list: natural capitalism.
The source material for this blog post is the BBC.
Link text: http://news.bbc.co.uk/2/hi/science/nature/7662565.stm

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What effects will the current economic downturn have on carbon trading and GHG legislation?

The figure shows how the current downturn (shown as the S&P 500 index, ^GSPC) affects prices for carbon trading (iShares ETF, GRN). Lower energy (oil) futures prices (USO) also have contributed to this reduced demand for carbon credits. Similar trends can also be seen for the actual CO2 price trends on the Chicago Climate Exchange, where the price of a ton of CO2 has fallen sharply to less than 2 $/T. In comparison, the price of first Regional Greenhouse Gas Initiative (RGGI) auction of CO2 emissions last week was 3.07 $/T CO2. As the economy slows down, it seems that people would be willing to pay less for carbon emissions. How this will affect policy is a key question. The McKinsey report (mentioned in an earlier post) notes that cost savings of up to 90 $/T CO2 could be realized by energy efficiency measures in sectors like commercial and residential electronics, and lighting. However, lowering energy prices will lead to lowered incentives for energy conservation. Will either Barack Obama or John McCain have enough political will to pass any carbon regulations? For now, the US presidential candidates seem to be committed to enact GHG regulations, as seen from their last debate.
Related articles:
Projected (2030) greenhouse gas abatement potentials and costs
Article from the Environmental Economics blog
Another article from the Climate Progress blog
Obama's Carbon Ultimatum: from the WSJ

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