The natural gas input into ethanol production is a serious long-term threat to economic viability. Since natural gas is a fossil fuel, and supplies are diminishing, it will put upward pressure on the price of ethanol over time. However, if the energy inputs could be produced from coal, ethanol prices would be insulated from escalating natural gas prices.
Using coal might also lessen the significance of the EROEI debate. If you take 1 BTU of (cheap) coal, and you get back 0.8 BTUs of (more valuable, liquid) ethanol, then EROEI doesn't have the same significance as when you use natural gas to produce ethanol. You converted the BTUs into a readily usable liquid form. This argument may be valid from an economic point of view, but it ignores the fact that coal is still an inherently dirty energy source. If coal remains abundant and cheap, coal economics will beat natural gas economics, but coal will increase the rate at which we put carbon dioxide into the atmosphere.
In those remarks Robert was writing about the use of coal as a power source for running the ethanol plant, as opposed to the use of natural gas. The feed stock would remain the corn that is fermented, and turned into the beer that is then distilled into the ethanol that can be used as a liquid fuel source. That process still raises the debate over fuel versus food.
In an alternative approach Celanese are now starting to build plants in China that will use coal as the feedstock, without the grain, and they claim that this technology, is a game changer.
The so-called TCX technology can convert coal, petroleum coke or natural gas to ethanol for 25 percent to 35 percent less than alternative processes, Celanese said today in presentation slides posted on its website. The cost of converting coal to ethanol is $1.50 a gallon, equal to making gasoline from crude oil costing $60 a barrel, the Dallas-based company said.The technology, which is still being held fairly close to the Celanese chest, appears to use some of Celanese technology for the manufacture of acetic acid and involves the gasification of the coal to syngas as an earlier step. That supply will be provided by Wilson.
“Fuel with our ethanol technology represents a game- changer for the company,” Chief Executive Officer David Weidman said in a presentation to investors in New York.
Weidman said he is advancing a November plan to build two factories in China that will turn coal into ethanol for industrial uses. The company also may produce ethanol for fuel in China, India, Australia, Colombia and Egypt, he said.
The use of coal is apparently currently commercial with this technology, while using the same process with a cellulosic feedstock is apparently not as yet that far along.
The two plants will each have a capacity of 400,000 tons of ethanol (134 million gallons) and will produce industrial ethanol rather than, at this stage, the fuel for use in vehicles. In China this is a larger (at 3 million tons/year) market than the fuel market, at half that size. Both are growing at up to 10% pa and the plants are expected to help meet that growth. Fuel ethanol prices in China have been estimated at $950 per tonne.
The most recent announcement comes as China is moving to increase coal imports by perhaps as much as a million tons a week due to drought reducing the output from hydro-electric power plants. Normally the country imports around 10.8 million tons a month, although this is a steadily increasing number. Without the additional imports it is possible that the country may see significant power shortages this summer, since the drought may lower available power by as much as 30 GW.
Speaking of the loss in power I did, eventually start to watch the second episode of Coal. One of the issues in that episode was the drop-out of power that was supplied to the mine. It is one of the ways in which mines can be given a lower price for electricity, if they accept that they will be “shed” if the demand exceeds that which the power generator can supply. The episode showed how that unexpected drop out can affect the men underground. Other power problems arose at the mine because the continuous miner operator was not fully experienced and was running the machine in to take too large an amount of coal or roof rock at one time. This overloaded the switches and tripped power. The necessary methodical restart of the system slows production, since nothing can start producing coal until all the components of the system are back up and running. As they are showing producing coal is not that simple or necessarily pleasant a process.
And a small additional note. In my comment on the first episode I was not that impressed with the way that the miners were bringing down the loose overhead rock. It turns out that I wasn’t the only one unimpressed. MSHA Inspectors, who watched the show, have fined Cobalt coal – for the use of improper barring tools and procedures, as well as a number of other violations.
The series has a considerable value in showing how difficult it can be to run a small mine, and though most of my experience has been in much larger operations (both financially and in terms of seam height) there are a number of different lessons that the series shows on coal mine operation. The problems of ventilation, when the belt drive started smoking and could have caught fire, are illustrative of that, with the telling message two miners died in a not too dissimilar event not that far away.