fuels: Crude awakening

16 November 2006
Coal is making a comeback. One of the many alternatives to oil and gas, coal fell rapidly out of favour towards the end of the last century, mainly due to the introduction of tough environmental laws. But the last year has seen a sudden resurgence in interest in this oldest of fossil fuels.
A prime reason is its low extraction cost compared with other fuels, particularly in a high oil price environment. 'It is not the resurgence alone, rather the growing interest in coal that is noteworthy,' says Geoff Morrison,

programme manager at the London-based Clean Coal Centre of the International Energy Agency. 'Coal is again prominent in energy policy planning in OECD countries and dominates energy supply in China, India and other developing states.'

Coal now accounts for 24 per cent of electricity generated worldwide. And this figure is set to grow as the US jumps on the bandwagon. According to the US Department of Energy, in 2003 coal contributed a hefty 50.8 per cent of its total net power generation.

However, issues related to emission levels and environmental pollution need to be sorted out urgently. 'Work is under way on zero emissions and clean coal technology to address these bottlenecks,' said Morrison. That is certainly the intention. By 2030, he estimates that global utility firms should be generating some 1,400 GW using clean coal technology.

Coal may emerge as the king of alternative energies, but other fuels are catching up fast. They include:Oil sands projects in Alberta, Canada. Estimated to hold reserves of 179,000 million barrels second to Saudi Arabia's 267,000 million barrels major investments are under way by international oil companies to produce 2 million barrels a day (b/d) by 2015 and nearly treble capacity by 2030.

Gas-to-liquids (GTL), which has come of age with the first commercial production

due to be marketed in early 2007 by SasolChevron from its 34,000-b/d Oryx project in Qatar. Work has also begun on-site recently on a mega-GTL project, also in Qatar. Called Pearl, it will have a nameplate

capacity of 140,000 b/d. Across the Gulf, in North Africa, plans are taking shape for a 36,000-b/d facility in Tinhert, Algeria. Despite all these efforts, GTL is unlikely to replace diesel as the primary source of vehicle fuel. 'It is important we do not oversell it,' says SasolChevron communications director Malcolm Wells. 'GTL is not a poor man's option and the big challenge will be to increase efficiency and compete with LNG [liquefied natural gas]'.

Coal-to-liquids (CTL), aimed at producing fuel oil from coal. As a rule of thumb, four tonnes of coal is required to produce every tonne of oil. At present, the Royal Dutch/Shell Group is carrying out a study for a 75,000-b/d pilot plant in China.

Biofuels, a favourite in the US, where the commercial production of hydrogen cars is now under way some 400,000 were on the roads last year, five years after their introduction. However, with limited market penetration, biofuels are unlikely to replace conventional gasoline. 'It can at best be up to 30 per cent,' says Anthony Eggert, associate research director at the US-based Institute of Transportation Studies. 'To achieve more, a major change is needed in agriculture.'

Nuclear, which is attracting growing attention. 'There was a slowdown in the 1980s, but it is now picking up,' says Tomihiro Taniguchi, a deputy director at the Vienna-based International Atomic Energy Agency. 'In Asia, the leaders are China, India and Russia. We have also held preliminary talks with some Middle East states, including Egypt, Algeria, Morocco and Saudi Arabia.'

Worldwide, the total number of nuclear power plants currently in operation is 443, accounting for a total capacity of 373 GW. However, looking ahead, Taniguchi estimates that nuclear power will account for 10 per cent of the global energy equation. 'But like other energy issues, nuclear is politic

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