GasificationTechnologies 2001

San Francisco, CAOctober 7-10, 2001

DOE’s Gasification Industry Interviews:Survey of Market Trends, Issues, and R&D Needs

Gary J. Stiegel, Stewart J. Clayton, and John G. WimerU.S. Department of Energy

Presentation Outline

• Interview Process• Gasification Markets• Environmental Issues• Technology Issues/Needs• Where Do We Go From Here?

Interview Process

Purpose of Interviews

• Evaluate the current DOE gasification program− Is the program focused on industry needs?−What are the weak points in the program?

• Obtain gasification industry’s perspective on:−Future markets and opportunities−Current and anticipated technology needs−Related environmental issues and trends−Priorities−Key performance criteria

Intended Benefits

• Provide Federal officials with a clearerunderstanding of technology trends andresearch needs

• Assist in establishing Federal fundingpriorities for gasification and relatedtechnologies

• Provide industry decision makers with a broadspectrum of creative opinions and forward-looking insights from industry experts

Interview Discussion Structure

• Markets (present – 2015)−Strategic business opportunities−Factors/hurdles that limit/enhance gasification−Viable feedstocks

• Environmental (present – 2015)−Major environmental hurdles/issues

• Technology Needs (present to 2015)−Key issues and performance requirements−Areas for development (feed handling, gasification,

cleaning, separation, utilization, by-products, etc.−Timing requirements

• Integration Issues• Engineering Analyses/Model Development

Participating Organizations

• Air Liquide• Air Products & Chemicals,

Inc.• Allegheny Energy Supply• Bechtel/Nexant LLC• Citgo/Lyondell-Citgo• Dakota Gasification Company• Dow Chemical Company• Eastman Chemicals Company• Enron• Fluor Daniel• Foster Wheeler• Gas Technology Institute

• General Electric Company• Global Energy, Inc.• Praxair, Inc.• Shell Global Solutions• Siemens-Westinghouse

Power• Southern Company• Tampa Electric Company• Tennessee Valley Authority• Texaco Global Gas & Power• UOP LLC

Gasification Markets

Overall Market – Factors/Complexities

• Economics• Energy and environmental policies• Regulatory Reforms• Resource Utilization issues• R&D funding – availability and prioritization• Partnering requirements and team formulation• Speed of innovation/acceptance to

competition

Factors Affecting Gasification

• Favorable− High NG prices− Low quality feedstocks− Feedstock flexibility− Market risk

management− Ultra-clean fuels− Superior efficiency and

environmentalperformance (requiresmonetization of benefits)

• Unfavorable− Low NG prices

(commodity marketuncertainties)

− Poor reliability− Uncertainties in

environmentalregulations

− Lack of Investorconfidence

− Real/perceived risks− Project cost, size, and

development time− Large footprint− Public perception of coal

Markets – Short Term (to 2010)

• Function of steady, incremental improvementsin unit economics and operation

• Affected by price/supply outlook for NG andportfolio diversification requirements (assethedge against volatility)

• Niche opportunities – simple economics andmarket fit−Low cost feedstocks (petroleum coke/residue)−Marketable products (electricity, hydrogen,

chemicals, etc.)−Waste recycling and disposal

• Overseas market not lucrative (infrastructure,project development schedules, financing)

• Limited opportunities for biomass

Long-Term Market Hurdles and Drivers• Hurdles

− Low reliability− Relatively high capital and operating costs− Regulatory uncertainties− Protracted EPC schedules− Perception of complexity, lack of technology maturity

• Drivers− Need for increased energy security− Requirements to capture and sequester CO2

− Environmental considerations in the pulp and paper, steel,and transportation industries

− Development of a hydrogen economy and infrastructure− Siting – reduced footprint and water consumption− Increasing emphasis on synergistic applications and waste

disposal/recycling technology

Environmental Issues

Environmental Benefits

• Most efficient and environmentally superior ofsolid fuel technologies

• Unique advantages in dealing with CO2(efficiency, means/cost of capture)

• Converts wastes (e.g., petcoke, refinery waste,and hazardous wastes) into useful products

• Waste recycling/disposal technology superiorto incineration/combustion (i.e., no dioxinsproduced)

Environmental Hurdles• Regulatory Uncertainty (NOX, GHG, Hg, solid

wastes)−Cost effective business development is contingent

upon on knowing if/when/how new regulations arenecessary

−Current approach of measuring emissions on fuel inputbasis – does not capture efficiency advantages

• Development Time (Permitting)• Misperceptions of Regulators (IGCC vs.

Incineration/Combustion)• Held to higher environmental standard than PC• Misperceptions of the Public (NIMBY)

GHG Emissions

• No strong consensus regarding the “if, whenand how” of U.S. GHG regulations

• High uncertainty - potential for U.S. GHGregulations already impacted the energy market

• Companies seriously considering GHG issue asthey plan and position for the future−Projects being screened for potential GHG liability

• Timing and structure of GHG regulations iscritical− If poorly conceived, massive switch to natural gas

would devastate the power and coal industries

NOx, Hg, Solid Waste Issues• NOx emissions may be limited to 3-5 ppm levels

−Rectisol and SCR required – increase capital cost• Most companies expect mercury regulations will

be issued in the near-term−Methodology/technology for measuring Hg not well

demonstrated−Control technology for capture Hg−Disposal of Hg-containing waste

• Solid waste−Extension of proposed EPA rule for syngas from

refinery waste to other industries−Applications other than landfill – qualification

Water Issues

• Permitting will become more difficult−Zero water discharge likely−Trace metals limits – arbitrary and often below

detectable limits− Inability to gasifier certain wastes could be an

obstacle to gasification growth

Technology Issues/Needs

Technology Issues• Gasification – Reliability• Gas Cleanup – Cost, contaminant removal• Gas Separation – Cost and performance• By-Products – Cost, CO2 sequestration• Instrumentation - Numerous• Utilization – Low NOx combustor, cost,

synthesis gas performance• Integration – Modularization, standardization,

reliability• Heat Recovery – Cost and reliability• Feedstocks – Preparation• Models - Minimal

Reliability: Gasification’s “Achilles’ Heel”

• Reliability identified as the key technicalchallenge!!!−Unable to meet performance milestones on which

economics are based−Single train availabilities must be at least 85-90%

for utility applications and greater than 95% forrefineries and chemical complexes

−EPCs unwilling/unable guarantee integratedperformance and risk huge liquidated damages

−Must phase out multiple trains to improveeconomics

−Standardize/modularize plants to optimize cost andreliability

Key Gasifier Priorities• Burners

− Extend burner life from 2-6 months to >12 months− Define factors leading to failure− Dry versus wet feed− Material development− Multi-fuel capability− Variable orifice burners – turndown during load changes− CFD modeling around burner

• Refractory− Tradeoff between carbon conversion and refractory life− Extend refractory life from 6-18 months to >3 years− Reduce material costs by 50%− New materials, on-line instrumentation for wear required− Eliminate the need for refractory

Additional Gasifier Priorities• Instrumentation

−Temperature measurement – extend life beyond 30-45 days

−On-line feed (fuel switching) and product analyses−On-line slag property analyses

• Ash/Slag Handling−Better knowledge of flux effectiveness−New fluxing agents to lower ash fusion temperature−Database of gasification properties of various coals

and solid fuel blends (ash fusion temperature, slagviscosity, feed reactivity)

Synthesis Gas Cleanup – Priorities• Deep cleaning technologies required to meet

future environmental regulations− “Meet Rectisol performance at equal or lower cost

than amine systems”• Better definition of contaminants and required

levels (particulates, H2S, COS, CO2, NH3,volatile metals, carbonyls)

• Need to operate closer to downstreamprocess requirements (e.g., gas turbine,syngas conversion)

• High cost of particulate and chemical removal(need fewer unit operations)

Synthesis Gas Cleanup Priorities• Cold Gas Cleanup (ambient)

−Opportunities to improve conventional technologies−Removal of heat stable salts−Need to develop new approaches

• Warm Gas Cleanup (300-700 oF)−Develop technologies that operate above the dew

point of the gas stream – more efficient operation−Development of technologies for multi-contaminant

removal (e.g., mercury, arsenic, selenium,ammonia, particulates, etc.)

• Particulate Filtration−Development of more durable, reliable, and cost

effective filters (Useful life - three years)−Simpler, cheaper approaches to solids removal

Gas Separation – Air Separation

• Cost of O2 ℵ $15/ton from cryogenic technology(12-15% of capital cost of IGCC plants)

• Oxygen purity requirements: 95-98%• Cost reduction and efficiency improvements

required• Ceramic-based membranes viewed favorably

−Air extraction design for gas turbines - priority• New technologies are needed

−Current ASU technologies primarily cryogenic−High temperature ASU being developed− intermediate temperature ASU may be desirable (-50

to 350 oF)

Gas Separation – Hydrogen/CO2

• First Priority: CO2 sequestration/utilizationtechnologies need proven−Need storage options before removal is mandated

• Preferred new technologies - produce bothhydrogen and CO2 at high pressures−Most technologies provide one or the other, not both

• Preferred temperature of operation <800 oF• Cost and efficiency improvements required• Also, considerable interest in membrane-

based separation technologies forapplications at lower pressures

Where Do We Go From Here?

Next Steps

• Complete comprehensive report and makeavailable to stakeholders (target 12/01)

• Develop gasification technology roadmap−Possibly with further industry input−Reestablish budget priorities

• Define competitive solicitations to addresshigh priority research needs

Possible FY 2002 Procurements

• Gasification Technologies Research Consortium−Provide opportunities to identify and address key

technology issues at the proof-of-principal levelthrough novel ideas and creative approaches

−Collaborative participation of multiple universities− Industry management council provides direction

• Gasifier Reliability/Performance Enhancements−Materials development (i.e., refractory)− Improved burners− Instrumentation (i.e., thermocouples, on-line analyzers,

flow measurements, feed systems, etc.)

Acknowledgements

• James Childress, Executive Director,Gasification Technologies Council−Obtaining support of GTC membership−Many helpful suggestions−Personal interest in the success of the process

• Participating organizations−Willingness to share thoughts with the DOE−Extensive preparation prior to meetings−Very productive meetings− Interest in results−Continued support of the gasification program