The Montana The Montana Coal Gasification and Coal Gasification and

Fischer-Tropsch ProjectFischer-Tropsch Project

Joe WendlandJoe Wendland

Cliff RobbinsCliff Robbins

IntroductionIntroduction

Technical aspects of Fischer-TropschTechnical aspects of Fischer-Tropsch History of Fischer-TropschHistory of Fischer-Tropsch Environmental impactEnvironmental impact Economic overviewEconomic overview Selected sites for advanced coal developmentSelected sites for advanced coal development Analysis of these sitesAnalysis of these sites

Technical Fischer-Tropsch Technical Fischer-Tropsch Coal to LiquidCoal to Liquid

DirectDirect Coal –> Crude OilCoal –> Crude Oil

Indirect (Fischer Tropsch)Indirect (Fischer Tropsch) Coal -> Gas -> CrudeCoal -> Gas -> Crude

Potential to reduce cost of ConversionPotential to reduce cost of Conversion

Brief History of Coal Gasification Brief History of Coal Gasification and Fischer-Tropsch and Fischer-Tropsch

Germany during WWIIGermany during WWII Parallel plate reactorParallel plate reactor

South Africa during ApartheidSouth Africa during Apartheid Arge reactor (Shell and tube reactor)Arge reactor (Shell and tube reactor)

China and MontanaChina and Montana Learning from past experiencesLearning from past experiences

Environmental Impact Environmental Impact

Carbon emissionsCarbon emissions Climate change (cost big 5-20% of GDP Stern Climate change (cost big 5-20% of GDP Stern

report)report) Carbon sequestrationCarbon sequestration More or Less than conventional Crude?More or Less than conventional Crude?

Strip MiningStrip Mining Not too badNot too bad

Economic Overview Economic Overview

Historic Price of oil: $13 - $75 Historic Price of oil: $13 - $75 Current Price: $60Current Price: $60 Fischer Tropsch - $40 / bbl (sequestration?)Fischer Tropsch - $40 / bbl (sequestration?) Construction cost - $750 millionConstruction cost - $750 million Construction time – 5 yearsConstruction time – 5 years

MontanaMontana

Selected Sites for Advanced Coal Selected Sites for Advanced Coal Development Development

Bull CreekBull Creek ColstripColstrip DeckerDecker KinseyKinsey Nelson CreekNelson Creek Otter Creek Otter Creek

Pros and Cons of Selected SitesPros and Cons of Selected Sites

ProsPros Most sites have sufficient water sourcesMost sites have sufficient water sources State governmentState government Existing transportation infrastructure to support Existing transportation infrastructure to support

initiation of some proposed sitesinitiation of some proposed sites Large amount of coal in reservesLarge amount of coal in reserves

Pros and Cons of Selected SitesPros and Cons of Selected Sites

ConsCons Addition to transportation infrastructureAddition to transportation infrastructure Additional pipelines needed since most are Additional pipelines needed since most are

operating near full capacity (80-90%)operating near full capacity (80-90%) Initiation costs and lack of federal fundingInitiation costs and lack of federal funding

ConclusionConclusion

Many challenges existMany challenges exist Challenges can be overcomeChallenges can be overcome Benefits of Economic Development and Benefits of Economic Development and

Energy SecurityEnergy Security