2011 Gasification Technologies Council Conference

Emerson’s Alan Novak, who leads the alternative energy industry team, shares his thoughts from a recent gasification conference:

The Gasification Technologies Council (GTC) annual conference was held this week in San Francisco, California USA. Emerson is a member of the GTC and I had the opportunity to attend and note a few interesting themes.

The combination of a weak US economy and an uncertain regulatory environment has put a damper on interest in domestic fossil fuel-based alternative energy projects. Attendance for the event was approximately 600 people, well off the 1,000+ who attended just a few years ago.

While the US market may have slowed, the rest of the world is moving ahead with innovative energy projects, many of which involve converting coal or petroleum coke (a solid high carbon substance which remains after refining a barrel of oil) into higher value products (natural gas, fuels, chemicals) through a high temperature/pressure process called gasification.

The most active (and largest) gasification projects are occurring in China, India and South Korea. They are being driven by a desire for greater energy diversification and the high cost of Liquefied Natural Gas (LNG) in Asia. LNG is currently priced at about $14/mmBtu versus an estimated cost of $5/mmBtu for coal. Substitute Natural Gas (SNG), a direct replacement for LNG, can be made more cheaply by gasification of coal, as seen in this picture from the POSCO GwangYang project presentation.

Phil Amick of ConocoPhillips noted that a large portion of the increased LNG demand is the result of Japan moving away from nuclear and toward natural gas-based power generation.

Several US companies provide some of the leading process technology for coal gasification. GE, ConocoPhillips, and new companies such as Synthesis Energy are all securing orders for their technology licenses, all for projects occurring outside the US.

As I’ve highlighted in an earlier post, the US has the largest reserves of coal in the world while China has the third largest (picture from the AsiaChem GTC presentation). Yet the majority of advanced coal utilization projects are occurring in China.

This will be an interesting market to watch as it develops. The big question is whether the US will adopt this approach in the future.