Progress in Producing Useful Hydrocarbons From Coal
Authors: Cochran Neal P. , Staber George I. 
Published: December 2007

As part of the continuing search to expand our national fuel resources, increased government-supported research is being conducted to derive hydrocarbons from coal. Private industry is attempting to develop new and improved processes for manufacturing economically competitive pipeline-quality gas, gasoline and other off-products with fuel value from coal. This article brings up to date current developments for nine processes, with the attendant economics, now being investigated by industry under contracts with the Office of Coal Research, Dept. of the Interior.

Introduction

The Office of Coal Research (OCR) was established in 1960 by Public Law 86-599. Its primary responsibility is to contract for research to develop new methods of mining, preparing and utilizing coal. Development of increased utilization of large tonnages of coal leads to a close examination of the nation's energy, requirements. Coal, the country's largest proven energy reserve, can be purchased at prices ranging between 10 and 25 cents/ million Btu. On the other hand, natural gas and finished petroleum liquids are sold in many areas of the country at prices ranging from 40 cents to well over $1/million Btu. Also, reserves of natural gas and petroleum are decreasing, or at least becoming more expensive to discover and develop.

Under these circumstances, developing new processes for manufacturing hydrocarbons from coal has become a major activity of OCR. A sufficient spread exists between the cost of raw material and the selling price of the finished product to make ultimate feasibility of such processes a reasonable possibility. If, by 1980, 10 percent of the projected liquid and natural gas demand is produced from coal. an additional 300 million tons of coal per year will be consumed. The increasing demand for the remaining 90 percent will require greater production of petroleum and natural gas. Enlarging the reserve base for producing liquid and gas fuel could also substantially benefit the consumer and the over-all economy. For instance, if liquid fuel costs are reduced in 1980 by 1 cent/gal below what the cost will be if new reserves are not found, per-year savings will be about $2.5 billion.

This article describes the progress made in processes since developments were outlined in an article by George Fumich, Jr., director of OCR.

Hydrogasification Process

Development of the hydrogasification process is continuing with encouraging results at the Institute of Gas Technology (IGT) at Chicago. Fluidized bed operation has been successfully demonstrated, and present experimentation is to determine operating parameters with a wide range of coals, including lignite. Most of the original work was done with Pittsburgh seam and Illinois coal. IGT reported in 1966 on a 250 million Btu/day plant (Fig. 1). A mine-mouth plant of this type would consume about 14,000 tons of coal/day. Such a plant would represent a total investment of about $147 million, and the price (not cost) of gas, based on investor-owned utility costing, would be about 58 cents/million Btu with $4/ton coal and about 52 cents with $3/ton coal. About half of the total gas cost based on Fig. 1 lies in hydrogen production. Fuel Gas Associates has been supporting a program (independent of OCR) for developing a high-pressure steam-iron process for producing hydrogen.

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