Coal Gasification Technologies in Building Energy Security - Some Policy Suggestions

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• Coal Gasification Technologies in Building Energy
  Security - Some Policy Suggestions
• R.H. KHWAJA, I.A.S
• CMD,SCCL

26th July 2006, ENERGY CONCLAVE -2006, NEW DELHI.
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• The price of oil hit record high of 78 per
  barrel on 10.7.2006. The energy crunch looks
  like heading from bad to worse in the coming
  days.
• Report of Goldman Sachs predicts that between
  2000-2050 Indias GDP will rise 60 times and
  Chinas 40 times.
• It is impossible to meet this demand. The world
  crude oil production today is just 85 Million
  Barrels per day and does not seem likely rise
  much higher.

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• Approximately 94 of Indias energy consumption
  is based on 3 sources of fossil fuels coal, oil
  and natural gas. Natural gas has experienced a
  fast rate of growth among the fuels in Indias
  primary energy supply.
• The imperatives of such rise in demand for energy
  and the rising oil prices dictate that the Energy
  Security of our Nation is as important as that of
  territorial security.
• As our President His Excellency Dr. Shri
  A.P.J.Abdul Kalam mentioned we should strive for
  energy independence to achieve the higher
  economic growth rate.

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• To build energy security of our nation, we should
  have a holistic approach towards various sources
  of energy, which includes renewable and
  non-renewable sources. There has to be an
  integrated approach in evolving a balanced fuel
  mix so that not only our energy needs but our
  environmental concerns are also addressed.
• Approximately 80 of the world's energy
  consumption is based on three sources of fossil
  fuel coal, oil, and natural gas.

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• If we continue to burn fossil fuel at our present
  rate, we could experience a quadrupling of world
  CO2 emissions over the course of the next 125
  years as a consequence of population growth and
  increased energy demands. According to the
  International Energy Agency (IEA), emissions
  generated by world energy consumption will
  increase by 70 by 2020.
• Since the Natural gas is combustible and burns
  more cleanly than any other energy sources helps
  reinforce its position as one of the most highly
  used energy sources in the future. Oil continues
  to drop even though the oil consumption has
  increased, while coal remains unchanged.

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• Therefore in the long run for eco-effective
  energy solutions India has to focus on coal
  gasification technologies like Coal bed Methane
  (CBM), Underground Coal Gasification (UGC),
  Surface Coal Gasification (SCG), Integrated
  Gasification Combined Cycles (IGCC) and Fluidized
  Bed Combustion which are cleanest, safest, and
  most useful forms of energy. RD efforts require
  to be intensified to make these technologies
  commercially viable.

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• Coal gasification offers one of the most
  versatile and cleanest ways to convert coal into
  electricity, hydrogen, and other energy forms.
  The first coal gasification electric power plants
  are now operating commercially in the United
  States and in other nations, and many experts
  predict that coal gasification will be at the
  heart of the future generations of clean coal
  technology plants for several decades into the
  future.

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• Coal industry should be the flag bearer in this
  extensional domain of mining that is Coal Bed
  Methane and Underground Coal gasification. The
  power and fertilizer industries emerged as the
  key demand drivers for natural gas due to the
  scale of their operations, policy intervention
  and social impact. Another application to emerge
  is the use of CNG for vehicles to replace liquid
  fuels, as urban pollution grows to alarming
  levels.
• Fossil fuels (coal, oil and gas) are non
  replenishable, hence they need to be utilized
  judiciously through the principle of sustainable
  development and coal gasification route is the
  best option to achieve it.

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• Fossil fuels (coal, oil and gas) are non
  replenishable, hence they need to be utilized
  judiciously through the principle of sustainable
  development and coal gasification route is the
  best option to achieve it.
• India is endowed with rich deposits of coal
  reserves in different sedimentary basins. The
  bulk of the coal resources in our country are
  around 256 billion tonnes. Large resources of
  high rank coal in the country provide ample
  opportunities for harnessing this un-conventional
  source of energy.

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• Recent studies indicate that the coal seams in
  the depth range of 600-1000m may yield on an
  average 4.5m3/tonne of gas in the blocks
  identified for Coal Bed Methane in Godavari
  Basin. Possibilities, therefore, exist to extend
  these studies to other areas of this master basin
  in future, where coal mining is not anticipated
  for the next 30 / 35 years.

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• UNDERGROUND COAL
• GASIFICATION (UCG)
• Underground Coal Gasification (UCG) is an
  emerging technology in which coal can be burnt in
  a controlled manner and gasified under insitu
  conditions to harness energy.
• In India, UCG was taken up as national project in
  the early 80s. ONGC is engaged in the UCG
  activities as it is having the required expertise
  in deeper drilling, 3D seismic imaging,
  directional drilling and underground ignition/
  combustion.

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• SURFACE COAL GASIFICATION (SCG)
• Surface Coal Gasification (SCG) is a process,
  which converts coal into combustible and
  non-combustible gases at high temperature and
  pressure at surface. The product derived by SCG
  known as syngas can be used for power generation
  and/ or as chemical feedstock. The down stream
  application of Syngas are
• Ammonia/ Urea
• Dimethyl Ether (DME) for power generation, as
  LPG substitute, as transportation fuel, as
  chemical feedstock etc.

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• Methanol for Gasoline Blending Coal
  gasification route can be extended to
  manufacturing Olefins from Methanol (called MTO)
• Coal to Liquid Petroleum (CTL)
• Power generation Syngas can be used for power
  generation through IGCC technique. This is the
  most common use of the syngas.

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• COAL TO OIL
• Last week, Finance Minister P. Chidambaram
  disclosed that South African Company Sasol is
  considering investing 1 billion, rising
  ultimately to 6 billion, for a project to
  convert Indian coal into petroleum products.
  Sasol is a pioneer in CTL (Coal to liquids)
  technology. It developed this technology in
  apartheid days to provide energy security to
  South Africa, which was then facing oil
  sanctions.
• Oil produced by this process was costly and
  uneconomical at the time. But with the sharp
  rise in oil prices in the last two years,
  coal-to-liquids suddenly looks a bargain
  technology.

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• POLICY SUGGESTIONS FOR PROMOTING COAL
• GASIFICATION TECHNOLOGY
• With rich coal bed methane resources in this
  country, the development of coal bed methane
  industry will undoubtedly present an important
  impact on the improvement of the national social,
  economic and environmental development. We
  suggest that the government work out a detailed
  overall coal bed methane development program as a
  key component of energy security policy. This
  program shall be included in the national
  development program for the XI XII
  Five-Year-Plans for implementation.
• Develop transportation and distribution assets in
  the oil and gas sector that provide services
  under common carrier principles applicable to
  natural monopolies.

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• Allow foreign operators to bring technology and
  investment to recover oil/gas from currently
  abandoned and/or marginal fields on economic
  considerations.
• Extend infrastructure status to the coal
  industry. Lower duties on capital goods imported
  for coal mines.
• We suggest that the government put in appropriate
  amount of funds to increase investments in
  development of infrastructures for CBM and other
  coal gasification technologies in our country.
  Government should consider preferential loan
  inclination policies for the development of such
  alternate technologies.

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• We also suggest that preferential treatment of
  income tax reduction or income tax exemption be
  given to investments made for coal bed methane
  Projects and other coal gasification projects.
• Every effort should be made to encourage the
  private investments in the sector and intensify
  technical and economic links with large
  enterprises and financial institutions at both
  home and abroad.
• (VIII) Amendments to present labour laws would
  also be necessary for introduction of these
  technologies. Coal mining sector should get
  exemption from provisions u/s 10(1) of Contract
  Labour Act 1970 which restricts outsourcing of
  activities necessary for coal gasification
  technology.

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