Gas industry: rising to the global environmental challenge - Life cycle analysis of GTL

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Gas industry rising to the global environmental
challenge - Life cycle analysis of GTL

• Fred Goede
• Sasol Limited
• 7th Doha Natural Gas Conference
• 11 March 2009

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An integrated oil and gas company with
substantial chemical interests

• Sasol has primary and secondary listing on the
  JSE and the NYSE
• Market capitalisation of US 31 billion (October
  2008)
• Current production capacity
• Coal mostly for conversion into fuels - 45
  million tons per annum
• Liquid fuels from coal gas in SA 8 mtpa
  (160 000 bpd )
• Liquid fuels from crude oil 4.6 mtpa (95
  000 bpd)
• Gas to liquids projects outside South Africa
• Oryx GTL in Qatar 49 stake with Qatar Petroleum
  Escravos GTL in Nigeria under construction both
  nameplate 1.3 mtpa (34 000 bpd)
• Currently undertaking feasibility coal to liquids
  studies in China, India and US

US 546m
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Contents

• Climate science and solutions
• Life cycle analysis (LCA)
• motivation, methodologies and results
• Future climate mitigation strategies
• Communication and awareness
• Conclusion

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Protecting the environment
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Reducing carbon emissions is particularly
challenging incremental reduction will help a bit
Models differ widely in their estimates of
contributions to the virtual triangle from
structural shifts (towards services), energy
efficiency, and carbon-free energy
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Natural gas switch plays an important part,
although no silver bullet exists
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Scenarios for GHG emissions will climb over a
hump

• developing countries will increase emissions at
  least until 2020 (best case), before reducing to
  reach current levels by 2050
• developed countries already reducing, aiming
  almost carbon neutral by 2050
• world can reach IPCC target of 550ppm if world
  emissions are 25 below 1990 levels in 2050

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Sasol GTL fuel technology offers viable
alternatives to crude-derived fuel

• large resource base with natural gas
• diversifies energy resource base and thus
  improves energy security
• uses existing fuel distribution systems
• products interchangeable to the end user
• offers environmental benefits
• proven technology that is already applied on a
  large scale

the world is not short of energy but short of
innovative solutions
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Our LCA history

• Conducting LCAs since mid 1990s as entry ticket
  to government negotiations and to build in-house
  understanding
• Commissioned independent LCA study in 2002
  transportation fuel technologies aimed at
  monetising remote natural gas
• LCA compared Sasol GTL technology with a modern
  refinery (Business-as-usual)
• Dr Michael Wang (Argonne National Laboratory)
  acted as critical external reviewer
• Further progress was made since, to address the
  development areas identified in the first studies

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In addition, LCA helped us understand recent
changes in proposed fuel legislation

• During January 2007 the following was announced
• California Low Carbon Fuel Standard (LCFS) for
  transportation fuels - 2020 target to reduce
  carbon intensity of passenger-vehicle fuels by at
  least 10
• Draft EU Fuel Quality Directive targets on GHG
  emission reduction - mandatory reporting of
  lifecycle GHG emissions for fuels from 2009 and
  fuel suppliers to reduce GHG by 1 p.a. between
  2011 and 2020

Licence to sell No data no
market
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LCA methodologies

• The EIA process is more suitable approach for
  evaluating GTL production facility environmental
  effects, not LCA
• But for the impacts of a whole industry, LCA is a
  better tool
• A subset approach is called well-to-wheels
  focussing on transport fuels only, allocating
  burdens on one product and normalizing results
  per unit of distance travelled, a simple method
• LCA Systems Boundary Expansion approach is more
  suitable for global issues like GHG emissions,
  but is more complex
• Other GTL products like GTL naphtha, GTL
  kerosene, GTL normal-paraffin and GTL lubricant
  base oils are important to be included in the LCA

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Two different types of LCAs
Allocation method (Well-to-wheels) method System Boundary Expansion (SBE) method
Not ISO compliant ISO 14040 series compliant
GM/ DOE, CSIRO, CONCAWE Sasol Chevron, Shell, Conoco Phillips
Focus on one specific product Focus on technology and all resulting products
Results GTL GHG emissions 10-15 higher than Refinery Results GTL GHG emissions comparable to Refinery
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Position on methodology

• GTL makes co-products that are less carbon
  intensive than comparable routes (e.g. GTL
  naphtha vs. Refinery naphtha) and in the case of
  GTL naphtha there is a downstream benefit. These
  benefits CANNOT be captured using an allocation
  approach. Full substitution/ displacement as used
  in system boundary expansion for LCA, is required
• WHY?
• Substitution/ displacement is a more
  comprehensive analyses. Given the critical issues
  of GHG emissions and future requirements, a
  comprehensive view is necessary
• The future energy requirements will depend on a
  diversity of alternative fuels and fair
  methodologies are imperative to ensure they all
  receive equitable treatment going forward

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Business as Usual (Refinery) and GTL cases used

• Refining crude oil is the current (an in the
  foreseeable future) the main process to deliver
  road transportation fuels. Large scale (200,000
  bbl/d) modern complex/ semi-complex refinery was
  used to supply three regions - typical crude and
  product slate for US, EU and Japan
• GTL case was scaled up and based on nominal
  34,000 bbl/d name plate ORYX GTL design data, the
  plant that is in operation today
• 2010 focus
• 10ppm (EU), 15ppm (US), 50ppm (Japan) for ULSD
• No technology advancements were taken into
  account

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GTL shows better particulate and acidifying
emissions
particulate emissions
acidifying emissions (SOx and NOx)

• Upstream
• Production

• Upstream
• Production

• Transportation to user
• Use

• Use

Conventional Diesel
Ultra low sulphur diesel
Diesel blend (20 GTL, 80 ultra low sulphur
diesel)
Conventional Gasoline
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Greenhouse gas results per lifecycle phase
All refinery products
Transportation fuels only
Basis 200,000 bbl/d Refinery
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Additional GTL benefits not claimed at this stage

• GTL is an emerging industry and technology that
  requires correct accounting for all GTL
  co-products
• Looking into the future, further refinements
  could reduce carbon burden below refinery
• Further expand product slate, e.g.
  normal-paraffin and base oil
• Develop dedicated engines with vehicle
  manufacturers
• Further improve GTL process efficiency through
  energy integration
• GTL offers CO2 emissions mainly from a single
  source (production plant), compared to tailpipe
  emissions. As a result, carbon capture and
  storage can be done more cheaply than combustion
  sources, but CCS needs a regulatory framework and
  financing incentives (UNEP, 2005)

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Updated GTL LCA results lubricant base oil case
study

• The allocation WTW method yields 454 g CO2e/mile
  for GTL
• However, using the LCA system boundary expansion
  method-
• 291 g CO2e/mile (26 better than conventional
  diesel)
• 35 better than GTL diesel allocation method,
  mainly due to benefits of GTL lubricant base oil
• Higher quality GTL lubricant base oils when
  compared to refinery product, has downstream
  carbon savings and extended oil drainage intervals

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Life cycle GHG emissions comparing Allocation
method with SBE method
Case study Including Base Oil case
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Life cycle GHG emissions comparing Allocation
method with SBE method
Case study Including Base Oil case
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Key message from LCA

• The Sasol GTL process offers significant benefits
  in air quality due to its lower emissions of
  hydrocarbons, nitrogen oxides and sulphur oxides
  when compared to refinery
• These benefits are achieved with no greenhouse
  gas penalty and shows even better improvements if
  all GTL products are properly accounted for

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We know the carbon solution is complex
GTL offers an competitive part of the energy
solution, but national and international efforts
are essential to deal with the complex social,
economic and technical challenges presented by
carbon A much broader and multifaceted approach
is required and other criteria pollutants also
have to be considered, which includes engagement
with appropriate stakeholders to gain mutual
understanding of the situation
there is no single GHG solution, but with
commitment, timing and correct investment
decisions, business has the opportunity to make a
difference
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Thank you

• fred.goede_at_sasol.com
• Sasol Limited, P.O. Box 5486, Johannesburg, South
  Africa. Tel [phone]