Vol. 15, No. 5 Week of January 31, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

US Air Force considers coal-to-liquids

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University of Alaska Fairbanks researchers helping military vet synthetic fuels; local officials demand overall GHG reduction

Stefan Milkowski

For Petroleum News

Armed with a $10 million federal grant, and pushed by a mandate to use synthetic fuels, the U.S. Air Force is studying the merits of a large-scale coal-to-liquids plant in the Interior. A half-dozen researchers from the University of Alaska Fairbanks are among those helping the Air Force vet the project.

In an interview Jan. 11, Staff Sergeant James Stewart, a spokesman for the Air Force, said Jacobs Engineering, Battelle and the University of Alaska Fairbanks were chosen as prime contractors to conduct the research.

The university was tasked with reviewing a wide range of things, including carbon sequestration techniques, “ultracleaning” of coal, local air quality impacts, and the use of alternative energy at the plant, according to Gwen Holdmann, director of UAF’s Alaska Center for Energy and Power.

The University of Alaska Anchorage’s Institute of Social and Economic Research was charged with evaluating the economics of the multibillion-dollar project, and the Fairbanks Economic Development Corp. was enlisted to poll residents on their feelings toward the project and toward various fuel sources in general.

In an interview Jan. 11, Holdmann said UAF had already completed a first phase of research, which included literature reviews and some modeling but no new research, and had submitted final reports to the Air Force. Based on that work, she said, the Air Force asked for follow-up research in several areas, which the university is now pursuing.

Interest in a coal-to-liquids plant developed in 2007 when a Fairbanks-based task force concluded that such a plant could help reduce energy prices and meet the region’s long-term energy needs. The plant would first make synthesis gas from coal, natural gas or biomass, and then use the gas to generate power, make synthetic fuels, and provide district heating. Proponents say the plant could help the Air Force meet a goal of using domestically produced synthetic fuels in its aircraft.

A preliminary study funded by the state and the Fairbanks North Star Borough and conducted by Hatch Ltd. found the project could be economic at oil prices above $108 a barrel. The total cost of a large-scale CTL plant was estimated at somewhere between $4.1 billion and $7.4 billion, depending on the plant’s capacity and feedstock. (See “Report: Coal-to-liquids costly but doable,” in Nov. 16, 2008, issue at

The Air Force study is funded with a $10 million appropriation secured in a fiscal year 2009 spending bill. Stewart said the Air Force’s research will be complete in time to provide recommendations to Congress in 2012.

While the Hatch study considered several different locations in the Fairbanks area for the plant, the Air Force study focuses specifically on a plant sited at Eielson Air Force Base.

Finding a place for carbon

One of the biggest hurdles for a CTL plant involves the huge amount of carbon dioxide the plant would produce. Local officials have said they will only support the project if it reduces overall emissions of greenhouse gases in the region. But capturing and sequestering carbon dioxide is likely to be expensive and technically challenging. (The cost of carbon sequestration was not included in Hatch’s preliminary figures.)

Cathy Hanks, an associate professor at UAF’s Geophysical Institute and in the Department of Petroleum Engineering, said she and others are studying the issue for the Air Force. Hanks said researchers considered a range of geologic storage options, including using the gas for enhanced oil recovery and injecting it into deep saline aquifers or into coal seams to increase production of coalbed methane. Researchers also created a catalog of other projects proposed around the world and considered whether CO2 emissions could be reduced through the use of biomass feedstock.

Ultracleaning of coal

Another project involves “ultracleaning” the coal before gasification to reduce emissions and potentially bring down the cost of operating the plant.

Rajive Ganguli, a professor of mining engineering who is conducting the research, said the goal is to reduce the ash content of the coal from 10 percent to a fraction of 1 percent. The process involves leaching the coal in acid to remove impurities, leaving the coal ash inert and benign, according to Ganguli.

Ultracleaning could cut operating costs at a coal-to-liquids plant by reducing the wear and tear on gasification chambers and extending the life of liners used in the chambers, he said.

Ganguli said the research, which is funded through the Air Force’s contract with Jacobs, will test various leaching acids and particle sizes of coal.

Looking to the future

In all, Hanks said six or eight UAF faculty members are involved in the research for the Air Force. “There’s a whole suite of things that we did to provide the Air Force with some sort of means of evaluating whether they want to proceed down this road of putting a CTL plant on Eielson,” she said.

In December, U.S. Rep. Don Young helped secure an additional $2.4 million for the Air Force for project-related research. In a statement on the funding, Young suggested carbon dioxide from the plant could be used to increase oil production on the North Slope.

FEDC President Jim Dodson described that as a tantalizing prospect. Establishing a value to the carbon dioxide could significantly improve the economics of the project, he said in an interview Jan. 19. Increasing North Slope oil production with the use of CO2 — something a 2005 study commissioned by the U.S. Department of Energy suggested is possible — could also provide a huge economic benefit, Dodson added.

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