Emerging Technologies Could Help Maximize Coal Utilization in the U.S.

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Researched by Industrial Info Resources (Sugar Land, Texas) – A number of new and emerging technologies using coal to produce a variety of fuel and petrochemical products including upgraded coal, synfuel and liquid products, could have a significant impact on the U.S. coal mining sector in the future. Already looking at a moderate U.S. coal production increase forecast in the 1-2% per year (See related July 30, 2007 news article Long-Term U.S. Coal Production Forecast to Increase as New Mine Development Outpaces Mine Closures), U.S. coal miners could see that figure increase significantly if certain developing coal technologies prove feasible. In addition to almost $4 billion in traditional coal mining related project work, the coal industry is developing about $30 billion worth of coal-to-liquids and coal-to-syngas technology projects in the U.S.

Click on the image at right to view a chart showing the breakdown of traditional coal mining sector project spending by market region.

One of the companies on the verge of commercializing coal upgrading technology is Evergreen Energy Incorporated (NYSE:EEE ) (Denver, Colorado), formerly KFx Incorporated. Coal upgrading technology takes low BTU coal and increases its BTU (British thermal units) value, and at the same time reduces environmental emissions of mercury, SO2 and NOx. In 2006, after years of development, Evergreen Energy finished construction of what is to become its first commercial scale coal upgrading plant at the Fort Union Coal Mine in Gillette, Wyoming. The company’s K-Fuel® process uses heat and pressure to physically and chemically transform high moisture, low BTU coals into a more energy efficient, lower emission fuel. A co-benefit of the K-Fuel® process is the removal of significant amounts of mercury and reductions in the emissions of carbon dioxide, sulfur dioxide and nitrogen oxides.

During the next year, Evergreen Energy will focus on the optimizing the process of its maiden plant to bring it up to 750,000 ton per year capacity.

In 2004 and 2005, Evergreen Energy evaluated a slew of projects for mine-mouth commercial scale projects at Fort Union, Coal Creek and Buckskin mines (all former producers). Since that time, the company has shifted direction away from mine-mouth project, focusing instead on siting coal upgrading plants at the end user – power plants.

Another important input into the coal production forecast equation is the development of coal-based liquids and synfuels projects which if commercialized could not only revolutionize the coal mining industry, but also could significantly effect U.S. coal mine production in the long term. With the world largest coal reserves, the U.S. has tried, for the most part unsuccessfully, to commercialize and make economic coal-to-liquids technologies. With the goal of using plentiful domestic supplies of coal, both government and industry sources are funding development of an increasing number of coal-to-liquids projects. The world largest coal mining company, Peabody Energy has signed agreements with two leading coal-to-liquids development companies (ConocoPhillips and Rentech) to apply and commercialize coal gasification technologies. Peabody Energy and ConocoPhillips recently agreed to study the development of a coal-to-syngas project to be built in Illinois, Indiana, or Kentucky. The project would utilize ConocoPhillips E-Gas gasification process. Peabody Energy and Rentech are involved in three projects in Illinois and Montana.

There are also coal gasification projects planned by DKRW, Empire Synfuel, Indiana Gasification, Process Energy Solutions, Ohio River Clean Fuels, US Syngas, Synfuel Incorporated and Silverado Green Fuel Incorporated, to name a few. If developed, these coal-to-liquids or coal-to-syngas projects will require expenditures approaching $30 billion and will require almost 30 million tons per year of U.S. sourced coal to process.

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