2007 Gasification Technologies Conference Gasification Industry Roundtable Oct. 15, 2007 Major Developments & Emerging Trends
2007 Gasification Technologies Conference Gasification Industry Roundtable Oct. 15, 2007 Major Developments & Emerging Trends
2007 Gasification Technologies Conference Gasification Industry Roundtable Oct. 15, 2007 Major Developments & Emerging Trends
Good morning. I want to thank Jim and the Council for pulling
together this industry roundtable this morning. As important as the
nuts and bolts of putting these plants together are, and those
technical topics are going to be discussed throughout these three
days of the conference, there are transcending drivers that are
changing the face of this industry. Coal, Coke, Congress, and China
are some of them, but it’s really all about Cost and Carbon.
Let’s talk about the power market for gasification first. The majority of
the announced new coal IGCC plants are in the United States. That’s
not saying there are not others around the world – demonstrations in
Japan and Korea, a couple of planned projects in Europe and some
recent announcements in China. There are non-coal IGCC’s as well,
mostly for polygeneration and using refinery residuals.
But the U.S. has always been the leader in coal-to-power gasification.
There were over two dozen announced coal IGCC plants in the U.S.
at the start of this year. Only one has been announced since then,
and in just the past three months, four of the more advanced projects
have been shelved or swapped to natural gas. Three others have
seen major delays stemming from slow regulatory closure. These
weren’t projects that were only newspaper ink, these projects have
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
been in planning for years and had millions of dollars invested in
them.
It’s not strictly an IGCC issue…it’s a coal plant issue and a major
capital project issue. Proposed conventional coal plants are
disappearing even faster than the IGCC’s.
I think we all know what the root causes are. Skyrocketing material
costs, spot labor scarcity and competing projects of all kinds that are
causing delays and increasing costs. Then too there is so much work
domestically and around the world that the EPC companies that build
these plants have record backlogs, and their appetite for supporting
almost any project risk has dried up. And the bigger the projects are,
the harder they are being hit. Energy projects are the most capital
intensive of all construction, and they are taking the biggest blows.
The projects being driven by regulation, such as environmental
retrofits and ethanol, are still happening. Projects being driven by
renewable portfolio standards, some of which are also supported by
$18/MWH federal tax incentives, are still happening.
Carbon capture has become the all important, all consuming issue
for coal power plants, and there are a lot of claims and confusion
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
surrounding both the capture and compression sides of the equation.
ConocoPhillips and WorleyParsons have been working together on
evaluating the performance and cost impacts of various levels of
carbon capture and compression in an IGCC plant. Importantly, these
studies are all based on current commercial technologies. We are
presenting a summary of the results of one of these studies, on sub-
bituminous coal, in the Tuesday morning Carbon Capture session
here at the conference.
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
Its ironic that all of the drivers for new efficient climate friendly power
plants are probably going to keep the old not-so-environmentally
friendly plants running even harder and longer.
I’m not trying to say the IGCC outlook is bleak. There are good
projects that are going to be built. But IGCC has always come in
waves. A quarter GW in the 80’s, a GW in the 90’s, and a 3-5 GW’s
now. But the wave that is true commercialization and widespread
utilization is slipping farther out to the future.
EIA tells us something different, but more and more private studies
are questioning their analysis, especially the capital cost basis and
carbon capture assumptions that their analysis says will lead to
increased coal consumption. There’s a serious bust there.
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
The E-Gas Technology gasifier is pretty well known for being fuel
flexible, but its syngas flexible too. Historically we’ve been focused on
the utility market and sort of plain vanilla syngas applications, but we
are receiving more and more inquiries from the industrial gasification
and polygeneration projects because we can custom manufacture
syngas over a wider range than the single stage gasifiers.
Five years from now, I think we’ll have a handful of IGCC plants
running or in construction in the U.S. Not just mostly government
funded technology initiatives like FutureGen and Orlando, but a set of
commercial projects like Mesaba, Pacific Mountain…and even
Edwardsport. It will be another wave of projects to solidify IGCC’s
position in the power industry. The DOE and Treasury are delivering
on the loan guarantees and tax credits that we’ve been talking about
for years. Many of the states are stepping up to give gasification a
boost as well. Everybody in this room needs to be behind all of those
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
projects because at the end of the day, coal is the largest domestic
energy resource, gasification is the biggest opportunity for coal, and
coal-to-power is the largest opportunity for gasification.
But there’s more than one kind of coal-to-power, and five years from
now there may be more SNG fed Combined Cycle plants than IGCC.
It’s not as efficient or technically elegant, but that’s where the cards
are stacked.
Its taken decades of all of our efforts (and high energy prices) to
make this happen.
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2007 Gasification Technologies Conference
Gasification Industry Roundtable Oct. 15, 2007
Major Developments & Emerging Trends
his own effort toward making this gasification industry what it is today
the guy that was always the brains behind the technology end of E-
Gas, will receive the Gasification Technology Council’s Lifetime
Achievement Award at lunch today.
Thank you.
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