Get your ash out of here!

“Clean coal” has always seemed to be an oxymoron, a phrase with words that do not belong in the same thought. Having seen the soot-coated buildings in British cities, the yellow tinged smoke pouring from the stacks of power plants around Tampa Bay, and the enormous bag houses often used to capture most of the fly ash, I simply couldn’t figure out how anyone outside of a marketing or lobbying organization could call coal “clean.” Perhaps I was wrong.

In a recent column, I mentioned Cenfuel as a possible competitor to oil and natural gas for the power generation fuel business. Cenfuel is a brand name, more generally the product can be called refined coal. A chemist named Robert Lloyd began developing the process in 1967 and has successfully tested it in many pilot plants during the past 25 years.

Though not yet widely available, the Lloyd Process is worth spending a few minutes to understand. It just might help the United States and other coal rich regions reduce their reliance on petroleum products while still enabling a cleaner environment.

In the current energy market, there is a large price discrepancy waiting to be corrected. Refined fuel oil and methane have achieved rough parity in price per unit heat here in the United States, with gas prices fluctuating between $4-$10 per million BTU and fuel oil selling for somewhere between $4-$6 per MMBTU.

Both prices depend on a wide range of factors including OPEC production agreements, number of soccer moms driving Excursions, number of PCs left on overnight in Chicago, and the temperature in Vermont. In the meantime, trusty old American coal sells for about $1.20 to $1.40 per MMBTU.

So far, however, fuel managers have been unable to take advantage of coal’s impressively low and stable heat cost because coal contains impurities requiring special handling and preventing its use in direct cycle gas turbines, the most cost effective heat engine currently available.

Because of the ash content, coal fired power plants require tube cleaning mechanisms, ash handling systems, post combustion fly ash removal systems, and a whole industry dedicated to hauling away the residue produced by its use. All of that ash represents a wasted investment in transportation resources used to move the impurities from the mine to the power plant. Finally, some of the constituents of the ash are toxins like mercury and selenium that pose health risks to many living creatures.

Part of the heat price discrepancy described above can be explained by the additional capital cost required to build a coal station. Part can be explained by the cost of transportation per unit heat actually delivered, and part can be attributed to the very real environmental problems associated with the impurities. If you can somehow leave the ash behind at the mine, you can overcome most of the disadvantages that coal has compared to oil and gas.

The Lloyd process does just that. Through coal pulverization and a clever use of fluorine acid chemistry, the system dissolves the impurities, leaving a product that is essentially pure carbon with less than 0.5% other stuff. This refined product will be in the form of particles that are fine enough to be suspended in air and blown into a turbine or boiler.

The ideal system for Cenfuel use will be combined cycle plants using large frame gas turbines in combination with heat recovery systems and steam turbines. The gas turbines could be built with what many turbine suppliers want their customers to believe is obsolete technology. There is no need for low NOX burners, complex blade cooling mechanisms or highly sophisticated blade materials.

In this configuration, the plants should be able to achieve thermal efficiency potentially exceeding 50%. This is a significant improvement over the 31%-33% overall efficiency currently achieved in standard coal fired power plants with post combustion flue gas clean-up systems.

However, the main reason to get excited by the possibilities offered by Cenfuel is that it will be able to substitute for oil or gas in even non-ideal power plants. Fuel managers of modern, competitive power plants desiring to use the cheapest heat available may soon have a new alternative.

This is especially true in light of President Bush’s recent decision to exempt carbon dioxide emissions from his anti-pollution plans. One fact that no amount of coal refining will overcome is that carbon fuels produce between 20% and 40% more CO2 than hydrocarbons would in an identical plant.

Of course, there are other hurdles that must be overcome. Refined coal will cost about twice as much per unit heat at the source as raw coal. (That is why there was little interest in the system when gas prices were about $2 per million BTU.) The cost differential is attributable to the capital and operating cost of the required refinery.

Customers will also have to make an investment in new fuel storage and handling systems to use the pulverized, purified coal instead of oil or gas. With current petroleum prices, investors in refined coal projects should see a significant return on their capital. The final product price should be determined by a competitive market where customers can decide between fuel oil, gas and refined coal.

A word of warning to the makers of Cenfuel or other licensers of the Lloyd Process: Do not expect everyone to be excited by a technology that produces a coal product capable of competing with oil and gas. There are a number of successful and politically astute corporations that are enjoying elevated petroleum prices and gloat about their enormous recent profits in annual stockholder reports.

Since some of those companies also brag about their contributions to organizations claiming to be stewards of the environment; do not expect that this system will satisfy the environmental lobby.