Building a coal-gasification system to supply Agrium USA’s Nikiski fertilizer production plant with power and feedstock, which would eliminate dependence on Cook Inlet natural gas, is technically and economically feasible, according to a recently released U.S. Department of Energy study.
The “Beluga Coal Gasification Feasibility Study,” produced by the DOE’s National Energy Technology Laboratory (NETL), focused specifically on the economic feasibility of having a coal-based plant in the Cook Inlet region to produce electrical power and marketable byproducts such as synthesis gas, Fischer-Tropsch liquids (synthetic fuels), fertilizers such as ammonia and urea, hydrogen, nitrogen and carbon dioxide.
Agrium is engaged in a long-range feasibility study of its own in an effort to determine if it can continue operating the Nikiski plant profitably by constructing a power generation plant and coal gasifier to produce energy and supply feedstock for its fertilizer manufacture operations. While the DOE study is independent of Agrium’s own, Agrium did participate in the DOE study, according to an Agrium spokesperson Lisa Parker.
The DOE study said economy-of-size considerations suggest the power plant would be large enough to produce an excess of electrical energy beyond that needed by Agrium power that could be sold to the Railbelt Energy Grid. The entire system could also produce other marketable byproducts, the study said.
The DOE’s conclusions were based on certain assumptions, some of which may no longer apply.
For instance, while DOE suggested construction of an integrated gasification combined-cycle, or IGCC, plant was a financially attractive configuration, Agrium spokesperson Lisa Parker said Friday that Agrium had rejected an IGCC plant due to cost as far back as mid-2006, and instead was looking at using a pulverized coal burner to generate the electrical power to run a coal gasifier, an air separation unit, the fertilizer plant itself, and produce up to 70 megawatts of excess energy available to the Railbelt Energy Grid.
A power plant operating on pulverized coal would require about 3 million metric tons of coal per year, far less than an IGCC plant, which would require about 4.5 million metric tons, Parker said.
Also, while the DOE study did a general assessment of a plant supplying energy and feedstock to produce ammonia, urea, hydrogen, various fuels and other byproducts, Parker said Agrium is now considering eliminating one of its main Nikiski plant product lines ammonia.
“In our redesign, our focus is on producing urea,” she said. “We would still need to make ammonia to make urea, but we would not be looking at export of the anhydrous ammonia.”
Agrium Project Manager Tim Johnson said it takes about two tons of coal to produce one ton of ammonia, but only one ton of coal to make a ton of urea, making urea the more economical product. That represented a key difference from the DOE study, in which maximizing ammonia production was the focus, he said.
Agrium launched its feasibility study around January 2005, and completed its evaluation of an IGCC design by October, shortly after the DOE study began. The DOE study looked at the IGCC, as well as another configuration called a conventional fluidized bed coal-fired boiler.
“We were on the advisory committee for the DOE study,” Johnson said.
Despite the differences between the two studies, Johnson and Parker said the DOE study complimented Agrium’s own, broader feasibility study.
“The DOE study is a very good study,” Johnson said, adding that it was very helpful in answering the basic question whether gasification could be made to work on the peninsula. While Agrium reached the same general conclusions regarding certain technical issues, it was good to have the affirmation of an independent study, he said.
In essence, the two studies consider what may be possible, but Agrium’s must go further and determine if an approach would make Agrium a profit, as well, Parker confirmed.
The DOE study concluded that there were sufficient nearby coal resources in Alaska to supply a gasification system and power plant at an economical price. Parker said Agrium had been looking at the Beluga coalfields as the likely source, but after determining it would need significantly less coal for a pulverized-coal power plant, all options are now on the table, including bringing coal from the Usibelli Coal Mine in Healy.
The DOE study also concluded that:
n Carbon dioxide (a process byproduct) could be produced in sufficient quantity and at a cost that may permit enhanced oil recovery of perhaps as much as 300 million barrels of oil from Cook Inlet fields. However, the CO2 price would have to be higher than currently projected to be economically feasible.
n Domestic and foreign markets exist for other possible byproducts Fischer-Tropsch diesel fuel, elemental sulfur and sulfuric acid, and slag as low-density aggregate, road-building material or sandblasting grit.
n Converting the Agrium plant for use of gasified coal would make more of Cook Inlet’s existing supply of natural gas available for other uses, including home heating and electrical power.
Parker said it was too early to say if Agrium’s study was leaning toward or away from proceeding with a gasification project.
“As you evolve through the process, you have targets you’d like to meet, but sometimes you have to go back and examine things again,” she said.
However, Parker also said that Agrium expects to be ready by January to begin the process of seeking the local, state and federal permits it would need should their study conclude that a gasification project ought to proceed.
“We are continuing to move forward,” she said, adding that a final decision whether to proceed could be made in the summer of 2008.
Hal Spence can be reached at email@example.com.
© 2017. All Rights Reserved. | Contact Us