The Australian newspaper reports today that a $2 billion coal project to turn brown coal into urea is to be launched in Victoria’s Latrobe Valley.
Apparently every year Australia imports 550,000 barrels of oil a day and 1.3 million tonnes, ($300 million worth) of urea for fertiliser, and this new project could replace all our petroleum imports by turning our huge reserves of brown coal to oil.
The plant will use coal gasification and condensing technology and its backers say all the CO2 produced will be stored beneath the sea, making it a ‘clean coal’ project.
Gasification works by treating coal at very high temperature with a controlled amount of oxygen to produce a gas that can be converted to diesel. Nitrogen is added towards the end of the process to make urea.
The entrepreneur behind the project, Allan Blood, says the new plant would generate 1.2million tonnes a year of urea and all the CO2 produced would be stored in reservoirs that once contained natural gas in Bass Strait. He says once the reaction is established, it is self-propelling and the CO2 generated is easy to trap and then store.
The Australian Energy Corporation chairman says:
“There’s no reason why Australia could not be totally self sustainable in petroleum products, or any other chemical product such as urea, from coal…
We have got all the coal in the world here for goodness sake. It becomes the highest-quality fuel or diesel imaginable. Sasol in South Africa have been doing it since 1968, making 150,000 barrels a day.”
The plant, expected to be operational by 2012, has the backing of several London-based equity funds. Joint-venture discussions with several major chemical companies have begun.
The project will require 1000 workers to produce urea through a gasification process similar to the one used in the first stage of producing oil from coal.
Turning coal into diesel goes back to World War II, when Germany used it to supplement its dwindling oil supplies. Today South Africa is by far the biggest user of the technology in what is a hangover from apartheid days when the country was concerned it would be locked out of world oil markets.
Although there is a large geographic spread of coal reserves, the process is expensive and it also produces significantly more carbon than traditional petrol-diesel production and has been described as one of the most environmentally unfriendly means of producing oil.
This all sounds positive… but can the environmentally unfriendly aspects be contained?