2 ctg expert opinions final

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Coal-to-gas backgrounder 2: expert opinions (as of July 2014) I. Advocates for expediting the development of coal-to-gas 1. Li Zhijian, Head of Department of Inorganic Chemical Engineering, China National Petroleum and Chemical Planning Institute 

Commentary: Clearing the Name of Modern Coal Chemical Industry o Compared to direct burning of coal, coal chemical engineering can centrally process and utilize pollutants, thereby lowering the emission of nitrogen oxides, sulfur oxides and dust. o “Development of intensive coal processing industry such as coal-to-gas production will positively impact the environment and economics of the country. It is a crucial means by which we can achieve efficient and clean utilization of coal resources and ensure the nation’s security in energy supply.”

2. Wang Shudong, Head of Energy Conservation and Environmental Research Division, Dalian Institute of Chemical Physics, Chinese Academy of Sciences 

“Given the surging demand for natural gas, supply must be made available via multiple channels.

Nonconventional sources of natural gas, such as coal bed methane and shale gas, have limited potential.

Only by actively promoting coal-to-gas development can we achieve self-sufficiency in natural gas and guarantee security in energy supply.” (interview: “Domestic technology support needed to spur coal-togas boom”)

3. Tang Hongqing, Senior Engineer, Synfuels China 

Commentary: Reasons for Supporting Coal-to-gas o A) Generating power from coal-converted gas is less harmful than from direct coal burning. B) advanced technologies can minimize pollution from coal-to-gas production o “Coal-to-gas is a niche that befits China’s current situation. Power generation using coal converted gas produces considerably less pollution overall than does coal-fired power generation. And this pollution we can contain using technologies currently available.”

II. Those who take a balanced view

1. Ni Weidou, Professor of Thermal Engineering, Tsinghua University, member of Chinese Academy of Engineering 

Commentary: Advancing China’s Future Energy Development (2006)  “Although the conversion from coal to SNG yields an energy efficiency of only 60% or so, gas pipelines prove to be more efficient in long-distance transportation. In terms of terminal utilization, the fact that it’s a clean gaseous fuel means that various advanced energy utilization systems, technologies and equipment can be used, including distributed energy supply and triple supply of heat, power and cooling. Looking at the entire supply chain, this may lead to improvement in overall energy efficiency and reduction in carbon emission. A key issue here is still emission and processing of CO2 from coal-to-SNG production. One possible solution is to combine wind power and SNG, using wind generated power to break water into hydrogen and oxygen through electrolysis. This can multiply the unit output of SNG much like in the production of methanol. This will also greatly reduce CO2 emission.”

2. Bai Yi, Deputy Dean of China National Petroleum and Chemical Planning Institute 

“The government needs to strengthen its control in project approvals. The key is to maintain a sensible approach to development and establish a sustainable industry structure. To effectively reduce the emission of pollutants from coal-to-gas production, the government has to lift the entry bar of coal-togas industry, strictly implement relevant environmental standards, encourage domestic energy giants in taking on R&D and pilots of key technologies, as well as explore new paths in modern coal chemical industry that are green, low-carbon and highly efficient.” (interview: “Coal-to-gas: Actual Reduction in Carbon Emission or Mere Shift of Pollution”

3. Zhou Xueshuang, Supervisor, Division of Petroleum, Chemical and Light Textile, Environmental Engineering Evaluation Center, Ministry of Environmental Protection 

Commentary: Current Status and Environmental Issues of Coal-to-gas Industry o “The country took on ’coal-to-gas’ as a means to curb airborne pollution. To best utilize ‘gas replacing coal’ as a measure to improve air quality, and to truly achieve visible results, the environment must be the dominating factor. Otherwise we will suffer such consequences as ‘Beijing’s pollution being shifted to Shanxi and Inner Mongolia’ and ‘pollution in the east being shifted to the west’.” o “Large-scale coal-to-gas development will inevitably center around the western region. It so happens that right now the appetite for economic growth in the western region is overly stimulated. Ecological system there is fragile, and the environment is already suffering from the blind and chaotic development of coal-to-gas industry. Reality calls for a scientific approach in development in the western region, with the environment as a dominating factor.”

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“For location of coal-to-gas plants in the western region, priority should be placed in areas where water resources are relatively in abundance and outlet is available for sewage discharge.

Coal-to-gas production should be in large scale and centralized where possible. It should be paired with other power production plants to achieve economies of scale, maximizing use of resources and minimizing emission of pollutants.”

4. Chen Liuqin, Deputy Head of China Institute of Energy Economics Research 

Commentary: Coal-to-gas Industry Steadily Marching Forward among Voice of Concern, Coal-to-gas Policy: Yesterday and Tomorrow, Coal-to-gas industry Should Advance with Great Care, Weighing Pros and Cons o “In the era of natural gas in China, coal converted gas will have its own place. The energy revolution needs to not only ‘increase gas’ but also ‘produce gas’. Only by actively promoting coal-to-gas development can we achieve self-sufficiency of natural gas and guarantee our security in energy supply.” o “As a substitute and supplement of liquidized oil gas and natural gas, coal-converted natural gas is a new way to clean energy production. It helps optimize the structure of the intensive coal processing industry and broaden the coal chemical supply chain. It boasts high efficiency in energy utilization, which is in line with the direction of future development in coal processing at home and abroad. We think that it is feasible to develop large scale coal-to-gas projects to an appropriate degree in selected areas. Coal converted gas may become an important substitute and supplement of liquidized oil gas and standard natural gas.” o “Growth and development of coal-to-gas industry is not possible without focused long-term strategic planning. Planning must precede development, be based on scientific research, and be able to serve as guiding principles. Planning and distribution of coal-to-gas projects must be conducted scientifically, orderly and reasonably under the guidance of national energy planning principles; the bigger picture must be taken into account and the distribution of projects must be justifiable. How the model projects pan out will be key in deciding future policies on coal-togas production. The economic gain, environmental sustainability and spillover effect on other industries from the model projects will serve as an important reference in shaping future policies on the coal-to-gas industry.”

III. Opponents of large scale development of coal-to-gas production 1. Li Junfeng, Supervisor, National Center for Climate Change Strategy and International Coorperation 

Research paper: Analysis on Environmental and Economic Indicators of Coal-to-gas Technology o Five suggestions regarding policy making:

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1. At present the coal-to-gas initiative should be regarded as only a makeshift measure, not a national strategy.

2. Even if coal-to-gas is feasible, production should not be concentrated in the northwest region where severe drought persists.

3. Given the need to control the peak level of our greenhouse gas emission as well as total energy consumption, China should not develop coal-to-gas production in large scale.

4. Taking into account energy security and international cooperation, it is not suitable to develop coal-to-gas production in large scale.

5. The relevant government bodies should set goals of clean and low-carbon energy development by strategically considering the pressure and needs of optimization of the energy consumption structure, control of environmental pollution and control of climate change.

“Given the current availability of technologies, we should develop coal-to-gas industry with great caution, or in limited scope and with conditions. A coal-to-gas industry swarming with blind investors should be avoided at all cost. If this system is allowed to take shape, it will sustain well into the future, negatively impacting our country’s energy supply chain, climate change prevention and environmental protection in an unforeseeable fashion.”

2. Qi Ye, Supervisor, Center for Climate Policy, Tsinghua University  

Research paper: Report on China’s Low-carbon Development, 2014 Special feature: Dilemma of Coal-to-gas Initiative: Relief in Smog in Selected Regions, Increase in Carbon Emission across the Country o “Coal-converted natural gas as a substitute for coal consumption may not effectively lower emission of air pollutants such as NOX and subsequently may not effectively control smog. In terms of coal consumption, greenhouse gas emission and water resources consumption, the production and consumption of coal-converted gas is a waste of resources and a passing on of environmental pollution. If coal-to-gas is continually utilized as a trouble-shooting measure to relieve smog, if we ignore its serious long-term problems of efficiency loss in resource and environment and loss of fairness, China’s environmental protection and low-carbon development will eventually fall into the vicious circle of firefighting. Therefore development of coal-to-gas capability must be taken seriously and approached with caution.”(page 73)

3. Chi-Jen Yang, Professor of Center on Global Change, Duke University  

Commentary: China’s Synthesized Natural Gas - an Epic Revolution, Blind Spot in China’s Coal-to-gas Development Exclusive interview: Coal-to-gas: a Course away from Sustainability 1. Coal-to-gas production is in essence a high carbon emitting and high water consuming industry.

2. Historical trend shows that environmental standards will only become stricter, with more and more limitations on the emission of carbon dioxide. As environmental guidelines become increasingly stringent, the now barely break-even coal-to-gas industry will but have to face higher and higher costs.

3. A grave lesson to learn from is the GPGA established in the US shortly after the abolishment of control on natural gas prices.

4. Lin Boqiang, Supervisor, China Center for Energy Economic Research, Xiamen University 

Commentary: Coal-to-gas Cannot Change Structure of Energy Consumption, but only Shifts Pollution Elsewhere o A) Coal-to-gas production itself is a high-energy-consuming process; B) Coal-to-gas apparently has no advantage in terms of control of pollutants emission; C) the coal-to-gas industry’s water consumption is as much a source of concern. o “It may seem that the large scale development of coal-to-gas capability can resolve the shortage in natural gas supply. In reality, the conversion of coal into natural gas for consumption is a production process requiring high input of coal, which does not help with the effort to control overall coal consumption. Also its pollutant emission is higher than directly burning coal.

Substituting coal burning with large scale coal-to-gas development only shifts pollution from eastern region to western region, leading to an increase in overall emission and diminishing climate control measures. Therefore coal-to-gas development is at best a supplement to ensure ample supply of natural gas and a secondary measure of smog control.”

5. He Jiankun, Deputy Director of China’s Advisory Committee on Climate Change, Dean of Institute of Low Carbon Economy, Tsinghua University 

“Coal-to-gas may become a major uncertainty in the low carbon development. Therefore smog control through coal-to-gas production must be scrutinized with great attention and caution be exercised in related policy making.” (interview: Dilemma of Coal-to-gas Initiative: Relief in Smog in Selected Regions, Increase in Carbon Emission across the Country)

6. Zhou Dadi, Deputy Director of National Energy Experts Advisory Committee, Former Director of Energy Research Institute, NDRC 

“The efficiency of the coal-to-gas system will be extremely low, especially when natural gas is used for power generation in future. From the point of view of energy system, this may not be a rational way. ” (interview: NDRC Expedites Approval of Coal Mining Projects, “Coal-to-gas” Development Provoke Much Doubt)

7. Zhou Tong, Dean of Research Institute of Coal Industry Planning and Design  Exclusive interview: Exclusive Interview of Zhou Tong, Dean of Research Institute of Coal Industry Planning and Design: Promote Dispersion of Population and Energy o “Airborne pollution control in China is one big plate. It should be considered as a whole and not be centered around key cities. Take coal-to-gas as an example. Big cities need more clean natural gas. If, however, environmental measures are not implemented properly, pollutants from the coal-to-gas process will remain in the location of production. This is a process of pollution transfer which I feel is not rational. Reduction in emission in energy production bases and big cities should be considered together. It is neither desirable nor feasible to keep yourself clean by piling the garbage at your neighbor’s door. Wherever the plants are located, emission standards should remain strict. It is not advisable to turn coal into gas and then send gas through long-distance pipes to a power plant. Why? Right now the cost of coal itself is relatively low. By directly burning coal and then controlling the emission, a coal-fired power plant can reach an emission level similar to or even lower than that of a gas power plant. There is then no need to turn coal into gas first and then use gas to generate electricity. The extra step in the conversion process lowers energy efficiency, gobbles up huge amount of water and still emits pollutants. It is even less advisable when taking into account the efforts required to treat these pollutants.”

8. Shi Yuanchun, member of the Chinese Academy of Sciences, member of the Chinese Academy of Engineering 

Commentary: Developing Coal Converted Oil Gas is No Different from Quenching Thirst with Poison o “In ecologically fragile areas, repairing damage to the ecological system brought about by human is next to impossible. Recently there has been a loosening in the approval of coal-to-oil projects and sluicing in the approval of coal-to-gas projects. The ecological disaster in Ordos is spreading fast into Xinjiang and other areas. It is not that coal mining should be prohibited.

Rather the extent of coal mining should be dependent on the availability of water resources. It should be conducted under the pretext of preserving local ecological environment, with slower steps so that the system can be sustainable.” o “The so-called conversion of coal into oil and gas is the conversion of the almost depleted and non-sustainable resource of coal from solid form to liquid or gas form. It requires a high input of resources (4:1) and spits out an increase in greenhouse gas emission by 5 to 7-fold. The huge amount of water drawn to feed the conversion causes a local ecological catastrophe. The price is simply too high. The astronomical costs in ecology will no doubt be taken on by the 1.3 billion Chinese people and their offspring. This mentality of ‘spending more than you can afford’ and this relentless pursuit of exhausting water to get coal – when can it be turned around? The government should have more sense of obligation. It should look beyond the immediate interests and the pursuit of interest groups. The nation’s interests should become the priority. It should be responsible for its future generations.”

9. Jin Yong, member of the Chinese Academy of Engineering, Professor of Department of Chemical Engineering, Tsinghua University 

Commentary: Strategies to Resolve Traffic, Energy and Air Pollution Problems o “The production of natural gas through conversion of coal we adopt in our country is not advisable. The combination of coal-to-gas production and power generation using resultant gas has undoubtedly lower energy efficiency than coal-fired power generation. The efficiency of power generation by natural gas via the CCPP mechanism is 60%. Coal-to-gas production also has an efficiency of around 60%. Therefore the power generation of coal converted natural gas has an efficiency of approx. 36%. Coal-fired power generation on the other hand can reach an efficiency of 45% with less investment. Power generation through ultra supercritical clean coal burning technology can further save 20% of energy and make a cleaner process. While coalconverted natural gas for civilian use is a highly clean energy source, domestic electrical appliances are also a clean source – the thermal efficiency of an electric rice cooker is 50% higher than that of directly burning natural gas. Household heating using electricity powered thermal pump technology also proves to save more energy than heating using natural gas.

Calculations show that, from a full life cycle point of view, coal converted gas only has a slight advantage over coal-fired electricity in energy efficiency in standard heating and industrial furnace.”

10. Yang Shuhong, Ding Yanjun, State Key Laboratory of Control and Simulation of Power System and Generation Equipments, Department of Thermal Energy, Tsinghua University 

Research paper: Analysis on the Whole Life Cycle of Technical Route of Coal-to-gas Production o “Research shows that the coal-to-gas process can achieve the goal of clean energy and solve the problem of end product pollution, but at the expense of relatively high life-cycle energy consumption. In Beijing for example, there are technologies that can save 33% of coal consumption from the coal-to-gas process, which would be a more rational method. Therefore, China must exercise caution when planning and researching its long-term strategy on coal-togas capability.”

11. Guo Jiaofeng, Assistant to Dean of Institute of Research in Resources and Environmental Policy, Development Research Center of the State Council  

Research paper: Expediting the Development of Clean Gaseous Energy is an Important Choice in China’s Sustainable Development Strategy Interview: Debate on Coal-to-gas Production

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Coal-to-methanol has a life-cycle external cost of RMB 0.6 Yuan/m3, while that of natural gas, shale gas and coal bed gas are RMB 0.1, 0.2 and 0.2 Yuan/m3 respectively.

“Results from experiments show that for every 1,000m3 of coal-to-gas produced, between 4.5 and 5 tons of carbon dioxide is emitted. If directly released into the atmosphere, there will be substantial increase in national carbon dioxide emissions. Now the majority of coal deposits in China are located in areas where water resources are scarce. And coal-to-gas plants happen to need huge amounts of water. Some areas blindly leaped to the coal-to-gas rush without considering the limited water supply which would greatly impact production later. Other areas continue to use technologies and equipment that feed on huge amounts of water. The negative impact of these on the balance of regional water resources will be hard to estimate. ”

12. Chen Weidong, Chief Energy Researcher, Energy Economy Research Institute, CNOOC 

Commentary: Coal-to-gas Not at All a Low-carbon Process o “Coal-to-gas process is nothing more than the conversion of solid fuel into gasified fuel. Raw fuel is high-carbon-content coal, which is still solid fuel. Efficiency of energy conversion aside, the carbon emission from this conversion process is in theory not any less than burning coal directly.

In this sense I do not think this round of coal-to-gas rush is a right step towards energy transformation.”

13. Sun Xiansheng, Dean of Economics and Technology Research Institute, CNPC 

J P Morgan 2014 China Summit, June 11, Beijing: o “In coal-to-gas production, there is a 30% energy loss from coal to gas, and another 30% loss from gas to electricity. In total there is a 40% of energy loss. Given the situation of our energy resources, we have no choice but to utilize this process. But we should limit its scope.”

There are three documents in Greenpeace’s series “Statistical Analysis of the Coal-to-gas Industry”. If you require more detailed information, data or contact information for a specialist, please feel free to contact us.

Media contact: Tang Damin, International Media Officer, Greenpeace Email: tang.damin@greenpeace.org Mobile: (+ 86) 139 1152 6274