NEWS RELEASE December 2018
Combust, Flow, and Treat Technology is a Major Geopolitical Force
Improvement and adoption of advanced combust, flow and treat technologies is changing the geopolitical order. North Korea hopes to avoid energy dependence by converting its coal to liquid and gaseous fuels. Oil prices in the U.S. might be $150/barrel if it were not for oil shale fracturing. China has a big coal to liquids/gases program designed to reduce LNG and oil imports. China has bigger shale reserves than the U.S. It realizes that even though the domestic shale presents more difficult challenges than some shale regions in the U.S it can become competitive by developing better flow and treat technologies.
China has an economy equal to the U.S. It is growing at nine percent per year compared to less than three percent in the U.S. It is the largest operator of coal fired boilers in the world with four times the capacity of the U.S. coal fired fleet. However, its lack of indigenous liquid and gaseous fuels has been a deterrent to growth.
North Korea presently exports 25 million tons of coal. It would need to liquefy only 6 million tons to meet its needs.
Because of the 1974 oil embargo, the U.S. accelerated its coal to liquids program. When the embargo was lifted the program was eliminated. China has taken advantage of everything the U.S learned and has a large number of coal to chemical complexes. One plan involves a $30 billion pipeline constructed by Sinopec to deliver clean coal gas from Northern China to cities throughout the country.
Homeowners and industry have switched to gas in anticipation of a low cost supply. Actual usage is up 19 percent in 2018 which far exceeds the 10 percent predicted. Much of the new demand will be served by imported LNG. Exxon Mobil Corp is placing big bets on China’s soaring liquefied natural gas (LNG) demand, coupling multi-billion dollar production projects around the world with its first mainland storage and distribution outlet.
Its gas strategy is moving on two tracks: expanding output of the super-cooled gas in places such as Papua New Guinea and Mozambique, and creating demand for those supplies in China by opening Exxon’s first import and storage hub, according to an Exxon manager and people briefed on the company’s plans.
The program is being expanded to serve local industrial facilities. Air Products and Chemicals will build, own and operate an air separation, gasification and gas cleanup processing facility in Hohhot, China. The plant will supply syngas to Jiutai New Material Co.
“This facility will be the first plant 100 percent owned by Air Products and is a prime example of a gasification strategy focused on building, owning and operating the facilities and supplying syngas under long-term onsite contracts," said Air Products Chairman, President and CEO Seifi Ghasemi.
Air Products will invest about $650 million in the facility and will receive a fixed monthly fee under the long-term contract.
The company said the project is expected to be ready for operation in the fourth quarter of fiscal year 2021 and add more than $0.20 to Air Products' earnings per share beginning in fiscal year 2022.
In the past fuels were created by drilling holes in the right places and watching the oil or gas gush out. Coal liquefaction and gasification , conversion of gas to LNG, and shale fracturing all require combust, flow and treat components to withstand extreme temperatures, corrosion, and abrasion. The cost of the produced fuels is dependent on these components.
Some of the biggest current recent improvements are in shale technology. The operating life of pumps used to inject slurry at high pressures has been extended with noticeable cost improvements. The proppants needed to fracture shale with extended horizontal drilling are being improved. One of the cost reductions has been to manufacture high quality proppants from locally available sand rather than rely on natural sand from the upper Midwest. These improvements are making the U.S. a low cost producer.
Low cost needs to be more closely defined. In the case of tight oil and gas from the U.S. the term is straight forward. However, for countries where oil and gas is easily extracted by natural pressures, the cost is a political calculation. The selling price has to be high enough to support the population. In the past Mid East suppliers have controlled pricing to drive out competitors. They no longer can do so thanks to the U.S. combust flow and treat technologies.
Energy related combust flow and treat markets are covered in
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