Jet fuel or liquid natural gas: now available from a trash bin near you, Part I

July 21, 2014 |

MSW-LNGBy Tim Sklar
Special to the Digest

Part 1 of 2

Anyone that has followed the evolution of processes that are used to make fuels out of waste recognizes that the permutations and combinations of processes that can be used has become mind-boggling, as the pathways that can best be used, continue to change. As a consequence, it is no longer straight forward as to what will work best in making a limited number of fuels out of a particular biorefinery feedstock, as many more biorefining options are reaching commercial scale.

As a consequence, alternative biofuels conversion pathways that should now be considered are not only a result of advances being made in biorefining technology. They are a result of changes in the sustainability and cost of feedstocks that are available to specific biorefineries. They are also a result of changes in the supply of and demand for conventional fuels that the biofuels to be produced are targeting to replace, and the price that such biofuels are expected to command.

In our previous biofuels project development efforts, we had initially focused on converting forestry wastes into bio-coal for export. We then followed the pathway for using such wastes to generate power. We are now focused on a biorefinery project designed to use municipal solid wastes (MSW) in combination with forestry wastes to produce biofuels.

In pursuing the many pathways for making this conversion, we have concentrated on intermediate processes that appear to work best on Refuse Derived Feedstock (RDF ), which contains a large proportion of MSW. We have backed away from processes that use various forms of acid-hydrolysis, turning instead to processes that convert RDF/MSW streams into syngas.

We have examined a range of downstream processes that convert syngas into liquids, focusing first on those less expensive processes that are limited to producing intermediate liquids, such as biomethanol, then on those that produce fuel grade ethanol. We then decided to evaluate the cost and benefits of using a newly developed “small scale” F-T catalytic hydrocracking process that could convert syngas into jet fuels, which could command a price premium over ethanol and could be sold using long-term contracts.

But we still find ourselves having to “connect the dots”, as we have just been made aware of the option for converting syngas into LNG using a small scale LNG process and having LNG marketed as transportation fuel at prices that are expected to be substantially lower than gasoline and biodiesel. Although this exercise in connecting this set of dots has been undertaken to provide insights needed in selecting the best alternative pathway for a waste-to-biofuels project development effort in which we are supporting, the focus of this article is to explore this Waste-to-LNG pathway in greater depth, to illustrate the complexity in trying to choose the best waste-to-biofuels pathway.

Basic Arguments for Considering a Waste-to LNG Pathway

The following sections provide information supporting the following arguments for making LNG from MSW derived RDF :

1. LNG demand is now expected to grow significantly on a worldwide basis both in the short term and medium term.

2. LNG demand in the US will benefit from growth in supplies of shale gas, as not all of this gas will be used to replace coal to generate power, nor will US exports of LNG absorb the expected excess.

3. Price spreads of competing transportation fuels should act as an incentive for supporting investment in infrastructure needed to facilitate more widespread use of LNG to fuel trucks, trains and ships.

4. New small-scale LNG processes will make it economically feasible for modest sized managers of solid wastes, such as the hundreds of SWA’s, to convert RDF into LNG and CNG, to supply the maritime and transport sector of the US transportation fuels market.

5. Potential JV Partners already exist who are positioned to market LNGs that SWA’s can produce.

Re: The Growing World-Wide Demand for LNG

The May 31st 2014 issue of The Economist Magazine contained a significant article on the fast developing international market for liquefied natural gas (“LNG”), aptly titled “Bubbling up” which they claim is being driven by increased worldwide demand for natural gas. This article suggests that this expected increase in demand for gas (and by implication, LNG) can be attributed in part, to the expected increased use of gas in generating power in China and other Asian countries.

With respect to the “bubbling up” of LNG demand, this article quotes a prediction made by sources in The International Gas Union (IGU) that LNG’s share of the world market for gas will “rise from approximately 20% now, to as much as 30%, if all the projects being planned come to fruition”. Another independent source quoted in this article, predicted that global LNG demand could double by 2030.

This article points to the fact that much of the gas that is expected to be produced will first be liquefies and transported by LNG tankers to LNG terminals before it is it returns to gaseous form as this technology is no longer considered “exotic”. The article suggests that LNG capacity is already undergoing a major expansion. The first wave of large-scale LNG projects commenced this year in Papua, New Guinea that is expected to increase worldwide LNG capacity by over one-third by 2018.

And a second wave of LNG projects are already underway in Australia that are expected to double LNG production capacity, adding “80 billion cubic meters (bcm) of gas to world supply by 2025… (which is) more than Germany’s entire current consumption of gas”. This article also mentions that added LNG supplies will be coming from LNG projects in the Russian Arctic, from Sakhalin in the Russian Far East, as well as from the aforementioned LNG projects in Papua, and Australia. However, this article does point to the fact that “in the past, huge capital and running costs involved in LNG (operations) have hampered the market’s growth (both overseas and in the US)”.

Re: LNG Demand in the US

As to LNG produced in the US, The Economist Magazine article suggests that “the shale-gas boom in the US, has stimulated development of LNG terminals to facilitate LNG exports that could exceed 750 bcm, by 2018”. But this article does not address the market for LNG within the US.

An article titled “Small-Scale LNG and The Jones Act” recently appeared in The Maritime News Magazine. This article provided assessments of small scale LNG market development in the US, using estimates of the capacity of current and proposed small to mid scale liquefaction facilities as a proxy. These estimates were based on LNG projects that have been announced by six major liquefaction project developers.

We continue the story in Part II, here.

Tim Sklar is a longtime Digest contributor on bifocal, MSW, and torrefection topics. He can be reached here.

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