The East is [Infra]Red: Gasification, energy and China

More prosperity, less pollution for China? In the East, the search is on for more sustainable, efficient energy, and flexible gasification answers the challenge. There, Synthesis Energy Systems is leading the way.

Premier Zhou En-lai famously referred to China as “an attractive piece of meat coveted by all … but very tough”. Myself, I have always thought as China more as a gas than a solid.

Like the element hydrogen, China is incredibly abundant in population and production, yet we always seem to think of shortages; you never seem to be able to isolate it as easily as you want to, it forms a part of almost everything you ever want to make or use, every time you think you understand it, another particle theory comes along, and under the wrong conditions one is fearful that a runaway combustion might begin.

A thousand Chinas

Fox Butterfield, whose China: Alive in the Bitter Sea won a National Book Award, once warned me over cocktails at Wollensky’s Grill in New York City not to make too much use of the phrases “China is…” or “China thinks…”. He told me that there’s one flag, a billion people, and a thousand Chinas.

And, there’s a thousand hydrogens, too — paired in innumerable ways with so many other atoms into so many other molecules. And in China, high purity hydrogen is a key ingredient to upgrade transportation fuels to meet China’s National V Standards. In addition, the non-state-owned refineries are motivated to build new large-scale refineries that increase energy conservation, to replace their existing smaller scale facilities, in order to gain the right to use imported crude oil which requires additional hydrogen.

The Chinese Dream

If you are a devotee of the politics of Chinese president and Communist party general secretary Xi Jinping, the paramount leader of China, you are likely to be highly familiar with the phrase “Chinese dream”.

It seems to have a million interpretations depending on which China you are referring to, no less so than Ronald Reagan’s “shining city on a hill”. But certainly one interpretation is that innovators and young people should ”dare to dream, work assiduously to fulfill the dreams and contribute to the revitalization of the nation” — meaning sustainable prosperity. It’s more about the aspirations of the collective, the nation, flowing from the inspirations of the Chinese — and socialistic rather than individualistic in nature.

But green energy — cleaner, yet no less transformative to economic prospects, and more efficient — doubling the per capita income while not sacrificing Beautiful China or Harmonious China, or even Strong China.

Which brings us to the most fundamental question of all — because it is the most fundamental element of all — and that is the future of hydrogen.

What does China want? Hydrogen, for one.

Hydrogen, hydrogen. hydrogen. Nothing that China aspires to be can exist without it, and a lot of it. Of all the answers to “what does China want?”, this is perhaps the least perplexing and one in which American know-how may actually play a key role.

The current source of hydrogen for China’s refineries is primarily through an expensive methanol cracking process or reforming of natural gas. Coal is the other low-cost route, but there’s the ruinous impact of more coal-based emissions of CO2 and particulates.

Let’s put the emissions problem into perspective. Last December, the Chinese government issued its second-ever “Red Alert” for smog, and 2100 factories were forced to temporarily shut down or reduce output, half the cars came off the roads in Beijing, and schools closed. The alert also affected the northern provinces of Shandong and Hebei. The reading on PM2.5 emissions reached as high as 300 micrograms per cubic meter. The World Health Organization pegs the maximum recommended exposure over 24 hours at 25.

Harmonizing growth and clean skies

So, how do you harmonize the need for low-cost hydrogen and the economic growth it promotes and sustains, with the China’s 2013 Air Pollution Prevention Action Plan calling for a reduction of coal consumption in Beijing, Tianjin, and Hebei of 73 million tons by 2020? Not to mention a “coal-free Beijing” by 2022?

A good example of the technology base of the future may well be Synthesis Energy Systems, whose proprietary gasification technology based upon U-Gas, licensed from the Gas Technology Institute, uses low-cost and low-grade coal, biomass or municipal solid waste as a feedstock. From SES’s “clean syngas” comes a cleaner hydrogen — which is why the company dubbed the outcome “Growth With Blue Skies”.

SES last month signed a project investment and cooperation agreement with Shandong Dongying Hekou District Government to produce lower-cost hydrogen needed for clean fuels production by refineries at the Hekou Blue Economy Industrial Park Project in Dongying City, Shandong Province. The $85M project is expected to deliver 50,000Nm³/hr of 99.99% high purity hydrogen, as well as syngas and other industrial gases, to the local refineries in the park, the first phase — as much as six times that in the future.

The project is expected to become a demonstration site for emission reduction through the capture and utilization of CO₂ — it will be injected into the Shengli Oil Field for enhanced oil recovery.

Those Chinese industrial parks

Put away thoughts of those small industrial parks that may be outside of your local town. Industrial park projects are huge in China, and huge for China — part of an overall strategy to move production away from the cities.  There may be a thousand Chinas but it feels like there’s an industrial park for every one.

Hekou Blue Economy Industrial Park, located about 22 miles from Dongying Port and approximately 4.35 miles from Lijin Binhai New District, is the key industrial park for Hekou District for the implementation of China’s yellow and blue national strategic plans.

For those newer to China’s geography, Dongying City houses the largest concentration of non-state-owned refineries in China, and is a city developed via the Shengli Oil Field. New petrochemical projects are not allowed to be built in Dongying except in three industrial parks, which include Hekou Blue.

DeLome Fair, CEO of Synthesis Energy Systems

Meeting DeLome Fair, CEO of Synthesis Energy Systems

“There is potential for tremendous growth in energy production during this period,” Fair told The Digest. “I think it is very important for new energy production capacity that is installed to be as clean as possible while still being affordable, as new and even cleaner technologies are being developed.”

Raised in Junction City, Kansas, east of Topeka, Fair is a chemical engineer by trade, and a sometime golfer in the limited time away from building a NASDAQ-listed company. She worked many years at GE, and has been in the gasification industry for almost 25 years in all. “I didn’t feel those companies were doing as much as could be done. They were working on so many projects, and I wanted to work on the most superior gas technology, where it was core to the company. I was familiar with the SES technology as a competitor, and the more I looked into it, I saw that it had the highest efficiency, the lowest cost, and was extremely flexible and could use coal biomass or MSW at the same time.”

What’s the magic with this technology?

There’s a long residence time on the fluidized bed, and they operate at a lower temperature. That matters for varied feedstocks, especially if there’s high ash or moisture content. “Compared to a gasification technology at high temperature,” said Fair, if there’s 30% ash 20% moisture, you’re not heating all that up. So, we’re able to move past high-rank feedstock, because we get a process efficiency; we are not taking a lot of water along for the ride.”

How is it different for biomass?

“It’s a different feed system than coal, that’s designed in, up front. There needs to be some pretreatment, so pelletizing is the best, but there’s optionality there, as long as there’s sort of uniformity. And we can handle a wide range of water content, we’ve run with feedstock that’s up to 40% water.”

The carbon capture

Gasification creates, more or less, two abundant molecules, hydrogen and carbon monoxide. There’s is often a little CO2 in the mix, not much.

“When we gasify, most of the carbon monoxide. That can be used for heat or the shift reaction to hydrogen. For power, we burn the syngas and it all goes to CO2, and our projects will have CO2 capture demonstration. It’s not all that hard to capture it, technologically, gasification is well suited to capture. The challenge with CO2 is once you have it, what do you do with it. In this case, the CO2 will be used in oilfield injection.

Targeted regions

“We focus on regions where low-rank feedstock is abundant and natural gas in expensive. So, China fits that description. Down the line, India jumps out as a potential. Throughout South-east Asia there is a need for large amounts of new energy, and no natural gas.

And China has a push to clean up their environment, so we bring a clean way to use low-rank feedstock, through carbon capture and through burning syngas instead of burning coal directly. If you burn coal to generate power, you get hot gases which you can use for power, but you get all the pollutants, like sulfur and mercury. You can remove it, but it’s challenging. In our case, we react the feedstock and turn it to gas, and we clean the gas before it is burned, so we’re similar to natural gas.

If you could change one thing

“If I could snap my fingers and change one thing,” Fair told The Digest, “I would remove the hurdles that challenge the economics of the more advanced bioenergy technologies. I am fortunate to work with a technology that provides a clean way to utilize coal today and the ability to move into the bioenergy arena as the economics continue to improve.”

Innovation through the front door

“The tall tree is crushed by the wind” goes the old Chinese proverb — and with it, some wisdom about how easy it is to be truly innovative in China. If the aversion to trying novel solutions feels sometimes suffocating at the official level, well, it’s not for nothing that the Chinese name for China, Zhong Guo, means “central country”, and so many faces turn towards the center for approval, and the red tape can be formidable.

But that’s the “one China” fallacy. Fox Butterfield once wrote of “a penchant for inventiveness, born of necessity” that had spawned an entire “counter-economy” back in the days after the Cultural revolution — when much that was accomplished required “going through the back door”. Times have changed, but a time of embracing innovation, born of necessity, is upon us once again. Perhaps this time it will not need to go through the back door. The front door looks more inviting than ever.

More on Synthesis Energy Systems, here.