Indiana Center for Coal Technology Research Located in the Energy Center at Discovery Park, Purdue University. ENERGY Options of Growth

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1 Indiana Center for Coal Technology Research Located in the Energy Center at Discovery Park, Purdue University ENERGY Options of Growth Indiana Energy Consortium November 2, 2011 Marty Irwin Director Indiana Center for Coal Technology Research US Energy Policy Don t just do something, sit there US Energy Policy: 1) Encourage Consumption, 2) Discourage Production, 3) Make up the difference by buying importing energy and exporting $ and Jobs. Reprinted with permission from creator cartoon, my how things have changed 2 1

2 Are Americans using to much Energy? THE USA IS NOT THE PROBLEM IT IS THE SOLUTION It is not what you use, it is what you do with it. % World Population Energy GDP Energy/GDP 1000Btu/$ USA 4.6% 19.5% 24.6%.793 ROW 95.4% 80.5% 75.4% 1.07 US population consumes 4.2 times the energy of the average person in the Rest Of the World; But we produce 5.4 times the goods and services of the Rest Of the World. USA and Japan are the World s model for energy efficiency. $GDP (Millions) per unit of energy use (constant 2007 $ per kg of oil equivalent). USA China India Japan Tons of CO2 per $ Billion manufacturing (2011, World Bank data) USA China India Japan (2007) Leading Manufacturing Economies Billion$ Rank USA 1, China 1, Japan India If you want to improve air quality then move manufacturing back to the USA. If the rest of the world consumed energy as efficiently as the USA total World Wide Energy Consumption would be reduced by 25% USA leader where nuclear is not majority of Electric production 3 2,000,000,000,000 Manufacturing Output from Worlds 4 largest Economies 1,800,000,000,000 1,600,000,000,000 1,400,000,000,000 1,200,000,000,000 1,000,000,000, ,000,000,000 United States China Japan Germany 600,000,000, ,000,000, ,000,000, = USA exceeded China and Japan Combined; in 2011 China will surpass USA China output increased 303%, Germany Increased 46% USA increased by >22% Japan >11% 2011 first time in over 100 years USA not the world leader in Manufacturing 4 World manufacturing production increase 74% from

3 How do we use Energy in Indiana? 2010 GDP National Rank Durable Goods 15.4% 2 Non-Durable Goods 11.8% 1 Total Manufacturing 27.2% Total Manufacturing of 27.2% is the highest in the nation, 14% the national average, (2 nd is Oregon at 22%) Your CO2 Footprint is large if you live in Indiana because we are a Manufacturing State: CO2 footprint measures your state s economic output, personal consumption is not relevant. Indiana s industrial sector provides about 27.2% of the state GDP & consumes 46% of total energy. Indiana consumes 35.7% more energy than average for Americans. Reducing your carbon footprint by purchasing a Honda s Hybrid increases our carbon footprint BEA Trillion Btu s Coal 1, % Petroleum % Natural Gas % Renewables % 13.7 wind 24.3 ethanol Indiana Primary Energy Consumption Source and Sector %.05%.1% 76.3% 1.3% 18.1% 16.4% 19.3% 4.3% 7.2% 48.7% 20.3% 43.4% 41.8% 19.8% 2,763,700,000,000,000 Btus total used in %.1% 3.1% 19.6 % 14.9% 4.3% 21.6%.8% 25.6% 2.7% 96.3% 1.1% 2.6% 95.0% 1.8% Electricity Manufacturing % Residential & Commercial % Transportation % Trillion Btu s 141 losses and export % % % 67.7%.03%.01% 11.8% Renewables doubled in 3 years 6 3

4 Indiana GDP and Energy GDP 2000=1.0 Energy 2000=1.0 BTUs /$ GDP 2000= GDP increased 27.2% Energy Consumption decreased 11.1% Btus per $ GDP decrease 30.1% (where is our award for energy efficiency?) 7 Energy costs for families earning less than $50,000 rose 98.5% between 2001 and 2009 $8,000 $7,000 $6,000 $5,000 $4, $3,000 $2,000 $1,000 $- Electricity Home heating Gasoline Total Total Expenditures $ 2,427 (4.85%) $ 4,819 (9.63%) Gasoline up 140.5%, Residential heating up 46.9%, Electricity up 71.3%: Total Energy Cost up 98.5% in 8 years. 8 4

5 Energy Cost Affect Families Differently Half of U.S. households paid 20% or more of their aftertax incomes on energy in Poor and working families those with incomes less than $30,000 - paid nearly one-quarter of their aftertax income on energy in Government subsidies increase as price of energy increases. It is imperative that we maintain a low energy cost not just for business and industry but for American Families Us DOE and US Census data 9 Coal, Natural Gas, & Renewables as Sources of Indiana Electricity Supplies Capacity vs. Generation Indiana Electric Generation Capacity Indiana Electricity Production: Coal 70.7% NG 21.5% Wind.7% Petro.2% Natural Gas 2.6% 19,757mw 6,003 mw Petro 1.8% 503mw Renewables 6.0% 1,686mw Coal 96.5% WIND 6,000 MW Unclassified Wind Not reliable enough to be included Least cost dispatch 10 5

6 Relative Cost of Energy Oil Natural Gas Coal Electriciy Inflation 1990=1 Electricity and coal have not kept up with inflation 11 Evolution of the Coal Power Plant Yet electricity per ton of coal continues to increase? CO2 is anticipated that successful progression from laboratory- through full-scale demonstration will result in several of these advanced technologies being available for commercial deployment by NETL May

7 The production of a KWh of electricity with the added environmental equipment and parasitic load takes 7.5% less energy than it did 35 years ago Btus/Kwh BTU/Kwh Btus/Kwh Under Energy Security Act of 2008 this does not qualify as Energy Efficiency 13 Population, GDP and energy use Increase Emissions Decrease When you use electricity you rent pollution control NOX reduced 82% SOX reduced 88% PM10 reduced 96% And we are the Dirty fuel. 14 7

8 Sources of Mercury Source Tons/year Nature: Volcanoes, Subsurface Ocean vents 9,000-10,000 Chinese Coal and Oil Power Plants* 400 Forest Fires 44 USA Coal and Oil Power Plants* 44 Human Cremations* 26 CFLs* 2.2 *Less than 5% from Human activity 15 Indiana s Average CO2 & Power Production from 1 Ton of Coal 1MWh of power 1 Ton of CO2 produced Illinois Basin and Powder River Basin coal produce 2.09 pounds of CO2 per KWH Produced Average Indiana Household consumes 10 tons of coal in the form of electricity and other energy. The household is responsible for the formation of produces 22.6 tons of CO2 a year Coal means electricity and electricity means CO2 16 8

9 CO2 control would require large amounts of physical space Gibson Power plant 3340 MW coal fired Scrubbed power Plant 3 rd largest coal fired plant in the US consumes 10 Million tons of coal a year Creating 800 mine jobs and 3200 ancillary jobs. 17 CO2 Control Cost National Energy Technology Lab, August 2011 Jared Ciferno 18 9

10 What does the EPA say about CO2 in their Findings This document itself does not convey any judgment or conclusion regarding the question of whether GHGs may be reasonably anticipated to endanger public health and welfare, as this decision is ultimately left to the judgment of the administrator. Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act. EPA December 7, 2009 Page ES-1 The document does not contain any data or scientific findings that can justify the control of CO2, but that is not necessary to have: Administrator need only use her JUDGEMENT. USA CO2 Policy is to be based on the JUDGEMENT of ONE PERSON, Not FACT or Science. This statement was removed after first printing of report 19 Who says this administration is not creating Jobs? While EPA acknowledges that come 2016, the administrative burdens may still be so great that compliance may still be absurd or impossible to administer at that time, that does not mean that the Agency is not moving toward the statutory thresholds, the EPA wrote in a September 16 court briefing. If the EPA wins its court battle and fully rolls out the greenhouse gas regulations, the number of businesses forced into this regulatory regime would grow tremendously from approximately 14,000 now to as many as 6.1 million. Hiring the 230,000 full-time employees necessary to produce the 1.4 billion work hours* required to address the actual increase in permitting functions would result in an increase in Title V administration costs of $21 billion per year, the EPA wrote in the court brief. ($91,300 per employee a year for 3 years to complete the work) (1.4 billion work hours will actually require 673,076 employees to hours per person per year, and 229 hours per business per year) 20 10

11 Reduce CO2 by 80% from its 1990 levels by 2050 Obama campaign pledge If we convert all of the coal, oil and gas electric power units to nuclear: If we eliminate Nat Gas for home heating, commercial use and for industrial processes and substitute nuclear electric: If we remove all 230 million gasoline and diesel engines and replace them with pure electric motors plugged into nuclear power sources: we still would not reduce manmade CO2 by 80%. To do the above would require the building of 800+ nuclear plants, 24 in Indiana alone, by 2050, at a cost of $12 Trillion + Pay $220 / month per household every month for next 40 years over the current level of payment. Human energy consumption drops from 10KW to 2 KW per capita roughly 1840 levels of energy consumption. 21 Energy Efficiency PC (unscrubbed) vs. IGCC Unscrubbed PC IGCC % chg Online Mw % BTU/KWH % Efficiency 23.4% 38.5% 64.5% SO lb/ MMbtu % NOx % PM % Hg * % Tons of Coal 152,959 (2007) 1,800,000 Onsite Jobs Coal Mining Jobs Ancillary Jobs More jobs are created from coal production than from the operation of the facility * 1 pound of mercury for every 420,596,000 pounds of coal 11

12 Future Demand by Fuel Next 20 years Coal remains the Primary fuel 2024 NG levels out while coal continues to rise 2010 shale gas is 12% of the Natural gas supply, by 2024 it will need to be 60% 23 US Sources Of NATURAL GAS 3.5 Times as much gas from shale in next 20 years. 33% reduction Standard sources 24 12

13 Fracking Taxes paid: $26,958 per oil/gas Job, average worker $107,000 All other industries $ 4,769 per Job, average worker $ 44, workers per well 25 New Albany Shale has 86 Trillion cubic feet of gas 95 Quads of Energy Indiana uses Trillion BTUs of Natural Gas per year (.555 Quads) Indiana consumes Quads of energy per year Potentially a major supplier of Shale gas in the US EIA states that Natural Gas cost will be level for the next 20 years. It also says that Shale gas will constitute 45% of the gas consumed in Shale gas will cost more than Natural Gas, overall gas price will increase. We will need to drill thousands of new shale wells, to replace NG sites, None of which have been approved by this administration. (you need to read the footnotes) 26 13

14 Wind and Solar Economics The Sun and the Wind are free, aren t they? California mandate of 1/3 electric from renewables, currently 52,000 Mw -Need 17,000 Mw: Assume 8,500 Mw each of solar and wind Ivanpah Solar Plant 370 Mw covering 5.5 square $2 Billion Need 23 more just like it. Total 129 square miles of surface area covered with panels at $46 Billion (not counting the cost of the land) areas equal to ¼ of the Los Angeles Basin. Roscoe Wind Farm Texas Mw covering 154 square miles need 11 just like it. Total 1544 square miles of surface area 10% of the State of California needs to be covered. $16.9 Billion (not counting the cost of the land) (50 tons of steel /Mw) Transmission lines: San Diego Gas & Electric tried to construct 117 miles of transmission lines to connect utility with geothermal project in Imperial County. Lawsuit filed to stop construction. Cost off transmission line $16.2 Million per mile New York times 6/7/ Adding Value to a Lump of Coal Coal is of no value until it is converted into something else 1 ton of coal Pulverized Coal Combustion Gasification Indirect Conversion (FT) Electric Power Production Products Value 2.25 MWh Electric $78.75 FT Fuels and Power Products Value 0.41 MWH Elect $ bbls Naphtha $ bbls jet fuel $81.00 Total $ Coal Electricity Naphtha Jet @$350/Ton Gasification Direct (Catalytic) Fertilizer, FT Fuels and Power Products Value 0.07 MWh Elect $ bbl naphtha $ bbl Jet fuel $ tons ammonia $87.00 Total $ Source: RenTech 28 14

15 Coal Technology Projects in Indiana Indiana coal to coke Purdue University, Calumet Recovering Coal slurry for fuel Crawfordsville, IN Coal Corridor Medaryville, IN Clean Coal Refining Coal to liquids Newport, IN Oxy Fuel Combustion Merom, IN Indiana Center for Advanced Energy Technology Vincennes University Underground Coal Gasification Gibson County IN Biomass / Coal blends for utility fuel Washington, IN Waste to energy Microgrid Crane, IN Direct Coal to Liquids, Warrick County Indiana Coal Gasification Rockport, IN 29 Indiana coal projects 1. Indiana Coal to Coke, Purdue Calumet, starting 3 rd year of CCTR funding of the project, which is now in the small scale test mode, gathering Steel Industry support. If all goes well should have a full scale coking unit in 2-3 years. Potential of 6 million tons of Indiana coal a year. 2. Fuelstreaming has purchased the Crawfordsville municipal power plant and will be upgrading the boilers to include a gasifier to burn a pellet created from the coal slurry and gob waste from an abandoned mine in southern Indiana. Potential is 1 million tons of recovered fuel a year, fully operational in 2 years. CCTR is working with the group to help with the technology to recover the coal slurry and convert it to a useful fuel 3. Clean Coal Refining will be taking 1500 acres from the Newport Munitions Depot to build a coal to liquids plant producing 10,000 barrels a day. Currently CCTR is working with them to secure funding for the Pre FEED portion of the project. This will be able to use coal, MSW or petcoke as a feedstock. If funded fully operational in 36 months. 4. OXY-Fuel Combustion technology is based on a study done at Purdue Lafayette funded by CCTR. This technology will use pure Oxygen instead of air in the combustion process. This will greatly reduce emissions and enable older smaller scale power units to keep producing power under the EPA rules. The technology is currently under consideration by Hoosier Energy for use in the Frank Ratts plant. 5. Indiana Center for Advanced Energy Technology (ICAET) will be based at Vincennes University and focus on apply the technologies developed by CCTR to retrofitting on existing power units. ICAET will work with the coal industry to develop and train the new wave of coal miner that will be needed especially as we move to more underground mining. The center is also working on a new technology that will use coal ash from power plants to build pillar systems in deep mines in order to increase the coverable coal from 45% of the resource to up to 90% per mine. CCTR is working with ICAET to secure Federal funding

16 Indiana coal projects, 6 Indiana Coal Corridor is an extension of a CCTR study on rail systems in Indiana. CCTR is working with coal companies, power plants and rail system to find the least cost and best means of moving Indiana coal north to Schahfer power plant (potential 4 million tons per year) and on to Burns Harbor where it is estimated that Europe will need 600 million tons of coal a year as the nuclear industry shuts down. This track will also connect to the Illianna Express rail plan when and if Illinois ever gets around to building it. Our goal construction in 12 months. Potentially in the short run the corridor would enable coal companies to expand their markets by 4 million tons a year with a long term potential of over 100 million tons of year over the next decade. 7. Biomass /Coal blends as power plant fuel will use the waste biomass, in this case primarily wood waste from the furniture industry to make a fuel for power plants. The advantage will be the use of the now wasted wood residue and to allow more use of older plant in that the new fuel will have a significant emission reduction. The company has already ordered 1.2 million tons of coal to be delivered over the next year and plans to ship the fuel to Europe via Mt Vernon and out of New Orleans. Currently CCTR is working on placing the fuel in the small scale Eagle Valley power plant in Martinsville and possible in IPL s Stout plant on the south side of Marion County. The company sees a big potential for the fuel if it could be shipped out of Burns Harbor rather than New Orleans. 8. Nu Steel is proposing a coal to liquids plant for Warrick County, not Rockport as originally proposed. The plant will use Indiana coal and produce 10,000 Barrels /day 4 million tons of coal a year. Countrymark is already shown interest in purchasing the raw fuel. CCTR is helping them with finding funding for the project 9. Rockport Power Plant is n need extensive retrofitting for their power plants to meet new EPA standards. CCTR introduced to I&M the possibility of using one of the 1300 MW units and convert it to a steel making operation which would produce 1200 MW of power for sell to I&M. The use of this method would be a less expensive way of producing the amount of power I&M needs without the emissions. This meeting just took place on Tuesday August 9 and there fore was not put on the original map. 6 million tons of coal and a 36 month construction period if I&M decided to proceed. 10. Indiana Gasification Inc. coal to gas plant is still being discussed for Rockport. CCTR is not working with them and is not sure what their current status is. 31 Coal Wind Hybrid Configuration 100 Mw Wind + 50 Mw Gas turbines = 60 Mw constant power 100 Mw wind will generate on average 27 mw of power Annually by itself. If you LOVE Wind Power, You had Better Like Transmission Lines, and gasification plants

17 33 Center for Coal Technology Research Coking Coal from Indiana Coal CCTR & Purdue Calumet How to replace about half of the 6 Million tons (+) of imported metallurgical coal with Indiana coal, Greatly reduce the air emissions from the 400+ coke ovens, Produce coke at a lower cost

18 CO2 Sequestration For EOR and CAPTURE Small amounts of CO2 dissolve in the oil, increasing the bulk volume & decreasing the viscosity, so facilitating flow On average only 13% of the original oil in place has been taken out Enhanced Oil Recovery, EOR 2-4 tons of CO2 yields 1 Barrel of petroleum Sources: Carbon Dioxide Capture and Storage, Intergovernmental Panel on Climate Change, WMO, UNEP, North through Indiana Via I $1.5 Million/Mile 4 years to complete. CCS retrofitting will not be available for Large scale power plants for at least 10 years (NETL). There is time. 400 Mile CO2 Green Pipeline Edwardsport Indiana to Jackson Mississippi. Denbury Resources 36 18

19 Indiana Center for Coal Technology Research Located in the Energy Center at Discovery Park, Purdue University Indiana Center for Coal Technology Research, Purdue University 203 S Martin Jischke Drive, Rm. 105 W Lafayette IN Phone: Marty W. Irwin, Director mwirwin@purdue.edu (765) or mirwin@oed.in.gov (317) Center for Coal Technology 1 North Capital Street Suite 600 Indianapolis, IN