China claimed its latest engineering laurels this week, becoming only the second country in the world to have a working coal-to-oil program. Driven by a genuine and practical obsession with energy independence, China joined South Africa as the only two nations in the world with Coal to Liquids technology up, running and churning out transport fuels.
The US has for decades shown an insincere and impractical obsesssion with energy independence — especially in an election year. It has a lot to learn from this week’s news. The little-known Lu’an Group produced its first liquid fuel from coal at its Shanxi CTL plant in late December, after two years of low-key but steady project development.
Liquid fuel was produced at Lu’an’s 160,000 mt/year (12,800 b/d) CTL project — production is due to be expanded to 3 million mt/year over 2012-1015, while the company expects to bump up its capacity to 15 million mt/year by 2020.
Skeptics will question the group’s ability to deliver that growth, especially in a lower-priced oil environment. CTL is an expensive technology to start up — through Sasol in South Africa has shown that once the capital costs are paid off, CTL is relatively cheap to run and can be very profitable indeed, with enough coal supply.
One thing South Africa, China and the US have in common is that — plenty of coal available.
Another thing they have in common — not enough oil.