China plans to build 50 coal gasification plants in less populated northwestern parts of the country, using the gas produced to generate electricity in the more populated areas, where smog is prevalent. Two coal gasification pilot plants have been built, three more are under construction, and 16 have been approved for construction, while the rest are in various planning stages. Eighty percent of the 50 plants are to be located in northwest China, in the provinces or regions of Xinjiang, western Inner Mongolia, Ningxia and Gansu. [i]

These plants are part of China’s plan to alleviate air pollution in its smoggiest cities by reducing coal use in these areas by 2017, instead using gas from coal produced miles away. According to the Chinese state-owned power companies, these plants are considered “clean energy” or “new energy.” To achieve cleaner air in the cities through gasification, net carbon dioxide emissions will increase, while water scarcity may result from a gasification process that uses a great deal of water.

Coal Gasification

In coal gasification, a technology that has been around for decades, coal is chemically transformed into synthetic natural gas (SNG). China, with its vast coal resources, is using SNG for power generation and to reduce its dependency on imported liquefied natural gas (LNG). China’s National Energy Administration plans to produce 50 billion cubic meters of gas from coal by 2020, enough to satisfy more than 10 percent of China’s total gas demand. It not only makes economic sense – it also allows China to exploit its coal deposits that are located thousands of miles from the country’s main industrial centers and to solve local pollution problems.[ii] In addition, transporting the natural gas to demand centers is cheaper than transporting the coal and using it directly.

Coal gasification produces more carbon dioxide than a traditional coal plant. According to a study by Duke University, synthetic natural gas emits seven times more greenhouse gases than natural gas, and almost twice as much carbon dioxide as a coal plant. Further, coal gasification is one of the more water-intensive forms of energy production. In the western parts of China where many of these plants would be located, there are already water shortages.[iii]

China’s smog problem is due to the release of oxides of sulfur and nitrogen and particulate matter (criteria pollutants) from the combustion of coal in power plants. Gas-fired power plants emit up to 99 percent fewer criteria pollutants than coal plants. China has turned to SNG because it does not have sufficient domestic natural gas, but it does have abundant coal resources. Although China has a large amount of shale gas resources—comparable to those of the United States—they are currently undeveloped.[iv] While imported LNG can help and China is also pursuing that avenue[v], it is less expensive and more energy secure for China to use its own coal resources.[vi] Further, the country can construct its SNG plants relatively quickly, and perhaps faster than the country’s shale gas infrastructure can be developed.[vii] Natural gas currently supplies 5 percent of China’s energy demand.[viii]

Coal Use in the United States

Unlike China, the United States has taken care of the release of criteria pollutants from its power plants to the point that the air quality in the United States is 72 percent cleaner than it was in 1970, despite energy consumption having increased by 47 percent, according to the Environmental Protection Agency (EPA).

Source: Environmental Protection Agency, http://www.epa.gov/airtrends/images/y70_12_lineStyles.png

However, the United States, in contrast, is faced with proposed regulations from the EPA that would cease the construction of new coal-fired facilities and retire many existing coal-fired power plants. EPA’s proposed power plant rule requires states to reduce their carbon dioxide emissions from existing power plants to levels specified by the agency, requiring the shuttering of coal plants to attain the required reduction – actions that require a technology that is not commercially available. That is to say, although that technology is in the “demonstration phase” – according to the EPA – it is so expensive compared to other competitive technologies that it is not a feasible alternative, even if it can be demonstrated as workable at pilot sites in the next few years.

Because the United States has developed its shale gas resources, it is now the world’s largest producer of natural gas. As a result, natural gas prices in the United States are low. Due to the reduction in criteria pollutants and its relatively large natural gas resource base, the United States has no need to produce SNG. The United States does have one coal gasification plant—the Great Plains Synfuels Plant in North Dakota– that has been producing SNG since the 1980s.[ix] When that U.S. facility was built, natural gas prices were volatile and on the rise.

Conclusion

China is building coal gasification plants at breakneck speed in order to contain its smog problem and to supply its population with needed power, despite the fact that carbon dioxide emissions will be even greater than if it built coal-fired plants directly. It is clear that China does not view the reduction of greenhouse gas emissions as a major goal. Rather, it is directing its efforts to increasing its economy and providing energy to its residents. In contrast, the United States took care of its criteria pollutant problem many years ago, and is now being pressed by the EPA to destroy the U.S. coal industry in the name of reducing its greenhouse gas emissions – a measure that will only reduce global temperatures by 0.018 degrees Centigrade by 2100.[x]

[i] New York Times, China’s Energy Plans Will Worsen Climate Change, July 24, 2014, http://www.nytimes.com/2014/07/24/world/asia/greenpeace-says-chinas-energy-plans-exacerbate-climate-change.html?emc=edit_th_20140724&nl=todaysheadlines&nlid=63692790&_r=1

[ii] BBC News, Coal Gasification: The Clean Energy of the Future?, April 13, 2014, http://www.bbc.com/news/business-26921145

[iii] Ibid.

[iv] Energy Information Administration, Technically Recoverable Shale Oil and Shale Gas Resources, June 10, 2013, http://www.eia.gov/analysis/studies/worldshalegas/

[v] LNG Industry, British Columbia and China commit to LNG future, http://www.lngindustry.com/news/liquid-natural-gas/articles/British-Columbia-and-China-strengthen-energy-links-1068.aspx#.U-E27uNdWSr

[vi] Energy Information Administration, International Energy Statistics, http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=1&pid=7&aid=6

[vii] The Energy Collective, Converting Coal to Synthetic Natural Gas In China, January 22, 2014, http://theenergycollective.com/geoffrey-styles/329851/converting-coal-synthetic-natural-gas-china

[viii] BP, Statistical Review of World Energy 2014, http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy.html

[ix] Dakota Gasification Company, About Us, http://www.dakotagas.com/About_Us/

[x] CATO Institute, The Vital Number Missing From EPA’s “By the Numbers” Fact Sheet, June 11 , 2014, http://www.cato.org/blog/002degc-temperature-rise-averted-vital-number-missing-epas-numbers-fact-sheet