Japan starts prototype coal-to-oil plant

A prototype Japanese plant which processes coal into more environmentally friendly oil has started running and is operating smoothly, the project developer said recently. The plant in Ibaraki prefecture, north-east of Tokyo, went into operation in late March and can process 150 tonnes of coal per day into roughly 600 barrels of oil, said Japan's semi-governmental New Energy and Industrial Technology Development Organisation (NEDO)
But despite the anti-pollution benefits, the plant does not as yet offer a viable alternative to normal crude in terms of costs. The production cost for the coal-derived oil is $ 20-$ 30 a barrel, more than the market price of a barrel of crude oil, NEDO said.
The plant, the first of its kind in Japan, is part of a pilot project under which coal is treated at high temperatures and atmospheric pressure, using a low-cost iron catalyst, to produce oil. After liquefaction, another process is needed to upgrade the oil into fuel oil which can then be used in conventional vehicles and aircraft. In the process, the sulphur and nitrogen content of the coal is greatly reduced, making it a more environmentally friendly fuel, NEDO said.
Coal-producing Asian countries such as China and Indonesia have expressed interest in the technology as it broadens the use of coal and also makes it a cleaner fuel, NEDO said. Coal has been used in the past to produce fuel oil, but usually for reasons of economic necessity rather than environmental protection. The pilot plant in Ibaraki will run for two years in order to assess the technology and gauge its economic efficiency, NEDO said.
World energy demand is expected to grow sharply in coming years, forcing heavier dependency on Middle Eastern oil supplies. Currently, the world's recoverable oil reserves are estimated to last about 45 years. Japan is poor in natural resources and is researching alternative energy sources and ways of easing its dependence on fuel imports.