Martin Lambert’s clean coal dream
Swan Hills Synfuels CEO says the 'economics are good' for coal gasification power project
Swan Hills Synfuels LP is taking a different approach to generating power with coal by producing syn-gas combusted from coal reserves deep underground. In 2011, the Calgary company wrapped up a two-year demonstration project in western Alberta. Commercial development is expected to begin in 2015. Chief executive Martin Lambert already has plans for a second facility. If he has his way, coal will still have a role to play in providing power to Albertans.
Alberta Oil: Where does in situ coal gasification fit into Alberta’s energy mix?
Martin Lambert: The syngas that we produce is a building block for a whole variety of end products. At the end of the day, market conditions will dictate what the syngas gets turned into. For sure some of it will be electricity, like we’re doing in our first project. Alberta needs that and we’ll need it more in the future. We also think petrochemicals and, more likely, liquid transportation fuels are likely candidates. We could make synthetic crude and gasoline and many other products as well.
AO: How does the process work?
ML: We combust a small amount of the oxygen that we inject [underground] and that raises the temperature. The gas, when it comes to the surface, has two primary components and both are sales products, so we split the gas into a CO2 stream and a finished syngas stream. The finished syngas stream is mostly natural gas, and mostly methane. The primary purpose of the syngas is to fuel a newly built 300-megawatt natural gas combined-cycle power plant. The secondary purpose is to take the CO2 and sell it to nearby energy companies, oil companies, and use that for enhanced oil recovery.
AO: Is the Swan Hills project dependent on selling CO2?
ML: Our economics are good and our primary sales product is electricity into the Alberta grid.
AO: Would the power plants need to be right next to the processing facility?
ML: It used to be with coal that the power plant had to be exactly where the coal was because you were physically moving the coal. You had to have them in the same place; otherwise you’re putting it on the rail car. Now, you’re not in that position and you can put the power plant where you need it. What you’re doing is putting the coal, the syngas facility, where the coal is and if the power plant is remotely located, you run an underground pipe to get the syngas to the power plant. That is, we think, way better environmentally, socially and politically than building transmission lines, and cheaper too.
AO: How many facilities could Alberta support?
ML: Speaking only to the coal that we have secured, we think on our lands we could do 30 facilities the size that we’re currently doing; and the one we’re doing right now is $1.5 billion.
AO: Will new coal-fired regulations support or hinder projects like yours?
ML: It stands on its own. Under those new regulations, none of the current Alberta coal plants comply. The one that had a shot at complying was Pioneer, but they couldn’t make the economics work. There will only be one coal-fired facility in Alberta that complies with the new federal regulations and that’s ours.