Executive SummaryLLNL has evaluated the economics of utilizing syngas from Underground Coal Gasification UCG for two scenarios: Power generation from UCG (at the 485 MW net output scale) Synthetic Natural Gas (SNG) from UCG (66 Trillion BTU/yr scale [34,500 Barrels Oil Per DayFor both scenarios, while the economics are not quite competitive at currently prevailing U.S. prices, they may be competitive for locations with higher prevailing energy and natural gas prices (e.g. Central Europe, Japan) or in the future if natural gas and electricity prices rise substantially in the U.S. The economics of power production become significantly more favorable after the depreciation period. Costs associated with sales taxes and corporate income taxes are not included in our cost estimates.For the synthetic natural gas from UCG option, we see significant challenges meeting pipeline specifications for content of nitrogen and other impurities. We have found that even with low percentages of nitrogen (<1.8%) in the feed syngas, separation processes in the gas cleanup increase the percentage of nitrogen in the syngas as CO 2 is removed and CO and H 2 converted to methane. Minor intrusions of nitrogen in the underground formation, combined with nitrogen within the combusted coal itself, may cause the percentage of nitrogen in the product SNG to exceed specifications of <5%. Hence, we judge SNG from UCG as being challenging technically under current pipeline specifications.
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