Coal Gasification Surging In China - WSJ

A boom in coal-to-chemicals conversion in China will likely have significant impact on global chemical manufacturers, the WSJ reported Monday. China is actively encouraging the growth of coal-to-chemicals in a bid to reduce its dependence on expensive imported natural gas. The Gasification Technologies Council, a trade group, said China has built almost 20 coal conversion plants over the past two years. Such plants, which render coal into a gas that can be used as a raw material in myriad products, use technology advanced by General Electric (GE) and Royal Dutch Shell (RDS), among others.

Western chemical manufacturers have lost market share in China to Asian competitors, and many of them view coal-to-chemicals as a means of regaining lost ground. Celanese Corp. (CE) opened a conversion plant in China this year, while Dow Chemical (DOW) has joined with the Shenhua Group to investigate coal-to-plastic conversion. The miner Anglo American (AAUK) is interested in coal-to-chemicals, and chemical suppliers like Praxair (PX) are trying to open accounts with the new plants. "Coal to chemicals is an opportunity that's literally exploding [in China] right now," said Timothy Vail, CEO and president of coal-gasification plant builder Synthesis Energy Systems.

North America also has enormous coal reserves, but concerns about carbon dioxide emissions have dampened enthusiasm for coal-to-chemical conversion there despite the fact that gasifying coal generates less pollution than burning coal. "There is a stigma about coal [in the U.S.] because of its historical environmental and safety concerns," said Edward Glatzer, director of technology at consultancy Nexant Inc. Some companies, including Dow Chemical, are evaluating new (and expensive) technologies to offset global-warming emissions generated by coal conversion. China, however, which is "poised to surpass the U.S. as the No. 1 emitter of greenhouse gases in the world," is allowing gasification projects to be "speedily green-lighted...without concern over emissions." China offers fast-track permits and relatively easy financing as well as "cheap labor and minimal regulations" -- factors that allow coal conversion plants to be built quickly and at 2/3 to 1/2 the cost of a similar project in the U.S. or Europe.

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Comments

[weihnachtsmann]

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[paultaut]

You have just illustrated the prime example of why US manufacturing has fled our country.

Labor,Medical are items where allowances can be made by each individual company....however, the costs are exacerbated exponentialy by all of the regulatory nit picking......local,sta... and national regulations, EPA concerns, not in my back yard concerns....in todays environment, project development costs can go up by 100-200% just because of delays in going through all of the hoops.

Other countries seem to understand what is needed to grow. The USA used to...