China Boosts "Coal-for-Oil" to Curb Pollution, Oil Shortage

China plans to initiate several large-scale coal-for-oil projects in the next 10 years, in a move to ease coal-generated pollution and dependence on exorbitant oil imports.

"Coal-for-oil" technique, a branch of the "clean coal program" that advocates pollution-free technologies in coal processing and usage, adopts chemical methods to transform coal and carbon materials into gasoline, diesel oil, liquefied petroleum gas and other forms of oil products.

In the future China will build a plant with an annual production capacity of 1 million tons of transformed oil products in Inner Mongolia Autonomous Region, north China.

Shanxi Province, which shares 40 percent of the country's coal reserves, will set up a 500,000-ton plant by the end of the year, introducing techniques from either the Netherlands or South Africa.

Construction of one or two more such enterprises will also be initiated during the period in coal-rich Shaanxi, Heilongjiang or Yunnan Provinces, in northwest, northeast and southwest China, respectively.

Germany established the world's first plant to directly transform coal and carbon into all types of oil products in the early 1920s.

Some coal-for-oil factories in South Africa produce over 7 million tons of oil products annually. The profit from these plants reportedly hit over 600 million U.S. dollars in 1999.

China became the largest coal producer in the world in 1989. With an exploitable coal reserve of 114.5 billion tons, coal provides over 70 percent of the country's raw energy consumption, but it also brings acid rain, dust and other serious pollution.

On the other hand, the domestic need for oil products keeps soaring in recent years, following China's rapid economic development and social advancement.

For the time being, China's oil reserves amount to 20.3 billion tons, with 2.4 billion tons exploitable. But China had to import oil from 1993 to meet the increasing demand in the domestic market.

Experts here said that one ton out of every five tons of oil in China's market are imported. China even imported at least 70 million tons of oil products in 2000, when the world oil price hit a record high, official statistics revealed.

Imported oil is estimated to account for 40 percent of the China's total oil consumption in 2010.

To ease the coal-induced pollution and balance the oil consumption in China, the technology of turning cheap coal resources into oil products is considered an effective way out.

China resumed its research in the field in 1980s, and has held constant technological exchanges with the United States, Germany and Japan over the past decades.

Having mastered liquefaction, activator and other key techniques in the process of coal conversion, China is now fully capable of establishing plants with a transformation capacity of up to 1 million tons.

Taking the cheap coal and labor resources and other factors into consideration, the cost of each barrel of coal-transformed oil product will be around 20 dollars in China, less than the price of 22 to 28 dollars per barrel valorized by OPEC, said Sun Yuhan, head of the Shanxi Coal Transformation Institute under the Chinese Academy of Sciences.

The continuous oil supply in the world market will face little barriers in the coming 30 years, except for a rapid price increase, estimated Li Dadong, an academician of the Chinese Academy of Engineering. Thus the coal-for-oil conversion is not only an issue

of economy, but also a strategic consideration to China, which is a big oil consumer.

It is necessary to boost the progress of coal-for-oil program in China, which will bring double benefits to energy development and environmental protection, according to Liu Tienan, a senior official with the Development State Planning Commission.

But taking China's current economic performance into consideration, the cost of the technology is still relatively high, Liu said.

One task facing China is to improve the technological level and generate higher added value in the transformed oil products, he said.

People's Daily Online ---