Much like alchemists toiling away in their medieval labs, contemporary firms are trying to find oil out of every other substance that might contain carbon. The challenges are manifold, but the potential prize is huge.

Accelergy, a Houston, Texas-based alternative fuels startup, is trying to commercialize its technology to convert various combinations of coal, natural gas and biomass into a liquid fuel.

The company started producing fuel in June at the Beijing Research Institute for Coal Chemistry (BRICC), its first test facility in China. The company also plans to utilize a larger facility that can process a larger range of coals in China.

Accelergy has already signed agreements with the US Army Tank Automotive Research, Development and Engineering (TARDEC) Center and the US Air Force to test and certify its fuels for several applications.

Solid To Liquid To Energy

Turning coal into liquid fuel is not a new technology, but Accelergy says its process is more efficient and less harmful to the environment compared to the traditional methods of liquefying coal.

“Unlike indirect liquefaction technologies such as Fischer-Tropsch, Accelergy’s three-step ‘integrated carbon biomass to liquids’ process converts carbon feedstocks directly to a liquid product [and] produces an 80% carbon efficiency”, said Rocco Fiato, Accelergy’s CTO. The process also allows the fuel to produce 20% more energy per pound than in its earlier solid state.

“That would be as high as you can imagine in the typical technology,” he said.

Accelergy uses a synthetic fuel process that carries a “great deal of similarity” to the Fischer-Tropsch process, a German technology now used by Sasol in operating coal-to-liquids plants in South Africa, said Pavel Molchanov, an energy analyst for Raymond James.

The company takes a “solid hydrocarbon like coal or biomass such as wood chips and directly liquefies it into a liquid transportation fuel such as diesel or jet fuel,” said Molchanov, an energy analyst for Raymond James.

The product is “not a true biofuel,” although it has a “renewable element,” he said.

At Home Among The Coal Giants

In the United States, Accelergy is working on demonstration facilities in Pennsylvania, Montana, and North Dakota. Accelergy’s process can be tuned to utilize a wide range of feedstocks, and the company is currently exploring the use of both coal and natural gas in the U.S, along with biomass.

The company is also targeting its efforts in China since the country already has a small number of synthetic fuels plants where coal is converted to a liquid, he said. China is also the world’s largest producer and consumer of coal.

“Accelergy is currently focusing on China with companies that will utilize its technology to develop synthetic fuels,” Molchanov said. “Accelergy is taking advantage of some Chinese companies who are already doing this to establish partnerships.”

One drawback to Accelergy’s carbon-biomass to liquids (CBTL) process in China is the heavy carbon footprint production “since any coal-based conversion by definition has a substantial carbon footprint,” he said.

The process is “not likely a candidate in the US” since generating substantial carbon emissions, blamed for global warming, is “fairly controversial,” Molchanov said.

In US, the company uses biomass such as camelina oil or other renewable feedstocks, yielding a lower carbon footprint, he said.

Defending Its Green Credentials

Accelergy said its process uses “algae biomass in a carbon capture and recycle system where the algae absorbs emitted carbon dioxide and is reused as a biomass feedstock or sold to a third party as fertilizer or similar organic compound,” Fiato said.

Accelergy’s process actually has a lower environmental footprint than many competing technologies, including biofuels, due to low land and water use, according to Fiato. The added algae carbon capture and recycle component further reduces emissions.

The process “emits 20% less CO2 than traditional oil refining,” he said.

“We are very confident we can achieve competitiveness with crude oil,” Fiato said. “Accelergy’s direct liquefaction coal-biomass to liquids process will be able to compete with crude oil trading at around the $60 per barrel range.”

The company will construct a pilot facility in Pittsburgh to produce and test gasoline, diesel and jet fuel. The facility is funded by a $1.3 million grant the company received from the state government of Pennsylvania in April.

Accelergy has received $40 million in Series A and Series B funding since 2007 from
Advent International, Goldman Sachs, Lux Capital, Mobius Venture Capital, Nth Power, Sequoia Capital and Technology Partners.

Photo Caption: A coal processing facility in Northwest China.