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Published: 1981

Total Pages: 13

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A detailed study was made of the feasibility of producing approximately 12,000 barrels per day of gasoline from high sulfur Illinois coal. The project was to be based on indirect liquefaction of coal by producing methanol and converting the methanol to raw gasoline. The plant design was based on proven processes: including atmospheric Koppers-Totzek type coal gasification, Rectisol gas purification, Claus and Scot sulfur recovery, and ICI low pressure methanol synthesis, all of which have been used in large commercial plants; and the fixed bed Mobil MTG process, which has been demonstrated in a four barrel per day pilot plant, to convert methanol into gasoline. The plant was designed to meet all federal and state regulations pertaining to environmental protection. The plant would cost approximately $1.27 billion (1981 dollars). Annual operating costs would total $243 million (1981 dollars). It has been determined that the project would not be viable in the present economic environment. Using 1981 dollars, and recognizing the present average refinery selling price in the mid-West of gasoline produced from crude oil is about $42 per barrel, the following gasoline prices have been calculated. For example, if the project were financed entirely by equity funds, then the selling price of gasoline would have to be $122 per barrel in a moderately inflating general economy in order to obtain a rate of return of 10% on the investment. The selling price would be lowered to $106 per barrel if no inflation is assumed. If 75% of the project were financed by debt at 16% interest, and the real price of coal and gasoline increased by 3% more than the general inflation rate, the selling price in 1981 dollars would be $76 per barrel in a moderately inflating economy. As the real price of gasoline increases in the future, this project and the related economics should be reviewed.