Gasification technology was first used in the 19th century to convert coal into ‘Town Gas’ (coal gas used for residential or industrial consumption) and was further developed by Germany during World War II to make diesel fuel. The process was advanced again by Sasol in South Africa to produce petroleum and has also been used for the past 50 years to convert coal to synthesis gas for use in the chemicals industry. The first integrated gasification power plant was built in California in 1984, the first of over 100 gasifiers in the U.S. and almost 400 in operation worldwide today.

Town Gas

Over the past decade, natural gas has become the fuel of choice due to its price, clean environmental profile and ease of transportation. However, high demand has caused prices to rise rapidly over the past five years to $6-8/MMBtu from less than $3/MMBtu just a decade ago – and forecasts predict that prices will continue to increase. Given that the U.S. is the world’s largest consumer of natural gas, yet holds only three percent of global natural gas reserves, current consumption rates present serious problems for the U.S., both in terms of security (foreign dependence) and cost of supply.

In contrast, the U.S. currently maintains the largest coal supplies in the world, accounting for 25 percent of the world reserves. Coal is low cost (80-95 percent of the cost of natural gas) and widely available, but transporting coal is increasingly difficult due to infrastructure constraints. Moreover, burning it in coal-fired power generation plants is increasingly challenging. Once considered to be an environmentally unfavorable fuel, GreatPoint Energy is changing the way we see, and utilize, coal.