Production of aviation jet fuel from coal


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Production of aviation jet fuel from coal
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Skaperdas, George T
United States -- Congress. -- Senate. -- Committee on Aeronautical and Space Sciences
U.S. Govt. Print. Off. ( Washington )
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94th Congress
2d Session j












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JUNE 1, 1976


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71-617 0

FRANK E. MOSS, Utah, Chairman
JOHN C. STENNIS, Mississippi PETE V. DOMENICI, New Mexico
GILBERT W. KEYES, Staff Director
JAMES T. BRUCE, Professional Staff Member
JAMES J. GEHRIG, Professional Staff Member
CRAIG M. PETERSON, Chief Clerk/Counsel
JOSEPH L. PLATT, Assistant Chief Clerk
WILLIAM A. SHUMANN, Professional Staff Member
CRAIG VOORHEES, Professional Staff Member
DR. GLEN P. WILSON, Professional Staff Member
CHARLES F. LOMBARD, Minority Counsel
EARL D. EISENHOWER, Professional Staff Member, Minority



Washington, D.C., June 3, 1976.
Hon. FRANK E. Moss,
Chairman, Committee on Aeronautical and Space Sciences,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: I am transmitting herewith a staff report
entitled "Production of Aviation Jet Fuel from Coal", the principal
findings of which are shown in the summary on page 1. It should be
of special interest to you that this report is a direct outgrowth of
recommendation number 6 of Senate Report 94-633 which was pre-
pared by the Committee. That recommendation states:
6. Serious study should be given to the possibility of the
development of alternative fuels such as those derived from
coal and oil shale, synthetic hydrocarbons, liquid hydrogen,
and nuclear propulsion.
This new staff report indicates that the production of aviation fuels
from the vast quantities of American coal is an alternative which
should be given serious consideration.
Staff Director.

Digitized by the Internet Archive

in 2013


Letter of transmittal ---------------------------------------------III
Glossary -------------------------------------------------------1
Summary -------------------------------------------------------5
1. Liquefaction of coal ---------------------------------------------7
2. Synthol product characteristics ----------------------------------- 8
3. Aviation jet fuel characteristics ----------------------------------- 8
4. Modifications of synthol process ----------------------------------- 9
5. Process description:
a. Coal preparation ----------------------------------------14
b. Coal gasification ----------------------------------------14
c. Gas purification -----------------------------------------17
d. Product synthesis ---------------------------------------17
e. Product recovery ----------------------------------------19
f. Chemicals recovery --------------------------------------20
g. Aviation jet fuel treating ---------------------------------20
h. Catalyst preparation -------------------------------------20
6. Plant design and estimate ---------------------------------------20
7. Economics for aviation jet fuel production ------------------------- 21
8. Conclusions --------------------------------------------------26

Fig. 1.-Manufacture of aviation jet fuel by SASOL-Synthol process
overall flow diagram -------------------------------------13
Fig. 2.-Lurgi coal gasification building ------------------------------15
Fig. 3.-Synthol reactors of SASOL plant ---------------------------- 16
Fig. 4.-Rectisol gas purification unit --------------------------------18

Table 1.-Products from SASOL-Synthol plant modified for Aviation jet
fuel production ------------------------------------------------21
Table 2.-Production of oxygenated chemicals from SASOL-Synthol
plant modified for aviation jet fuel production ----------------------- 21
Table 3.-Operating costs and revenues ------------------------------23
Table 4.-Modified SASOL-Synthol plant output of coproduct chemicals-. 25

Acids-Organic acids, such as formic acid, acetic acid, etc., produced
in Synthol reaction.
Alcohols-Organic compounds, such as methyl alcohol, ethyl alcohol,
etc., produced in Synthol reactor.
Aldehydes-Organic compounds, such as formaldehyde, acetalde-
hyde, etc., produced in Synthol reactor.
Arge-A process developed in Germany to convert synthesis gas into
heavy oils and waxes.
Aromatic-A class of hydrocarbons in which carbon atoms are ar-
ranged in six member rings like the ring in benzene.
Benzene-An aromatic compound containing six carbon atoms and
6 hydrogen atoms and characterized by alternate double bonds
between the carbons.
BPD-Barrels per day.
Butane-A paraffin hydrocarbon containing four carbons and ten
hydrogens in the molecule.
BTX-A mixture of benzene, toluene and xylene.
Cash flow-Annual profit plus annual depreciation.
Catalyst-A material which accelerates the rate of a chemical reaction
without itself undergoing a permanent chemical change.
Claus-A process for converting hydrogen sulfide to sulfur.
Converter-A reactor vessel in which materials undergo chemical
Countercurrent-A method of contact between streams of materials
flowing in opposite directions.
Cyclone-A conical vessel used to classify dry powders or separate
dust from gases by centrifugal action.
DCF-Discounted cash flow. Sum of each year's cash flow generated
by a project with each cash flow discounted at a selected interest
rate to the year of start up. The. sum of all DCF's over the plant
life is set equal to the total investment committed to the plant at
start up less salvage value at the end of plant life.
Fractionator-A multi-stage distillation tower used to separate compo-
nents of a mixture by successive vaporization and condensation.
Gasifier-A reactor to convert coal to gaseous fuels.
Gum-A shellac-like material formed by thermal decomposition of
olefin-containing fuels. Gum can interfere with fuel feeding devices.
Hexane-A paraffin hydrocarbon containing six carbon atoms and
fourteen hydrogen atoms per molecule.
Hydrocarbon-A compound of carbon and hydrogen.
Hydrogenation-Chemical reaction involving the addition of hydro-
gen to another chemical usually in the presence of a catalyst under
high pressure.
Hydrotreater-A reactor in which hydrogenation is carried out.
Isomerization-A reaction converting straight chain hydrocarbons
to branch chain hydrocarbons.


Ketones-A class of organic compounds including a carbonyl bond
consisting of oxygen attached through a double bond to carbon.
Ketones are usually good solvents.
LPG-Liquefied petroleum gas. A mixture of light hydrocarbons from
Lurgi-The Lurgi process gasifies lump coal by countercurrent contact
with steam and oxygen rising through the coal.
Methanation-A reaction converting synthesis gas to methane.
Molecular weight-The weight of all the atoms contained in a mole-
cule of a material.
Naphtha-A light fraction of petroleum generally used as a gasoline
component but also used as a petrochemical feedstock.
Octane-A gasoline property that measures fuel performance in auto-
motive engines. Also a paraffin hydrocarbon containing eight car-
bons and eighteen hydrogens per molecule.
Olefins-Hydrocarbons containing two less hydrogens than paraffins
per molecule and possessing some instability with respect to gum
Oxygenated chemicals-Compounds of carbon, hydrogen and oxygen
produced in the Synthol reaction and including aldehydes, alcohols,
ketones and acids.
Paraffins-Hydrocarbons containing maximum possible hydrogen
and exhibiting stability to chemical reactions including gum
Pentane-A hydrocarbon containing five carbon atoms and 12 hydro-
gen atoms per molecule.
Pilot plant-Plant of a scale intermediate between laboratory-scale
and large-scale units to evaluate integrated, continuous operations
of chemical processes or to provide engineering design data.
Phenol-An aromatic compound containing a hydroxyl group (an
oxygen atom attached to a hydrogen atom) such as carbolic acid.
Psig-Pressure in pounds per square inch gage.
Pyrophoric-A material that burns when exposed to air.
Rectisol-A process developed in Germany to purify synthesis gas
prior to its catalytic conversion to hydrocarbons.
SASOL-South African Coal, Oil and Gas Corporation, Ltd., a South
African company operating the only commercial coal liquefaction
Solvent extraction-Selective transfer of specific components from one
liquid into an immiscible solvent for ultimate recovery of the
Standpipe-A vertical column of powder used to develop static
pressure needed for circulation of powder through a (reactor)
Steam reforming-A catalytic reaction to convert hydrocarbons to
synthesis gas of which the active components are carbon monoxide
and hydrogen.
Straight chain-A characteristic of hydrocarbon molecules in which
all carbon atoms are connected to adjacent carbons in a straight
linear manner.


Synthesis-The reaction converting carbon monoxide and hydrogen
contained in synthesis gas into hydrocarbons and oxygenated
Synthesis gas-A mixture of gases containing hydrogen and carbon
Synthol-A synthesis reaction developed in the United States and
used by SASOL in South Africa.
Toluene-An aromatic hydrocarbon containing seven carbons and
eight hydrogens per molecule.
Water gas shift-A reaction converting carbon monoxide to hydrogen
by reaction with steam to adjust the ratio of hydrogen to carbon
monoxide in synthesis gas for desired operation of the synthesis
Weir scrubber-A process for removing sulfur oxides pollutants from
stack gases in boiler plants.
Xylene-An aromatic hydrocarbon containing eight carbons and
ten carbons per molecule.

71-617 0 76 2

(Prepared for Senate Committee on Aeronautical and Space Sciences by George T.
Skaperdas, Pullman Kellogg, Division of Pullman Incorporated)
The SASOL plant was designed and has been operated in South
Africa to produce motor gasoline rather than aviation fuel and, there-
fore, does not furnish direct commercial demonstration of aviation
jet fuel production from coal. But the basic Synthol process, which
accounts for most of current SASOL production and which will be
used exclusively in the current expansion, can be modified to maximize
jet fuel production rather than gasoline. Using information available
from pilot plant operations carried out during the development effort
in Synthol in Pullman Kellogg's laboratories (then located in Jersey
City), the product distribution to be expected when running the proc-
ess for aviation fuel has been estimated. The results show a wide
variety of co-products along with the jet fuel and reflect the same range
of co-products as produced at SASOL.
A plant to produce jet fuel from coal has been designed in a pre-
liminary manner in order to provide an estimate of the economics for
further evaluation of this system. A plant charging 17,100 tons per
day of coal and producing some 9,400 barrels per day of jet fuel will
require a total investment of 780 million dollars and will produce jet
fuel that would have to be sold at 76 cents per gallon to provide a
15 percent discounted cash flow rate of return on the investment. Such
commercial operation is difficult to justify as long as petroleum jet
fuel remains available at less than half this price. But jet fuel produc-
tion from coal could be set up as a matter of national security to
minimize the dependence of aviation jet fuel on petroleum which is
being imported at an increasing rate. Under these conditions, funds
for construction could be supplied by the Government and no return
on these funds would be required of the operation. The resulting fa-
cility could then be operated under contract and jet fuel could be
supplied to the Government at no cost by the contract operator who
would have as his incentive income from sale of byproduct chemicals.
This incentive seems attractive for a single plant producing some
2 percent of the Nation's military aviation fuel. If ten plants were to be
considered in order to provide 20 percent of the nation's needs for
military jet fuel, disposal of chemicals may raise some problems par-
ticularly with ethanol. Several methods of handling these problems
appear to be available.

Conversion of coal to hydrocarbons can be of national interest because
such conversion can free important national energy requirements from
dependence on imported petroleum and can then supply these energy
needs from abundant, indigenous coal.
This is particularly important in the case of aviation jet fuels. These
are currently derived from petroleum which is now significantly and
increasingly dependent on imports. Thus a prolonged embargo by
overseas petroleum exporters could seriously impair ready availa-
bility of aviation jet fuels for both civilian and military use. Conver-
sion of coal to hydrocarbon liquid fuels suitable for aviation does,
therefore, merit consideration as a means of providing freedom from
disruption of aviation due to unfriendly actions of oil exporting
Coal has been converted into hydrocarbon liquid fuels either by
complete gasification followed by synthesis or by hydrogenation.
Hydrogenation was widely used in Germany during World War II
to produce liquid hydrocarbons but the processing conditions are
severe and this process approach is no longer being used in any
commercial-scale operation, having been abandoned in the post-war
period. Development work is currently underway in several labora-
tories to improve the hydrogenation method by carrying out the reac-
tions very rapidly. This will serve to retain hydrocarbon structures
that occur naturally in coal and thus minimize the chemical work
that must be done in synthesizing liquid hydrocarbons. But this effort,
though potentially promising, is in the early research stages and is
not available for the near future.
In contrast the gasification-synthesis approach has been in com-
mercial use for two decades at a plant of the South African Coal,
Oil and Gas Corporation, Ltd. (SASOL) in South Africa. In this
operation coal is essentially completely gasified to synthesis gas
which is largely a mixture of carbon monoxide and hydrogen. The
synthesis gas is then converted to liquid hydrocarbons by reaction in
the presence of a suitable catalyst. Conversion of the coal substance
to simple gases does require substantial energy but the synthesis
step does make it possible to make a more closely controlled liquid
product that is not burdened with the more complex molecular frag-
ments that are produced from coal by direct hydrogenation. Thus a
cleaner fuel is possible from synthesis and costs of purifying or up-
grading hydrogenation product are not necessary.
The synthesis approach goes back to experiments reported in 1923
by Franz Fischer and Hans Tropsch on their work at the Kaiser
Wilhelm Institute. This early work dealt with catalyst preparation
and catalyst properties since the catalyst proved to influence the
course of the synthesis reaction very significantly. Further develop-
ment of the process led to the Arge process which used a pelleted


cobalt-based catalyst held in tubes. The Arge synthesis is used at
SASOL to produce relatively small quantities of lubricating oils
and waxes composed of paraffins, products also produced by this
route in Germany during the war. A second development of the
Fischer-Tropsch chemistry was completed by Pullman Kellogg in its
laboratories some thirty years ago. This development, known as the
S ynthol process, uses an iron catalyst in powdered form and circulates
t he catalyst at high flow rates together with the synthesis gas through
t he reactor. Improved process and temperature control provided by
the Synthol catalyst and reactor design permits better control of
product characteristics and the Synthol process has been used at
SASOL to produce most of the product output, which is largely motor
gasoline. The SASOL plant is now being expanded very substantially
after some twenty years of operating both the Arge and Synthol
syntheses. It has been reported that the Synthol process will be
used exclusively in the planned expansion.
The Synthol process was developed to produce motor gasoline which
is the major Synthol product at SASOL. This motor gasoline is quite
high in olefins which account for 60-70% of the material in the gaso-
line. The olefins are desired for motor gasoline because they provide
a much better octane rating than is provided by paraffins made in the
Arge process. In addition to gasoline, the Synthol process produces a
spectrum of other products ranging from methane (which can be sold
as substitute natural gas) through light olefins (basic petrochemicals),
light paraffins (petrochemical feedstock or LPG), naphtha or motor
gasoline, diesel fuel and some wax. In addition to these hydrocarbons,
Synthol produces oxygenated straight chain organic chemicals such as
aldehydes, alcohols, ketones and acids. Thus, the Synthol process
produces a variety of byproducts along with its major gasoline
product. The same is true of the Arge synthesis.
But the product distribution of the SASOL operation does not con-
tain any aviation jet fuel and, as a result, the two decades of commer-
cial coal liquefaction experience at SASOL cannot be used directly
to evaluate the gasification-synthesis approach for converting coal
to aviation jet fuel.

There are several important differences between SASOL or Synthol
gasoline and aviation jet fuel. First, the hydrocarbon molecules of
aviation jet fuel are larger, containing more carbon atoms. Gasoline,
for instance, contains hydrocarbons ranging from butane (four
carbons) to dodecane (twelve carbons) while aviation jet fuel contains
hydrocarbons up to at least hexadecane (sixteen carbons). As a result,
jet fuel has the advantage of a higher flash point and is, therefore,
less subject to fire from accidental sources of ignition during use or
The hydrocarbons of Synthol gasoline are largely olefins and thus
provide the necessary octane rating to prevent engine knock in auto-
motive internal combustion engines. This advantage of olefins, how-


ever, is accompanied by the disadvantage of relative instability to
gum formation at the higher temperatures prevailing in the fuel
systems of jet engines. As a result, an olefin specification of less than
1% has been set for aviation jet fuel. It may be noted that this specifi-
cation has been set for olefin content of petroleum materials that con-
tain olefins produced by cracking reactions. These reactions produce
small quantities of diolefins which form gums very much more readily
than do olefins and the low olefin specification may reflect the un-
wanted characteristics of accompanying diolefins more than the
inherent instability of olefins themselves. The Synthol olefins are free
of diolefins and may, therefore, be much more acceptable than the
more familiar, but contaminated, olefins produced by cracking petro-
leum. Since Synthol olefins have not been considered or used for avia-
tion jet fuel there is no information on their performance in jet engines
and it appears best, at this time, to accept the 1 % limitation on olefins
even though this may, in fact, be unnecessary.
Olefins can be hydrogenated to paraffins in order to meet the olefin
specification for jet fuel stability but this increases the freezing point
of the hydrocarbon. It becomes necessary, therefore, to consider what
further processing of the Synthol product, after its hydrogenation may
be needed in order to meet aviation jet fuel freezing point specifications.

A number of modifications of the SASOL-Synthol operations are
necessary in order to meet the three requirements of aviation jet fuel,
namely (1) larger or heavier hydrocarbons containing more carbon
atoms in the molecule (2) very low olefin content to provide stability
against gum formation and (3) satisfactorily low freezing point.
The extensive research and development program on the Synthol
process carried out in the laboratories of Pullman Kellogg some thirty
years ago prior to the SASOL project has shown that the size of the
hydrocarbon molecules produced can be varied over a wide range by
changing the catalyst composition and the reaction conditions imposed
on the synthesis reaction producing the hydrocarbons. The following
tabulation illustrates this by showing how the distribution between
gasoline molecules and heavier molecules, including jet fuel molecules,
varied in one set of tests.
Percent A B C D
Gasoline in product ---------------------------------------- 94.4 88.4 84.4 70.6
Heavier than gasoline --------------------------------------- 5.6 11.6 15.6 29.4

These results, all obtained on one of the many catalysts studied,
show that conditions selected for the reaction can effect a very sub-
stantial change in product distribution, increasing the portion of
product containing jet fuel from 5.6% to better than 29.4% of the
hydrocarbons produced. Furthermore, modest changes in catalyst
formulation also provide substantial additional changes in hydro-
carbon molecular weight distribution further increasing the ability to
maximize aviation jet fuel production. Review of these factors has

led to the conclusion that the Synthol process can be modified to yield
a hydrocarbon mixture having the following distribution of naphtha
(essentially motor gasoline), aviation jet fuel and the still heavier fuel
oil. Percent
(by volume)
Naphtha ---------------------------------------------------------27
Aviation jet fuel ---------------------------------------------------50
Fuel oil ----------------------------------------------------------23
Total ------------------------------------------------------100
From this liquid product distribution and the demonstrated varia-
tion of other products as the liquid product yield varied, an overall
product composition expected for aviation jet fuel production was
estimated and is shown in Table 1 in Section 6 of this report. The
variety of co-products is illustrated in this table.
It may be noted that this desired distribution of hydrocarbons was
not produced in any test operation in the Synthol development
program. The objective of that program was to maximize motor
gasoline and the research, therefore, concentrated on this objective.
Variations in test conditions did, however, show that jet fuel com-
ponents can be increased substantially relative to gasoline, and the
knowledge of Synthol reactions provided in the development program
makes it possible to conclude with confidence that the proposed jet
fuel operation can be achieved successfully.
Should the decision be made to proceed with a project to make jet
fuel from coal it will be necessary to confirm the proposed product
distribution. A relatively short development program should be suffi-
cient, however, to provide the necessary confirmation of the projected
product distribution.
Such a program will require a minimum level of effort if the hydro:
carbon type of molecules produced is the same as the SASOL material
and only the size of the molecules is increased. Under these conditions
the product in the aviation jet fuel range of molecular weights will
contain some 60% to 70% olefins. As already pointed out, this is
unsatisfactory for aviation jet fuel because of relative instability of
olefins with respect to gum formation. Reference to the Standard
Specifications for Aviation Turbine Fuels (ASTM Designation: D
1655-73) shows that olefins in aircraft turbine fuels should be limited
to about 1 percent or less. It is, therefore, necessary to hydrogenate
the raw jet fuel from the modified Synthol process to convert the
olefins to paraffins. This hydrogenation requires hydrogen which,
fortunately, can be made from co-product methane produced in the
Synthol reactor. Conversion of methane by reaction with steam in a
conventional reformer furnace to a hydrogen-rich gas which can then
be refined to essentially pure hydrogen is a well-known, thoroughly-
demonstrated industrial operation. Furthermore only a modest
portion of Synthol-produced methane is needed to generate the
necessary hydrogen so that it is not necessary to import hydrogen into
the proposed plant. In addition the hydrogen manufacturing process,
itself, and the Synthol olefin hydrogenation process, also a well-known
industrial operation, require very little additional capital and impose
very little economic burden on the conversion of coal to aviation jet
fuel. Consequently the facilities proposed for evaluating production of
jet fuel from coal include a hydrogen manufacturing plant and an

olefin hydrogenation plant and all the necessary support facilities
making use of plant-produced methane as the source of hydrogen. No
experimental test or demonstration program is considered to be neces-
sary for these two units.
When Synthol olefins are hydrogenated the paraffins produced will
easily pass the gum stability test specification. The skeletal structure
of the paraffins will depend on the structure of the olefins produced in
the Synthol reactor and, as a result, the paraffins will be a mixture of
normal paraffins and isoparaffins. (In normal paraffins the carbon
atoms of the molecule are attached to each other in tandem in a
straight line while in isoparaffins one or more of the carbons are
attached to the remaining straight-chain carbons as branches off the
straight line). The normal paramns in the jet fuel range have boiling
points some 70OF above the freezing point of -58F specified for
aviation jet fuel in ASTM D 1655-73. The isoparaffins have freezing
points, fortunately, that are up to 100F below the freezing points of
normal paraffins. Thus isoparaffins will easily meet the freezing point
specification. The actual jet fuel material will be a blend of normal
and isoparaffins reflecting the comparable olefin type distribution in
the untreated Synthol jet fuel fraction. The actual concentration of
the two types for the jet fuel materials to be produced by the modified
Synthol process is not known in full detail. Consequently it appears
prudent for the current technical and economic evaluation study to
include the process step of isomerization of the Synthol jet juel
material after hydrogenation. This should ensure the presence of
sufficient branch chain isomers to permit the jet fuel to meet the
freezing point specification.
Isomerization of normal paraffins has been practiced commercially
for almost four decades. The hydrocarbons isomerized commercially
have ranged from four to six carbon atoms per molecule and thus are
lower in molecular weight than the jet fuel material which ranges
from eleven to sixteen carbon atoms per molecule. Though no com-
mercial demonstration is available for isomerizing the jet fuel range of
normal paraffin hydrocarbons (there has been no commercial need for
such a reaction when dealing with petroleum-derived materials), the
reaction is a relatively simple one. It seems probable that a suitable
isomerization process can be demonstrated easily starting with the
established isomerization technology on lighter hydrocarbons and can
then be used to meet freezing point specifications.
A further approach is available to meet the freezing point specifi-
cation. This reaction is polymerization and has also been demonstrated
commercially for many years. In this approach the lighter portion of
the gasoline-range naphtha can be separated out and can then be
polymerized into the heavier jet fuel range of hydrocarbons. In this
case the two smaller straight chain olefins combine to make larger
branch-chain olefins. When these compounds are hydrogenated, branch-
chain paraffins are produced of much lower freezing point than the
straight chain equivalents formed directly in the Synthol reactor. This
route is also available to meet the low freezing point specification. In
addition, this incremental process step can transfer some 1,300 barrels
per day of hydrocarbons from naphtha to aviation jet fuel, increasing
the jet fuel production from 9,381 to about 10,600 barrels per day.

71-617 0 76 3


In addition, incorporation of selected aromatics into the hydro-
genated and isomerized jet fuel is available to lower the freezing
point still further. Thus, the ASTM specification permits 20%
aromatic content by volume in aviation jet fuel. Substituted benzenes
except for the xylenes have low freezing points and these materials
will be available in the benzene-toluene-xylene fraction (BTX) that
will be distilled from coal along with tar in the upper part of the
slagging Lurgi gasifiers used in the process sequence adopted for this
study. It is a simple operation to recover low freezing point aromatics
by simple fractional distillation from the BTX and use these to
depress further the freezing point of the jet fuel product. This would
also provide some increase in jet fuel output. From the aromatics
condensed out of the coal gasification unit an additional 400 barrels
per day could be blended into the aviation jet fuel which would then
be produced at the rate of 11,000 barrels per day.
It is clear that a number of alternate process steps are available to
decrease the freezing point of the hydrogenated jet fuel material
produced by the Synthol process. These alternates include isomeriza-
tion, addition of polymer made from the light naphtha and addition
of aromatics. Additional study, probably including some experimenta-
tion with actual Synthol fractions will be needed to select the best of
the alternates which may turn out to be a combination of these
possibilities operating each at a partial level of conversion to obtain
best performance.
Still another alternate that is possible and may provemost economic
is to use insulation and engine exhaust gases to maintain the aircraft
jet fuel tanks at a temperature above the high altitude levels so that
the hydrogenated olefins are satisfactory with no further processing.
Such a temperature may be about 40'F if no further processing is
adopted, but, again, a combination of some insulation and some
processing may prove most economic.
Of the several alternates available for meeting all aviation jet
fuel specifications, the following combination has been selected for
the current evaluation. The olefins from the modified Synthol process
will be hydrogenated and then isomerized. Facilities for making hydro-
gen from part of the fuel as produced in the plant will also be included.
This arrangement is felt to provide an evaluation of reasonable, though
less than maximum, aviation jet fuel production. As a result a con-
servative evaluation should result. Furthermore the petroleum
industry technology that is to be modified for use in the proposed
plant has been developed to a high degree of sophistication and it is
reasonable to conclude that the necessary technology adaptations of
hydrogenation and isomerization can be developed with a very high
degree of probability of success and at modest cost.

The overall plant arrangement required for converting coal to
aviation jet fuel and the accompanying co-products is shown in
Figure 1, which shows the relationship of the Synthol unit to the
many other units that must be operated with the Synthol unit.



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FIGUE 1-Manfacure f aiaton jt fel b SAOL-ynthl poces ovral


Coal delivered to the plant site goes first to a coal preparation unit
where it is crushed and dried to 2 percent moisture content. A portion
of the coal is transferred to the steam plant to be used for generating
utility steam required in all other operating units of the plant. Flue
gases from the steam plant are treated in a Weir Scrubber which re-
moves sulfur oxides to permit compliance with air quality standards
and also removes fly ash that has escaped the precipitators. Limestone
is fed to the Weir Scrubber and sludge is discharged for disposal.
The major portion of the crushed, dried coal is transferred to the
Coal Gasification Unit where it reacts with oxygen generated in an
Air Separation Unit and steam generated in the steam plant. Lurgi
gasifiers have been used in the proposed plant for this study, but
operation with ash slagging has been postulated. In contrast, the
Lurgi gasifiers (See Figure 2 for example.) used at SASOL operated at
lower temperatures and discharged a granular ash. Slagging operation
is being successfully demonstrated in a Lurgi gasifier that had been
used commercially at Westfield, Scotland before its dedication to this
development program. This program is sponsored by a group of
American Companies and is being conducted by the British Gas
Corporation with some participation by Lurgi. The more modern
slagging operation was selected for this study because it offers eco-
nomics in both capital investment, operating costs and the necessary
environmental control facilities in comparison with the Lurgi gasifiers
discharging a granular ash as installed at SASOL for operation in 1952.
The selection has been made on the premise that slagging operation
will be fully demonstrated by the time that plans for a coal-based
aviation jet fuel plant can be completed. This seems reasonable in
view of the fact that two runs of 1-week duration have already been
successfully completed and a longer run is in the final stages of prep-
aration. Ash slag flows from the bottom of the reactor to be quenched
in water. The resulting slurry of ash is then transferred to disposal.
Raw synthesis gas produced by the gasifiers leaves the top of the
gasifier after countercurrent contact with the feed coal which is charged
to the top of the gasifier and flows downward. This contact reduces
the temperature of the gas from temperatures approaching 2000'F
where gasification is occurring to about 1000'F at the top gas outlet.
The raw gas is composed primarily of carbon monoxide and hydro-
gen along with some methane and carbon dioxide from gasification,
but to these components are added distillation products from coal
generated by distillation of the coal before it reaches the gasification
zone. These components include aromatics such as benzene, toluene,
xylene (BTX), gasoline, heavier oils and tar. In addition the gas
contains unconverted steam as well as sulfur and nitrogen contami-
nants. This gas requires important purification and adjustment before
it can be used as a satisfactory synthesis gas in the Synthol reactor.
(See for example, Figure 3, page 16.)



FIGURE 29.-Lurgi coal gasification building-Steam generation in background.


.:i.:'' I

FIGURE 3.-Synthol reactors of SASOL plant.


The first step in gas purification is cooling including recovery of
some of the heat content in a waste heat boiler which supplements
the coal-fired steam generator. Tar is condensed out of the gas on
cooling and is used as additional fuel in the steam plant and then the
lighter hydrocarbons, which are highly aromatic, are separated out
and sent to the Product Recovery section of the plant. In addition a
phenolic, oily water is condensed from the gas during cooling and this
water stream flows to a solvent extraction plant where phenol is
extracted from the water for sale. The extracted water then enters
a secondary treatment plant where it is further purified so as to meet
effluent control standards before being discharged from the plant.
Gas leaving the cooling section of the Gasification Unit then flows
to the Gas Purification Unit where it first undergoes water gas shift
reaction. Here the carbon monoxide content of the gas is reacted with
steam to generate hydrogen and carbon dioxide. The purpose of this
operation is to raise the ratio of hydrogen to carbon monoxide in the
subsequent synthesis gas to permit effective use of the synthesis gas
in chemical conversion to liquid products. Following water gas shift,
the gas flows to a Rectisol unit where sulfur and nitrogen compounds,
final traces of gum-forming compounds and excess carbon dioxide
are removed. Purification in the Rectisol unit is provided by counter-
current washing of the contaminated gas with a refrigerated, re-
generated methanol stream. (See for example Figure 4.) The recovered
sulfur compounds, mostly hydrogen sulfide, are converted to sulfur in
a Claus unit.
Gas leaving the Rectisol unit now contains hydrogen and carbon
monoxide in the right ratio together with some methane, carbon diox-
ide and nitrogen. This highly purified synthesis gas is now ready for
reaction in the Synthol unit and is fed to the suction of the synthesis
converter recirculating blower, where it is combined with the washed
gas leaving the converter system. The combined gas streams are pre-
heated in a heater exchanger by the oil slurry circulated over the
product scrubber and enter the bottom part of a Kellogg converter.
The high velocity gas stream entrains the desired amount of iron
catalyst fed to it through a slide valve. The gas carrying the suspended
particles flows upward through the reactor body. The reactor body is
provided with heat exchanger coils through which cooling oil is
circulated maintaining a temperature of about 600'F in the reactor
space. Hot oil is cooled in a waste heat boiler where it generates 450
p.s.i.g. steam which is used to drive the main power consumers in the
Synthol plant and also provides heating steam for reboilers in the
product recovery section.
Reacted gases carrying the catalyst leave at the top of the converter
and enter the catalyst settling hopper in which the bulk of the cata-
lyst is removed from the reaction gases. The gases then pass through
a system of cyclones in which most of the fine particles remaining in
the gases are knocked out. The combined streams of the catalyst fall
by gravity into a vertical leg from which they are reintroduced into
the gas stream entering the converter through the slide valve men-
tioned above. Fresh catalyst is introduced into the bottom part of the
stand pipe and used catalyst removed from its upper part.


I A, I' .. ." I .

FIGURE 4.-Rectisol gas purification unit.


The combined wash water streams are taken to the Primary Dis-
tillation Tower; alcohols, ketones and aldehydes are distilled over-
head, and separated into desired individual products in distillation
towers. Main product is ethanol; propanol, butanol, higher alcohols,
acetones, acetaldehyde and methyl-ethyl ketone are also produced.
Bottoms stream of the distillation tower is mixed with ethyl acetate
in a system of extractors. Acids dissolve in ethyl acetate, the solution
is separated from water, ethyl acetate recovered and organic acids
separated by distillation. Main product is acetic acid; some propionic
acid and higher homologs are also formed.

The aviation jet fuel fraction produced in the Synthol reactor is
transferred to a final treating section to produce specification grade
product. Here the material is treated with hydrogen in a hydro-
treater unit over a cobalt-molybdenum catalyst to reduce olefins to
less than 1 %. Hydrogen for this purpose is generated in this section
of the plant from natural gas using the known combination of steam
reforming, water gas shift, carbon dioxide .removal and methanation.
Methane for this purpose is available from the Product Recovery
section of the plant. The hydrogenated stream is finally isomerized
to produce isoparaffins that will permit freezing point requirements
to be met.
The catalyst used in the Kellogg Synthol Process is basically pure
metallic iron. Because its life is short (about 60 days) and large
amounts are needed, catalyst preparation is considered as part of the
overall plant. Mill scale or magnetic ore are fused in an electric fusion
furnace at 30000F, activators added, and fused product is quenched
in water, ground, and reduced to metallic iron by a stream of pure
hydrogen prepared in the plant. The catalyst is pyrophoric and must
be kept under an inert or reducing atmosphere.

A preliminary plant design was selected, using the sequence of
operations described in the preceding section, to serve as a basis for
economic evaluation of aviation jet fuel produced from coal. This
plant will require a coal supply of 17,100 tons per day of a coal having
an ash and moisture content of 10.2% and 10% respectively and a
heating value of 11,030 Btu per pound when dried to 1% water con-
tent. These coal characteristics are readily available at the location
of the plant design used in this study.
The net production of materials, after allowing for all internal con-
sumption within the plant, including the hydrogen, hydrogenation and
isomerization units, is shown in Table 1. The oxygenated chemicals
produced in the plant are shown in Table 2 along with the revenues
that can be generated by the chemicals when sold at typical market
The investment in the completely erected plant ready for operation
has been estimated to be $780,000,000 in current dollars. This in-


vestment includes all the process units needed to prepare coal, gasify
it, purify the gas, synthesize the products and, finally, recover the
products for sale. In addition, all offsites including all utilities gener-
ation, effluent control facilities, plant utility distribution systems,
maintenance facilities and product storage and handling are included
in the estimated cost of the plant, Thus all costs necessary to operate
the plant on run-of-mine purchased coal have been included.
The overall plant, containing fourteen individual units as shown on
the block flow diagram of Figure 1, requires a substantial amount of
processing to upgrade coal to the clean fuels and chemicals that are
produced. Each step is designed with due attention to energy con-
servation and the overall energy efficiency is 64 %. That is, the heating
value of all the products is 64% of the heating value of all the coal fed
to the plant.
The plant design selected for this study required a water supply of
some 30,000 gallons per minute or about 40,000 acre feet per year.
This water is used for process cooling since water was readily available.
In other areas where water may be less available, air cooling can be
used for process purposes and the water requirement can readily be
brought down to about 5,000 gallons per minute or 7,000 acre feet
per year.

TABLE 1.-Products from SASOL-Synthol plant modified for aviation jet fuel
production Pound8 per
Fuel gas (6,450,000,000 Btu per day) -----------------------------14, 335
Substitute natural gas (4,130,000,000 Btu per day) ------------------8, 835
Ethylene ---------------------------------------------------10, 034
Liquefied petroleum gas (6,950,000,000 Btu per day) -----------------14, 335
Propylene --------------------------------------------------34,045
Butylene-Butane --------------------------------------------17,560
Gasoline (5054 BPD) -----------------------------------------53, 039
A-1 aviation jet fuel (9,381 BPD) ------------------------------109,662
Fuel oil (4350 BPD) ----------------------------------------55, 548
Oxygenated chemicals ---------------------------------------- 50, 172
Sulfur -----------------------------------------------------48, 738
Benzene, toluene, xylene, gasoline, oil (18,200,000,000 Btu per day)... 37, 987
Total ----------------------------------------- 454, 290

Pounds per Annual Pounds per Annual
hour income hour income

Acetaldehyde ------------- 810 $960,000 Normal butanol ----------- 2, 030 2, 720, 000
Methanol ---------------- 216 256,000 Heavy alcohols ----------- 2,950 6,970,000
Acetone ----------------- 2, 500 2, 760, 000 Acetic acid ---------------4, 570 5,950, 000
Methylethyl ketone ------- 925 1, 310,000 Propionic acid ------------ 1, 040 1,470, 000
Ethanol ------------------ 27, 500 18, 400,000 Higher acids ------------- 720 1,700, 000
Propanol ----------------- 6,060 11, 000,000
Isobutanol --------------- 844 1,400,000 Total -------------- 50,172 54,896,000


Economic factors in the operation of the selected plant are summa-
rized in Table 3, which lists all operating costs, including return on
investment, and balances these costs against revenues to be earned
from all the co-products made in the operation.

A coal cost of $5.00 per ton has been used in the economic evaluation
of the plant set up for aviation jet fuel production. This is a lower
price than the average price of $15.46 per ton, including delivery
charges, paid by the electric utility industry or the average price of
$15.75 per ton, f.o.b. mines, paid by all users of coal in the United
States in 1974. The $5.00 price is judged, however, to be more reason-
able because of the following considerations. It is highly unlikely that
the very large investment in the coal conversion processing plant will
ever be made without a very strong assurance that dependable, unin-
terrupted supply of coal at an acceptable price is available through
the life of the plant. Such assured supply essentially mandates the
commitment of a mine of sufficient size to serve this coal conversion
plant and no other customers so that unforeseen and uncontrollable
market factors do not interfere with continued, dependable supply of
coal. As a matter of interest, the three proposed coal gasification plants
designed to produce pipeline quality substitute natural gas (SNG)
commercially have all been set up with an adjacent coal mine dedi-
cated fully to the individual SNG plant. Applications to the Federal
Power Commission in connection with these three plants have de-
tailed the cost to the plant of coal produced by the dedicated mine.
The most recent of these applications, made early in 1974, details all
mining costs including taxes, royalties and capital return, and reports
a total cost of coal delivered to the process plant of $4.25 per ton. The
mine capacity for the SN G plant is about the same as for the aviation
jet fuel plant and the cost of coal to the two plants should, therefore,
be comparable. Allowing about 20% escalation since the SNG coal
cost figure, it is concluded that $5.00 per ton is a reasonable cost for
coal to the liquefaction plant. In this connection, it may be of interest
to note that a recent report by the Council on Wage and Price Sta-
bility concluded that surface-mined coal should be rather stable in
price and should be available at $5.00 to $6.00 per ton f.o.b. mine for
the next decade, regardless of how much coal demand should increase
in this period.
In any event, coal cost will depend on mine location and mine char-
acteristics and a definitive coal cost can only be determined for a specific
site at the time of operation. Until such factors have been determined
it does appear that $5.00 per ton is a satisfactory figure for economic
evaluation of the proposed operation. Furthermore, the cost of coal is
not a major item in the estimated cost of jet fuel. The effect of coal
cost on jet fuel price is shown later to be a modest one.
Finally, coal consumption by the proposed plant is equivalent to that
of a conventional electric utility, generating 1700 megawatts.
The cost of catalyst and chemicals consumed in the plant as well as
the labor required have been estimated by itemizing and adding indi-
vidual requirements for each of the dozen odd units in the overall
plant. Overhead and maintenance and local taxes and insurance costs
are judged to be typical values. Capital return is based on 15 percent
discounted cash flow (DCF) return of all investments less salvage
value after the life for the plant assumed to be 20 years. Total invest-
ment used in the calculations included working capital and interest
over the three-year period assumed for construction of the plant.
The figures in Table 3 show clearly that capital return and Federal
income tax are the most important cost items, the two together ac-
counting for almost 76 percent of total operating costs.


Distribution of costs among the eight major products listed in Table
3 may, of course, be made in a number of ways. The specific method
used in Table 3 used the following bases. First, the olefins were as-
sumed to be sold at typical values of 12 cents, 10 cents and 6.2 cents
per pound, respectively, for the ethylene, the propylene and the
butylene-butane mixture. The oxygenated chemicals were assumed to
bring in the revenues shown in Table 2 while sulfur was set at a value
of $40 per long ton and the BTX, gasoline and oil were taken at 8
cents per pound. The remaining revenues needed were derived from
the individual liquid and gaseous fuel streams assuming each fuel to
be sold at the same value per unit of heating value.
On this basis the three liquid fuel streams would have to be sold at
the following prices.
per gallon
Aviation jet fuel --------------------------------------------------- 76
Motor gasoline ---------------------------------------------------- 69
Fuel oil ----------------------------------------------------------- 85
The price of 76 cents per gallon for aviation jet fuel may be compared
with spot prices for refined petroleum products in intrastate commerce
as published weekly by the Oil and Gas Journal. For kerosene, which is
largely used for aviation jet fuel, these spot prices have been ranging
recently from about 30 cents to 34 cents per gallon. Thus the modified
SASOL-Synthol operation bears a very heavy burden if it must
earn a capital return characteristic of industrial operations.
If the plant were to be operated at 10 percent DCF rate of return,
the aviation jet fuel price at the plant would drop to 44 cents per
gallon but if 20% DCF were needed, the jet fuel price would become
$1.15 per gallon. These figures simply emphasize the sensitivity of jet
fuel price to the rate of return because of the extremely high capital
intensity of this coal-based operation. Even at 10 percent DCF rate
of return, which seems low for the very large risks involved, the price
of aviation jet fuel is too high to justify commercial investment and
operation of the proposed coal conversion facility.
(millions per
year) Percent
Operating costs:
Coal at $5 per ton ------------------------------------------------- $30.19 8.7
Catalyst and chemicals ------------------------------------------------------ 3. 04 .9
Operating labor ------------------------------------------------------------ 3. 45 1.0
Overhead ----------------------------------------------------------------- 4.0 1.2
Maintenance at 4 percent --------------------------------------------------- 31.3 9. 1
Local taxes and insurance at 13 percent -------------------------------------- 11. 7 3.4
Income tax (48 percent) ---------------------------------------------------- 107.0 30. 9
Capital return (15 percent DCF) ---------------------------------------------- 155.0 44.8
Revenues needed ---------------------------------------------------------- 346. 0 100. 0
Aviation jet fuel at 76 cents per gallon ---------------------------------------- 99.0 28.6
Motor Gasoline at 69 cents per gallon ----------------------------------------- 48. 4 14. 0
Fuel Oil at 85 cents per gallon ----------------------------------------------- 51. 1 14. 8
Oiefins -------------------------------------------------------- 29. 4 8. 5
Fuel gases ------------------------------------------------------ 32.5 9.4
Oxygenated chemicals ------------------------------------------------------ 54. 9 15. 8
Sulfur -------------------------------------------------------------------- 6.9 2.0
BTX, gasoline and oil ------------------------------------------------------- 24. 0 6. 9
Total ------------------------------------------------------------------- 346.0 100.0


If the price of coal delivered to the SASOL-Synthol plant were to
rise from $5 per ton to $10 per ton, which does not appear to be ex-
pected, the effect of this would be to increase jet fuel price from 76
cents per gallon to 86 cents per gallon at a 15 percent DCF rate of
return. Thus a doubling of coal price would have a much smaller
effect (10 cents per gallon) on jet fuel price than an increase to 20
percent DCF rate of return which would lead to a jet fuel price
increment of 39 cents per gallon. Jet fuel cost is much more sensitive
to financial factors than it is to coal price because of the very high
capital intensity of the operation and, also, the relatively good thermal
The proposed operation can, however, make jet fuel as well as other
important fuels and chemicals from domestic coal. Such an operation
can minimize disruption to domestic aviation, both military and
civilian, that could result from future oil embargoes particularly as
imported oil grows in its share of the domestic market. Should this
factor be considered important enough for the national security, it
becomes of interest to examine the cost relationships if the plant
investment is treated as an item of national defense and no capital
return is judged necessary. The total annual operating costs drop to
$84 million dollars per year and income from the petrochemicals will
be $114 million dollars per year. This assumes no income from the
aviation jet fuel, motor gasoline, fuel ol and fuel gases. Thus a
Government-built plant could be operated under contract permitting
supply of fuels to the Government at no cost and leaving a potential
income to the operator of some $30 million per year for purchasing
coal under contract, operating the complex plant and marketing the
wide spectrum of chemicals. This interesting possibility is but one of
many and again illustrates the effect of the high capital intensity of
the process.
The production of the plant is about 9,400 barrels per day of jet fuel
which is about 2 percent of the military jet fuel used in the United
States. If 20 percent of the military fuel were to be supplied it would
be necessary to build ten of the proposed plants for a total plant
investment of about $8 billion dollars.
Should ten such plants be built, the quantity of co-products to be
produced and sold are listed in Table 4 and compared with recent
figures on national production of these materials. It may be seen that
the national markets can absorb the co-product output in most cases
without undue disruption of commerce in these materials. But in the
case of ethyl alcohol, the output of ten plants would equal the total
current industrial production. It would be unacceptable to release so
much new material into the market and it will be necessary, therefore,
to find another outlet. Such an outlet can be the jet fuel itself, into
which the ethanol can be blended. This may well be undesirable
because of water solubility induced by ethanol. Such water solubility
appears unacceptable because it would probably raise the freezing
point above the 58'F specification. If, however, the ethyl alcohol
were to be converted to esters or ethers, this advantage would be
overcome. Such a solution, however, would lower the heating value of
the jet fuel because of the oxygen content and would decrease the
aircraft range for a given weight of fuel. Another, and possibly better,
solution would be blending of ethanol into the fuel oil where it should


make a boiler fuel of superior quality because of its freedom from
sulfur content. Protection of such fuel against water freezing problems
should be relatively simple in boiler fuel applications. Still another
option is available. Ethanol can be converted to motor gasoline using
a recently-announced process now under development. This gasoline
could be absorbed by the motor fuel market quite easily.
Output, millions of pounds National
per year capacity
1 10 (Millions of
plant plants pounds
per yaar)
Ethylene ------------------------------------------------- 79. 1 791 23, 500
Propylene ------------------------------------------------------- 342.0 3,420 9,821
Butylene-butanes ------------------------------------------ 138.0 1,380 --------------
Acetaldehyde ---------------------------------------------------- 6.4 64 1, 500
Methanol ------------------------------------------------------- 1.7 17 6,660
Acetone -------------------------------------------------------- 19.7 197 2,015
Methylethyl ketone ------------------------------------------- 7.3 73 5,056
Ethanol --------------------------------------------------------- 216.0 2,160 2,120
Propanol ------------------------------------------------ 47.8 478 ------------
Isobutanol -----------------------------------------------6.6-66-. 6.6 66 115
Normal butanol -------------------------------------------- 16.0 160 551
Heavy alcohols --------------------------------------------- 23.2 232 ---------
Acetic acid ------------------------------------------------------ 36.0 360 2, 265
Propionic acid --------------------------------------------------- 8.2 82 60
Higher acids ----------------------------------------------- 5.7 57-----------
Sulfur -------------------------------------------------- 384.0 3,840 23,600
Benzene, toluene, and xylene ---------------------------------- 294.0 2, 990 24, 290

In short, disposal of the chemicals should be no impediment for
operation of a single plant and, indeed, may provide an attractive
incentive for contract operation of a Government-owned facility. But
for operation of 10 plants to supply some 20% of the Nation's military
aviation jet fuel, it will be necessary to consider and select from
several alternates for disposal of ethyl alcohol co-product.
If polymerization and aromatics blending were to be used, aviation
jet fuel would increase from 9,400 to 11,000 barrels per day and 8
rather than 10 plants would be needed to supply about 20 percent of
the military jet fuel. The cost of eight plants would be about $6.5
billion dollars and the problem of disposing of ethanol would be
eased somewhat, though not eliminated.
Aviation jet fuel supply can also be insulated from imported oil
embargoes even though it is made from domestic petroleum if im-
ported petroleum were to be replaced by fuels from oil shale, tar sands,
secondary or tertiary oil recovery, coal liquefaction to made syncrude
or coal gasification for high or low Btu gas to replace oil uses. These
alternate approaches, in general, have the same characteristics as the
proposed jet fuel operation. They require very high capital invest-
ments and fuels made by these alternate approaches are also very
heavily burdened by capital return requirements characteristic of
commercial operations. At the current state of development of these
alternate technologies, the uncertainties in capital requirements appear
large enough so that it is not truly possible to determine the relative
economics of the several approaches. It does appear that the na-
tional interest in developing energy independence or energy supply
assurance would be best served by constructing and operating demon-


stration plants of each alternate approach, including the SASOL-
Synthol approach. This would provide basic cost data on the economics
of the various technologies so that a sound selection of the most
economically advantageous processes can be made when the switch to
domestic resources must be faced. The cost of such a program is not
small, but it can be repaid very rapidly because it will permit selection
of the most economic method of using indigenous resources.

The SASOL plant in South Africa has been producing motor gaso-
line as primary product along with a large number of co-products.
Aviation jet fuel, however, is not one of the co-products and thf
SASOL operation, therefore, does not provide commercial demonstra-
tion of the production of jet fuel from coal.
Aviation jet fuel differs from SASOL gasoline in the following
respects. Aviation fuel must have (1) a higher boiling range and the
associated higher flash point, (2) less than 1 percent olefins compared
to a very olefinic SASOL gasoline and (3) a much lower freezing
point specification of 58'F. The Synthol process, which accounts
for the bulk of the SASOL production, can be modified to make jet
fuel boiling range material as a major product. This conclusion is
available from pilot plant data accumulated during development of
the Synthol process in the Research Department of Pullman Kellogg.
Information from this program has provided a basis for estimating
the product slate and properties of the raw jet fuel fraction when
operating to make aviation fuel boiling range material. The raw
material must then be hydrogenated and isomerized to meet existing
ASTM aviation fuel standards for olefins and freezing point.
A commercial-scale plant making jet fuel and associated co-products
from coal using the general SASOL approach but modified, as indi-
cated, for aviation product is expected to require a plant investment
of $780 million when making 9,400 barrels per day of jet fuel from
17,100 tons per day of coal. This preliminary estimate shows the
proposed operation to be very capital intensive. In fact some 76 per-
cent of the total operating costs are associated with capital charges
to earn 15 percent on the plant investment on a discounted cash
flow basis and to pay income tax on the needed return. As a result
of these capital-related factors, aviation jet fuel would have to be
sold at 76 cents per gallon and the operation bears a very heavy
burden as long as aviation jet fuel from petroleum is available at 30
to 34 cents per gallon.
If production of aviation jet fuel from coal were to be justified on a
national security basis it is possible to consider operation of a Govern-
ment-owned plant on which return on capital investment is not re-
quired in contrast to the situation with commercial operation. One
option under these circumstances would be to contract out the opera-
tion of the plant to a company that could assume the entire operation
of the plant, provide the aviation jet fuel to the United States at
no cost and perform these services in return for the chemical co-
products as its incentive.
This arrangement appears attractive for a single plant of the size
selected but such a plant provides only some 2 percent of the national


military jet fuel requirement. Should ten such plants be contemplated
to meet 20 percent of military aviation fuel needs, the volume of
ethanol produced would be so great as to disrupt these markets and
remove this incentive, which is a major component of the suggested
incentive for the proposed operator. This problem could be handled
by further processing the ethanol for blending into aviation fuel or
by blending it directly into fuel oil. These options would reduce the
income from chemical co-products and would require income from
aviation fuel or the other fuels to restore the contract operator's
incentive. It is of interest to note, in this connection, that erosion of
co-product chemical income to 50 percent of the income in Tables
2 and 3 can be made up by a charge of about 8 cents per gallon for
aviation jet fuel, motor gasoline and fuel oil turned back to the
Thus it is concluded that commercial operation of a modified
SASOL-Synthol process to make aviation jet fuel from coal is not
attractive, but arrangements appear possible to operate such a facility
with Government supply of the needed capital for national security


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