The prices of crude oil and natural gas continue to hover at high levels, and low-cost coal has been pushed to the front as an alternative raw material for producing chemicals, and has prompted more companies to seriously explore the possibility of using coal as raw material. Michael Kratochvil, vice president of petroleum and chemical business at Nexant Chemical Systems, a world-renowned consultancy, said last week.
Kratochville believes that at the current crude oil price of approximately US$60/barrel, the production of chemicals through the coal gasification project is competitive in cost, but if the price of crude oil falls sharply, companies will face price risks. He also said that if the price of natural gas is between 5 and 6 dollars per million British thermal units, if the government creates incentives, producing some chemicals through coal gasification is also attractive. However, if the price of natural gas reaches 9 to 10 U.S. dollars per million British thermal units, the situation is different. Even if there is no government incentive policy, the production of chemical products from coal is competitive.
He believes that if crude oil and natural gas prices fluctuate within the above range, more companies will re-enter this trend in the next five to six years, especially if taxation or other economic incentive policies exist.
The United States has already implemented relevant incentive policies. The U.S. Department of Energy said that the U.S. Internal Revenue Service had already reduced the first federal tax concession of US$1 billion and granted nine advanced coal-fired power generation and gasification projects. These gasification projects include: BP's petrol coke-based hydrogen energy project at the Carson refinery in California; Duke Energy's coal gasification combined cycle power project in Edwardsport, Indiana; and Tampa Electric's coal gasification combined cycle in Polk, Florida Power Generation Projects; Mississippi Power is a gasification project located in Kemper, Mississippi; Texas Energy is located in Longview, Texas, a gasification project serving synthetic gas and chemicals.
The U.S. Energy Policy Act of 2005 focused on clean energy and advanced technologies. It authorized the government to provide tax incentives as an incentive to promote advanced technologies to the market. Two types of coal technologies are also listed in the tax preference reduction plan. One is advanced coal projects and the other is gasification projects. A total of US$1.65 billion in tax concessions for advanced clean coal projects has been approved, including a $350 million tax concession for advanced gasification projects. The remaining $650 million in tax incentives will be implemented next year.
Kratochville believes that at the current crude oil price of approximately US$60/barrel, the production of chemicals through the coal gasification project is competitive in cost, but if the price of crude oil falls sharply, companies will face price risks. He also said that if the price of natural gas is between 5 and 6 dollars per million British thermal units, if the government creates incentives, producing some chemicals through coal gasification is also attractive. However, if the price of natural gas reaches 9 to 10 U.S. dollars per million British thermal units, the situation is different. Even if there is no government incentive policy, the production of chemical products from coal is competitive.
He believes that if crude oil and natural gas prices fluctuate within the above range, more companies will re-enter this trend in the next five to six years, especially if taxation or other economic incentive policies exist.
The United States has already implemented relevant incentive policies. The U.S. Department of Energy said that the U.S. Internal Revenue Service had already reduced the first federal tax concession of US$1 billion and granted nine advanced coal-fired power generation and gasification projects. These gasification projects include: BP's petrol coke-based hydrogen energy project at the Carson refinery in California; Duke Energy's coal gasification combined cycle power project in Edwardsport, Indiana; and Tampa Electric's coal gasification combined cycle in Polk, Florida Power Generation Projects; Mississippi Power is a gasification project located in Kemper, Mississippi; Texas Energy is located in Longview, Texas, a gasification project serving synthetic gas and chemicals.
The U.S. Energy Policy Act of 2005 focused on clean energy and advanced technologies. It authorized the government to provide tax incentives as an incentive to promote advanced technologies to the market. Two types of coal technologies are also listed in the tax preference reduction plan. One is advanced coal projects and the other is gasification projects. A total of US$1.65 billion in tax concessions for advanced clean coal projects has been approved, including a $350 million tax concession for advanced gasification projects. The remaining $650 million in tax incentives will be implemented next year.