REFUEL PROGRAMKick-Off Meeting

THINK SMALLCatalytic Process Scaling

Centralized vs Decentralized

Dane A. Boysen, PhDLawrence Berkeley National Laboratory

Denver, COAugust 17, 2017

Historic Events

England and all civilised nations stand in deadly peril of not having enough to eat [...] The fixation of atmospheric nitrogen is one of the great discoveries, awaiting the genius of chemists.

SIR WILLIAM CROOKES, 1898

“”

Presidential Address to British Association for the Advancement of Science

Haber-Bosch Process,1909

• N2 + 3 H2 → 2 NH3

• About 50% of nitrogen in our body comes this process

• Earth able to support only 3 billion people without it

• Current world population over 7 billion people

DR. FRITZ HABER(1968-1934)

World War I1914-1918

• Carl Bosch, BASF CEO (1919-1926)

• BASF erected first Haber-Bosch plant in Oppau in 1913—produced 9,000 tons/day ammonia

• Plant converted to make gun powder during WWI

• Today’s BASF Ludwigshafen plant produces 875,000 tons/day ammonia

BASF Oppau, Germany, 1921

CARL BOSCH(1874-1940)

BASF Ammonia Facility, Oppau, Germany

25tons per day ammonia

1913

BASF Ammonia Facility Ludwigshafen, Germany

2,400tons per day ammonia

2016

Ammonia Plant Scale-upCAPACITY VERSUS NORMALIZED COST

Industry Average

After 100 years, the Haber-Bosch process looks virtually the same

except one feature:

unit sizeBASF 1913

BASF 2015

Energy Technology Today

AMMONIA PLANT

PRICE TAG $0.5-5 BN

PRICE TAG $5-50 BN

GTL PLANTCOAL POWER PLANT

PRICE TAG $1-10 BN

Why do we go big?

Economies of Unit Scale

Sources: (1) PJA Tijm. Gas to liquids, Fischer-Tropsch, advanced energy technology, future's pathway. Feb 2010; (2) C. Kopp. The US Air Force Synthetic Fuels Program. Technical Report APA-TR-2008-0102. (2008)

“2/3 scaling law”

10,000

100,000

1,000,000

10,000,000

1 100 10,000

Cos

t, k

/ ($/

bpd)

Capacity, c / bpd

EscravosPearl

pilot

commercial

GAS-TO-LIQUIDS PLANTS

Why do we scale-up?ARGUMENTcapital cost ∝ area [L2]capacity ∝ volume [L3]capital cost / capacity ∝ [L2]/[L3]

FLAWpipe thickness ignoredhoop stress (constant) ∝ t / rcapital cost ∝ l · r2

capital cost / capacity ∝ constant

Why is scale-up a problem?

HUGE CAPITAL RISK

Source: E.W. Merrow. Understanding the outcomes of megaprojects: a quantitative analysis of very large civilian projects, The RAND Corporation, Santa Monica, CA, 1988.

Shell Pearl GTL Facility, Qatar

RAND Study:• 52 mega-projects • $0.5B and $10B (1984 dollars)• average over budget = 90%

MEGA-PROJECT ECONOMICS

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1,000

10,000

100,000

1,000,000

10,000,000

< $100k < $1M < $10M < $100M < $1B < $10B < $100B > $100B

Companies(number)

Revenues($ billions)

Capital ResourcesU.S. COMPANIES BY REVENUE, 2007

8 companies

How many U.S. companies can finance a $1 billion plant?

Capital ResourcesGDP OF AFRICAN COUNTRIES, 2015

Source: https://en.wikipedia.org/wiki/list_of_african_countries_by_gdp_(nominal)

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6 countries

How many African countries can finance a $1 billion plant?

BARRIER TO INNOVATION

Innovation Challenge

GTL PLANT

(boe/d) ($/bpd) plant cost

1 47,000k $47M

10 10,000k $100M

100 2,200k $220M

1k 470k $470M

10k 100k $1,000M

AMMONIA PLANT

(ton/d) ($/tpd) plant cost

1 10,000k $10M

10 4,500 $25M

100 2,000k $200M

1k 900k $900M

10k 400k $4,000M

FINANCING ECONOMIES OF SCALE

calculated from “2/3 scaling law”

Innovation Challenge

GTL PLANT

(boe/d) ($/bpd) plant cost

1 47,000k $47M

10 10,000k $100M

100 2,200k $220M

1k 470k $470M

10k 100k $1,000M

AMMONIA PLANT

(ton/d) ($/tpd) plant cost

1 10,000k $10M

10 4,500 $25M

100 2,000k $200M

1k 900k $900M

10k 400k $4,000M

FINANCING ECONOMIES OF SCALE

calculated from “2/3 scaling law”

R&D demo

pilot demo

commercial

R&D Spending

FY 2015 $561MFY 2014 $570MFY 2013* $495MFY 2012* $337MFY 2011 $434MFY 2010 $660MFY 2009 $876MFY 2008 $465M

OFFICE OF FOSSIL ENERGY BUDGET

Pilot chemical and power plants require more than $200M

*continuing resolution

How can we innovate with vastly inadequate funding?

DISTRIBUTED CHALLENGES

Developing World

AFRICA17% WORLD POPULATION1% WORLD FERTILIZER USE

In 1999, Uganda farmers bought urea for $600/ton, global market price was $100/ton, why?

• Market size (< 1% global market)• Transport cost (>$50/ton, 30% total)• Finance cost ($300k, 1 kton)

Source: World Bank, 2015

DISTRIBUTED MARKETS

Isaac Mkalia, 20, checks his mobile phone in Kojiado district, near the Tanzanian border (Photograph: Sven Torfinn/Oxfam)

Isaac can make a phone call to anywhere in the world, but he can’t make his own fertilizer

Credit: NASA Earth Observatory/NOAA NGDC

Chicago

MinneapolisSt. Paul

Denver

St. LouisKansas

City

Can you guess this city?

Natural Gas Flaring

NORTH DAKOTA FLARING

• North Dakota flares roughly 20% of produced natural gas

• Most flaring is under 300 mcf/d, but highly time dependent

• Small wells are uneconomical to bring to market

DISTRIBUTED RESOURCES

0%

10%

20%

30%

40%

50%

1

10

100

1,000

Flar

ing

Con

tribu

tion

Wel

l Num

ber

Well Flare Rate / (mcf/d)

wells

flaring

North Dakota Flaring, 2011total: 4,367 mmcf/d

How do we break the hegemony of scale-up?

Democratizing Technology

1450GütenburgPress

INFORMATION

1977Commodore PET

COMPUTATION

1908Ford Model T

TRANSPORTATION

1950ISO Shipping Container

SHIPPING

1973Motorola DynaTAC 8000X

COMMUNICATION

HISTORIC EXAMPLES

Democratizing Technology

1. Empowers the little guy

2. Never developed by the incumbent

3. Displaces entrenched incumbent

4. Levels the playing field

5. Leverages capital of the many

6. Modular, mass produced, standardized

7. Fast innovation cycles

WHAT ARE THE DEFINING FEATURES?

…and there are many examples

guns …displaced swords

Gutenberg press …displaced illuminated manuscripts

iso-containers …displaced bulk shipping

cellular phones …displaced land lines

personal computers …displaced central computing

automobiles …displaced horses

photovoltaics …displaced solar thermal

electric-arc furnaces …displaced blast furnaces

e-commerce …displaced store fronts

televisions …displaced theatres

record players …displaced live musicians

1,000

10,000

100,000

1 100 10,000 1,000,000

Cos

t / ($

/uni

t)

Production / units

Economies of Unit Number

Sources: (1) PJA Tijm. Gas to liquids, Fischer-Tropsch, advanced energy technology, future's pathway. Feb 2010; (2) C. Kopp. The US Air Force Synthetic Fuels Program. Technical Report APA-TR-2008-0102. (2008)

FORD MODEL T, 1909-1916

“experience learning”

Modular DesignMODULAR VS INTEGRAL

MODULAR INTEGRAL

MODULAR INTEGRAL

MODULAR VS INTEGRALModular Design

OIL REFINERY (WORLD)

• 7 TW petroleum refining• 700 plants• $500/kW capex

AUTO ENGINES (U.S.)

• 1.3 TW motive power• 250 million engines• $50/kW capex

Small Modular

GAS TURBINES (U.S.)

• 0.2 TW electricity• 5000 gas turbine generators • $1000/kW capex

AUTO ENGINES (U.S.)

• 1.3 TW motive power• 250 million engines• $50/kW capex

Small Modular

What about the democratization of chemical processing?

not if, but when and who

Democratization through Innovation

1450GütenburgPress

INFORM

????Modular Chemical Plants

PROCESSING

1908Ford Model T

TRANSPORT

1950ISO Shipping Container

SHIP

1973Motorola DynaTAC 8000X

COMMUNICATE

Isaac Mkalia, 20, checks his mobile phone in Kojiado district, near the Tanzanian border (Photograph: Sven Torfinn/Oxfam)

Thank You

Dane A. Boysendane.boysen@gmail.com