FROM GAS MONETIZATION TO SUSTAINABLE MOBILITY

THE TECHNICAL AND STRATEGIC BACKGROUND INFORMING TODAY’S DEVELOPMENTS

Dr. Theo H Fleisch

DME Sustainable Mobility Workshop24 May 2019

BerlinLandesvertretung NRW

DME

DME Profile: Steckbrief

• A simple small molecule: CH3OCH3

• Parents: Methanol

• Safe, clean and green (50 year history as consumer propellant product). Helped save the ozone layer!

• DME Mobility: with simple LPG infrastructure

• Multiple fuel markets: from power fuel to cooking fuel to fuel cells

• Promising career as “Ultimate diesel substitute”

• Transition from fossil to bio to renewable DME

• With Methanol is one of the “Twin Pillars” of the “METHANOL ECONOMY”

“DME: The Diesel Wonderfuel” (Peter Meurer, VP, AVL)

1. No soot formation• No soot breaks soot/NOx trade-off• Allows lower NOx operation

2. Lower CO2• About 20% lower CO2 than gasoline• Record low CO2 with bio-DME

3. Low cost• Small modification to diesel engines• Inexpensive distribution infrastructure

4. Safety• Low pressure, liquid fuel (10bar)• Customer friendly

5. Others• Acceptable energy density• High cetane• Quiet operation• No cold start problems

Just a little chemistry…

Dimethyl-ether(DME)

Methane

Methanol

Water

Propane

Butane

Hydrogen Carbon Oxygen

1.4 tons MeOH to 1 ton DME

LPG

Carbon Neutral Methanol/DME Economy

H2

SI Methanol and CI DME are the twin pillars for all fuel uses and chemical products

MeOH & DMEcan be co-produced

Outline

DME Highlights

Discovery of DME as versatile energy carrier

Development and Demonstration of DME Diesel technology

Creating a sustainable DME mobility business

Fuel supplyDistribution networkMarket development

Summary

The Challenge: Stranded Gas Monetization• From the 1970s a large global R&D effort was underway to monetize “stranded/remote”

natural gas resources (pipelines technically/economically not feasible)• A global LNG business was emerging• Intense efforts on catalysis and process engineering to chemically convert the stranded gas

into transportable liquid fuels • Most major oil and gas companies focused on the old German Fischer Tropsch technology

since it produced conventional hydrocarbons• Mobil developed and commercialized a methanol to gasoline (MTG) process• Amoco (Standard Oil of Indiana), based in Chicago, developed something new… a multi-

market fuel: DME, a derivative of and complement to Methanol

DME

LPG

Power

Diesel

Hydrogen

Fuel Cells

Other

Olefins

Gasoline

The Invention: DME as novel fuel and energy carrier

• A lot of “European DNA” in the invention and demonstration process• Some of our European partners were:

– Haldor Topsoe (Denmark): Scale-up of DME manufacturing technology– AVL Graz (Austria): DME diesel engine demonstration– GE and Siemens (Germany): DME power turbine demonstration– ENI (Italy): DME/LPG blending demonstration– Volvo (Sweden): DME engine development– AkzoNobel (Netherlands): DME EHS properties and DME handling– TNO (Netherlands): early global coordination efforts– Lurgi (Germany): EPC of Titan (2500tpd) and Atlas (5000tpd) methanol plants

in Trinidad in preparation for multi-train Methanol/DME Parks (each train 5000tpd methanol or 3500tpd DME)

– “Mr. DME” (Austria)

Mr. DME: visionary or not?

Amoco leadership in nineties

• DME value chain integration from manufacturing, storage, distribution, shipping to final multiple customer applications

• R&D and Market demonstrations • Scale-up of DME technology

– 1st 2500tpd and 1st 5000tpd methanol plants• Close collaboration with Japan

• Key learnings:– DME fits into a number of large markets – DME can compete economically with conventional fuels– DME can provide better performance and lower emissions– DME can provide a pathway to sustainability

Outline

DME Highlights

Discovery of DME as versatile energy carrier

Development and Demonstration of DME Diesel technology

Creating a sustainable DME mobility business

Fuel supplyDistribution networkMarket development

Summary

A brief history of DME diesel: 1991 -1995

SAE paper 950061

From lawnmower

to forklift

to power generator

to heavy duty dieselengine

Global DME vehicle developments after 1995

Jim McCandless (AFT Inc): early pioneer

1st on the road DME bus demonstration (Denmark, 1996-1998)

Bus fleet in China (10 buses in Shanghai) Prof. Zhen Huang, SJTU)

Numerous Volvo trucks (Europe and USA)

Many Asian vehicles (Japan, China, Korea)

Isuzu Nissan

Volvo search for the overall best, renewable and sustainable fuel solution with 7 fuels

1: Bio diesel

2: Synthetic Diesel

3: DME

4: Methanol/ Ethanol

5: Biogas

6: Biogas + Biodiesel

7: Biogas + Hydrogen

7 Fuels:• Biodiesel (B100)• Methanol/Ethanol (Spark Ignition)• Hydrogen + Biogas (Spark Ignition)• CNG (Spark Ignition)• LNG (Compression Ignition + pilot injection)• Synthetic Diesel• DME (Compression Ignition)..rated highest

Criteria:• Climate Impact• Energy Efficiency• Land Use Efficiency• Fuel Potential• Vehicle Adoption• Fuel Cost• Fuel Infrastructure

Volvo: DME is the best diesel alternative

“Fuel from the Forest” (2008-2013)

DME EU Executive Briefing Brussels September 2011

1. Objective Production of DME from biomass and

utilisation as fuel for transport and for industrial use (Budget: ~30MEuro)

2. Vehicles 8 Standard Volvo HD trucks with new fuel

system and engine control Standard diesel engine modified for use

with DME ~ 800 km range More than 1,400,000 km travelled

3. Outcome Overall a huge technical success Happy customers But: no business

Website: www.biodme.eu

xME-Diesel Europe: Ether fueled passenger cars

• Goal: Sootless, ether fueled passenger cars

• Duration: 2015 to 2019• Multiple partners (FVV)• Main target: eliminate soot emissions• DME and OME1 (DMM)• Studies of fuel manufacturing

technologies – Different feedstocks– Different technologies– Delivered fuel costs

• Ultimate goal: Renewable DME for sootless, low carbon diesel engines

DME mobility options: more than CI fuel• Sootfree, renewable CI engine fuel

• LPG/DME blendingUS Patent 5,632,786 (1997): cleaner, oxygenated SI fuel

Addition of up to 20% DME/bio-DME to LPG

• DME as hydrogen carrier (fuel cells, H2 engines)CH3OCH3 + 3H2O = 6H2 + 2CO2

• “Liquid DME”; “polyDMM38”20% blend with diesel reduces soot by about 50%

NO SOOT!!TOYOTA

Methane MethanolDimethylether

(DME)

Dimethoxymethane(DMM)“OME1”

Fuel Family Tree: the search for “liquid” DME

Dimethoxydimethylether(DMM2)

Poly-oxymethylene“”Poly-dimethoxymethane

(DMMx)

( )X

“Liquid DME” “polyDMM38”

Outline

DME Highlights

Discovery of DME as versatile energy carrier

Development and Demonstration of DME Diesel technology

Creating a sustainable DME mobility business

1. Fuel supply2. Distribution network3. Market development

Summary

Qatar-India Methanol/DMEGlobal Integrated Gas Project

Qatar to India Methanol/DME projectPhase 1: 4 trains of 1.2million tpa DME each (1.6 billion liters per year)

Gas Production in Qatar:• Lots of cheap gas• Good business climate• Good geographical location

Manufacturing• Topsoe technology• EPC companies

Shipping• Outsourced• Japan/Korea• Methanol or DME

Markets• Power• LPG Cooking• HD Diesel

Qatar-India DME business development

• Chicken/egg first problem: Managing DME supply with market development

• 8 year/4 trains methanol/DME marketing plan• Power first: 1 train output for about 700MW• LPG blending second; Diesel fleets third• India: 50/50 partnership with “India Consortium, IC”• IC consisted of IOCL/GAIL/IIP

– Storage, distribution and sale of DME– Responsible for legislation, regulations and standards– IIP: R&D, Testing

• Technology risk management– E.g. GE provides performance guarantees for gas turbines– Extensive safety testing of DME/LPG blends for cooking

• Learnings for Europe today?

Creating a sustainable DME mobility business in Europe

1. DME supply

• Large and rapidly expanding global methanol supply• 2018: ~100 million tpa• IGP Methanol: Largest Methanol Park (7MMtpa or ~9

billion liters per year)• Very low carbon footprint (0.35tons CO2/ton MeOH)

• Advent of bio-methanol production (BioMCN, Nordic Green, Enerkem et al (WTC),… )

• Proven renewable DME technology from CO2 hydrogenation (Carbon Sequestration)

• CRI (Carbon Recycling International) in Iceland• New BASF/Linde technology• The Methanol Economy Cycle is closed

CO2 + 3H2 = CH3OH + H2O

IGP Methanol Park

Global activities in low-carbon, bio & renewable methanol

Renewable Methanol Report(www.methanol.org)

IGP: ~60% less CO2

“LIQUID WIND”“LIQUID ELECTRCITY”

BioMCN

Creating a sustainable DME mobility business in

Europe 2. Storage and distribution

• LIQUID GAS EUROPE and SHV are the key to success

• Past success:• >46,000 LPG stations• >15,000,000 LPG vehicles

• DME will be a promising new member in the “Liquid Gas” family and contribute to their future success

• Rapid deployment of DME is possible• Immediate options

• DME or Bio-DME blend with LPG• Bio-DME blend with DME• Pure DME

Creating a sustainable DME mobility business in Europe

3. Market developments

• Strong environmental/legislative drivers (eliminate soot emissions and maintain low CO2, high efficiency CI engines)

• Aftermarket conversions break OEM high production volume bottleneck

• DME engine conversions build on LPG conversion experience

• 25 years of DME engine R&D and fleet demonstrations make for low technology risk

• Great progress in international standards and regulations based on early efforts by Oberon Fuels

SUMMARY: Critical Learnings• DME Mobility option is not new • 25+ years of global R&D and testing• Renewable DME is an interesting sustainable CI engine option • Methanol and DME are the Twin Pillars of the renewable METHANOL ECONOMY

• Legislation drives change and timing is great for DME commercialization in Europe

• Fuel availability– Large volumes of low carbon DME– New availability of Bio-DME– Renewable DME is here

• Europe is global leader in LPG distribution– 46,000 stations; 15,000,000 cars (gasoline)– Repeat business with DME diesel retrofits

• Aftermarket retrofits are key to rapid DME vehicle introduction– Collaboration with OEMs

Future: How do get to commercial use

DME SUPPLYfossil & bio/renewableimported & domestic

DISTRIBUTIONINFRASTRUCTURELiquid Gas Europe

VEHICLE MARKETOEMs & Aftermarket

LEGISLATIONCOLLABORATION

LOBBYING PAN-EUROPEAN STRATEGY

INTEGRATED BUSINESS PLAN

• FVV/BMWI-XME-PROJECT HAS BEEN SUCCESSFULLY COMPLETED• RENEWABLE DME MOBILITY OPTION LOOKS PROMISING• HOWEVER: WARNING! We just arrived at the well-known VALLEY OF DEATH

separating us from the promised land of wide-spread commercialization