Thursday, December 6, 2012

A Bechtel Patent Based on Coal

This is a short story of a recent clean tech invention that may be caught between the grindstones of evolved market forces and prices, and looming regulations.


Bechtel Power Corporation, headquartered in Frederick, MD, is a subsidiary of Bechtel Corporation, a world-wide engineering, construction, and project management company with corporate offices in San Francisco and 53,000 employees. From a description of the company’s history on its home page:
One of the oldest and largest family-led corporations in the United States, Bechtel has been in the forefront of engineering and construction for more than 110 years. What began as a railroad-grading operation in the Oklahoma Territory has grown into a multinational company with hundreds of projects around the world. 
Since its founding in 1898, four generations of Bechtels have steered the company through 23,000 projects in 140 nations and seven continents. Along the way, we established a reputation for undertaking “megaprojects”– projects too big, complex, or remote for others. Many of them have become our signature projects, including Hoover Dam, the Channel Tunnel, and the San Francisco Bay Area Rapid Transit (BART) system.
Bechtel’s expertise includes
  • Roads and rail systems
  • Airports and seaports
  • Fossil and nuclear power plants
  • Refineries and petrochemical facilities
  • Mines and smelters
  • Renewable energy
  • Defense and aerospace facilities
  • Environmental cleanup projects
  • Communications networks
  • Pipelines
  • Oil and gas field development
A search of US patents shows Bechtel as the assignee on 285 – the most recent is the subject of this post, the earliest was issued in 1971.

Changed Energy Supplies & Prices

The US Energy Information Administration provides a chart showing US natural gas production from 1990 through 2035 projections. From 2000–2005 shale gas played a very minor role in the overall mix of US natural gas production and sources. After 2005, through the present, shale gas has played a linearly increasing role, and from 2012 forward, all increases in domestic natural gas production are projected to be due solely to increased shale gas. In 2012 shale gas provides 32% of US natural gas production, up from 4% in 2005. A factor of 8 increase in seven years – due to the application of hydraulic fracturing (fracing) techniques. EIA data on natural gas prices paid by utilities for electricity generation show a price of $8.47 per thousand cubic feet in 2005 declining to $4.89 per tcf in 2011 (with a peak of $9.26 per tcf in 2008). Thus, supply has significantly increased and prices paid by electric utilities have declined by 42% over the seven-year period.

An Invention Too Late?

These dramatic changes may have caught Bechtel Power Corporation inventors Harvey Wen and Rattan K. Tawney, both of Boyds, MD, by surprise. They were issued US 8,118,895, “Method and apparatus for refueling existing natural gas combined cycle plant as a non-integrated gasification combined cycle plant,” on February 21, 2012. The application was filed four years previously, in March 2008. For the sake of argument, let’s estimate that the invention was in development within Bechtel and the application being prepared by their inventors and their IP law firm for three years prior to filing. That included drafting and filing a provisional patent application  60/920,999 filed March 30, 2007, and writing the non-provisional application that was filed March 29, 2008 (one day before the provisional was going to expire.)  That takes the invention back to around 2005 (and it’s quite possible that it was earlier). This would place the development period around the time of high natural gas prices, and low production from shale gas documented by EIA. Let’s take a look at why this matters.

The invention, summarized in the patent abstract, provides:
"[a] process of generating power utilizing a low level heat from a raw syngas produced in a quench gasifier … The process includes a first stage that includes: producing raw syngas at the quench gasifier, making 150 psi saturated steam from the produced raw syngas, superheating the saturated steam, and using the superheated saturated steam in a low pressure steam turbine to generate power. The process includes a second stage that includes: providing the raw syngas and a process condensate stream to a thermal fluid vaporizer to vaporize an organic thermal fluid, and using the vaporized organic thermal fluid in an expander turbine to generate power via an organic Rankine cycle."
From the Field of Invention, we learn (patents teach their art) that “This invention related to converting existing natural gas fired combined cycle power plants with coal-derived synthesis gas (syngas). This conversion would allow the relatively expensive natural gas fired power plants to burn relatively low cost coal fuel.”

The Background of the Invention states that “Power plants built during the past decade in the US were mostly natural-gas-fired gas turbine combined cycle (GTCC) plants.

Unfortunately, the operating capacity factor of these units is less than 25 percent due to the persistent high cost of natural gas. It is unlikely that the price of natural gas will return to the $3-$4 per million Btu level that served as the basis for the economics of these plants.”

The patent drawing provides a process flow diagram. Raw syngas produced from an oxygen-blown quench type gasifier 1 is comprised of hydrogen, carbon monoxide, carbon dioxide, water vapor and a multitude of impurities including sulfur compounds and nitrogen compounds. Stream A represents the raw syngas flow path. After it is quenched in a water pool to 455 °F at about 865 psia, it is cooled in a reboiler 2 to produce a saturated steam at 150 psia. Stream B represents the steam/water condensate flow path. In addition to provide superheating, the HRSG 7 also generates additional steam required to meet auxiliary power requirement of coal gasification plant operation and for startup. The superheated steam from HRSG 7 is used to drive a steam turbine 8 for power generation. The steam turbine exhaust is condensed in a water-cooled condenser 9 and water condensate is returned by pump 10 to the reboiler via condensate preheaters 6 and 4.
Returning to USEIA data, we find that the average spot price of natural gas was $3.73 per million Btu on October 31, 2012.

In addition to changed market conditions for natural gas supplies, there are significant indications that the USEPA is planning to release a myriad of regulations that have been postponed thus far by the Obama Administration. Now that the President has been re-elected, and Democrat control of the US Senate retained, it is quite likely that these regulations will come to fruition. Their net effect will impose greater than $500 billion per year in additional fees, penalties, and compliance costs on the US energy sector. The coal industry will continue to be especially hard-hit. It is quite possible that there will not be any syngas production from coal, knocking the bottom out of the ’895 patent.

A Lesson

Bechtel could have requested accelerated examination under USPTO’s Green Tech Pilot Program for this invention – they did not. Ultimately, had they been granted the patent more quickly (it took 4 years; the Green Tech Program cut pendency by about half for those patents that were successfully prosecuted under the program), they could have brought it to market that much sooner.

Timing matters, but intervening market and regulatory conditions might matter more.