Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : YEEHAW CANDIDATES -- Ignore unavailable to you. Want to Upgrade?

To: ACAN who wrote (14552)	1/17/2006 11:12:15 AM
From: Esoteric1	Respond to of 23958

Fischer-Tropsch Coal Gas Cost Effective With Current Oil Prices? Future Pundit The Chinese are planning to start converting coal into liquid fuels. ROYAL Dutch/Shell Group has handed in a feasibility study report on a coal-to-liquid project in China worth several billion dollars to compete with Sasol Ltd, the National Development and Reform Commission said. The project involves the proposed building of two plants with a combined investment of US$6 billion to US$8 billion in Shaanxi Province and Ningxia Hui Autonomous Region, which represent areas with the most significant coal reserves in the country. The estimated crude production capacities of the two plants are up to 80,000 barrels per day, or more than 1 percent of China's total oil consumption currently. Shell is competing against South African company Sasol which currently makes 150,000 barrels of oil per day from coal. The Governor of Montana wants to have Montana coal converted to synthetic gas and liquid fuel. Gov. Brian Schweitzer believes Montana is sitting on the answer, and it’s in the form of the nation’s second largest coal reserve. Schweitzer wants the state to begin using an 80-year-old technology developed by Nazi Germany to turn Montana’s vast supplies of coal into usable, ultra-clean-burning diesel and aviation fuel. ... With oil prices more than doubling the break-even point of producing synthetic fuels, oil companies and world leaders are beginning to take a serious look at the future of Fischer-Tropsch fuels. Schweitzer predicts they could be produced at a cost of about $1 per gallon in Montana if large-scale commercial plants could be developed in the state. ... Closer to home, the Great Plains Synfuels Plant near Beulah, N.D., began operating in 1984 in response to the 1970s energy crisis and today produces more that 54 billion cubic feet of natural gas using the Fischer-Tropsch process. “The Department of Energy was going to build hundreds of those plants but then oil prices dropped and we all forgot about it,” says Schweitzer, who visited the Beulah plant three weeks ago. “The cost of production [of syngas] at that plant last year was $3 per MCF (thousand cubic feet). Now the price of [natural gas] is $7 per MCF.” Are Governor Schweitzer's numbers correct? What is the cost to convert coal to natural gas and then to liquid fuel with the Fischer-Tropsch process or some other process? Is synthetic gas (gaseous hydrocarbons - not gasoline) already cheaper than the current price of natural gas in the United States? Three coal gasification plants are proposed in Illinois. Three coal gasification plants currently are proposed in Illinois; only three are operating in the nation. A 260 megawatt gasification plant in Florida currently uses Illinois Basin coal. The state government, coal companies and even utilities have banded together to lobby for an Illinois siting of the federally-subsidized near-zero emission coal plant of the future known as FutureGen. Planning for nine additional Gas-To-Liquid plants were underway in 2004 worldwide. Synthesis gas can also be created from natural gas - and this is less costly than from coal. Since 1993, Shell in Malaysia (Bintulu) and PetroSA in South Africa (Mossel Bay) have been operating industrial Fischer-Tropsch Synthesis facilities, which produce liquid fuels from synthesis gas which comes originally from natural gas (Gas To Liquid, GTL). A third similar plant is being built by Sasol and Qatar Petroleum in Qatar in the Persian Gulf. Last year nine more GTL-facilities were being planned world-wide; most of them are to use Fischer-Tropsch Synthesis. Both coal gasification and conversion of natural gas to liquid fuels are becoming more widely used. Liquid fuel produced by the Fischer-Tropsch Gas-To-Liquids (GTL) process burns more cleanly than conventional fossil fuels and hence is less polluting. Shell and ExxonMobil are ramping up production on a fuel, called Gas-to-Liquids, that's derived from natural gas. It significantly reduces the sulfur, carbon monoxide and other pollutants that belch from car tailpipes. And although more costly than regular gas, it should help crimp the air pollution in places like Los Angeles, or in New Delhi, where diesel buses are banned. One impetus behind use of the Fischer-Tropsch GTL process is that natural gas is hard to transport. At the same time, the demand for liquid fuel is strong and prices are high. Shell has a plant in Borneo and is building another in Qatar to convert locally produced natural gas into a diesel-compatible fuel that burns much more cleanly than does diesel made from oil. Note that natural gas gets used to generate electricity. If nuclear, wind, and solar generated all electricity then more natural gas would be available to make liquid fuel for transportation. There is already a lot of potential for substituteability of fuels even without development of better battery technologies. Big politics and big money are also converging to support oil shale development. Legislation recently signed by President Bush instructs the Interior Department to lease 35 percent of the federal government's oil shale lands within the next year, provides tax breaks to the industry,reduces the ability of states and local communities to influence where projects are located and compresses lengthy environmental assessments into a single analysis good for 10 years. ... To produce the oil, Shell and other companies sink heaters half a mile into oil shale seams for up to four years, subjecting the rock to 700 degrees. Over time, natural gas and a liquid that can be refined into light crude oil rise to the surface. To prevent the brewing hydrocarbons from spoiling groundwater, the heated rock core would be surrounded by a 20-to-30-foot-thick impermeable ice wall, which also requires electricity to keep it frozen. The federal government has begun leasing land for oil shale production. Ten new research and development leases are being processed by the Bureau of Land Management in Colorado. Others have been awarded on federal land in Utah and Wyoming. See my previous post on Shell's effort to develop a better method to extract oil from oil shale. On coal gasification see a couple of Green Car Congress posts: "RENTECH Moves on Its PolyGeneration Strategy: Fertilizer, FT Fuels and Power" and "RENTECH Tracking to Startup Coal-to-Liquids Pilot Plant in Q4 2006". Also, RENTECH makes the argument that synthetic liquid fuels made from natural gas (or coal gas for that matter) contain less contaminants that will mess up fuel cells than do liquid hydrocarbons made from oil. So when fuel cell technology matures that might increase the demand for synthetic liquid fuels even further. Nuclear power could free up more fossil and biomass fuels to use as liquid fuel for ground transportation. This could be done a number of ways including the following: * Build a nuclear plant next to the Canadian tar sands and use nuclear energy to heat up the tar to extract oil from it. I think over half the energy extracted from the tar gets used to do the extraction. The planned Canadian natural gas pipeline will have part of its natural gas going toward tar oil extraction. That could be avoided with nuclear power. Then more oil could be made from the natural gas. * Build a nuclear power plant next to a coal field and run all the Fischer-Tropsch processing steps using nuclear power. * Build a nuclear plant next to the oil shale fields and use nuclear power to heat up the shale under ground using Shell's extraction process. * Use nuclear power for agricultural uses such as power water pumps and dry corn. Then biomass liquid fuel production would not use fossil fuels. There's enough coal to provide liquid fuel for a long time to come even if part of the coal is used to generate energy to process other coal into natural gas and liquids. Ditto with oil shale and Canadian tar sands. But for making liquid fuels nuclear power could stretch the supplies of coal, oil shale, and oil tar (perhaps doubling or tripling the amount extractable as liquid fuel) and also reduce the total amount of polluting emissions generated by the production of liquid fuel. My bigger point here is that even if the "Peak Oi" pessimists are right and oil production peaks sometime in the next 10 years that would not spell the end of the fossil fuels economy or the end of heavy reliance on cars and trucks. We will not enter a worldwide depression. The liquid hydrocarbon alternatives to oil are not prohibitively expensive. The quantities of capital needed to rapidly build up conversion plants would be available because the energy marketplace deals in sales in the hundreds of billions of dollars every year. Non-fossil fuel energy sources can even be used to help convert non-liquid hydrocarbons into liquid hydrocarbons. Looking down the road a few decades I expect solar photovoltaics to become cheap as a result of nanotech advances. That might happen as early as 10 or 20 years from now. If Peak Oil comes early we can keep vehicles moving using liquid fuels made from coal and oil shale. Then we can transition to nuclear and solar to charge better batteries once battery technologies advance far enough to make pure electric vehicles possible. I'd rather that the transition to nuclear, solar, and batteries happen sooner for environmental, national security, and economic reasons. But I'm not worried about Peak Oil if the transition away from oil comes as soon as the pessimists predict. futurepundit.com