A New Era of Hydrocarbon Fuels: Gas to Liquids & Coal to Liquids

Unconventional liquid fuels are slated to provide ever growing proportions of future demand for transportation fuels. The burgeoning success of plants such as Shell's Pearl GTL plant in Qatar herald a new era of liquid fuels production.

In terms of what GTL is, it is the process of chemically turning natural gas into cleaner-burning liquid products, including fuel, base oil for lubricants and feedstock for chemicals. To produce, the process firstly involves methane and oxygen which are converted into a mixture of hydrogen and carbon monoxide known as synthesis gas or syngas. This is then fed to a reactor with a proprietary Shell catalyst that accelerates the conversion of the mixture to long-chained waxy hydrocarbons and water.

From the GTL reactor, the long-chained hydrocarbons are then reacted with hydrogen and ‘cracked,’ into a range of smaller molecules of various sizes using another proprietary Shell catalyst. This process is referred to as ‘hydrocracking.’ The final step is distillation. Various boiling points are reached to separate out the products, which can be in the form of GTL naphtha, GTL kerosene, GTL normal paraffins, GTL gas oil, or GTL base oils. These are then eventually fed to their own storage tanks ready for use.

...One of the products, GTL gasoil (diesel-type fuel), can contribute significantly to the diversification of the diesel fuel supply. This product can reduce local emissions of nitrogen and sulfur oxides and particulate matter. Because it contains virtually no sulfur or aromatic compounds and has a high cetane number – a measure of combustion quality – GTL gasoil burns more efficiently than conventional oil-based diesel and thus produces fewer local emissions and less black smoke than conventional diesel. The high cetane of GTL gasoil can lead to noise reductions in certain engines under certain driving conditions and improve cold start performance. GTL gasoil can also be blended with conventional diesel and/or biodiesel and used in the same vehicles and infrastructure, thus offering a low investment cost compared with other alternatives.

GTL Kerosene is an alternative to conventional oil-based kerosene. Its primary use is expected for aviation. GTL kerosene can be used as a blend with traditional jet fuel without any modifications to existing aircraft and engines. Given that the aviation sector will rely on liquid hydrocarbons for decades, this fuel can help support the future energy needs of the industry, and offer customers fuel diversification. GTL kerosene has higher energy density than conventional oil-based kerosene and this reduces the required fuel payload, thus aircraft may be required to carry less fuel weight to cover the same distance. _QatarShell

When even pro-nuclear activists such as Rod Adams are speaking out in favour of a coal - nuclear partnership to produce liquid transportation fuels, you should understand that people are finally beginning to look at the possibilities.

Coal is a valuable resource that can be safely mined for centuries by well-trained and compensated miners. Instead of eliminating the use of coal, I would prefer to help coal miners and coal mine owners to recognize that they could make more money and sell a cleaner product if they upgraded their fuel at the mine rather than shipping a dirt-filled, unrefined product that sells for a huge discount in the energy market.

...My pitch to the coal industry would be to use cheap, clean nuclear heat to convert H2O and their carbon rich fuel into a refined hydrocarbon that could compete with petroleum products.

...Shipping oil instead of coal from our domestic mines would also be very beneficial to the US national security and to the prosperity of the world. Just think about the positive impact that substantially lower US demand would have on the price of diesel fuel delivered to a developing country. _RodAdams

Until more people are able to think of energy in multi-disciplinary, multi-industrial terms, societies will be forced to pay higher prices for fuels and energy than is necessary. By including cheap and unlimited nuclear reactor process heat into the fuel production mix, we can immediately bring CTL, GTL, bitumens to liquids, kerogens to liquids, and even biomass to liquids (BTL) into the feasible and profitable arena.

Fortunately, more nuclear advocates are beginning to understand the importance of cleanly integrating coal and gas into the overall energy and fuels mix. But we need more bright chemical engineers like Robert Rapier, and physicists like Tom Murphy, to crunch the numbers once again -- this time including the powerful impact of high temperature process heat from modular and mini-modular HT gas-cooled nuclear reactors.

By utilising scalable, factory produced reactors which can be sited at the point of production of gas, coal, bitumens, kerogens, methane hydrates -- and even biomass in some situations of intensive cultivation -- it should be clear to any objective observer that a new era of hydrocarbon production is quite feasible.

Government action could certainly prevent this development. The great carbon hysteria delusion -- if firmly enacted into law in the developed world -- would not only kill unconventional fuels, it would kill the economic viability of the underlying societies themselves. That is what several governments, from the UK to Obama's US to Australia to the EU are attempting to do in various ways.

A far less likely -- but still potentially effective -- way to stop the revolution in unconventional fuels, is for the national oil companies of OPEC and other oil dictatorships to route needed funds into oil field production, exploration, discovery, and development. It would be easy for existing oil fields and fields under development to ramp up production to overwhelm even the current inflated levels of global demand -- if the equipment, manpower, and funding were allotted for the purpose. But this will not be done, because governments from Russia to Venezuela to Saudi Arabia etc need oil prices to remain artificially high so that they can use oil profits to pacify unstable populations and pay off highly placed insiders.

Previously published on Al Fin Energy

Extra bonus just for loyal Al Fin readers: China apparently has vast shale gas reserves. China is vigorously pursuing the development of these gas reserves.

In the early phases this will help the North American engineers and drilling companies who assist in China's learning curve for shale gas production. It will also help China negotiate more favourable gas prices with Russia's Gazprom.

In the long run, these huge natural gas reserves will help reduce China's oversize demand for imported crude oil. This down-shifting of global oil demand will occur due to China's increasing use of an up and coming coal -- natural gas hybrid liquefaction process. This process of synthetic fuels production should become particularly economical when using cheap nuclear process heat as the primary heat source.

Russia itself will be forced to adopt GTL technologies as it finds some of its best customers turning to their own shale gas reserves, and turning away from Gazprom.

Peak Oil: Meet Sophisticated Coal and Biomass to Liquids

There is more than 250 billion tons of recoverable U.S. coal reserves – equivalent to an estimated 800 billion barrels of oil, compared to Saudi Arabia’s proven reserves of 260 billion barrels

_National Mining Association_via_Accelergy.com

EERC PDF
Accelergy's Coal Biomass to Liquids (CBTL) process utilises direct liquifaction of coal (using hydrogen from gasification of algal biomass and coal), combined with advanced catalytic processing of hydrotreated coal and hydrotreated algal lipids, to produce advanced hydrocarbon liquid fuels at high yields.

Accelergy is developing its coal biomass to liquids technology in several locations across the US, in China, and for the US military.

In the United States, Accelergy is working on demonstration facilities in Pennsylvania, Montana, and North Dakota. Accelergy's process can be tuned to utilize a wide range of feedstocks, and the company is currently exploring the use of both coal and natural gas in the U.S, along with biomass.

The company is also targeting its efforts in China since the country already has a small number of synthetic fuels plants where coal is converted to a liquid, he said. China is also the world's largest producer and consumer of coal. _Energy.AOL.com

Consider these facts about CBTL [Coal Biomass to Liquids]:

Abundant Supply: There is more than 250 billion tons of recoverable U.S. coal reserves – equivalent to an estimated 800 billion barrels of oil, compared to Saudi Arabia’s proven reserves of 260 billion barrels. (Source: National Mining Association)

Environmental Benefits: Combining the Coal-to-Liquids (CTL) and Biomass-to-Liquids (BTL) processes, Accelergy removes 20% of the CO₂ emissions associated with standard refining methods, resulting in cleaner fuels that reduce nitrogen oxide and particulate emissions and enabling use of higher efficiency engines.

Reliable Sources: Coal currently provides more than half of the nation’s electricity and is the largest single source of overall domestic energy production at more than 31% of the total, according to the National Mining Association. Additionally, our feedstocks can be grown domestically an land deemed unsuitable for food crop cultivation. _Accelergy

More on direct coal liquefaction:

• Direct liquefaction processes add hydrogen to the hydrogen deficient organic structure of the coal, breaking it down only as far as is necessary to produce distillable liquids.
• Coal dissolution is accomplished under high temperature (~400 0 C) and pressure (~1500-3000 psi) with hydrogen and a coal-derived solvent.
• The coal fragments are further hydrocracked to produce a synthetic crude oil.
• This synthetic crude must then undergo refinery upgrading and hydrotreating to produce acceptable transportation fuels. _Direct Liquefaction of Coal PDF

More on Accelergy's licensing of Exxon Mobil technologies

Accelergy patent dealing with a related but variant process

More on Accelergy's potentially lucrative move into the Chinese market

Accelergy's approach to CBTL is rather sophisticated, involving some advanced Exxon Mobil technology along with other imaginative innovations. The fact that Accelergy is working with the US military, with civilian US entities, and inside China, indicates that the company is following an aggressive path of expansion and development.

Taken from a previous posting at Al Fin Energy

With its vast resources of coal, natural gas, bitumens, kerogens, oil, uranium, thorium, and more, North America is well situated to transition from the fossil fuel age to the advanced fission / fusion age.

Bad government is a far greater threat to North America and Europe than resource depletion, climate catastrophe, or overpopulation doom. Fear only bad government and the accompanying twin demons of debt and demographic decline.

Gas & Coal to Liquids: Trillions of Barrels of Fuel On the Way

There is always big money to be made in substituting a lower cost feedstock or commodity for a higher priced one. The obvious big money substitution opportunity in the energy field, is the substitution of low cost natural gas or coal for high priced oil. Natural gas is difficult to transport globally, unless it is transformed into a denser liquid form, such as LPG or GTL. Coal can likewise be made more valuable by transforming it into a liquid fuel. Observe the huge potential quantities of fuels available from coal to liquids and gas to liquids in the chart above.

Gas to Liquids 

NYTThe above chart reveals the significant price differential between oil and the equivalent energy of natural gas. Clearly there is a lot of money to be made via efficient conversion of gas to liquids (GTL), via either Fischer Tropsch (FT) or methanol-to-gasoline (MTG).

Shell's gas-to-liquids (GTL) technology is producing high value hydrocarbon fuel and chemicals in Qatar and in Malaysia. But it is very expensive to build large scale GTL plants based on this technology, which limits entry into the field. As the technology proves itself in the market, other big players are likely to step in.

Sasol and PetroSA have GTL plants in South Africa, where rich shale gas fields are coming under development. Shell is moving into those gas fields, and may be thinking about opening its own GTL plant in South Africa, if it can deal with the government corruption.

applications of excess product. Primarily, natural gas is used as feedstock for the Gas To Liquid process. The GTL process converts natural gas to synthetic fuels. This has proven to be far more profitable product for oil/energy and exploration companies to supply into the energy markets. There are currently only two plants in SA capable of refining natural gas to liquid petroleum products. Sasol has its GTL plant located in Secunda and PetroSA has its plant in Mosselbay. _CBN

Australian companies are looking at building GTL plants to take advantage of large gas deposits there, but are somewhat daunted by the high cost of entry. The uncertainty of long term oil prices also causes planners to hesitate.

"Higher oil prices provide the incentive to look at ways and means of producing synthetic fuels, other than simply refining crude oil," Mr Wendt told AAP.


However, he says a major barrier is the high price of setting up a processing plant to make a product that is a commercial alternative to oil-based fuels.


It would cost $1 billion or $2 billion to build a plant that produces synthetic diesel at $40 or $50 a barrel.


But if the price of oil drops dramatically, people won't buy the synthetic product, leaving the owner of the plant unable to get a return on the investment, Mr Wendt said. _ninemsn

There is also debate in Alaska about turning North Slope gas into more lucrative liquid fuels. One of the problems is deciding on the best chemical approach to the transformation of gas to liquid fuel.

For a number of years there has been discussion of the potential to convert North Slope gas to diesel fuel on the North Slope using a process called gas to liquids, or GTL, and then shipping the diesel fuel down the trans-Alaska oil pipeline. The core of the GTL process is the Fischer-Tropsch synthesis, a chemical process first used in Germany in 1936 to produce synthetic liquid fuel. However, a study of the relative costs of the Fischer-Tropsch process and MTG has indicated that it is significantly cheaper to produce a given volume of fuels with MTG than with Fischer-Tropsch, while the gasoline produced from MTG has a higher value and quality than the diesel from GTL, Van Wijk said. _PetroleumNews

The Oxford Catalyst microchannel Fischer Tropsch GTL approach is just getting started, commercially, but is already receiving "buy" recommendations from Charles Stanley -- assuming the investor possesses abundant intestinal fortitude and staying power.

One of the largest driving forces behind the drop in natural gas prices -- and the opportunity to take advantage of the gas-oil price differential -- is the recent advances in horizontal drilling and hydraulic fracking technologies. Gas and oil trapped within shale has existed for eons, only waiting for a species intelligent enough to go in and get it.

Summary of gas-to-liquids technologies

Coal to Liquids 

Synthetic fuels from coal will compose a larger share of the transportation fuels market over the next few decades. This will come about due to more economical processes for coal to liquids (CTL) combined with a long term trend of rising oil prices.

Ambre Coal to LiquidsThe methanol-to-gasoline (MTG) process is the prime competitor to the Fischer Tropsch (FT) process, in the conversion of carbonaceous mass to liquid fuels. Ambre Energy of Australia is involved in the clean conversion of low quality coal to high quality liquid fuels, using the Exxon-Mobil methanol-to-gasoline process (PDF).

Methanol is usually synthesised from syngas, a mixture of H2, CO, CO2, methane, etc. Syngas can be produced via gasification of coal, natural gas, biomass, or any other carbonaceous material.

Methanol is used as a feedstock to produce fuels or other chemicals. Methanol can also be used as a fuel itself, or as a fuel additive. Methanol is also finding greater use in methanol fuel cells -- a market that is expected to grow very rapidly over the next several years.

Ambre CTL process
PDF description of Ambre CTL
Ambre is involved in a technical study agreement with Synthesis Energy Systems to develop an improved coal to liquids project which will produce both synthetic gasoline and LPG from methanol.

Economical Scaling of Fischer Tropsch 

Up until now, putting together a production plant for converting coal to liquids or gas to liquids would cost you around $1 billion. But the North American subsidiary of a UK company has devised a scalable method of converting syngas to liquid hydrocarbon (diesel) in a "shoebox" sized device. The microchannel Fischer-Tropsch (FT) devices can be combined for a capacity to produce as much or as little diesel fuel from gas, biomass, or coal, as a producer wishes to pay for.

...a major exploration and production company is seriously considering the possibility of incorporating microchannel FT reactors into a planned 5,000 -15,000 barrel per day (bpd) GTL facility onshore in North America designed to convert shale gas into finished synthetic fuels...The shortlisted technologies will be subjected to further evaluation as part of a major high-budget engineering study that will last for several months. The results of the study will be used to select the project’s technology providers. _Engineer

Oxford Catalyst's microchannel F-T technology for converting gas-to-liquids (GTL) is one of the frontrunners to be intensively studied for shale gas to liquids operations onshore in North America.

The technology is already being adopted for offshore applications in Brazil.

PDF presentation on Velocys / Oxford Catalyst's microchannel F-T technology

Microchannel FT reactors developed by Velocys and using a new highly active FT catalysts developed by Oxford Catalysts exhibit conversion efficiencies in the range of 70% per pass, according to Jeff McDaniel, Oxford Catalysts director of commercialisation.


“The high efficiency and modular nature of our microchannel FT reactors makes them particularly useful for this type of application because capacity can be easily increased by simply ’numbering up’ or linking together additional FT reactor modules,” said McDaniel. _Engineer

The potential fuels available from unconventional liquids goes far beyond all known petroleum deposits. And of course, proved deposits of oil, gas, coal, kerogens, bitumens, etc. are only going to continue going up over time, as they have done since humans began using hydrocarbons.

It is time for humans to jettison pseudoscientific garbage theories such as anthropogenic climate doom and peak energy scarcity doom, and move forward into a world of abundant energy.

Nuclear energy such as advanced fission and scalable fusion are much preferred to hydrocarbon energy in general, but we need to pay as we go. Hydrocarbons will serve until we can break through to better energy strategies.

Material above taken from previous postings at Al Fin Energy blog

Peak Oil: Meet Clear Coal

Update 11 June 09: A reader emailed to request contact information for Coal Sack Energy. It seems he has some investors who want to back the company but cannot find a way to invest. Is it possible that Barak Obama -- who promised to bankrupt the coal companies -- has decided to block all access to investing in new coal technology? Just kidding. More likely, the company listed below is playing hard to get, for reasons of its own. So be careful when you invest. Some things sound too good to be true because they aren't.Brian Westenhaus gives us a look at a promising new treatment for coal and other carbon sources, Clear Coal. This process claims to remove all mercury and almost all sulfur from the coal in the process of increasing the available energy.

The technology is claimed to make it possible to convert any type or grade of coal, including scrap coal, oil shale, tar sands, etc., into three basic by-products char, synthetic oil and gas - through one integrated process.

Greg Boyd, 47, is the more youthful leader of CoalSack Energy. Asked by Bob McCarty for a 60-second spiel to a prospect Boyd answers with some interesting numbers. “I’d say we have a patent on low-temperature carbonization which takes out 99.2 percent of the sulfur from a ton of coal,” Boyd explained. “The mercury is not even measurable. We’re raising the BTUs by upwards of 40 percent, averaging between 28 and 40 percent. With the same ton of coal, we’re producing the highest grade of light sweet crude oil which can be turned into Jet A fuel and that we’re getting about 7,000 cubic feet of gas.”

...Using a low temperature carbonization process, we are able to carefully control internal temperature ranges inside a roasting unit called a Coal Carbonization Module or CCM™ to vaporize the contaminate elements contained within coal. These vaporized elements are then transported to tanks using steam, whereupon they are condensed into their natural, uncontaminated forms. We are able to produce the nearly contaminate-free char, synthetic oil, and synthetic gasses that are sold to industrial markets, such as refined into Coke for steel production, used for electricity production, or refined into liquid fuels like gasoline, diesel, and Jet A. The carbon monoxide and carbon dioxide production is also converted into liquid fuel, and injected into the product stream where it is sold as a value-added product.

Those four products are interesting. The char is a clean burning smokeless boiler fuel, which can be used for electricity and heat production. The char may also be used in the production of steel and activated charcoal products including filters and carbon fiber. Char has a higher BTU range than coal, 12MBTU/lb – 14MBTU/lb, making it more valuable per ton. Utilities using char as a fuel source become carbon creditors, and could eliminate expensive flue gas scrubbing units. _NewEnergyandFuel

This is an intriguing promise. The process purportedly removes pollutants, incorporates all carbon -- including CO and CO2 -- into useful fuel, and turns low grade "junk coal" into high grade fuels and fuels precursors.

I would like to see how it works on bitumens and kerogens, as well as dried compacted biomass.

Despite what you may have heard from your peak oil friends, the energy game is just getting started. Only an incompetent political reich can thrust civilisation into abject energy scarcity -- "political peak oil".

Cross-posted in Al Fin Energy

China Outsmarts Obama / Pelosi Carbon Reich

In a brilliant feat of legerdemain, China has demonstrated its own adroitness on the world energy scene. Anticipating the carbon-phobic stance of the incoming Obama / Pelosi reich, China has laid the foundation for supremacy in clean-coal IGCC (integrated gasification combined cycle) technology. Coal gasification is a critical component of any intelligent "bridge energy policy" meant to span the gap in time between the "cheap oil age", and the "abundant clean sustainable energy age".

Coal is an abundant energy resource worldwide, and using IGCC technology coal can be cleaner than most other current large-scale forms of energy production. But US carbon-hysteric politicians in the Obama / Pelosi reich are afraid of coal, and are unlikely to allow most large scale coal gasification projects to proceed. That carbon-phobic stance leaves the door wide open for any nation willing to develop this vital bridge energy technology.

The oil and gas giant BP reinforced China's position as a clean-coal technology leader last month, by establishing a $73 million research center in Shanghai with the Chinese Academy of Sciences to help commercialize technologies such as carbon capture and storage (CCS) and gasification. In another sign of the country's suddenly bold role in green technology, China's battery giant BYD launched the world's first mass-produced plug-in hybrid vehicle yesterday.

Underpinning China's potential leadership in carbon-neutral coal power is broad expertise with gasification. By 2010, China will have installed 29 gasification projects since 2004, compared with zero in the United States, according to the Gasification Technologies Council, a trade group based in Arlington, VA. Most of these Chinese projects turn coal into synthesis gas (or syngas)--a blend of carbon monoxide and hydrogen--to feed catalysts that synthesize chemicals and fuels. IGCC technology uses the same syngas to drive turbines and generate electricity with far less pollution than conventional coal plants. For example, mercury and soot levels are close to those seen at natural gas-fired plants, while carbon dioxide comes out in a pure stream that should be easier to capture and sequester.

...The project plans to start up a 250-megawatt IGCC plant in Tianjin in 2010 using a novel gasifier designed by the Thermal Power Research Institute in Xi'an; the plant will also supply some syngas and heat to local chemical plants. GreenGen plans to catapult the output of the gasifier design, from a 36-tons-per-day pilot plant, directly to commercial scale of 2,000 tons per day.

And GreenGen is already preparing to scale up further: in April, GreenGen and Tianjin officials signed an agreement for two 400-megawatt IGCC units. Meanwhile, Chinese utility firm Huaneng, GreenGen's majority stakeholder, started up a CCS pilot project at its Beijing coal power plant this summer. _TechReview

With the experience and expertise of building and operating large scale IGCC projects under their belts, Chinese enterprises will be in the driver's seat, energy-wise. As Europe and the Anglosphere grow more carbon-phobic and energy-starved, China will be the only one experienced enough with IGCC and "clean coal" to bail out the foolish carbon hysterics.

Of course if the west pursues advanced generation nuclear fission, or gets lucky with scalable nuclear fusion, coal can be used for making chemicals and polymers instead of energy and fuel -- sometime in the next 30 or 40 years. In the meantime, several decades will need to be spanned with some form of plentiful energy source.

China is betting on a sure thing, the same "sure thing" at which the Obama / Pelosi reich turns its nose up. In fact, the O / P reich turns its nose up at a lot of things, including oil sands, oil shale, coal, nuclear, offshore oil, arctic oil, and almost any other form of energy you can think of.

Solar thermal and geothermal are two likely sources of energy with big futures, which are also sustainable. In 20 or 30 years, they could both be a hugely important part of the energy portfolio. Wind is too unreliable for anyone but airheads to rely on it. Photovoltaics are still waiting for large scale energy storage that is affordable. Even biomass -- the best renewable -- will take decades to scale up to its potential.

Any way you slice it, coal gasification (IGCC is the best form), is a very good bet. You can judge the good players and the poor players by how they react to that technology.

Coal To Liquids -- Smart, But Not Politically Correct

The world is full of coal, particularly the cheap low quality coal that is problematic for combustion. But if you take that low quality coal, gasify it, and turn it to liquid fuels, the pollution and contaminants are captured harmlessly for safe disposal. The subsequent liquid fuels and other chemicals -- including fertilisers and polymers -- will make the world far less dependent on the oil-producing state sponsors of terrorism.

In the 'indirect liquefaction' CTL route, coal is first gasified using oxygen and steam to form 'syngas' (a mixture of hydrogen and carbon monoxide). Syngas then can be further processed, via the proven Fischer-Tropsch (F-T) technology, to get liquid fuels like diesel and petrol. Next, depending on coal quality and requisite systems, F-T processes can yield substantial quantities of ammonia. The latter can be used to produce large quantities of nitrogenous fertiliser read urea. Besides, Integrated Gasification Combined Cycle (IGCC) technology can be incorporated in F-T plant design-and vice versa-to generate power at very high thermal efficiency. The objective ought to be to diffuse IGCC systems in the power sector, with speed. It would then be possible to generate say a third or even 50% more power, using quite unchanged quantities of coal. Clearly, viable CTL technology would have multi-sectoral impact.

The other method, albeit less common is 'direct liquefaction', which adds gaseous hydrogen to a slurry of pulverized coal in the presence of catalysts. The process requires further refining so as to derive high-quality liquid fuels. _ET

Gasification of low quality coal makes excellent sense, and produces a much cleaner product than the simple combustion of that same coal. The partial liberation from dictatorial oil states such as Russia, Venezuela, Iran, and Saudi Arabia that this technology would allow makes it worth doing by itself.

So why do Obama, Pelosi, Boxer, and the other usual demented suspects continue to stand in the way of clean and profitable uses of coal, oil sands, oil shales, and other indigenous energy sources? Because the American voter lets the fools get away with it. Do not piss on my leg and tell me it's raining. You may find yourself needing to sit down to pee for the rest of your life.

Coal to Liquids: Smart Coal

Coal can be converted to liquids profitably as long as the oil price remains over 80$ a barrel. Brian Westenhaus has an article today on coal-to-liquids (CTL) that looks at some of the details.

The developed world can solve its oil and gas problems with F-T. All the facts and sources are enough to make an oil exporter very nervous, indeed....

...even today with oil coming back to near $100 a barrel the F-T processes can be highly competitive. It’s the carbon and hydrogen available in the feedstocks that make pricing work or not. Coal at $50 a ton, as shown by Sasol can yield 1.25 barrels of oil equivalent, can be worth twice the feedstock price. South Africa found that Sasol profits got so high that excess profit taxes were levied.

In the U.S. several companies have started coal to liquid process experiments that range from pilot plants to commercial installations. The big oil firms like Shell, Exxon and StatoilHydro are already running in South Africa, Malaysia and New Zealand closing in on 60,000 barrels a day of production.

The little guys like American Clean Coal Fuels who is developing a 30,000-barrel per day combined biomass and coal plant in Oakland Illinois uses carbon capture and sequestration to keep the unused CO2 from the atmosphere.

Baard Energy is building a 53,000-barrel per day combined biomass and coal plant in Wellsville Ohio with a market for the excess CO2 headed to oil field enhanced recovery. _NewEnergyandFuel

The CO2 produced can be piped to an algae oil operation conveniently located next to the CTL plant. Biomass can be easily integrated into the gasification and F-T process as well, providing a multi-feedstock, multi-product operation.

You Don't Have to Be Nuts to Believe in Peak Oil Doom, But It Helps!

Image Source

If all the citizens of Planet Earth were polled, it is likely that most citizens believe in one doomsday cult or another. Peak oil doom is a highly addictive, though irrational, doomsday cult. Like the climate catastrophe doomsday cult, it is a quasi-scientific religion, with just enough factual bits included to snare the unwary.

The first problem one confronts when trying to come to grips with the cult of peak oil, is finding a definition of the phenomena which is both widely held among adherents, and clear enough to be falsifiable. Here is a short explanation from Matt Savinar of Life After the Oil Crash (as quoted by Fabius Maximus)

In practical and considerably oversimplified terms, this means that if 2005 was the year of global Peak Oil, worldwide oil production in the year 2030 will be the same as it was in 1980. However, the world’s population in 2030 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil dependant economies will crumble, and resource wars will explode.

The issue is not one of “running out” so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. … A loss of as little as 10-15 pounds of water may be enough to kill him. In a similar sense, an oil based economy such as ours doesn’t need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty. … _FabiusMaximus

Fabius Maximus analyses Savinar's claims line by line at the link above, and explains in several ways why the peak oil cult is massively overblown, and suitable only for people with nothing important to do or think about. Take one of Savinar's points: oil production follows a bell curve. Does that actually hold up in reality? Not really. Think rather of a curve with a long plateau at the top (yet to be reached) and a gradual skew to the right over decades.

JD at Peak Oil Debunked blog has an interesting recent post explaining how a drop in demand for oil such as we are seeing now, can completely change the equation. Here is more on the demand slump in the US.

New supplies--even new wells that will not produce for 5 or 10 years--will also have a downward effect on oil prices and a re-shifting in markets. Producers who are holding back production will be inclined to sell more at current higher prices before later new supplies kick in. See this non-OPEC outlook (PDF), and consider the coming oil rush to the offshore and the arctic.

In China, India, Indonesia, Malaysia, Mexico, and many other emerging economies, governments are subsidising petroleum costs for residents. This is incredibly expensive for those governments. Some of them are already tapering their supports, and others are making definite plans to do so. The loss of those subsidies will trigger a demand destruction in those countries similar to what we are seeing in North America and Europe. It is like a dimmer switch: high cost of a commodity affects how that commodity is used, and promotes substitution of all kinds. This is one of the many things that peak oil cultists fail to comprehend.

It is very likely that high oil prices (above $90 a barrel) will continue to stimulate massive investment in oil exploration, production, and improved refinement--particularly of heavy, sour, and unconventional oils. It is also virtually inevitable that the headlong rush to develop bio-energy solutions will not only continue but will accelerate--as long as oil stays above $90 a barrel.

The US Democratic Party controlled congress will try to continue to cut off energy supplies to the US by banning offshore drilling, arctic drilling, shale oil exploration and development, coal to liquids and coal to gas technologies, nuclear fission power plants, etc. That is political peak oil which we have plenty of. If Barak Obama is elected, he has suggested that he may even ban Canadian oil sands from being used anywhere in the US--political peak oil in spades!

But the US Democratic Party functionaries such as Nancy Pelosi and Barbara Boxer are playing with fire, considering the mood that US consumers, taxpayers, and voters are in. There will be a reckoning, and the Pelosis, Boxers, and Obamas may not enjoy the final tally. Political peak oil is a useful scam for temporarily wrecking an economy only as long as you can blame the carnage on your political opponents. Once the voters begin to see who is really responsible, an intelligent political crook should know when to back off. It is not clear that the cronies leading the political peak oil charge in the US are intelligent.

Even the election of John McCain will not help the energy equation very much, since McCain is actually a believer in climate catastrophe--and probably peak oil doom--at heart. Much of his current posturing is merely a savvy reading of the electorate's mood.

What we are seeing now is a race between the political peak oilers who are trying to shut the US energy supply down via prohibitions, regulations, and bans, and the energy entrepreneurs, engineers, wildcatters, inventors, and innovators--who want to see continued economic growth based upon ever cleaner and more abundant energy. Who are you cheering for?

US Congressional Asylum: Criminally Insane?

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Fuel prices are high enough in the US to squeeze budgets of families and corporations. The mood is grim in many parts of the country, and people are looking for someone to blame. What we are seeing now resembles nothing so much as a lynching mob. And the US Congress has witlessly placed itself firmly front and center--following an invalid and obsolete ideology. An ideology that threatens to sink the US economy. More and more people are seeing what the Congress is doing, and they do not like it even a little bit.

...they are against business, against investments in domestic energy supply and for aggressive carbon controls... __Source

High oil prices are beginning to cook up a dangerous inflationary brew. By the time the next president is settled into office, the inflationary trend could be irrevocable--if Congress continues down its current slippery slope.

No profits. No exploration. No drilling. And no domestic oil with which to correct our dependence on foreign oil and thus provide a measure of security to a nation that runs on oil. __Source

Obama, McCain, and the Democratic Party dominated US Congress are all pointing the finger at big oil companies. They have put huge deposits of shale oil off-limits, have hamstrung coal-to-liquids processes that could provide oil at $30 a barrel, have paralysed the nuclear energy industry, and a number of Democratic Congressmen are even calling for nationalising the oil refinery industry.

But a rapidly growing proportion of US voters can clearly see that it is Congress itself that is limiting the options of the American economy. Even a national media that is sycophantic toward both Obama and the Democratic Party cannot stop the groundswell of awareness by the public, of how the Congress is shutting off US energy options.

If Congress continues along this road, there will be a price to pay. Oynklent Green [OTC:OYNK] is monitoring the situation closely.

Excerpted and modified from a previously published Abu Al-Fin piece

Resurrected Oil Wells Come Back from the Dead

According to oil microbiologist Lewis Brown, 2/3s of oil in US oil wells remains in the ground, for lack of advanced enough technology to extract it. Brown is learning how to take oil wells that have been declared dead, and bring them back to life.

Before Brown began his Alabama experiment, analysts had predicted those wells would stop producing in 1998. After Brown had applied his method, follow-up analysis indicated the wells could still produce--and might continue to do so until 2015...To date, the Alabama project has recovered more than 400,000 additional barrels. "This process has us talking about potentially recovering much of the now unrecoverable oil," Brown said. "This will help give us more time to develop replacements for our major energy source."

...By feeding only indigenous microbes in the oil-bearing formations, Brown avoids problems that can plug the wells. While limiting the amount of environmentally friendly nutrients limits their growth, it successfully alters the paths of injected water used to sweep the hiding oil from previously untouched areas.

In addition to being environmentally friendly, the process is cost-effective, Brown observed. In a recent field trial, the additional cost of the process was just $1.32 per barrel of new oil...Though there are limits to the depths at which microbes can be expected to grow, Brown has been able to isolate microbes at depths of more than 14,000 feet, and some can even grow at temperatures above 100 degrees Celsius.

"This certainly extends the number of oil fields where this methodology could be applied," Brown said proudly.

While Brown continues to work with petroleum industry leaders in removing additional oil from the ground, he has launched a second project in Wyoming to revive depleted natural gas wells located in coal beds. As with the liquid product, he's using indigenous microflora in these wells to produce more methane. __Source__via__NextEnergy

Enhanced oil recovery methods are yet another factor that Peak Oil Prophets had not counted on. Peak Oil collects a ragged and pathetic following, that seems to revel in the imagined collapse of civilisation.

But scientists such as Brown can not waste their time on such absurd fantasies. He has work to do. After all, the oil won't pump itself.

Previously published in Al Fin Energy

Update: Dennis Mangan provides a stock pick. He may well be on to something.

Peak Oil: Meet Peter Jackson

Peak Oil theory predicts an abrupt fall in oil production, with devastating effects on the oil-dependent world economy. Peter Jackson has studied the issue for CERA Oil Supply, and suggests that the theory is faulty.

There is no evidence that a peak will occur in the next ten to 15 years, nor if we look out to approximately 2030. CERA believes that we will see an undulating plateau of global production starting sometime after 2030, which is likely to last for a number of decades. Towards the end of the plateau period, we envisage that global production will decline more gently compared to the very rapid production decline predicted by the peak oil lobby. Very importantly, CERA believes that the duration of the undulating plateau will be determined by above ground factors – such as levels of investment, economics and geopolitics - rather than the scale of below ground resources.

....I believe we still do not know the scale of the global resource base very accurately. However, including both conventional and unconventional sources such as oil sands and shale oil, I believe that well over 4 trillion barrels of resource remain – that’s about four times as much as has been produced thus far in the history of the world.

....Global oil supply has been relatively tight in recent years, but CERA predicts that productive capacity will grow very quickly in the next few years. Unconventional oils such as ultra heavy oils in Canada and Venezuela are the focus of considerable investment at present. We also see gas-to-liquids projects springing up, in the Middle East for example, and coal-to-liquids projects being planned in quite large numbers in South East Asia and Australia. Interestingly, there’s a lot of biofuel being produced in the US and Brazil at the moment,and the proportion of biofuel is likely to expand quite considerably, over the coming decades.

Source.

It is highly likely that huge undiscovered oil and gas reserves exist in difficult to explore undersea deposits. As the more cheaply extracted reserves are depleted over the next few decades, technology will inevitably make accessible these reserves which are almost impossible to access today, economically.

Peak oil will not happen the way that many radical environmentalists are predicting. But then, a lot of people believed in the inevitability of a Y2K crisis as well. There is something in the human mind that loves to contemplate disasters and catastrophes of apocalyptic proportion. CAGW falls into the same category, and appeals to much the same ideological groupings as Peak Oil--paradoxically enough.

Peak Oil: Meet Alan Goldman and his two Friends, Fischer and Tropsch

The conversion of coal to liquid hydrocarbons has a long history. But only recently has the process become clean and efficient enough to make a difference. This Physorg.com newsrelease discusses a breakthrough in the coal to liquid fuel process.

Goldman explained that the breakthrough technology employs a pair of catalytic chemical reactions that operate in tandem, one of which captured the 2005 Nobel Prize in Chemistry. This dynamic chemical duo revamps the Fischer-Tropsch (FT) process for generating synthetic petroleum substitutes, invented in 1920 but never developed to the point of becoming commercially viable for coal conversion.

The FT process recently gained national attention through the efforts of Brian Schweitzer, governor of coal-rich Montana, who has been publicly extolling the potential of Fischer-Tropsch. The Goldman group's innovations eliminate shortcomings in the process that can finally make it a workable solution to dwindling domestic oil reserves.

"The key to energy independence in the next five decades is Fischer-Tropsch chemistry, amended and enhanced," said Goldman, a professor in the department of chemistry and chemical biology at Rutgers, The State University of New Jersey. "The study of catalysts, the little molecular machines that control chemical reactions, is my field. With our new catalysts, one can generate productive, clean burning fuels with Fischer-Tropsch, economically and at unsurpassed levels of efficiency."

This discovery is reported in the April 14 issue of the journal Science by Goldman and his colleagues. Source.

This link provides much detailed information on the Fischer-Tropsch process. For a briefer discussion, try this Wikipedia article.

The best sources of energy are renewable sources. But in the meantime, while gearing up for biofuels, solar, wind, tidal, OTEC, wave, etc., it is nice to see more evidence that all the doomseeking of the peak oil crowd is circular wrist flexion-extension.

Peak Oil: Meet Athabasca Oil Sands

The Athabasca oil sands region lies in northern Alberta Province, in Canada. The Chevron oil company has been involved in oil recovery efforts in Athabasca for several years. Now Chevron is moving into the region in a big way, having recently acquired several oil sands leases, for land with over 7 billion barrels of oil in place.

The new leases are approximately 76 miles west of Fort Mackay in northern Alberta, and 24 miles south west of AOSP.

Chevron will use Steam Assisted Gravity Drainage (SAGD), an in-situ technology that uses steam and horizontal drilling to extract the bitumen. Shell Canada and Western Oil Sands will each have the right to elect to acquire a 20% working interest in these leases.

The SAGD process involves drilling pairs of horizontal wells in the oil sands reservoir. Steam is injected through an upper well—about 3 to 10 meters above the lower—and contacts the bitumen. The heated bitumen becomes mobile and flows with condensed water from the steam chamber to the lower well through gravity drainage. Thence it is lifted to the surface for upgrading.

Each well pair is typically 2,500 to 3,000 feet in length, and optimally produces 1,000 to 1,500 barrels per day. Well pairs are drilled parallel to one another, and spaced 300 to 650 feet apart.

Read the full article here.

Oil sands are a heavy oil resource, requiring special refining methods, and not nearly as well suited for gasoline production as sweet crude oil. Along with shale oil, oil sands represent a huge and relatively untapped oil resource.

In addition to oil sands and shale oil, coal is another fossil fuel that can be converted to liquid hydrocarbon fuel form. Cleaner methods of processing and buring coal are a top priority in the industrial nations.

Peak Oil Debunked is an excellent source of information about Peak Oil Hype. Go on over and give them a look.

I am a big fan of renewable energy, having helped install a number of solar and wind home energy systems. Fossil fuels and nuclear fission should be seen as only a stopgap measure until renewable methods of energy production can take over.

One other source of gasoline that I should mention--cow dung! Japanese scientists have learned to make gasoline from the dung of cattle. They are a bit short on details at the moment, but it seems they are in earnest.

Update 6 March 06: Here is an update on the Chevron oil sands venture:

On Friday I was at the Stanford Institute for Economic Policy Research’s Economic Summit (some videos available), where among other things I learned that the oil sands of Canada are, unfortunately, more accurately thought of as “tar sands”. But Chevron has announced a $60 million deal to develop these sands. The Motley Fool’s Jack Uldrich speculates on why they are willing to take this big project on:

“The risky venture could ultimately cost tens of billions of dollars and take up to a decade to develop, since the tar in the oil sands isn’t easily converted to usable oil. But Chevron may have a very tiny ace up its sleeve, thanks to its involvement with nanotechnology…

“Chevron’s work in creating new nanoparticles offers the greatest promise. If the company can produce new nanoparticles with unique catalytic capabilities, it may be able to more effectively and efficiently refine the thick, gooey tar-sands into highly refined — and profitable –oil.

“Headwaters (NYSE: HW) is already developing nanocatalysts to convert heavy oils into higher-yield oils, and I have reason to believe that Chevron is doing the same. If the company succeeds, these powerful new nanocatalysts could make extracting oil from the tar sands profitable, even at prices lower than $35 a barrel. And if oil prices stay high, a cheaper extraction process will only bolster Chevron’s profit margins. It’s yet another small solution to a potentially big risk.”

The use of nanoparticles as catalysts to make the oil sands more productive, is just one timely synergy of technological development. There will be many more, that improve both the economy and the environment. The key is for the active members of society to think like problem solvers, rather than doomsayers.