20 August 2006

A Diesel Substitute from Coal--Dimethyl Ether vs. Peak Oil

Peak oil disciples want to make you afraid of the future. They say that the world will run out of oil, unprepared, and suffer fatal shocks to the world economic system. Hundreds of millions, perhaps billions of people, will die--by starvation, disease, and war.

Scientists, engineers, and the big investors, are not taking those Cassandra pronouncements seriously. Instead, they are continuing to explore alternatives to oil--as prices rise--while continuing to discover new oil fields.

Coal is plentiful in many parts of the world, and finding ways to substitute refined products of coal for liquid fuels such as gasoline and diesel is important to the industry of many countries. China is developing better ways of producing dimethyl ether--a diesel substitute--from coal.

China is to begin construction of the largest dimethyl ether (DME) project yet with an annual output of 3 million tons. China’s National Development and Reform Commission (NDRC) has banned any coal-based DME project with a design capacity lower than one million tons.

The country’s current annual output is 120,000 tons of DME each year, according to the NDRC.

Participants in the project include power giants China National Coal Group Corporation, China Petroleum and Chemical Corporation and the Shanghai-based Shenergy Group.

Located in Ordos in north China’s Inner Mongolia Autonomous Region, the project will cost 21 billion yuan (US$2.6 billion), according to a report in Shanghai Securities News.

A pipeline will be built to transfer the DME from Ordos to the port city of Tangshan in north China’s Hebei Province.

Earlier in August, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed a financing package for China’s Xinao Group to support another coal to dimethyl ether (DME) project that will be one of the world’s largest. That project is expected to come online in 2009. (Earlier post.)

DME can serve as a synthetic fuel that is to diesel what LPG is to gasoline. It is gaseous at ambient conditions but can be liquefied at moderate pressure. With a high cetane number, DME has very attractive characteristics as an alternative fuel for diesel engines. DME can be blended with LPG in a 15 to 20% blend without any modifications to equipment or used as a replacement.

The Chinese government is supporting the development of DME as a possible alternative to diesel.


With clever chemical manipulation, coal can be refined to produced many chemicals that will substitute for petroleum products.

Peak oil soldiers complain bitterly whenever someone points to coal substitutes as an argument against peak oil. But that is disingenuous, because the whole point of peak oil in the first place--the only reason at all that anyone would take peak oil seriously--is the predictions of severe economic shocks leading to extreme hardship, from peak oil. The failure of logic is not generally an impediment to strong quasi-religious beliefs, however.

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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