I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Sun Dec 30, 2007 1:05 pm Post subject: How could coal help (synfuels), and is it possible?
Assuming PO is going to happen very soon, I was wondering how much coal (CTL, synfuels) could help mitigate PO (for the short term), and if it was actually possible to scale CTL up as much as needed, and how long it takes to build the infrastructure?
Even though coal would probably be bad for GW and be very bad for the environment, and even though we will probably have a peak coal soon too, I am pretty sure that in particular the US would try to use coal once there are PO problems such as shortages etc.
So my questions to you:
- how much infrastructure would be needed to replace say 10% of oil?
- how expensive would that be (or how expensive would oil have to be to make it worth it)
- how long does it take to build such infrastructure?
- when would we expect a peak coal, assuming that most countries would try to replace oil with synfuels?
- can synfuels also be used for plastics, agriculture, jet fuel etc?
Dallas-based North American Coal, along with Headwaters Inc. of South Jordon, Utah, and Great River Energy, of Elk River, Minn., have formed American Lignite Energy LLC to oversee the proposed $4 billion project in western North Dakota.
Quote:
The plant would produce 460 million gallons of gasoline a year and generate electricity to power the plant and to sell to markets in Minnesota and Wisconsin.
Quote:
The coal-to-gasoline factory in western North Dakota would draw 15,000 gallons of Missouri River water per minute for its operations. That's enough water to fill an Olympic-size swimming pool in less than five minutes.
So $4 billion to produce 11 million barrels of gasoline/year or 30,000 barrels a day of gasoline.
The price of this will probably be a lot more, that always tends to happen...and
Quote:
If the plans move ahead, the plant could come on line in late 2013
So probably wouldn't be operational for at least another 7 or 8 years, more like 10 or never! _________________ Clothing should be optional.
Posted: Sun Dec 30, 2007 2:13 pm Post subject: Re: How could coal help (synfuels), and is it possible?
There is an excellent paper circulating which deals exactly with this question in great detail. Just search for the "Hirsch Report". Plenty of links and discussions on this site and elsewhere.
Executive summary: If we start building the infrastructure ten years before peak oil, there is a slim chance for our societies to keep running, but in order to provide a smooth transition the project have to start at least 20 years before peak oil.
If nothing is done UNTIL peak oil happen, there won't be the resources to build a new infrastructure at all. The energy needed to build the infrastructure would compete with all other needs for energy, and people would prioritize the immediate needs before the needs for an infrastructure which might give energy 10-20 years down the road.
Joined: Sep 16, 2004 Posts: 4847 Location: Southwest WI
Posted: Sun Dec 30, 2007 2:34 pm Post subject: Re: How could coal help (synfuels), and is it possible?
Probably hasn't been built because the wealthy can just sail their yachts to Dubai and fill up with American taxpayer funded Iraqi crude!!! _________________ Clothing should be optional.
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Sun Dec 30, 2007 3:23 pm Post subject: Re: How could coal help (synfuels), and is it possible?
$4 billion to produce 11 million barrels of gasoline a year?
11 million barrels is 462 million gallons a year.
At $3/gallon, that's $1,386 million a year.
Your plant will pay for itself in less than 4 years.
Not a bad investment!
That sounds like something that should attract a mountain of capital.
Now obviously, it does have its input costs but based on the information they give you, it is competitive with traditional gasoline so long as oil trades in the $35-$45 range.
And with oil in the $90 range...the CTL business should do quite nicely.
Frank, did you calculate the revenue from 11 million barrels of gasoline before dismissing it? _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Sun Dec 30, 2007 5:46 pm Post subject: Re: How could coal help (synfuels), and is it possible?
korosten wrote:
The total gasoline usage per year is approx. 146 billion gallons per year, that is about 3.5 billion barrels of gasoline / year.
If one plant = 11 million barrels of gasoline a year, then that is about
0.3 %
So in order to cover say a 4% drop per year, we would need 12 new plants every year
Question:
- how many such plans *could* in theory be built, based on the amount of coal available (and accessible!), and water usage?
Chantal
I could make the same argument and say that the 12% decline in UK oil production amounts to only a .3% decline in global oil production.
You can't break down every project and look at it in comparison to global Big Picture.
It would be very easy to build 4 plants every year. That would be $16 billion a year. Call it $32 billion and it is still a small amount of money (Less than ExxonMobil's profit for 2006).
However, CTL will not be the only energy source. (again, dismissing every alternative because it doesn't 100% fix the shortfall is silly)
If you are going to look at the global picture in terms of oil supply, you must also acknowledge the global supply of other sources.
And CTL can be a big piece of that picture.
I hope it's not too big a piece, because CTL tends to be very polluting. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Sun Dec 30, 2007 5:53 pm Post subject: Re: How could coal help (synfuels), and is it possible?
Tyler_JC wrote:
korosten wrote:
The total gasoline usage per year is approx. 146 billion gallons per year, that is about 3.5 billion barrels of gasoline / year.
If one plant = 11 million barrels of gasoline a year, then that is about
0.3 %
I could make the same argument and say that the 12% decline in UK oil production amounts to only a .3% decline in global oil production.
However, CTL will not be the only energy source. (again, dismissing every alternative because it doesn't 100% fix the shortfall is silly)
The numbers where only for the US (even though I am not American, I guess I tend to focus on the USA .
I agree that there are alternative sources. I just wanted to see how much coal could add to the mix - especially since currently alternative sources seem to provide only very little, and in addition, most alternative sources generate only electricity (such as solar/wind/nuclear etc) and do not provide liquid fuels.
Also, it seems that lot of water is needed to support such a plant. How many such plants could the USA or UK support given the water requirements?
Joined: Sep 25, 2005 Posts: 2050 Location: Waiuku, New Zealand
Posted: Sun Dec 30, 2007 6:37 pm Post subject: Re: How could coal help (synfuels), and is it possible?
Tyler_JC wrote:
$4 billion to produce 11 million barrels of gasoline a year?
11 million barrels is 462 million gallons a year.
At $3/gallon, that's $1,386 million a year.
Your plant will pay for itself in less than 4 years.
Not a bad investment!
That sounds like something that should attract a mountain of capital.
Now obviously, it does have its input costs but based on the information they give you, it is competitive with traditional gasoline so long as oil trades in the $35-$45 range.
I don't know how you worked this out from the figures in Frank the Tank's post. I assumed that a $4 billion project means that it would cost $4 billion just to build it. I very much doubt that the running costs are zero, so it would likely take a lot longer than 4 years to pay for itself. The only information given about running costs is a $50 million annual salary bill, nothing else. If coal has already peaked in energy content in the US (as an Energy Watch Group reported earlier this year), then coal costs are only going to go up from here. There must be numerous other costs involved also.
Joined: Oct 18, 2004 Posts: 2098 Location: kiwibush
Posted: Sun Dec 30, 2007 8:26 pm Post subject: Re: How could coal help (synfuels), and is it possible?
Not possible. Or else apartheid South Africa would not have collapsed.
South Africa with its advanced synfuel unit at SASOL in Merebank, Durban is still struggling to meet a fraction of that country's needs despite improvements in the technology since the fall of apartheid.
I'm an ex South African btw and the fuel crisis over there is dire. _________________ Bugger me, I hear oil's runnin out mate!
Posted: Sun Dec 30, 2007 10:21 pm Post subject: Re: How could coal help (synfuels), and is it possible?
korosten wrote:
Assuming PO is going to happen very soon, I was wondering how much coal (CTL, synfuels) could help mitigate PO (for the short term), and if it was actually possible to scale CTL up as much as needed, and how long it takes to build the infrastructure?
A quick FYI: PO occurred almost 3 years ago.
Regarding your question: coal gasification is a good approach for petrochemicals, but it's too inefficient for powering vehicles. Far better and easier to just burn the coal in ordinary generating plants and use the electricity to power EVs.
Quote:
Data are presented to show how electric vehicles will travel approximately twice as far per ton of coal burned to produce electricity for EV propulsion, than will an ICE vehicle burning the synfuel produced from an equal amount of coal.
The EV approach also eliminates the need to construct CTL plants, which are very complex and capital intensive. We already have coal burning power plants which can be used to charge EVs in off-peak hours. In fact, a 2006 DOE study(pdf) shows that 84% of the current car/light-truck vehicle fleet could be powered by the existing grid. EVs are the solution, and the CTL/ICE combination is a pipedream which, in the long run, won't be able to compete in terms of efficiency/price. _________________ Think outside the petri dish.
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Mon Dec 31, 2007 12:14 am Post subject: Re: How could coal help (synfuels), and is it possible?
TonyPrep wrote:
Tyler_JC wrote:
$4 billion to produce 11 million barrels of gasoline a year?
11 million barrels is 462 million gallons a year.
At $3/gallon, that's $1,386 million a year.
Your plant will pay for itself in less than 4 years.
Not a bad investment!
That sounds like something that should attract a mountain of capital.
Now obviously, it does have its input costs but based on the information they give you, it is competitive with traditional gasoline so long as oil trades in the $35-$45 range.
I don't know how you worked this out from the figures in Frank the Tank's post. I assumed that a $4 billion project means that it would cost $4 billion just to build it. I very much doubt that the running costs are zero, so it would likely take a lot longer than 4 years to pay for itself. The only information given about running costs is a $50 million annual salary bill, nothing else. If coal has already peaked in energy content in the US (as an Energy Watch Group reported earlier this year), then coal costs are only going to go up from here. There must be numerous other costs involved also.
I know the operating costs aren't free. I'm not an idiot.
I'm pointing out that revenue exceeds the cost of building the facility after 4 years.
A traditional oil refinery costs the same amount of money as this CTL plant and produces, say, 4 times the volume.
Unfortunately, refining margins are rather low because crude prices and gasoline prices tend to move in sync with each other...cutting out the potential for big profits from turning one into the other.
However, coal is much cheaper than gasoline on a per BTU price. Thus, converting coal to transport fuel should be profitable.
It will take a major increase in CTL to bring coal's per BTU price in line with oil's. And by that point, we would only be sucking the rent out of CTL, not making it unprofitable.
As for South Africa's collapse because of the failure of CTL...?
Sasol is quite profitable. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: Sep 25, 2005 Posts: 2050 Location: Waiuku, New Zealand
Posted: Mon Dec 31, 2007 4:22 am Post subject: Re: How could coal help (synfuels), and is it possible?
Tyler_JC wrote:
I know the operating costs aren't free. I'm not an idiot.
I'm pointing out that revenue exceeds the cost of building the facility after 4 years.
Thanks for correcting your error; so you're not saying that the investment would pay for itself within 4 years, as per your previous post.
Tyler_JC wrote:
]]However, coal is much cheaper than gasoline on a per BTU price. Thus, converting coal to transport fuel should be profitable.
Until the price goes shooting up because of shortage. You appeared to be proposing that many such plants could be built, to provide a significant quantity of synthetic fuels. Do you think the US coal mining operation could cope, or that exports could be pumped up to cope, either at all or at a cheap enough cost?
Tyler_JC wrote:
It will take a major increase in CTL to bring coal's per BTU price in line with oil's. And by that point, we would only be sucking the rent out of CTL, not making it unprofitable.
Well, you were proposing a major increase and your latter point is pure speculation, if there is any coal left at that point.
Posted: Mon Dec 31, 2007 11:11 am Post subject: Re: How could coal help (synfuels), and is it possible?
JohnDenver wrote:
A quick FYI: PO occurred almost 3 years ago.
Regarding your question: coal gasification is a good approach for petrochemicals, but it's too inefficient for powering vehicles. Far better and easier to just burn the coal in ordinary generating plants and use the electricity to power EVs.
I agree that Peak *crude* oil happened 3 years ago. I guess I meant peak "liquids" as it is often interpreted these days .
Re EV: I agree that EV's would be better. However this would require a huge investment for each person to buy such an EV. I don't think it is realistic that most people can affort an EV.
Even if the fuel is inefficient (how inefficient?), I think it is more likely that coal-to-liquids will be attempted first in the US.
(In Europe or other countries this might be different)
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