stkl- atkins vs. southbeach diet on cnbc,, then there is the biofuel aspect,,, guess everybody watching oil,, dont even notice the n.gas run...
here is some reading:
Companies, People, Ideas
Synfuels Are Back
Lynn J. Cook, 05.24.04
Much of the world's natural gas is going to waste. Wouldn't it be terrific to turn it into liquid fuel?
Every day natural gas flares blaze across swaths of Africa, Russia, Asia and the Middle East, burning off 10 billion cubic feet of energy--the equivalent of 1.7 million barrels of oil. There's more gas where that came from. Reserves of "stranded" natural gas--the stuff that's abandoned because there's no economical way to transport it--come to maybe 2,500 trillion cubic feet. If captured and converted, the gas would make (after conversion losses) 250 billion barrels of synthetics, from clean-burning diesel to jet fuel. That's like finding another Saudi Arabia.
My kingdom for a synfuels catalyst! For a century the world has been looking for economical ways to convert undesirable fossils like coal and methane into desirable ones like diesel. Success may finally be at hand.
One aspirant to this royal achievement is a tiny R&D company in Tulsa, Oklahoma called Syntroleum Corp. In 20 years of struggling Syntroleum hasn't made a dime (last year it lost $34.6 million on revenues of $19.2 million). But it says it has refined a gas-to-liquids process to the point that it's now cheap and safe. "Every technology has its day," says company founder Kenneth Agee. "But there was no reason for GTL until now."
That's not quite true. During World War II Germany had a desperate need to convert coal into motor fuels and used the very chemical process at the heart of the Syntroleum technology. And in the late 1970s there was a U.S. government-funded effort to make synfuels, an effort that receded when oil prices declined. Now, with oil approaching $40 a barrel once again, synfuels may have their day.
Absent a cost-effective way to turn natural gas into oil, the gas itself has to be transported, and that can be very hard to do. Without a gas pipeline at hand, the gas must be turned into a liquid for shipping. A stampede is on to build a global liquefied natural gas network, with 45 proposed receiving terminals in North America, from Fall River, Massachusetts to Baja California. But LNG gets complicated. Gas gets piped to mammoth plants in places like Qatar and superchilled down to a liquid state. From there it's shipped in special cryogenic tankers to fuel-strained Japan or the U.S., where it goes through a regasification terminal. By comparison, GTL, if it could be made to work, would be easy.
One way to turn methane (natural gas' main ingredient) into liquid fuel is to blend it with pure oxygen under heat and pressure to produce synthesis gas, a mixture of carbon monoxide and hydrogen. With help from a catalyst, the synthesis gas is transformed into waxy hydrocarbons, which in turn can be cracked into smaller, diesel-like fuel molecules. This can all take place out in the gas field, after which transportation is a snap. Unlike diesel derived from crude oil, the synthetic version doesn't require you to replace or upgrade an engine and doesn't emit any sulfur, metals or many particulates when burned. Even the California Energy Commission loves it. Last May it released a report calling synthetic diesel the most effective alternative fuel, above biodiesel and all fuel cells.
How legit is the technology? In the last 18 months ExxonMobil, Royal Dutch/Shell, ChevronTexaco and South Africa-based Sasol have proposed an assortment of giant gas-to-liquids projects in Qatar, involving more than $20 billion in investments. (BP has experimented with the stuff, but its brass remain unconvinced that GTL can actually steal a sizable chunk of the diesel market from oil.) Syntroleum's variation on this theme: smaller, more flexible GTL plants that can run off air rather than pure oxygen and that can work on a small scale--on a barge off the coast of Nigeria or on an icy plain in Russia's Arctic Circle or wherever the stranded natural gas is.
The Qatar projects are much larger than what Syntroleum has in mind. A $900 million undertaking by Sasol, for example, is designed eventually to produce 34,000 barrels a day of synthetic oil. "The project is financed by 18 banks, not 1 or 2," says Rajnish Goswami, an analyst at energy consultancy Wood Mackenzie who believes in GTL but wants to see Syntroleum's technology prove itself.
Until the last couple of years GTL couldn't compete unless per-barrel oil prices hit $35. Today Syntroleum and the majors claim they can be profitable with $20 oil. Syntroleum's synthetic diesel, it declares, will cost $13 per barrel from a 20,000-barrel-a-day plant in a remote location. With crude selling currently at $37, the synthetic diesel, having fewer impurities than regular, could be sold for a 10% premium to diesel, or about $57. That leaves a comfortable margin for transportation fees, a return to the owner of the gas and a recovery of the cost of the GTL plant.
Higher production costs held back GTL for years. The conversion process was invented back in 1923 when German scientists Franz Fischer and Hans Tropsch found a way to convert coal into liquid fuels. Coal-rich South Africa took up GTL's torch in the 1950s, in a move toward energy self-sufficiency. The country was motivated by the oil embargoes slapped on its apartheid government. Sasol still pumps out 160,000 barrels per day of coal-produced diesel but also has experimented with a natural-gas version of the Fischer-Tropsch process. This is what it will install in Qatar.
"The time is ripe for natural gas to go global," says John (Jack) Holmes, Syntroleum's president. As if to underscore how wonderfully natural his solution is for energy shortages, the chemical engineer has been known to take a sample and swallow it. It looks like water, smells like wax and is rather like the mineral oil you get in a pharmacy. The effect, he insists, is no worse than eating a few prunes.
Founder Agee first read about the Fischer-Tropsch method in 1984. After working day shifts as a chemical engineer at a Texaco refinery, Agee tinkered at home with methane and catalysts. "It's like playing God with the molecules," he says. With 100 mostly new patents on the books, he and his engineers managed to devise a cheaper cobalt catalyst to create liquid hydrocarbons from synthesis gas in their Tulsa test plant. Then they figured out how to substitute air for the oxygen. That move could shear 25% off capital and operating costs, according to one analyst.
Publicly traded since 1998, Syntroleum has burned through $100 million on R&D from government grants, angel investors and shareholders. At least Holmes has stemmed the bleeding. Still, he acknowledges, "hope is not a strategy."
So the company has lately done some partnering. Teaming up with Spanish engineering firm Dragados and TI Capital, the Los Angeles-based investment arm of Falcon Group, a Middle Eastern shipping company, Syntroleum will build, own and operate GTL plants mounted on barges that can park in a harbor or float up a river, nosing along to wherever the natural gas is trapped. Holmes is in talks with Cameroon's government about an offshore block there. Russian gas monopoly Gazprom is partnering with the company in the hopes of developing 12 fields that could eventually yield 250,000 barrels of GTL-produced fuel per day. Marathon Oil, which has proposed a massive 140,000-barrel-per-day plant in Qatar, has already licensed Syntroleum's technology. (Marathon and Syntroleum have a history, splitting the costs on the $70 million Tulsa test plant that's up and running as part of the U.S. Department of Energy's Ultra-Clean Fuels Program.)
Complains Wood Mackenzie's Goswami: "In theory it [the Syntroleum process] sounds great, but commercially it isn't proven yet." Holmes has heard it all before. "Everybody wants to be the first to build the second plant," he laments.
Holmes says there is enough flared gas in the world to run 60 Syntroleum GTL barges. Just one would be enough for the company to turn profitable. So he hopes.
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