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172 comments on Wednesday Open Thread and News Dump

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Oilrig medic on April 12, 2006 - 1:34pm Permalink | Subthread | Parent | Comments top
low cost, low risk = low return

I think there are investors willing to gamble on high risk high return.

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Twilight on April 12, 2006 - 4:27pm Permalink | Subthread | Parent | Comments top
I'm sure there will be, but I'm not sure what the relevant point is.  Do you think that will represent a significant percentage?  The conventional solution is also the fastest, and therefore will return more quickly.  

There is a reason why conventional is conventional - by definition that's the solution most often implemented.   Do you see forces that would change the equation, and make non-conventional solutions more appealing from a business point of view?  

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Oilrig medic on April 12, 2006 - 7:00pm Permalink | Subthread | Parent | Comments top
"Any large scale CTL would take decades to implement, and we as a society aren't even to the point of making proposals for that kind of an effort"

"Montana is actively pursuing development of coal-to-liquids technology as a means of converting our significant coal reserves into synthetic gasoline and other fuels. Synthetic versions of petroleum fuels have been made for almost a century, and this technology offers great promise for reducing American dependence on foreign oil."
http://governor.mt.gov/hottopics/faqsynthetic.asp

"How long will it take for America to produce enough synfuel to make a difference?
There are already a number of small plants being designed around America, but a large-scale national effort must involve the federal government and would take a number of years. Given South Africa's success in this field, we should assume that if the federal government became meaningfully invested in this concept, America could have a strong synfuel industry by the next decade."

The last sentence, does that mean by 2010 or 2016?

Anyway this and other tax breaks do make alternatives viable in a business sense. Ten years is not a long time for a major corporation to invest on a known return.  FT method works and is proven.  It is just as conventional as any other current use for coal.

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Twilight on April 12, 2006 - 7:42pm Permalink | Subthread | Parent | Comments top
OK, then are these as common in recently constructed generation plants that utilize coal?

I was just listening to a report on NPR a couple of weeks ago about how New Mexico (I believe) was trying to force consideration of a coal gasifaction plant, but was having a very hard time.

"Actively pursuing development" is a long way from actual serious proposals.  There's nothing in that link about Montana that sounds like any more than talk - are there any drawings, any plans?  Have they figured out wher they'll get the water from yet? If the answers are no, then they are decades away.  

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TJ on April 12, 2006 - 10:03pm Permalink | Subthread | Parent | Comments top
Anything by 2010 is impossible.  Say you want 1 mbpd by 2016, which would be a minimal program.  That's five 200,00 mbpd huge coal gasification/FT plants (Montana is trying to find financing for a 60,000 bpd plant).  To make the 2016 date we then have to authorize one $6-8 billion plant every year starting now. Three years from now, when the equipment is delivered, we can start construction on the first.  We have a few years to figure out how we're going to build three or four giant projects simultaneously without the necessary talent.

Except that it's obvious we're not going to start this year, and no corporation is going to make that investment, despite having large profits.  The best shot is that a few governments like Montana will do something.

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JD on April 12, 2006 - 11:35pm Permalink | Subthread | Parent | Comments top
Good points. Money really isn't an issue. The oil industry already invests about $60 billion per year in the U.S. for exploration and production alone. A lot of that money will naturally shift to unconventional as conventional gradually poops out. The U.S. military is also interested in CTL, and they have a budget of $400 billion a year. $8 billion a year is big, but it's still just a small fraction of what we're spending already to develop conventional.

Also, a lot of the posts here have criticized Laherrere's curve because CTL can't be scaled up to fill such a large gap. But that totally misses the point. It is not the case that liquids=CTL. Lots of things fall under the category of liquids: NGL, GTL, CTL, heavy oil synthetics, tar sand synthetics, sugar cane ethanol, biodiesel. Even CNG can be regarded as a liquid, in that it can be (and is) used to fuel vehicles and supplant demand for conventional oil.

So, that's the liquids dragon you pessimists have to slay. You have to show that the full ensemble of liquids can't fill the gap. Liquids=CTL is a straw man.

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172 comments on Wednesday Open Thread and News Dump

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