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Montana could supply the whole US with fuel!
Posted by Yankee on August 26, 2005 - 11:56am
Topic: Alternative energy
As seen at Neocommons: Gov. Brian Schweitzer of Montana thinks his state's store of coal can fuel the US for the next 40 years! And without further contributing to global warming! (Reuters)
The governor estimated the cost of producing a barrel of oil through the Fischer-Tropsch method at $32, and said that with its 120 billion tons of coal -- a little less than a third of the U.S total -- Montana could supply the entire United States with its aviation, gas and diesel fuel for 40 years without creating environmental damage.
Why start now? Well, price, of course! (Billings Gazette)
And it is the cost that heretofore has kept the process in the experimental/pilot project stages. For F-T, the break even point comes when crude oil is more than $35 a barrel. Friday crude oil futures settled at $60.57 a barrel.Of course, before Schweitzer can get started, he's only going to need a couple billion dollars. No prob.
Schweitzer said a 150,000 barrel per day unit would cost about $7.5 billion to build. However, F-T units can be built in modules, so a 22,000 barrel per day unit could cost $1.2 billion, he said.Plus another several hundred million to get functional coal mines and a railroad to deliver the coal to the F-T plant.
(Mike Gustafson, president of Wesco Resources of Billings) estimates the railroad from Ashland to Miles City would cost about $200 million to build and another $80-$90 million to open a mine producing 12 million tons per year. He argued that any customer for the coal is going to want to know what the delivered price was going to be before signing a contract. The state must offer a sufficient amount of reserves in its first bid to sustain the infrastructure once it is committed, he said.
I don't mean to be so glib, really. But this comes under the "I'll believe it when I see it category." It does sound like a good idea, but is it really feasible?
More on Fischer-Tropsch at Wikipedia.
Technorati Tags: peak oil, oil, coal, Fischer-Tropsch
Now this may not be enough for a business investment, where you not only want to break even but hopefully have a long term, highly profitable business. But at least it can take away the sting a little if the bottom drops out of the market.
However, the time constraints are such that the unconvential sources will always be running behind (hence the bumps) declines in convential production.
Diesel is preferred for coal > fuel (C-H ratio, gasoline is more of a stretch). Gasoline from NG (same reason).
Plans for more than small projects are still years away from a "Financial Decision Point". Figure eight years from "FDP" to operations.
Water is a limitation out in MO.
A multistage plant using high sulfer Illinois coal (max buildout 200,000 b/day of diesel) is building Stage 1 (from memory). No water problems there.
Carter wanted to build these plants 32 years ago.
TERRIBLE for GW :-((
So it seems like maybe you aren't so sure you believe in doom, you are just hoping for it.
It's clear oil prices will be in the range where this will be profitable (if production costs are really $32/bl). So I glad to hear the Governor supports it and will help it along. A project like this will take a decade to get up and running, and peak oil by or before 2015 is a forcast many oil experts would agree with.
I wouldn't worry about a project this small allowing US oil use to remain at current levels--even with this and other future projects US oil use will, the only question is how far?
As if it wasn't bad enough that the administration is doing nothing, there's the problem that Bush had already run two oil companies into the ground. And he had advisors then too.
http://www.missouri.edu/~cprc/Facts%20about%20CLP.html
You can put virtually anything in the process; coal, wood, domestic garbage and even chemical waste!
In the Netherlands there is a small facility in wich there is being experimented with this. It is very succesfully and it shows it works.
Offcourse there are to downsides to this; there are still bad environmental sideeffect (but they can be overcome or minimilized).
The second is offcourse that it will never produce the same enourmous amounts of energy as the free flow of oil does.
But still, it can offset the doom-pictures most of us peak-oilers might have; there will be less energy to go around, but still enough to keep the western world fed for a couple of decades more...
Groan. I suppose this is inevitable that people will try this. Same as with the tar sands gunk in Alberta.
I suppose the bright side (if there is a bright side) is that the same equipment could be used for biomass-to-liquids - kind of like what Choren does, I suppose.
Why is it that I keep wanting to write "Fisher Price" instead of "Fischer Tropsch"?
This has been demonstrated for a long time. It was used to fuel the whole German war-machine during WOII. South Africa is using it for a long time.
But I agree that it would be preferable to use only Bio-mass.
But still, we're working on a clean methode now in the Netherlands.
Yes, I know it is real, and I know it works.
The only thing I really hate is that they want to use coal as a feedstock.
It isn't that I hate coal - I just wish it would stay buried in the ground.
Coal is a non-renewable resource, and the consumption of coal leads to global warming. The mining of coal leads to huge environmental problems too.
If we just replaced all of our oil-derived fuel with coal-derived fuel, what we have succeeded in doing is replacing peak oil with peak coal. The dynamics are of course different, but you get the idea.
And how is oil shale/oil sands different than using coal?
Who said it was any different?? Tar sands are even worse than coal. You consume a good deal of energy to extract the stuff.
My only point is that the same F-T equipment could be used for biomass-to-liquid.
Well... we could also buy it, or use biomass....
His mine will only generate 12 million tons of coal per year.
Is 12 million tons enough for all them barrels?
I don't know what the conversion from lump of coal to barrel of oil is.
anyone?
Media In Trouble
Doing a significant chunk of that may not be as completely impossible as it seems, given that the current US oil bill is something like $400 billion/yr and that whenever oil does peak there are going to be a lot of engineers, skilled laborers, etc. available to work on new projects in a closely related industry.
Definitely not a very "moving forward" solution.. It would just keep our society inefficient and wasteful until we get to a "peak coal" crisis, and nothing will have been solved.
It could be useful on the small scale to gain some time while we invest massively in clean technologies, maybe.
However, I think this statement by the Governor is overly optimistic and coal liquidation is only part of the answer.
First of all, their estimate of how long the coal will last are based on how long it will take to use every single ton of coal. And as the readers here all know, any resource peaks in production half way through the total reserves. Simply because it is far harder to mine the second half, then it was to mine the first half. So 20 years into their estimate coal production will decline and become much more expensive.
Secondly, the estimate is based on U.S. consumption. And unless they are going to bar the sale of this cheap new oil to foreign counties this is misleading. The U.S. consumes 25% of all oil. And if we sell this new oil source to the rest of the world, they have underestimated demand by 400%. Therefore based on this new demand estimate the coal reserves will last 10 years of demand, NOT 40 years.
Lastly when you combine these two facts, 4 times under stated demand, and a production peak half way through the reserves. The numbers come out that Montana Coal can be used for 10 years of production and on the 5th year of production, coal prices will rise because of declining returns.
5 years of $32 oil production sounds a lot different than 40 years of $32 production.
But if I stopped writing here, readers might think I have forgotten that there are larger reserves out side Montana. They might dismiss my arguments because "we can always use the coal from another state."
So in an effort to put these arguments into the big picture context lets do the calculations for the entire U.S.A. coal reserves.
The entire nation's coal reserves are estimated to last for the next two hundred years based on current consumption. Now, we add the fact that we are liquidating coal to replace the decline of oil. If oil production declines at 3 percent, then each year we must increase coal consumption by 3 percent just to keep production flat. Now we add economic growth; if the economy grows at only 3 percent and our electrical consumption keeps pace with it, then every year we must increase our coal consumption by an additional 3 percent for electrical generation.
This is another reason statements like "we have two hundred years of coal" are misleading. These statements assume 0% growth in consumption! If we take a more realistic estimate of 6% annual increase in coal consumption, instead of 200 years of coal reserves, we have 35 years of coal reserves. Now we include the fact that half way through the reserves there is a peak in production.
Instead of 35 years, we have 17.5 years of coal at $32 a barrel of oil for the entire nation's coal reserves!
17.5 years of "cheap" coal, is a lot different than 200 years of coal.
My main point is that coal liquidation is NOT the silver bullet that will replace crude oil.
I don't believe there is a silver bullet that will replace crude oil, any time soon!
Instead of a silver bullet, I think there must be an effort to increase the use of many crude oil replacements. Such as; Biodiesel, Wind Power, Coal Liquidation, Solar Power, Tar Sands, and Ethanol. Only by using all of these power systems can we hope to replace the large role crude oil has played in all our lives.
Don't forget the easiest and best way to make gains: Efficiency and conservation.
Matt Simmons has said that we will need to pull "all levers" to get through this, meaning conservation and every possible energy source. I couldn't agree more. We are headed for a future of greatly diversified and decentralized energy sources (what I call our "D and D future")--wind, solar, wave, ethanol, F-T CTL, nuclear, etc.
And the entire industrialized world, especially the US, needs to get religion about the notion that a gallon saved through conservation is no different than a gallon produced by a new-found source.
The mainstream has a long, difficult learning curve ahead. We should do everything we can to get them started no, since it's in everyone's best interest.
Moving intercity freight by electrified rail instead of 18 wheel trucks will take 1/8th the energy and a few drops of oil for lubrication. More than 2 million b/day (i.e. 10% of US oil consumption) if this goes 100%. Given efficiency gains, minimal new power plants needed (and new wind turbines could be > new rail demand for electricity).
Urban rail in DC saves a half billion gallons/year directly and more than that from changed developemnt patterns. "Rinse and Repeat" in Miami, Dallas, Houston, Phoenix, Seattle, St. Louis, New Orleans, Austin, Honolulu, San Antonio, Tampa, Las Vegas, Los Angeles, Nashville, Memphis, Salt Lake City, Minneapolis-St Paul, Detroit, Cincinatti, ... and expand systems in DC, NYC, SF, San Diego, Portland, etc.
DRAMATIC energy savings vs. current urban transportation modes (SOV SUV) & development patterns. Again, wind turbines alone can handle the increased demand for elelctricity in most parts of the country.
And replace heavy bus routes with trolley buses.
Right, coal liquefication is no silver bullet. But if we think of the total energy of oil used now, neither are these other alternatives, not even taken together. The net energy gain of biodiesel and ethanol is very low. And where do you take the extra acres you need for farming the biomass needed? People have to eat, too. And we should not forget that electric power production is already now under greater demand press. Solar power is needed there. And how many megawatts? There have been much discussion about tar sands. Some synthetic oil, yes. But not enough.
And one thing more. The growth is the problem. We are in trouble because of the growth of energy consumption. If the world had been able to keep the oil consumption flat for example at the 1960 level, there would not be any problems for a long time. Technology has advanced but it has mostly helped to consume more energy.
The renewables have a nasty property of not been able to grow. That's why they are renewables. They are in principle like a constant flow. You can take a bigger share of the flow but no more than 100%. The is no way to sustain the energy growth.
I guess everything old is new again. (Though given the doubts over Saudi oil reserves, I get nervous when people proclaim that "we are the Saudi Arabia of coal".)
The cumulative average for this year alone is off approx 170,000 bbl/day year over year compared to same period last year, or -1.4%.
Comparing the same period of time in each of the prior 8 year - 6438 - 5432 = 1006 M bbl/day domestic production loss over the past 8 reporting periods = 126,000 bbl/day loss on average per year, potentially accelerating over the past two years despite high motivation to produce all that can be done at these persistant high prices.
So the good Governor will need to get a move on, because by the time the first plant is ready to go (how long? 2, 3 years?) they'll need to have built 3 by then just to replace that which is lost.
Can't blame him for looking for an economic angle - if his role model is Alberta (not far away) he's probably tired of hearing about Alberta's balanced budget (no debt at all, not just no deficit) and multi-billion dollar annual surpluses. VP Cheney is heading to the alberta oil sands - perhaps he's coming back with notions of digging coal at home, who knows.
One of the concerns I'd have is if "traditional" economic remedies are the only things being considered, and if PO is nearby, simple, traditional, economics are not going to "work" and by that I mean allow most of us to escape without significant financial harm.
From EIA history data:
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr_histo rical.html
2005 2004 Chg
5,432 5,509 -1.4
2004 2003 Chg
5,525 5,720 -3.4
2003 2002 Chg
5,827 5,862 -0.6
2002 2001 Chg
5,899 5,802 1.7
2001 2000 Chg
5,818 5,828 -0.2
2000 1999 Chg
5,825 5,868 -0.7
1999 1998 Chg
5,954 6,372 -6.6
1998 1997 Chg
6,417 6,438 -0.3
Oil has a Peak and depletion curve. Thus it is not sustainable long term. Coal has a similar peak, and thus falls into the same category. Uranium also does, although with radioactive isotopes this peak may be very long, provided we have adaptive breeder reactors.
The real issue is that this is a WORLD problem. We live in a GLOBAL economy. Everything is interrelated - so if we do not tackle this from a global perspective, then we will fail - globally. That means a return to a much different era - not?
But IMHO, the only long term solution is to reduce consumption and operate within the confines of renewable resources. And IMOHO, this means a reduction in world population through some mechanism, and an end to the belief in never-ending growth as an economic goal.
Return to a simpler way of life, a different era? Might happen. In a rapid PO scenario, surely it would. All this just-in-time globalization would tend to fall apart at the seams, but surely not before we (the developed world) do our best to totally screw up the rest of the world. In some respects we are well on our way.
They still apply, despite our machinations to avoid them.