The Oil Drum

Chevron Australia has been in the news this week after announcing plans to develop a new LNG plant on the WA mainland to process gas from its Wheatstone discovery on the north west shelf. Interestingly, as well as feeding gas into the domestic network, they are considering developing a gas-to-liquids facility as part of the plant - which may slightly reassure those who look at both our trade deficit (in which imported liquid fuels are a major factor) and the possible impacts implied by the export land model.

I have stated on several occasions that I believe global warming is a greater immediate threat than Peak Oil. As long as the demand is there, energy companies will strive to supply fuel to the marketplace. To meet the demand, we will develop tar sands, even though doing so will consume enormous quantities of natural gas. We will turn natural gas and coal indirectly (and inefficiently) into ethanol. Finally, we will turn vast quantities of carbon sources into fuel via what I term "XTL" technologies. XTL technologies consist of a partial oxidation (POX) reaction followed by the Fischer-Tropsch (FT) reaction. When the POX feedstock is natural gas, this is referred to as a gas-to-liquids (GTL) process. If the feedstock is coal or biomass, this is referred to as CTL, or BTL respectively.

This is a guest post by Dr Michael R. Smith of Energyfiles Ltd. Dr Smith gave an excellent presentation to The Oil Depletion Conference hosted by The Energy Institute in London last year and this post is an abridged version of what he had to say. If you like the post, then please use the "tip jars" or send the link to a friend.

I have been writing on oil supply issues since 1995, in particular the imminent supply gap and the looming new energy era; forecasting a peak in global supply arriving between 2010 and 2020 depending on demand growth. The Energyfiles report “Oil & Gas – Global Ten-Year Projection” (now in its 2007 edition) was published in response to queries about the data used to arrive at these conclusions.

Nonetheless, despite new evidence in the form of higher than expected demand, capacity squeezes and price rises, there remains a view amongst some geologists and economists that the peak is many years away and even that technology, new energy sources, and new efficiencies will make it irrelevant. Although I believe such views are driven by wishful thinking, I do not want to digress on this subject here. Instead I want to address energy supplies after peak; the size of the so-called supply gap and how it might - or might not - be filled by alternative transport fuels and by efficiencies.

Another fuel to power your car arrives in R.I.

Some excerpts from the article:

May 24--WARWICK -- Hate the gas-guzzling SUV? Worried about greenhouse effects and smog? Fearful that we'll someday run out of oil? Rhode Island's eco-conscious, your day has come.

Environmentalists have long offered the benefits of compressed natural gas vehicles as a solution to all of these problems. The engines burn immaculately clean. Vehicles powered by CNG produce only 10 percent of the carbon monoxide and particle discharge of gasoline-powered engines, and half the nitrogen oxides. Carbon dioxide discharge is reduced by 30 to 40 percent.

The fuel, which is primarily methane, is cheaper than gasoline -- at T.F. Green, the natural gas will retail for $2.69 for the equivalent of one gallon -- and natural gas-powered cars get better mileage.

The world' liquefaction capacity is projected to reach 41 Bcf/d in 2010 from 2004's total of 17 Bcf/d, he said. There are already firm commitments to build 35 Bcf/d in liquefaction capacity by 2009, he added. LNG produced in the Atlantic Basin would mostly be shipped to the US and Europe, while LNG produced in the Pacific Basin would primarily be shipped to Asia, he said. The growing amount of production in the Middle East will help develop a global LNG swing market because the area is positioned between Atlantic and Pacific markets, he said.