Posted on 12/04/2012 5:50:36 AM PST by thackney
WESTLAKE, La. — In an ambitious bet that the glut of cheap natural gas in the United States will last for many years, a South African energy company announced on Monday that it would build America’s first commercial plant to convert natural gas to diesel and other liquid fuels.
The company, Sasol, which is based in Johannesburg, has been a pioneer in a technology that has tantalized energy scientists for decades over its potential to produce liquid fuels without using oil, which has historically cost far more than natural gas.
Having already built smaller plants in South Africa and Qatar, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its “gas to liquids,” or G.T.L., technology. It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.
“By incorporating G.T.L. technology in the U.S.A.’s energy mix, states such as Louisiana will be able to advance the country’s energy independence through a diversification of supply,” said David Constable, Sasol’s chief executive, at a news conference here Monday near the project’s planned location.
The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products.
What makes this southwestern corner of Louisiana attractive to Sasol is its proximity to bountiful shale gas fields just north of here and west in Texas. A boom in shale drilling has reduced the price of natural gas in the United States in the last four years by more than two-thirds, encouraging many energy and chemical companies to build and expand manufacturing plants around the Gulf of Mexico...
(Excerpt) Read more at nytimes.com ...
“Only a handful of gas-to-liquid plants operate commercially in Malaysia, South Africa and Qatar, and they collectively produce a bit more than 200,000 barrels of fuels and lubricants a day — the equivalent of less than 1 percent of global diesel demand.”
Why bother? I got an idea: Drill baby drill.
No, just the opposite.
In 2013, natural gas is expected to be $3.34 per MMBtu. It should average $2.65 per MMBtu in 2012.
http://www.eia.gov/forecasts/steo/archives/Sep12.pdf
The current price of diesel in the US is over $31 per MMBTU. There is a lot of room to spend money on the conversion and still profit on the conversion.
Another reason for gas to liquid conversion is the 1000x “compression” that occurs.
There is lots of stranded natural gas ie gas that is too far away from viable markets. Currently they flare it. Having the ability to turn this waste product into usable crude is a good thing.
I suppose for the same reason I’m not crazy about gas grills..I’m afraid of a collision/exposion. Let me know when they make the tanks leakproof/crash proof.
I know that sounds a bit paranoid..but even gas grills make me nervous (have had/seen a flareup or two). So, I still use charcoal.
This has been done before. Founded by Sam Mosher in 1922 as the Signal Gasoline Company, Signal was originally a California company that produced gasoline from natural gas.
GTL is very energy intensive, but feasible.
Its economic feasibility is determined by the relative economic value of natural gas and liquid fuels.
Sasol has a lot of experience with this. In South Africa, they gasify coal to obtain the gas feedstock for GTL.
GTL is very energy intensive, but feasible.
Its economic feasibility is determined by the relative economic value of natural gas and liquid fuels.
Sasol has a lot of experience with this. In South Africa, they gasify coal to obtain the gas feedstock for GTL.
I believe you are referring to capturing the natural gas liquids from a “wet” gas well to separate out gasoline components.
This process is converting methane to much heavier hydrocarbons like Octane, Octene, Decane, Decene, etc.
The amount flared is way less than it used be typically done. Places like the Alaskan North Slope now re-compress and inject back in the reservoir the gas produced but not used.
Most of the royalty owners now require payment of the loss of gas if flared. Producing companies are financially penalized now if flared. So if the quantity is significant in a locations, it is either sent to market or back to the field.
I understand that in South Korea a lot of their vehicles are running on hydrogen. Very explosive! But I have not seen one report of any of these hydrogen tank explosions. Reckon none are getting involved in wrecks?
When I was growing up in East Texas, quite a few people ran their pickups and cars on propane, apparently as safely as gasoline.
Most likely CNG or LNG tanks are being designed to withstand severe collision and puncture incidents. There are many 18 wheelers and trains hauling 5,000 or 10,000 gallon tanks of LPG/LNG everyday.
I use charcoal because I want my food taste like is been Barbecued.
137 EPA jobs
387 Justice Department jobs
14 Department of wild life and Fisheries jobs
I’ve been nibbling at Cheniere Energy (CQP), a domestic coverter of nat gas to LNG with pipelines and terminals for export.
Thanks for the information.
Do you have links to any information on that?
We are almost literally awash in hydrocarbons from which we can refine suitable liquid fuel products. The only issue is if the spread between the cost of the hydrocarbon feedstock and the probable selling price is low enough to justify the capital investment and the cost of conversion. This company thinks it now is but notice the author calls this decision “an ambitious bet”.
The economist Franz Oppenheimer observed there are only two ways of gaining wealth. He called one way the “economic means” by which he meant free exchange of value. He called the other way, the “political means” by which he meant government coercion, subsidy, rent seeking, regulatory capture, etc.
I would add that this GTL project is an “ambitious bet” because with increased socialism a capitalist not only has to deal with economic risk, that is being that the project will suffer from unforeseen costs and delays, but we must now add “political risk”, that being unforeseen regulatory decisions and litigation based on specious legal theories.
The only people who would put their money at risk are those who have a very high expectation of success and where the rewards of the project are very high. This means that as the level of political risk increases, the number of projects that people are willing to fund greatly diminishes.
And we wonder why there are no jobs.
What about nano technology replicated enough times to get 5 gal/day?
Louisiana is a good place to build this.. it’s already stanky in many spots.. fortunately, it’s natural gas and not coal.. them plants are pretty smelly too.. spent a month at a Sasol op., in the TRansVaal , a coal to gasification project, big ‘un too, upwind, it’s great, downwind,, whewwww.
what price jobs tho? sad we have to seek out foreign expertise , can only imagine the legal hassles ahead regardless.
Unlike coal, the natural gas is going to be enclosed in pipes.
Any refinery is going to have some emissions. Seeing this is taking the place of a crude oil feed refinery, I doubt it would be worse.
OK .. you can mine the coal and burn it or mine the coal, process it, THEN burn it ... right?
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