Skip to comments.Clean Diesel from Coal
Posted on 04/19/2006 5:56:25 AM PDT by aculeus
As the cost of oil soars and worries over the U.S. dependence on foreign petroleum escalate, coal is becoming an increasingly attractive alternative as a feedstock to make a range of fuels. Now chemists have invented a new catalytic process that could increase the yield of a clean form of diesel made from coal.
The method, described in the current issue of the journal Science, uses a pair of catalysts to improve the yield of diesel fuel from Fischer-Tropsch (F-T) synthesis, a nearly century-old chemical technique for reacting carbon monoxide and hydrogen to make hydrocarbons. The mixture of gases is produced by heating coal. Although Germany used the process during World War II to convert coal to fuel for its military vehicles, F-T synthesis has generally been too expensive to compete with oil.
Part of the problem with the F-T process is that it produces a mixture of hydrocarbons -- many of which are not useful as fuel. But in the recent research, Alan Goldman, professor of chemistry and chemical biology at Rutgers University, and Maurice Brookhart, professor of chemistry at the University of North Carolina at Chapel Hill, use catalysts to convert these undesirable hydrocarbons into diesel. The catalysts work by rearranging the carbon atoms, transforming six-carbon atom hydrocarbons, for example, into two- and ten-carbon atom hydrocarbons. The ten-carbon version can power diesel engines. The first catalyst removes hydrogen atoms, which allows the second catalyst to rearrange the carbon atoms. Then the first catalyst restores the hydrogen, to form fuel.
Diesel fuel produced in this way has several potential advantages. Ordinary diesel contains molecules, called aromatics, that, when combusted, produce particulates, Goldman says. But the diesel formed by the new catalysts does not include aromatics, so it burns much cleaner, overcoming one of the major objections to diesel fuel. This could lead to more vehicles using diesel engines, which are about 30 percent more efficient than gasoline engines.
But the biggest advantage may be that the United States has huge amounts of coal: "We have as much energy in coal as the rest of the world has in oil. That's enough to last us the next hundred years or so," Goldman says. Thus, a more efficient, and so less expensive method of converting coal to diesel could significantly cut U.S. dependence on foreign oil, and do so for a long time.
"When I saw this I thought it was really a terrific contribution that could be very important," says Richard Schrock, professor of chemistry at MIT, who won the Nobel Prize in Chemistry in 2005, with two other scientists, for discovering the type of catalyst used in the second step. Combining two catalysts this way "is pretty rare," he says. "You can't just throw any two things together and expect to get the results you anticipated."
According to Robert Grubbs, professor of chemistry at Caltech, who shared the Nobel prize with Schrock, "The key is finding catalyst systems that are compatible, and will operate at the temperatures where you can do both processes together."
At this time, the new catalytic method is still a proof-of-concept, and not ready for commercial use. For example, the second catalyst tends to break down. But Schrock says this problem should be solvable: "It's theoretically possible that this could become practical. I e-mailed Alan Goldman and said, 'Look, we've got a lot of catalysts, and I can think of some things that might be thermally more stable.' So I'm going to send him some catalysts, and he's going to try them out."
It also might be possible to make catalysts that use products from the first reaction to regenerate themselves. "Then the catalyst wouldn't die, and you could in fact keep the reaction going," says Schrock.
How does that work??? I'd like to convert some of my cars to E85-E100... would a simple still work?
There are many different grades of oil.. different oil requires different forms of refining. Whoever is at the other end of the futures contract would need to know with good certainty the characteristics i.e. density, sulpher content, etc.
What does the buyer have to lose? They will only pay if there is product to take possession of?
Let's say this is a conventional oil and my above problem does not exist. The coal-to-oil produce enters into a futures contract to sell some amount, let's say 1 million barrels on 6/30/2010 to somebody who needs 1 million barrels on 6/30/2010. That somebody is going to use the oil to produce a chemical... this chemical venture is profitable for oil at $70/barrel, but rapidly loses profitability as oil goes above $70. The bank that is financing the chemical venture thus demands that in order to get the financing, the chemcial venture must lock in its oil cost at $70 or below in the futures market.
The chemical venture enters into the futures contract. On 6/30/2010, oil is $140 dollars a barrel. The coal-to-oil company can't deliver because hey, well, it was an untested product and we ran into production difficulties. Chemical company goes out of business, bank loses its loan.
Actually, this doesn't happen because the company doesn't enter into the futures contract with someone with questionable ability to deliver in the first place.
I recognize that there are various ways to structure the futures contract. My over-simplified example lumped the costs that will truly be sunk (both broker fees, etc. and lost opportunity cost for the committed money) with the final cost. Still, the sunk costs will be significant, on a significant buy. I think we'd need more than laboratory studies before that becomes economically attractive.
Oil is still sucked from the ground at $2 a barrel. Nothing comes close to competing with this. However, when easy oil is gone, these processes will be used, and oil will be in the vicinity of $200 a barrel. It is the modern thing to do in business to find fees for this and fees for that. Look at the telephone bill and all the little charges for taxes and other things they make; everything comes with charges and fuel for vehicles is no different. There will be fees for gasoline from coal that haven't yet been invented in legislatures and boardrooms. We will view $3 gasoline as the good old days, and pretty soon.
How? War? Thats a real possibility, given the Iran situation.
I have no viable info on that.
According to the Governors of WV and MT, the break-even point for coal gasification is $43/bbl.The example here would be to contract the coal-oil for delivery at $55 a barrel in a large enough quantity to recoup for your capitalization costs.
2 posted on 04/19/2006 9:00:48 AM EDT by Roccus
If oil goes below the profit threshold, you will go out of business, but the investors will at least break even. If oil holds or increases, you sell your non-contracted product at market prices.
The issue is the capital cost, and the risk which is associated with the economic factors of the investment. But that is not unique to petroleum products; any brick-and-mortar investment has some risk the hindsight will shot that it was put in the wrong place at the wrong time.
Selling oil futures is a way of spreading out the risk that petroleum prices will come back down, in exchange for assurance that it won't go further up. Let's say that half of the $43/bbl figure would go to the coal miner, and 40% of it would go into capital equipment, and 10% would go into labor. Since that was quoted as a break-even cost, you really need confidence the price will be 10% higher than that in order to be worthwhile.
But once you pour the cement and erect the steel, the price of petroleum would have to drop below the cost of the coal and the labor before it would be logical to shut down.
Agree with everything you said, except the last, which is that they might. It just wouldn't be prudent to contract a large percentage with them (hedging the hedge). So the company sells a large number of small contracts, vice a low number or large ones. Once the technology is proven though, the risk of nondeliver drops substantially.
But if an established, well capitalized business, were to do it, that makes it all the more enticing.
The only real effect day traders have on the market is to add liquidity, which is a good thing.
The Fischer-Tropsch process has been used for decades. South Africa's SASOL.
that could easily be solved by government placing a floor on the price of oil - it cannot go below $45 let's say - else its taxed to that level. this will prevent new entrants into the energy market from being wiped out by a manipulated dive in oil prices, to wipe out the startup's investments, just as they come to fruition.
A price floor would be the fastest way to ensure alternative methods of oil production.
But some here at the Free Republic would call that fascism.
Concur. The only problem is getting the Fed. Gov. to do a direct assignment of the revenue. I would pick refunds.
The answer is yes, when oil is at $70 a barrel, no when it is at $20 a barrel. Right now it is very profitable without subsidies of any kind. The break even point on wind power is about $50 a barrel. That would likely decrease as the market grows.
There is nothing more constant than the sea breeze. In during the day, out at night. What proportion of the population lives withing 100 miles of a coast? In the U.S. I think it is around 80%.
there is nothing evil or unlawful in meeting competition for customers..if coal/oil or ethanol/gas must depend on oil prices at historic high levels..they will be undercut every time, consumers will choose to save 10 or 20 or even 75 cents a gallon when given the chance so your pie in the sky alternative energy plans must support high oil prices..which limit growth..until alt energy can compete with oil at or near break-even for oil production/refining it will never get off the ground without Gov mandated high oil prices kinda what we are seeing right now..only the fools for alt energy complain when they must pay the high prices for gas, when what they WANT- demands these high prices be set without competition from cheaper oil ..well a fool and his money