Economic warfare

[Chuck Moreland]

While the coal to liquid fuel conversion process is not 100% efficient, that is far from the only consideration.

Here is the biggest - existing infrastructure.

I can't put coal in my tank. But if coal to fuel can run in existing combustion engines and use the existing distribution network, it makes economic sense to accept a lot of inefficiency.

If $55 / barrel is a real number, that would be net of all conversion inefficiencies. And still less than half the current price of crude!

Sound like a no brainer.

[m21sniper]

Originally Posted by svandamme

you are aware that physics have not changed since 77?l converting one energy source into another one, costs energy, a net loss. Converting one energy source into another one, costs energy, a net loss

Our efficiency at harnessing energy is vastly superior at this time.

And converting EXTREMELY ABUNDANT fuel sources from one type to another far more valuable type can very well be a net gain.

Originally Posted by svandamme

and considering that combustion engines aren't exactly fuel efficient to begin with
the coal to be would be better off used in an electricity factory, which yields probably more then twice the use per kilo of coal compared to car engines
for the same, if not less carbon emissions...
l

I am sure in 1977 that was true.

This can be done, there is proof. People are doing it.

The question is, can it be done for less than $3.60/gal ....cause that's what i paid today at the pump for 87 octane regular.

[sammyg2]

The plant in North Dakota makes a synthetic type of natural gas.

After over THIRTY YEARS it is still not profitable enough to have paid for itself. After over THIRTY YEARS the plant still owes the US government $330 million on the loan to build the plant.
Here's some history:

Great Plains Synfuels Plant
Recapture of Original Loan Guarantees
The Great Plains Synfuels Plant was constructed with financial assistance from the DOE through $1.55 billion in loan guarantees. Of the original amount at risk, about $330 million remains unfunded thus far, and the DOE is still contracted to receive shares of the plant revenue through 2009 to further offset this amount.

Original Construction
The plant was originally constructed by private investors for a total investment of $2.1 billion in the early 1980's. The investors provided $550 million and borrowed $1,550 million. The borrowed money was guaranteed by the DOE.

Original Owners Default
The original investors defaulted on August 1, 1985, about one year after first gas was put in the pipeline, due to the very low price of natural gas. The DOE refused to provide further assistance.

DOE Operation Period
The DOE operated the plant from 1985 until 1988 when they sold the plant to Basin Electric Power Cooperative. During this time the DOE accumulated $135 million in operational cash flow.

Sold to Basin Electric Power Cooperative
Basin Electric purchased the plant from the DOE in 1988 for the sum of $85 million plus an agreed revenue sharing mechanism, access to an environmental trust fund ($30 million), access to an operational trust fund ($75 million) and the forfeiture of $755 million in tax credits.

Revenue Sharing to Date
The revenue sharing has provided payments to the DOE of $235 million through 2005 and an estimated $40 million for 2006 for a total of $275 million through 2006. Basin Electric did call upon the $30 million environmental trust fund, but did not use any of the $75 million operational trust fund.

Financial Balance to Date
Of the original 1.5 billion loan guarantee, all but $330 million has been recouped by the US government so far, and DGC will continue to share profits through 2009 to further offset this amount.


The following table lists the original loan guarantee amount and how the U.S. Government has recouped its money to date.
$ in millions

Original Construction Cost of Plant
$2,100

Financing from Original Owners
550

Loans guaranteed by DOE
$1,550

Loans Defaulted and Covered by DOE
1,550

Operational Cash Flow while under DOE Ownership
135

Net Deficit at time of sale to Basin Electric
1,445

Sale Price to Basin Electric
85

Environ. Trust Fund Payment to DGC
(30)


Profit Sharing through 2006
275


Production Tax Credits Waived by DGC
755

Net payments from DGC to US Gov.
1,085

Total US Government recapture from original loss
1,190


Net US Government loss from loan guarantee to date
330

[sammyg2]

This plant cost $2.1 billion in the early 80's (probably equivalent to about $6 billion today) and earned $40 million a year on it's best year. That's a payback of around 28 years, if every single year is at or near a record as far as profitably.
Not much of a payback, but maybe they've figured out how to do things much better today

[HarryD]

Originally Posted by Mule

Are you a member of the flat earth society?

Actually, I am quite convinced the earth is round but that is another discussion.

But to your other points: the folks doing the cola conversion process technology already know what I am saying. Technology will not change these aspects of chemistry and physics. In truth, these technologies (plus the more recent ones) do work and work well. They still need to pay the piper.

Like it or not, the hydrogen to liquify coal has to come from somewhere. All known processes to make hydrogen from available resources, require energy to liberate the hydrogen to be used in turn liquify or gasify the coal.

[HarryD]

Originally Posted by m21sniper

...

The question is, can it be done for less than $3.60/gal ....cause that's what i paid today at the pump for 87 octane regular.

Bingo!

the almighty dollar is what controls what we can and cannot do.

[HarryD]

Originally Posted by sammyg2

This plant cost $2.1 billion in the early 80's (probably equivalent to about $6 billion today) and earned $40 million a year on it's best year. That's a payback of around 28 years, if every single year is at or near a record as far as profitably.
Not much of a payback, but maybe they've figured out how to do things much better today

Sammy,

Thanks for the $ support. I know hte history, but I did not have it handy. BTW, do you think I can get a $330 million interest free loan that I make no payments for the first thirty years. Where do I sign up

You current scenario also assumes $0 operational costs (feedstock, salaries, etc). Add in the cost of operation and you have a very looooong payback.

As I noted elsewhere, we can do this. Do we want the pain that goes along with it?

While it has been a while since I looked at the economics closely, in the past, the best use of coal is either a feedstock for chemical manufacturing (higher value added products than fuels) or generation of electricity. Existing liquid feedstocks (i.e. crude oil) is best reserved for desirable liquid transportation fuels (gasoline, diesel, etc) as all you really need to do is separate the fractions, provide (relatively mild) treatments to convert fractions to usable products, and use them.

[m21sniper]

Originally Posted by sammyg2

This plant cost $2.1 billion in the early 80's (probably equivalent to about $6 billion today) and earned $40 million a year on it's best year. That's a payback of around 28 years, if every single year is at or near a record as far as profitably.
Not much of a payback, but maybe they've figured out how to do things much better today

Invalid comparison, as that plant is built based on decades old technology. Any modern plant should be quite a bit more efficient, and therefore profitable. It's like saying hybrid vehicles are inviable because the early prototypes from the late 80s were unprofitable under performers.

Originally Posted by HarryD

Like it or not, the hydrogen to liquify coal has to come from somewhere. All known processes to make hydrogen from available resources, require energy to liberate the hydrogen to be used in turn liquify or gasify the coal.

We have a truly mind-boggling amount of coal to work with. There is enough to harvest the carbon for both the hydrogen and the gas itself, for quite a long time.

The question is, how much will it cost. If you can make this stuff for $2.50 a gallon, and it's on US Soil, then it's sure as hell worth it. We should start NOW.

[Mule]

Originally Posted by HarryD

Actually, I am quite convinced the earth is round but that is another discussion.

But to your other points: the folks doing the cola conversion process technology already know what I am saying. Technology will not change these aspects of chemistry and physics. In truth, these technologies (plus the more recent ones) do work and work well. They still need to pay the piper.

Like it or not, the hydrogen to liquify coal has to come from somewhere. All known processes to make hydrogen from available resources, require energy to liberate the hydrogen to be used in turn liquify or gasify the coal.

Your statement may make some sense to you but probably not to many others.

1. This technology has been in existence for at least 60 years. My guess is that it has been improved on since the nazis first used it. According to you, this particular process cannot be improved on by technology. I call BS.

2. Nobody has said it's free. Those involved in the process say $55 per bbl.

I thought this was simple.

[m21sniper]

Originally Posted by HarryD

As I noted elsewhere, we can do this. Do we want the pain that goes along with it?

As opposed to the pain from the occasional middle east military foray?

No need for M.E. oil = no national interests in the M.E.= no military misadventures into the most unstable region on earth.

That's the upside.

Tell me again, what's the downside?

[tabs]

Are U people retards or what....The US only imports 14% of its oil from the ME. The rest of the ME production goes to the rest of the world..China, Japan India etc. Exactly what are they going to do for oil? You are no longer living in an insulated world, the world now has a Global economy. So what happens in China effects you here in America.

I say let us start building steam powered cars...throw a lump of coal in the firebox and heat that boiler up. Can U imagine a steam powered Porsche...you might even need a fireman to keep shoveling the coal.....

[Mule]

I guess there's a point there? Somewhere!

[HarryD]

Originally Posted by Mule

Your statement may make some sense to you but probably not to many others.

1. This technology has been in existence for at least 60 years. My guess is that it has been improved on since the nazis first used it. According to you, this particular process cannot be improved on by technology. I call BS.

2. Nobody has said it's free. Those involved in the process say $55 per bbl.

I thought this was simple.

South Africa and our plant in ND use the old Fischer Tropsch batch reactors.

In the '70's there was a huge push for more advanced technologies. The Institute for Gas Technology developed some (Hygas, Steam Iron etc), Texaco developed a very appealing gasifier technology as well. There are others. All of them have similar designs. you pulverize the coal, spray it into a heated reactor where you inject O2 (or air) that allows the coal to partially burn into CO, water and hydrogen. Add more water to use the CO formed to convert the H2O into CO2 and H2 and allow the H2 to react with the CO formed to make synthetic fuels. Depending on the reaction conditions, you can make a variety of products. They all died from unfavorable economics due to the price of oil.

I am not sure if it is still operating, but in Tennesse (http://www.eastman.com/NR/rdonlyres/030719DC-A795-48A6-9619-32BE84E84EC8/0/Growth_Through_Gasification_Brochure.pdf) there is (was) a coal to chemicals plant that uses these later technologies.

Bottom line: They all must obey the chemistry and convert some portion of the feedstock (coal) into energy (to dirve the process) and for conversion of water to hydrogen.

Another bit of food for thought. I used to work for a chemical compnay that purchased from third parties vast quantities of Ethylene. They did not buy the feedstocks and make it themselves. Why not after all they could easily afford to build their own plant. As it turned out, because everytime a supplier decided to raise proces, the company would start designing and building an ethylene plant to supply their own needs. They never broke ground but instead, the suppliers saw the light and lowered thier price to a point where my company would not see the benefit of building it's own plant. Perhaps this is the strategy we need to pursue.

Or perhaps as long as we are in Iraq, we take over the pipelines and terminals, run the wells flat out, fill our tankers and bring the crude here as payment for American lives and resources lost over there.

[HarryD]

Originally Posted by m21sniper

Invalid comparison, as that plant is built based on decades old technology. Any modern plant should be quite a bit more efficient, and therefore profitable. It's like saying hybrid vehicles are inviable because the early prototypes from the late 80s were unprofitable under performers.

It may or may not be more efficient. you still need to address the fac tthat there are physical limits to what can and cannot be done. Extracting hydrogen from other materials is a energy intensive process regardless of how you do it.

We have a truly mind-boggling amount of coal to work with. There is enough to harvest the carbon for both the hydrogen and the gas itself, for quite a long time.

The question is, how much will it cost. If you can make this stuff for $2.50 a gallon, and it's on US Soil, then it's sure as hell worth it. We should start NOW.

Agreed. As I pointed out above, to me the sensible approach is to limit petroleum to those uses where alternatives are not that appealing. Things like transportation. Most other uses, heating, power generation, chemical manufacture, can be performed using alternative carbon sources (coal/natural gas).

[HarryD]

Originally Posted by m21sniper

As opposed to the pain from the occasional middle east military foray?

No need for M.E. oil = no national interests in the M.E.= no military misadventures into the most unstable region on earth.

That's the upside.

Tell me again, what's the downside?

I agree that dealing with the ME is a lousy proposition. Sadly, they have a large amount of reserves that are easy to get.

Those guys over there are not fools. They know how much it really costs to make a competitive product. It is no accident that their pricing always seems to be less than ther competition. After all, what is their true cost of production? Many years (about 20) ago it was about $0.50-1.00/bbl. Assuming 10% cost inflation over this time, the cost would now be $3.36-6.72/bbl. You think they can lower prices significantly and still be ahead?

[Mule]

Originally Posted by HarryD

It may or may not be more efficient. you still need to address the fac tthat there are physical limits to what can and cannot be done. Extracting hydrogen from other materials is a energy intensive process regardless of how you do it.




Agreed. As I pointed out above, to me the sensible approach is to limit petroleum to those uses where alternatives are not that appealing. Things like transportation. Most other uses, heating, power generation, chemical manufacture, can be performed using alternative carbon sources (coal/natural gas).

You should contact those folks already doing this & inform then that they are folls & this cannot be done!

[Bill Douglas]

US companies pump a HUGE amount of oil from here in New Zealand. Our goverment gets something like 10% of it's worth and the oil companies and their infrastructes do the work. The reason it's not cheap is because the oil companies don't want it to be cheap. that's why they have made billions of dollars profit in an era of high prices for crude. They are costing it out as if it has cost them the world spot prices, and pass this cost onto the consumer, whereas it probably cost them 10 bucks a barrell.

[competentone]

Originally Posted by tabs

I say let us start building steam powered cars...throw a lump of coal in the firebox and heat that boiler up....

Yes! Let's bring back the steam-powered cars!

And the best thing of all, you don't need to limit yourself to any one fuel. Anything that burns -- even trash -- will work just fine to keep you rolling!

Steam car vs. Porsche 911:

[lendaddy]

Should we discuss the ROI on government loans and grants for wind/solar/etc...???? How about ethanol?

Nuke and clean coal.

[sammyg2]

Originally Posted by HarryD

In the '70's there was a huge push for more advanced technologies. The Institute for Gas Technology developed some (Hygas, Steam Iron etc), Texaco developed a very appealing gasifier technology as well. There are others. All of them have similar designs. y.

Oh man, dirty word! Go wash your mouth out with soap!
In the refinery where I work (a former Texaco refinery), right in the middle of the area I'm responsible for, we have a Texaco gasifier unit.
Thank god that POS is no longer in commission.
They shut it down years ago because it was soooo unreliable and so inefficient, and soooooo dangerous.
If they ever decided to re-start that hunk of junk I'd quit.