Coming Boom in Coal to Liquids (CTL) and Gas to Liquids (GTL)

Gas TechnoStanford Research Institute's (SRI) clean, new approach to coal-to-liquids (CTL) utilises methane gas as a hydrogen source. This makes the SRI process something of a hybrid CTL and GTL approach. More from MIT's Technology Review:

SRI claims its process addresses three liabilities that have slowed the commercialization of the technology. By blending some natural gas into the conventional coal-to-liquids (CTL) process, the private research lab, based in Menlo Park, California, claims to have eliminated CTL's carbon footprint, slashed water consumption by over 70 percent, and more than halved its capital cost.

...In SRI's process, methane preheated to 600 °C displaces much of the water required, thus reducing the unwanted reaction with the coal. The methane also reduces the amount of heat absorbed by the gasification process, eliminating the need for oxygen and combustion to maintain the 1,400 to 1,500 °C temperatures the process requires. As a result SRI says it can eliminate the use of oxygen-fired combustion that the process requires, making do with zero-carbon renewable or nuclear power instead.

Skipping oxygen not only eliminates a source of carbon dioxide, but contributes substantial cost savings by eliminating the need for an oxygen plant. Further savings are achieved through more efficient fuel synthesis.

...SRI estimates that its zero-carbon process will generate jet fuel for $2.82 per gallon, which is under DARPA's $3 target. SRI's projected capital cost for a 100,000 barrel/day plant—$3.2 billion—is well below the $6 billion cost of a CTL plant, but still well above DARPA's $1.5 billion target. _TechnologyReview

Alaska is thinking about using its considerable coal and natural gas resources to produce synthetic liquid fuels for US military bases in the Pacific basin:

A GTL (or CTL) plant in Alaska, while utilizing conventional transportation and storage within the state, could also fulfill military desires throughout the Pacific Basin.

Alaska, with its vast quantities of coal and natural gas should enter this field, both to service domestic needs, but also to support the nation’s military mission in the Pacific Basin. As the state and industry continue to ponder a natural gas line to the Lower 48 and Liquefied Natural Gas (LNG) is pushed, both into questionable competitive markets, Alaskans continue to suffer under extremely high petroleum fuel prices.

Strategically located Alaska has the potential of delivering completed fuel at a shorter distance, and more secure routes, than any other domestic region; and far more reliable and safe than from foreign sources. For example vessels traveling from Alaska to a forward base at Guam can be shadowed and protected by the U.S. Navy and land based aircraft. _AlaskaJournal

South African energy giant Sasol is pushing ahead with its Fischer-Tropsch based GTL technology in both the US and Canada.

The company is a world leader in GTL and CTL production. Upstream production of coal, oil and gas is either sold on the open markets or used a feedstock for Sasol's synthetic fuels production. The final leg of the company's revenue sources is chemical production and sales.

...In June 2011, Sasol Limited closed a deal for 50 percent ownership of the Montney gas basin assets of Talisman Energy (TLM) for approximately $1 billion. Plans for the shale gas production site include the construction of a GTL plant, which would have a capacity of 50,000 or 100,000 barrels per day of synthetic fuels. A GTL plant has the potential to turn low value natural gas production into high value synthetic fuels. _NM

Sasol is also considering putting a GTL plant in Louisiana.

Shell's Pearl GTL plant in Qatar is ramping up production, and looks to generate profits of $6 billion per year, on total capital costs of around $20 billion.

GTL and CTL are capital intensive enterprises, requiring very high up-front investment. At the same time, more scalable approaches to GTL are being developed by Oxford Catalysts, Carbon Sciences, Gas Techno, and others.

The key to efficient GTL and CTL will be the eventual mass availability of cheap, abundant, high quality process heat from gas cooled nuclear reactors (750 C to 1000 C). Using nuclear reactor process heat to substitute for fossil fuel heating, GTL and CTL suddenly become a lot more profitable -- and well able to moderate hysterical market tendencies which might otherwise further over-inflate oil costs based upon fleeting rumours.

Natural gas and coal can be as easily converted to high value chemicals as to diesel or gasoline. This allows producers a great deal of versatility in dealing with changing markets and prices. They will also offer fierce competition to crude oil suppliers in multiple markets, further helping to contain the highly volatile fluctuations of the petroleum market.