Saturday, March 31, 2012

Gallery of World Hydrocarbon Endowment & Shale Gas Resources

The first two charts -- of global hydrocarbon endowment and US hydrocarbon endowment -- come from Gary Swindell Petroleum Engineering in Dallas, TX.

The next 4 maps come from an Autumn 2011 article in Oil Field Review (PDF)

The last two graphs provide two more cautious estimates of the global hydrocarbon resource -- one including renewable fuels and the approximate costs of production using today's technology.

The purpose of such graphic resource estimates is to provide a visual impact beyond what mere numbers often provide.

The very generous Swindell estimates on top come with several sources, provided at the link. The source of the shale gas maps data is listed on the maps. The data in the next to the last chart above is taken from BP estimates, and the data in the last one is taken from IEA sources.

Keep in mind that resource estimates are not proven reserves, but are rather a guesstimate of where future technologies may eventually lead based upon best available data. Proven reserves have always risen, and continue to do so as discoveries and new technologies warrant.

It should be easy to see from the charts how important liquefaction technologies (GTL, CTL, BTL etc) will become over the next few decades. As abundant and cheap process heat from advanced modular nuclear reactors becomes available, such liquefaction processes will come into their own, economically.


Friday, March 30, 2012

Enough Oil for Decades, If Not Centuries

Rather than running out of oil and/or gas any time soon, I think the bigger danger is that we have more than enough oil and other fossil fuel energy resources to sustain us for quite a few decades if not centuries. Any efficiency and/or conservation of energy, combined with some replacement of fossil fuel energy with renewables than these finite resources, will extend hydrocarbon resources quite a few additional decades. _George Wuerthner, Ecologist
When M. King Hubbert offered his simplistic analysis of regional and global oil depletion back in the 1950s and 1960s, most people didn't know any better. Bestselling books such as "Silent Spring" and "The Population Bomb" were predicting the near-term collapse of the global ecosystem and global civilisation. According to those now-or-soon-to-be decomposing prophets of doom, we shouldn't even be here discussing the topic of our future. And yet, here we are.

The modern doom-equivalents of Rachel Carson and King Hubbert are warning of global collapse of civilisation and the ecosystem, due to peak oil and / or carbon hysteria / climate change. Some things never change, particularly the attraction of humans to doom and predictions of doom.

But why was Hubbert wrong, and why are his modern-day disciples just as wrong?
The problem for anyone trying to predict future resource availability is discerning the initial starting amount of a resource such as oil when one cannot readily see or gauge accurately the resource. This lack of transparency presents huge opportunities for error, in particular, erring on the side of under estimation of the total resource. And time has consistently shown that under estimation of total resource is the most common error, and as we shall see this is exactly the error that Hubbert made with regards to his estimates of our remaining oil and gas reserves. Hubbert can be forgiven because new technology can make previously unavailable resources accessible, even less expensive to exploit. In fact, he even anticipated this to a degree in his paper, another point that Hubbert’s admirers today tend to overlook.

...Hubbert grossly underestimated total oil supplies, and thus his predicted high point of the bell curve deviates significantly from reality. Indeed, there is good evidence we haven’t even reached the top of the bell curve, much less past it in 1970.

...Predicting future oil and gas supplies is fraught with dangers. Many factors influence oil extraction other than geological limits. A rapid shift to renewable energy, a decline in global economies, new technological innovation, energy conservation, a high oil price that dampens consumer demand, political instability and wars all significantly affects energy production, thus when and how “peak” is achieved. Many believe a more realistic model rather than a bell curve is a rapid run up in production to a spike or series of spikes followed by a long drawn out plateau and production decline with ultimately more oil production occurring after the apparent peak, but less rapidly than prior to the “peak” which of course wouldn’t really be a peak in the traditional sense of the word.

...Hubbert estimated that the “ultimate potential reserve of 150 billion barrels of crude oil for both the land and offshore areas of the United States.” Hubbert’s estimate was based on the crude oil “initially present which are producible by methods now in use.” Using the 150 billion barrel estimate he predicted US Peak Oil occurring in 1965. But to be cautious, he also used a slightly higher figure of 200 billion barrels which produced a peak in oil production around 1970—the figure that Hubbert advocates like to use to demonstrate that Hubbert was prophetic in his predictions. However, by 2006 the Department of Energy estimated that domestic oil resources still in the ground (in-place) total 1,124 billion barrels. Of this large in-place resource, 400 billon barrels is estimated to be technically recoverable with current technology.

...Obviously if Hubbert were correct, and we had reached Peak Oil in 1970 (point where we had consumed half of our oil) and we started out with only 200 billion, we could not have nearly 200-400 billion still left to extract—and total resources are likely even higher than this figure.

It’s also important to keep in mind that “technologically recoverable” resources are not the “total” amount of oil thought to exist in the US, so the total in-place reserves are much, much larger. It does not take a lot of imagination to predict that many of these oil resources will eventually be unlocked with new technological innovation thus added to the total “proven reserves.” _Counterpunch
Read the entire piece, for a better understanding of the author's claims that planet Earth has at least several decades of oil remaining.

Everything in the piece above has been published here at Al Fin Energy at one time or another. But the Counterpunch article is a good refresher piece, counter-acting much of the daily drone of doom coming from peak oil cathedrals and seminaries.

What attracts otherwise normal people to these religions of doom and catastrophe? You may as well ask what attracts otherwise normal people to smoking, excess drinking, or overeating. Humans are just barely advanced apes. Capable of language and rudimentary reasoning but generally not capable of overcoming innate weaknesses and counterproductive instincts.

Doomers will feed relentlessly on doom, at the cost of problems that might have been solved, and essentials that might have been produced. The rest of us have work to do.


Thursday, March 29, 2012

Can Hydrogen Energy Storage Save Germany from Itself?

Germany will serve as a test case to show whether industrialized countries can compete while relying on renewables _TechnologyReview
Germany -- the economic powerhouse of Europe -- has settled upon a risky energy strategy, staking its industrial future on the intermittent and unreliable forms of energy, big wind and big solar. Germany is turning away from nuclear power, and aims to use renewables to generate 33% of its electric power by 2020, and 50% of its electric power by 2050.

Unfortunately for the future of German industry, the intermittency of big wind and big solar will make it almost impossible for German utilities to provide clean, affordable, and reliable power to industry and other consumers, at the high levels of penetration by intermittent renewables that Germany is trying to achieve. Clearly, some form of utility-scale storage would be needed to make such a scheme "work." That is why German planners are considering the "hydrogen option."

The hydrogen option involves using intermittent renewables to convert water into H2 and O2 using electrolysis, then converting the H2 back to electricity when needed, using fuel cells. Unfortunately, the round trip conversion efficiency of the "hydrogen option" is only about 20 or 25% -- in other words, Germans will lose 75% to 80% of the total energy generated by the intermittent renewables. Which is precious little to begin with.

With that information in mind, here is more about the German plan from Technology Review:
If Germany is to meet its ambitious goals of getting a third of its electricity from renewable energy by 2020 and 80 percent by 2050, it must find a way to store huge quantities of electricity in order to make up for the intermittency of renewable energy.

Siemens says it has just the technology: electrolyzer plants, each the size of a large warehouse, that split water to make hydrogen gas. The hydrogen could be used when the wind isn't blowing to generate electricity in gas-fired power plants, or it could be used to fuel cars.

Producing hydrogen is an inefficient way to store energy—about two-thirds of the power is lost in the processes of making the hydrogen and using the hydrogen to generate electricity. But Siemens says it's the only storage option that can achieve the scale that's going to be needed in Germany.

Unlike conventional industrial electrolyzers, which need a fairly steady supply of power to efficiently split water, Siemens's new design is flexible enough to run on intermittent power from wind turbines. It's based on proton-exchange membrane technology similar to that used in fuel cells for cars, which can operate at widely different power levels. The electrolyzers can also temporarily operate at two to three times their rated power levels, which could be useful for accommodating surges in power on windy days.

Germany, which has led the world in installing solar capacity, isn't just concerned about climate change. Its leaders think that in the long term, renewable energy will be cheaper than fossil fuels, so it could give the country an economic advantage, says Miranda Schreurs, director of the Environmental Policy Research Center at the Freie Universität Berlin. Germany will serve as a test case to show whether industrialized countries can compete while relying on renewables. _MITTechnologyReview
It is fascinating that German leaders would be willing to make Germany a "test case" to determine whether industrial countries can compete when dependent upon intermittent renewables on a large scale. It seems that the gas chamber would be faster and more merciful. My first choice would be to allow Germans to choose from the full range of energy options, given full disclosure. But clearly, that is the last thing which leftist green politicians would like to see happen.

It is not too late for Germans to think this problem through, all the way down to the lowest turtle in the stack. To do this, they would have to ask: "Why are we going through all of these painful and expensive contortions? What is the chain of reasoning involved? And how far are we willing to go, to remain subservient to the conclusions reached through this chain of reasoning?"

German politicians rejected nuclear power on the basis of post-Fukushima fears -- even though Germany is not in an earthquake / tsunami zone, and no one died or got sick from radiation exposure post-Fukushima. Germans reject a large-scale coal and natural gas energy future due to fears of anthropogenic global warming catastrophe and carbon hysteria. Even biomass is suspect in that regard, for Germans. And as we have learned, deep geothermal drilling in crystalline rock can cause small earthquakes.

But don't Germans know that wind turbines kill birds and bats, present a deadly danger to livestock, and make nearby humans agitated and nauseated? And solar power wastes huge sections of land in an inefficient production of low voltage DC current better suited for ringing doorbells or charging cellphones than powering German industry?

There nay be something poetic about a wealthy and powerful nation such as Germany, committing energy suicide purportedly for the sake of its ideals. Is a nation that just 75 years ago wanted to rule the entire world, now risking everything to prove a point?

The people are afraid. Leaders are controlling the people, using those fears. But the leaders themselves are being controlled out of their desire to continue to rule. And who controls the leaders? Now, that is an interesting question.

Comparison of other energy storage options


Wednesday, March 28, 2012

Obama: I'll Do It "The Chicago Way!" A Tale of Two Pipelines

Enbridge has just announced the expansion of its pipeline access to the Gulf of Mexico, to provide an alternative pathway for Canadian oilsands in the wake of the recent Obama rejection of the Keystone XL pipeline northern leg.
Enbridge Oil Sands Alternative via Chicago

When Obama took executive action to prevent the upper leg of the Keystone XL pipeline, environmentalists celebrated as if they had won a victory. But there may be more involved in the story than what was printed in the newspapers or broadcast on the airways and cable channels. Whenever an economic decision is made by a government, sceptical people always ask: "Who benefits?"

Brian Westenhaus takes a look at the recent Enbridge announcement that it is expanding its pipeline network to provide an alternative pathway to the Gulf of Mexico for Canadian oilsands.

Oil flowing through Illinois is subject to local fees and taxes, which enrich the many corrupt FOOs (friends of Obama) who have taken up positions of power there. But one must also wonder what goes on behind the scenes before such a decision is even made.
Keystone XL Bypasses Chicago
As you can see if you follow the dotted green line representing the Keystone XL pipeline, the pipeline which Obama is stonewalling does not come anywhere close to Illinois or Chicago. In that sense, the pipeline is no good to Obama or all the crazy FOOs in that corrupt state. Unlike the alternative pipeline plan recently announced by Enbridge.

More from GCC

Politics can be a byzantine affair, twisted and labyrinthine in its ways of distributing power and money to those who please the king.

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Polymers from Biomass: Freeing Up Crude Oil for Other Uses

Crude oil is used for many things besides transportation and heating fuels. One of the many important uses of crude oil is as a feedstock for production of polymers -- plastics and fabrics, ropes, and membranes etc. Substituting renewable feedstocks for crude oil would free up more crude oil for other markets, and shift the economics of supply and demand in global oil markets significantly.

A company called OPX Biotechnologies Inc., is using a synthetic biology platform to commercialise the production of bio-acrylic. The acrylic market is worth $10 billion a year.
OPX Biotechnologies Inc. (OPXBIO) today announced another milestone that is a major step toward commercializing its more-economical and renewable alternative to petroleum-based acrylic acid. The company successfully demonstrated its fermentation process for bio-based acrylic acid (or BioAcrylic) at the 3,000-liter scale. _SacBee
OPXBIO is working with The Dow Chemical Company to bring BioAcrylic into the $10-billion market for acrylic used in products such as diapers, detergents, paints and adhesives.
Scale-up milestones are big proof points in this industry. We have increased the size of our BioAcrylic fermentations by more than 300 times with good results. This gives us even more confidence we're on the right track.

—Charles R. (Chas) Eggert, president and CEO of OPXBIO
OPXBIO worked with the Michigan Biotechnology Institute (MBI) to successfully scale up its BioAcrylic fermentation process to 3,000 liters. MBI is a not-for-profit company with 30 years of experience in derisking and scale-up of bio-based technologies. _GCC
All of the chemicals and polymers markets where bio-renewables could substitute for petroleum are worth at least hundreds of billions of dollars a year. Transportation fuels markets are worth $trillions per year, but the more lucrative high value chemicals and polymers markets are far more attractive to would-be biofuels manufacturers.

That is why smart companies such as OPXBIO will focus on the high profit, lower volume products initially. Once profitability and cash flow is initiated, these companies can work toward a more competitive stance versus petroleum based fuels.

Even in the fuels market, these companies are more likely initially to produce high value fuel additives, and fuel additives which help oil companies to meet political mandates and regulations, rather than competing head to head with petro-diesel or petro-gasoline.

Eventually, bio-derived fuels will provide more and more of the total product for transportation fuels markets, but that transformation is likely to take several decades to occur.


Tuesday, March 27, 2012

Next Big Thing in Energy? Think Scalable GTL

When most people think of earth-shaking breakthroughs in energy, they tend to think of nuclear fusion, advanced nuclear fission, LENRs, or even advanced solar power. But the more likely source of important near term energy advances will likely tie in to cheap and abundant resources of natural gas and/or coal. And since the most pressing energy need besides electricity is for liquid transportation fuels, the important advance will involve the liquefaction of gas and/or coal.

It is clear that the cost of oil has ballooned so far beyond the cost of gas (and coal) per mmbtu, that GTL and CTL conversions have become very attractive economically. The big problem with GTL and CTL up to this point, has been the huge up-front costs of capitalisation for production facilities. The Shell Pearl GTL plant in Qatar, for example, required almost $20 billion in development costs alone. Granted, the Pearl plant will generate profits of roughly $6 billion per year. But few companies can afford the up front capital costs to build such a plant.

That is why the idea of a scalable GTL plant (and CTL, BTL, etc) has become so intriguing. The Velocys F-T GTL approach is not likely to be as efficient or economical as the huge Shell Pearl GTL plant, but it is far more affordable and practical for placing onboard an offshore rig, or for installing at stranded wells far from gas pipelines.
Unless green energy starvationists inside the governments of the EU and the US can completely shut down shale gas production, natural gas production is likely to stay high, and natural gas prices are likely to stay relatively low compared to crude oil, for a matter of decades.
Inside Futures

Coal prices have been driven downward at least partially due to the low costs of natural gas. This makes scalable CTL more attractive as well, although it seems clear that GTL is much more easily scaled downward than CTL will be. Biomass to liquids (BTL) is another up and coming liquefaction technology for synthetic fuels production, but it is likely to thrive only in areas which lack cheap natural gas, at least for the next two decades. Political mandates, regulations, taxes, and prohibitions can change that equation, of course.
Carpe Diem

Inside Futures

Besides Velocys, other opportunistic entrants into the scalable GTL field include Carbon Sciences, Compact GTL, GTL Solutions, Gas Techno, and more.

Basic information on large scale GTL

Within the next 10 to 15 years, large scale CTL and GTL producers will be able to take advantage of cheap nuclear process heat from high temperature gas cooled nuclear reactors -- which will shift up efficiencies and profits considerably. Once new processes are developed to take advantage of that rich, abundant new resource, most of the things you think you know about the future of liquid fuels will change.

More on how utilities choose between natural gas and coal for electric power generation here and here. Until more national governments begin promoting safe, efficient, reliable new nuclear technologies, even the most advanced societies will remain dependent upon coal and natural gas for electric power generation.

But once new nuclear technologies come on board, vast new supplies of power -- both baseload and load-following -- and industrial process heat will become available. This will shift a significant amount of coal and natural gas away from power generation, and toward liquid fuels production.

It is all up to governments, and how hard they wish to make things for their industries and their populations. Current leaders of the EU and the US apparently want to make things very hard indeed. Shame on them, and shame on the voters and supporters who allow them to stay in power.

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Monday, March 26, 2012

Higher Yield Production from Sophisticated Synthetic Biology Techniques

“It should one day be possible to dynamically regulate any metabolic pathway, regardless of whether a natural sensor is available or not, to make microbial production of commodity chemicals and fuels competitive on a commercial scale.” _LBL
Researchers at the Joint Bioenergy Institute at DOE Lawrence Berkeley Labs have discovered a sophisticated synthetic biology technique which opens the door to much higher yield microbial production of fuels, chemicals, drugs, polymers, and much more.
Significant boosts in the microbial production of clean, green and renewable biodiesel fuel has been achieved with the development of a new technique in synthetic biology by researchers with the U.S. Department of Energy (DOE)’s Joint BioEnergy Institute (JBEI). This new technique – dubbed a dynamic sensor-regulator system (DSRS) – can detect metabolic changes in microbes during the production of fatty acid-based fuels or chemicals and control the expression of genes affecting that production. The result in one demonstration was a threefold increase in the microbial production of biodiesel from glucose.

...Hampering microbial production of fatty acid-based chemicals has been metabolic imbalances during product synthesis.

“Expression of pathway genes at too low a level creates bottlenecks in biosynthetic pathways, whereas expression at too high a level diverts cellular resources to the production of unnecessary enzymes or intermediate metabolites that might otherwise be devoted to the desired chemical,” Zhang says. “Furthermore, the accumulation of these enzymes and intermediate metabolites can have a toxic effect on the microbes, reducing yield and productivity.”

Using the tools of synthetic biology, there have been several strategies developed to meet this challenge but these previous strategies only provide static control of gene expression levels.

“When a gene expression control system is tuned for a particular condition in the bioreactor and the conditions change, the control system will not be able to respond and product synthesis will suffer as a result,” Zhang says.

The DSRS responds to the metabolic status of the microbe in the bioreactor during synthesis by sensing key intermediate metabolites in an engineered pathway. The DSRS then regulates the genes that control the production and consumption of these intermediates to allow their delivery at levels and rates that optimize the pathway for maximum productivity as conditions change in the bioreactor.

“Nature has evolved sensors that can be used to sense the biosynthetic intermediate, but naturally-occurring regulators will rarely suffice to regulate an engineered pathway because these regulators were evolved to support host survival, rather than making chemicals in large quantity,” Zhang says.

To create their DSRS, Zhang, Keasling and Carothers focused on a strain of Escherichia coli (E. coli) bacteria engineered at JBEI to produce diesel fuel directly from glucose. E. coli is a well-studied microorganism whose natural ability to synthesize fatty acids and exceptional amenability to genetic manipulation make it an ideal target for biofuels research. In this latest work, the JBEI researchers first developed biosensors for a key intermediate metabolite – fatty acyl-CoA – in the diesel biosynthetic pathway. They then developed a set of promoters (segments of DNA) that boost the expression of specific genes in response to cellular acyl-CoA levels. These synthetic promoters only become fully activated when both fatty acids and the inducer reagent known as “IPTG” are present.

“For a tightly regulated metabolic pathway to maximize product yields, it is essential that leaky gene expressions from promoters be eliminated,” Zhang says. “Since our hybrid promoters are repressed until induced by IPTG, and the induction levels can be tuned automatically by the FA/acyl-CoA level, they can be readily used to regulate production of biodiesel and other fatty acid-based chemicals.”

Introducing the DSRS into the biodiesel-producing strain of E.coli improved the stability of this strain and tripled the yield of fuel, reaching 28-percent of the theoretical maximum. With further refinements of the technique, yields should go even higher. The DSRS should also be applicable to the microbial production of other chemical products, both fatty acid-based and beyond.

“Given the large number of natural sensors available, our DSRS strategy can be extended to many other biosynthetic pathways to balance metabolism, increase product titers and yields, and stabilize production hosts,” Zhang says. “It should one day be possible to dynamically regulate any metabolic pathway, regardless of whether a natural sensor is available or not, to make microbial production of commodity chemicals and fuels competitive on a commercial scale.” _LBL

Similar techniques are used to produce valuable pharmaceuticals using microbes. The earliest commercial uses of the techniques discovered at LBL / JBEI will likely produce high value chemicals rather than commodity fuels. Bioreactors are expensive, as are the buildings in which they are housed, as well as the personnel who must maintain, monitor, and operate them. High value products will pay for such facilities long before commodity fuels can do.

But at some point, the economics of fuels markets will shift far enough so that microbial fuels can compete with petroleum based fuels and synthetic fuels from other hydrocarbons.

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Oil Price Bubble Battles Demand Decline and Destruction

The ongoing bubble in global oil prices is fighting for its life against declining demand across the developed world -- and the threat of a near to intermediate-term collapse in demand from emerging nations such as India and China.
Fundweb: Decline in Demand Occurring First in Developed World
...a volatile mix of factors is in play. There is an appetite for risk, he says, but based around demand for a futures position, the buying of paper contracts, not the physical demand for petroleum. Real economic demand for oil, by contrast, is in retreat, and a thin support for current prices.

...More generally, the International Energy Agency (IEA) has forecast shrinking demand for oil from developed nations for 2012, and modest growth in the developing world of 2.8%.

“We are seeing a bit of a bubble, understandably connected to the take on Iran and the embargo,” says Evans.

...The popularity of the Peak Oil theory...has helped to bake-in continually bullish expectations about higher prices. In other words, it has helped create an ongoing foundation for speculation.

Government intervention in the form of monetary policy also seems to have played its role in higher prices. As part of a strategy of “reflation” of asset prices after the 1990s equity collapse and economic downturn, Alan Greenspan, the then Federal Reserve chairman, lowered interest rates to record lows, leading in turn to a new phase of dollar value depreciation from 2002 to the present.

As new capital sought to hedge against a depreciating dollar and inflation, a paradox was created, some argue. As commodity prices rose, capital inflows created the inflation it sought to avoid as a certain amount of passive “buy and hold” money entered the market and rolled over contracts on a regular basis.

...Greater credit there has driven growth, in turn driving up demand for raw materials and commodity prices.

“However, there is a fairly convincing argument that the aggressive loosening of monetary policy everywhere has seen authorities shooting themselves in the foot,” says Neumann.

Consumers in the countries where quantitative easing (QE) has been introduced face higher petrol prices and inflation, for example. More generally, it is not difficult to see why rising oil and therefore petrol, fuel and heating costs, and inflation in general, are causing concern.

With stagnant or declining real wages, and high unemployment in many parts of the developed world, living standards are already coming under pressure. Inflation adds to the cost of living and, of course, has a more serious impact on the poorest of the world in the developing nations.

At the same time, higher oil prices mean higher production costs for a whole range of industries – agriculture, transport, manufacturing, and so on – which, to one debatable degree or another, may be passed on to consumers via higher prices.

Not surprisingly in this context, analysts and economists are trying to quantify the impact of certain oil price levels on economic growth more generally.

...Each type of crude oil – ranging from the heavy varieties in the Middle East, which can be easily extracted, to the lighter North American types – needs to sell for a certain price for profits to be made. The costs of producing a barrel of Canadian Tar Sands oil before profit are thought to be about $40-50.

In this context a higher sale price for oil is likely to have encouraged rising production in America, where production costs are high.

If bullish forecasts are to be believed, America is on the verge of energy self-sufficiency within a decade, given the huge shale oil deposits it has, and the possibility of using the same technology developed for shale gas – hydraulic fracturing, or fracking.

An estimate is that such oil deposits contain two trillion barrels of oil. For comparison, America consumes roughly 19m barrels of oil a day.

...One of the paradoxes about the oil and broader energy market is that, in economic, operational and technological terms, the market has been relatively successful at the basic in supplying half of the world with the energy it has been demanding to raise living standards. The future does not seem too terrible, either, for technological breakthroughs and further development.

According to the US Energy Information Administration, there is enough oil worldwide to meet demand for the next 25 years.

... instability in the [oil] market is...being introduced from the financial and geopolitical sides.

Discussions about reform in the financial area are underway. The US Commodity Futures Trading Commission is considering ways to stop excess liquidity and speculation in futures markets from distorting price discovery and affecting the physical market and real economy.

It plans to implement “position limits” in the futures markets, for example. Ex-futures traders are some of the most strident critics of the system. In his book, Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy, Dan Dicker, an energy analyst and ex-oil trader, explores how financial markets have become more divorced from the practical and productive activities in the physical oil industry.

The problem might be broader still. A further analysis might look at what is happening with broader money creation, the excess liquidity and price instability problems stemming from the central bank objectives of “reflation”, and their impact on the oil market. _Fundweb
Read the entire article linked above for much more detail, provided in a relatively even-handed and broad overview.

The article fails to consider what will happen should propped-up and subsidised demand from emerging nations such as China and India should decline -- either gradually as in the developed world, or abruptly in the form of demand collapse.

Global demand for energy is increasing at the same time that demand for crude oil -- at its currently inflated prices -- seems to be declining. Europe, Russia, and parts of East Asia are experiencing demographic implosion, which can only lead to a future drop in demand for oil. The only parts of the world still exploding in population are the parts of the world that can least afford to buy expensive commodities -- but are instead more likely to sell their birthright commodities in order to supply corrupt leaders and their families with European townhouses and extended vacations.

Global energy markets involve far more than crude oil. Rapidly improving technologies of fuel and energy substitution are likely to further diminish the importance of crude oil as a controlling influence of national and international economies by the 2020s.

If you don't mind losing your shirt again and again, the peak oil religion may be appropriate for you. Otherwise, a bit of nuance may be called for.


How Long Before Half of Global Energy Comes from Non-Fossil Fuels?

Daniel Yergin thinks it will take about 40 years to half-wean the world off fossil fuels. Vinod Khosla thinks it will take only 25 years for a global half-wean. Khosla is very optimistic about the future of biomass to liquids (BTL).

Up until the past year or two -- with the explosion of shale gas discoveries world-wide -- Al Fin energy consultants would have been closer to Mr. Khosla's estimate. But as the technologies of CTL and GTL begin to utilise nuclear process heat as an energy source, it grows more likely that synthetic fuels from natural gas, coal, and a combination of gas & coal will give fossil fuels liquids a big multi-decadal boost, beginning in the 2020s.

MS. STRASSEL: How many years do you think it will be before half of our global energy production comes from non-fossil fuels?

MR. YERGIN: World energy probably is going to grow by 25% or as much as 35% over the next 20 years. I think the shift in the composition won't be too significant until after 2030, so maybe by 2050.

MR. KHOSLA: I guess 25 years. I'm definitely more optimistic.

...MS. STRASSEL: Vinod, in the past, you've talked about black-swan technologies—the idea of some innovative idea coming out and turning everything on its head.

MR. KHOSLA: Shale gas was a black swan. And my point is black-swan technologies will show up again. Shale gas was some combination of fracking, which we already knew how to do, and horizontal drilling that changed the assumptions around natural gas from "we need to import $100 billion worth" to "we can export it." The same thing will happen if an oil equivalent can be produced in country at $60 to $70 a barrel.

As soon as liquid-fuel technologies from things like wood chips, which are scalable, start to reach that level, our assumptions will change. _WSJ

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Sunday, March 25, 2012

Massive Global Coal Resource in Demand

Thanks to growing demand for energy in India and China, global demand for coal is increasing. For example:
China's coal consumption, including its growing imports totaled about 3.75 billion tons in 2011. At that rate and for China's estimated 1.33 billion population, this is a consumption rate of 2.8 tons per person a year... _Source
Worldwide, several projects for large scale conversion of coal to gasoline and other liquid fuels are in the works, including two in the US -- in Wyoming and West Virginia. Both of the proposed US plants are under attack from faux environmentalist green groups such as the Sierra club, but the Wyoming plant appears to be making progress against the lefty-Luddite assault:
“We think Wyoming is a pacesetter here,” said Kelly, executive chairman of DKRW Advanced Fuels, which wants to build the $1.7 billion to $2 billion plant to convert coal into gasoline and carbon dioxide for sale, among other products. “This would be the first project like this in the U.S. and really, the West.”

...The company won a critical victory in March 2011 when the Wyoming Supreme Court upheld a state-issued air quality permit for the project and its adjacent mine, despite a Sierra Club challenge. But the plant and similar projects continue to face opposition from the club and other environmental advocacy groups.

...Medicine Bow Fuel and Power, the company’s project subsidiary, has obtained the right to use technology key to the plant’s conversion process. It also has a buyer for both gasoline and carbon dioxide to pump into old fields to boost production.
The DKRW plant will use a General Electric coal gasification technology, which produces a synthetic gas, also known as syngas, and strips it of nearly all sulfur and carbon dioxide. Using a licensed ExxonMobil technology, the syngas is converted into methanol, which is converted into gasoline.

DKRW has also retained CitiBank as adviser in its search for private financing. DKRW has sunk $100 million into the project’s development so far, according to Kelly.
“All that’s a big task, and it takes a long time,” Kelly said. “Those are gigantic things to do and they’re expensive things to do.” _BillingsGazette
The project still faces significant financial obstacles -- primarily due to delays caused by faux environmentalist lawsuits and other ideologically-based red tape.

Another obstacle to standard CTL plant projects in North America is the very cheap price of natural gas there. Some projects are switching from CTL to GTL (gas to liquids) to take advantage of cheap gas prices, and the possibility of a quicker route to production.

A better approach to coal liquefaction (CTL) might be a combined coal and natural gas approach, where natural gas is used as a hydrogen source. At today's natural gas and coal -- compared to oil prices in North America and elsewhere -- such an approach makes sense.

The best approach of all for synthetic liquid fuels production would be the use of nuclear process heat for CTL, GTL, and combined gas and coal liquefaction. The only meaningful resource limits, after all, are those in the human mind.

If we allow the lefty-Luddite dieoff.orgy green mentality of energy starvation to take over modern societies, we will have little to look forward to but increased global poverty, violence, and societal decay.

One way or another, humans will make use of the massive coal resource. It would be best if coal were cleanly converted to liquid fuels or electricity. But if faux environmentalist greens prevent the clean use of coal, coal will be used in dirty ways, using increasingly more primitive and polluting technologies prevalent in the growing third world.

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More on the Russian SVBR 100 Fast Modular Reactor

Here is an update on the Russian fast reactor from AKME Engineering, the SVBR 100:
The SVBR-100 could be the first reactor cooled by heavy metal to generate electricity. It is described as a multi-function reactor for power, heat or desalination and a power station with 16 such modules would be expected to supply electricity at lower cost than any other new Russian technology, said AKME, while achieving inherent safety and high proliferation resistance. _WNN
The unit is described as an integral design because the steam generators and reactor core both sit in the same pool of coolant - lead-bismuth at temperatures in the range 340-490 deg C. It would be factory assembled and shipped to site in a module measuring 4.5 metres in diameter and 7.5 metres high ready to be placed within a tank of water that provides passive cooling and radiation shielding.

The SVBR concept has already run on seven Alfa-class submarines, as well as within experimental land-based installations, giving a total of about 80 reactor-years of operating experience. In 2009 AKME-Engineering was set up as a 50/50 joint venture between Russian state nuclear company Rosatom and Irkutskenergo of En+ Group, aimed at commercializing the technology.
The plan is to complete the design development and put on line a 100 MWe demonstration plant by the end of 2017, with total investment of RUR16 billion ($585 million). The site is to be the Research Institute of Atomic Reactors at Dimitrovgrad - Russia's largest nuclear research centre. _WNN
The Russian design is more advanced than most of the SMR designs initially being considered by the US NRC. It may be well over a decade before the US NRC considers more advanced reactor designs for licensing.

Meanwhile, Russia is building a successful overseas nuclear reactor market, thanks to growing demand from Asia. If the Russians can offer a safe and economical advanced SMR such as the SVBR 100 to overseas customers, it should prove extremely profitable.

h/t Next Big Future

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Friday, March 23, 2012

Obama's EPA Busy Shutting Down Energy Industry

Over just the past six months, three refineries supplying about half the gasoline, diesel and jet fuel to the East Coast have closed, including two owned by Sunoco Inc. They say they simply cannot make money anymore.

Philadelphia-based Sunoco's refinery business in the Northeast has lost almost $1 billion over the past three years as U.S. demand for gas fell and the cost of foreign crude soared.

But over the same period, it had to shell out "significant expenditures for environmental projects and compliance activities" to satisfy onerous EPA mandates, according to the company's latest 10-K report.

In fact, it's spent more than $1.3 billion just to comply with stricter EPA rules, which carry stiff fines or penalties for violations. Sunoco fretted that these regulatory costs would grow exponentially under the Obama administration, which has hit some of its refineries with fines.

"During 2009, the EPA indicated that it intends to regulate carbon dioxide emissions, (which) could result in increases in costs to operate and maintain the company's facilities, as well as capital outlays for new emission control equipment at these facilities," the company warned investors in its 2011 report filed with the SEC.

"Compliance with current and future environmental laws and regulations likely will require us to make significant expenditures, increasing the overall cost of operating our businesses, including capital costs to construct, maintain and upgrade equipment and facilities," Sunoco added.

"To the extent these expenditures are not ultimately reflected in the prices of our products or services, our operating results would be adversely affected."

In the end, the company could not weather market crosscurrents long enough to recover the government-induced costs. It bled so much money that it decided to exit the refining business entirely.

A Sunoco spokesman confirmed in an interview with IBD that "the cost of complying with environmental requirements" was one of the factors that led it to decide to exit refining. _Investors
Candidate Obama promised to cause energy prices to skyrocket, and expressed a desire to see US gasoline prices rise much higher. That is one promise that he is keeping.

In many ways Obama's EPA -- and his entire administration -- is a huge governmental wrecking ball set loose in the US economy on a path of destruction. The US constitutional system of checks and balances on governmental abuses is being strained to its limit. It is a tribute to the caliber of persons who wrote the original US constitution that the republic is able to continue under a government grown so oppressively large and corrupt.

A look at some of the early congressional pushback against US EPA abuse of power and ideological caprice. Expect to see an increasing amount of scrutiny and opposition to malicious EPA counterproductiveness over the next several months.

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Global Oil Trade in Turmoil: Data Easily Manipulated

The graphic below displays China's rapid buildup in oil reserves, which may be at least partially responsible for much of the distortion of global market signals.
Sage observers of the global oil trade often assume that the markets are solidly built on issues of supply and demand. But what do markets do when the data grow confused, and supply and demand are not so easy to sort out?
Baseline numbers for demand, supply and inventories are being read quite differently and in some cases are pointing in opposite directions. Vast areas of the world market provide no data at all or incomplete figures, making any sensible forecasts exceptionally difficult.

...The world's leading forecasters see output from the Organization of the Petroleum Exporting Countries at a four-year high of 31 million barrels per day (bpd). Demand for the group's oil is running at around 30 million bpd.

Simple maths show supply well in excess of demand, but there are widely diverging views on how much of that oil is actually building up in storage tanks.

"On paper at least, current conventional global supply and demand balances appear to show a market awash with crude oil," said Lawrence Eagles of JP Morgan, but says the market doesn't reflect that: "High prices and backwardated structures in crude and product markets reflect the underlying tightness in global crude inventories."

Eagles and other leading analysts say one of the keys to understanding the oil market is the level of stockpiles. But it is nearly impossible to get an accurate fix on the amount of oil that is being stored in large parts of the world, particularly in energy-hungry China and India.

Others see fast rising stocks of up to more than 1 million bpd during the first half of the year and, other than the Iran supply risk, cannot understand why prices do not come down.

"With this surplus in production from the OPEC countries, inventories will continue to build," said Oswald Clint of Bernstein Research.

...The two top global oil forecasters - the U.S. government's Energy Information Agency (EIA) and the Paris-based International Energy Agency (IEA) - can't even produce a consensus on what global demand will be this year.

Their estimates are almost 1 million bpd apart with the EIA at 89.62 million bpd and the IEA at 90.47 million bpd.

Output capacity is equally controversial. _Reuters
Supply and demand data are clearly being manipulated to the benefit of particularly powerful and influential traders, whose fingers reach even into government ministries and into national and international energy agencies.

When markets reach such a state, there is very little of certainty to be said except that a select group of individuals and organisations is likely to profit very handsomely, at the expense of a huge number of rubes.


Thursday, March 22, 2012

Virgin Australia Eyes Eucalyptus Pyrolysis for Renewable Jet Fuel

Advanced catalytic pyrolysis has always been a favourite method of biofuels production among Al Fin energy analysts and consultants. The trick is in finding the right form of cheap and prolific biomass, and combining it with the best catalytic processes and sources of hydrogen. Virgin Australia thinks that Eucalyptus mallee trees are a promising form of biomass, and the company is working with partners to develop viable advanced methods of catalytic fast pyrolysis.
Eucalyptus mallee trees, grown in Western Australia’s wheat belt, are sustainably harvested and converted to a feedstock. Mallee is indigenous to Australia and is well adapted to the environment. It is a suitable sustainable crop because it helps return salt-affected land to a productive state.

Mallee can be planted on farms alongside crops, and provide a range of environmental benefits and contribute to the long term sustainability of the overall farming operation. Growing these trees to make alternative fuels encourages large scale planting, which is expected to bring a range of environmental and social benefits to farmers and rural communities.

The pyrolysis thermal conversion process has yet to be recognized by the world’s fuels standards authorities. Airbus’ role includes supporting the approval and certification process so that Pyrolysis based fuels can be used for the first time in commercial aviation.

The project objective is to have a pilot alternative fuel production plant operating in Australia in the next year. The sustainability analysis is managed by the CRC, Airbus and the UK’s Manchester Metropolitan University.
In order to produce a biofuel that can be used sustainably in our current aircraft, it is important to have members from every part of the supply chain involved. Airbus will bring vast expertise in aircraft manufacturing to the consortium and we are very pleased to have a company of its caliber joining this promising Australian project.

—Virgin Australia Group Executive of Operations Sean Donohue
It is likely that other forms of biomass are more prolific than eucalyptus. But the pyrolysis product of a particular biomass is just as important as the volume, as a feedstock for intensive processing into a final fuel or chemical product.

It is likely to be a decade or more before air carriers will be able to rely upon renewable jet fuels. But developing reliable substitute fuels before they are needed, is the sign of wise leadership.

Once the fascist orthodoxy of carbon hysteria is dethroned and dismantled from Australia's political power structure, Australians are more likely to look to intriguing methods of combining coal and coal seam gas for coal liquefaction. Such an approach to substitute fuels is likely to become economical on a large scale before advanced biofuels, all political constraints aside.

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An Extra 600 Billion Barrels of Recoverable Oil from Just One Technology?

The quickest and cheapest way to find "new" oil is to look in old oilfields. As better technologies for recovery of oil from existing fields mature, new billions and hundreds of billions of barrels of oil suddenly become recoverable.
The potential prize of improving ultimate oil recovery with pulsed injection is considerable. A 1% increase in recovery equals 2 billion barrels of additional reserves globally; a 5% increase in recovery-a conservative increase thought to be achievable-would produce an extra 300 to 600 billion barrels. Ultimately, the use of pulsed injection can result in enhanced oil recovery from a field of between 5 and 10 percent depending on reservoir conditions.

...Since their first application in 1998, Wavefront's pulsed injection processes-which create a pulsating injection stream with typically 20 to 40 pulses per minute, at speeds of up to 100 meters per second-are administered via tools that it leases to oil companies for use on their wells. The company reports that it has consistently delivered successful results for optimized oil well stimulation and secondary oil recovery. In some cases, its technology has reportedly increased the production of individual wells by greater than 300%. To date, its pulsed injection system for oil recovery-which the company markets under the name Powerwave-has been used in more than two dozen fields in Canada and the U.S. The company has also recently implemented its process in major oil production operations around the world, including Argentina and the Middle East.

In a recent quarter, Wavefront secured four key contracts for Powerwave totaling 24 tools: A six-tool contract with the largest oil production company in the Sultanate of Oman; contracts with Pluspetrol in Argentina and Clayton Williams in Texas; and an 11-tool, three-field contract with a major Calgary-based oil producer. _AOLEnergy
This is just one aspect of "spare capacity" and "new replacement reserves" which are not considered by the famous oil depletion graphs which are bandied about by the peak oil punkocracy. There are many other aspects -- some technological, some geological, some geo-political -- which are studiously avoided by peak oil true believers.

That is why those who want to see beyond currently published numbers reflecting the status of oil markets, must avoid any taint of ideological thinking, superstitious thinking, or quasi-religious thinking such as peak oil.


Wednesday, March 21, 2012

A New Regime for Global Oil Market Prices?

Saudi Arabia is ramping up oil production in response to appeals from European governments to moderate oil prices. But it may be that no matter what Saudi Arabia does, oil prices will remain well above the level that ordinary market mechanisms of supply and demand would place them. Here is more on the Saudi move, followed by further excerpts from the FT article which reveal a deeper dimension to how oil prices are set.
Speaking to reporters in the Qatari capital Doha, Mr Naimi [the Saudi oil minister] said he wanted to “dispel this pessimism in the market” and the widespread fear that the world could see a repeat of 2008’s oil price increase which was a harbinger of the global recession.

“I think high prices are unjustified today [on] a supply-demand basis,” he said. “We really don’t understand why the prices are behaving the way they are.”

Supply was “much more firm today than in 2008” when crude rose to $147 a barrel, he said, with global supply now exceeding demand by 1m-2m barrels a day.

Saudi Arabia had 2.5m b/d of additional production capacity, which it could bring online if necessary, he said. The kingdom is likely to be producing about 9.9m b/d of oil in April and exporting roughly 7.5m-8m b/d of that, he said.

Asked if it could ease prices by exporting more oil, he said customers were not asking for additional crude. “We are ready and willing to put more oil on the market, but you need a buyer,” he said.
The statements of the Saudi oil minister are interesting enough, suggesting that the Saudis are still capable of achieving a 25% increase in oil production. Continue reading, to understand why even a 25% boost in Saudi oil production might not knock oil prices off their pedestal:
...the relatively modest move in the oil prices was a sign of some scepticism in the market.

“I don’t think it’s much of change for the market,” said Mike Wittner, head of oil research at Société Générale [investment bank] in New York. “The problem is the more they produce the less spare capacity they have. If they want to try to bring down prices not only do they have to keep on producing at very high levels they need to show the world that they are bringing on extra spare capacity.”
Can you see the hidden assumptions in Mr. Wittner's comment above? Mr. Wittner thinks that he knows the "true" spare capacity of the Saudi's oil production sector. Speaking as an investment banker and oil speculator, Mr. Wittner is as much as saying that the uber-investors will not allow oil prices to come down until insider (and public) assumptions about spare capacity can be beaten down with a big stick of reality.

This is the self-fulfilling peak oil mentality writ large, currently installed at the highest levels of New York investment banking. No matter how much oil OPEC decides to pump, Mr. Wittner and his cohorts think that they can set the global prices of oil based upon their beliefs in OPEC "spare capacity."

A very interesting prelude to financial disaster, once again, for pension funds, university endowments, and the life savings of countless numbers of retirees and near retirees. But a huge windfall for the top investment bankers and uber-investors.
Up until now, Saudi Arabia has kept silent on the price rally, although it is pumping oil at 30-year highs. But a statement issued by the Saudi cabinet on Monday could signal a more active policy. The cabinet said that it had noted the risk high oil prices posed to economic growth and the kingdom would work individually and with others if necessary to “return oil prices [to] fair levels”.

When asked, however, Mr Naimi declined to specify what specific measures Saudi Arabia could take to moderate prices.

The minister, who was in Doha for a meeting of the Gulf Co-operation Council, acknowledged that he had been approached by a number of ministers from European and developing countries complaining about the effect of high oil prices on their economies.

The weak global economy was tempering demand for oil, he said. Europe’s economy was “iffy” and growth was moderating in Asia. “I don’t think an economy that’s sick today is all of a sudden in the third and fourth quarter going to turn around,” he said.
Under an oil-pricing regime where top investors can manipulate spot prices via the futures market -- using leased storage facilities as well as a backward-propagating manipulated shortage of market supplies when futures prices are bid up -- it takes far more oil production to overcome artificially inflated prices caused by the intercession of big money investors.

It is rare for investment banks to admit as much, but if you listen closely you can hear their confessions. But the investment banks, in their quasi-Peak Oil fervour, are deluding themselves about "spare capacity." Spare capacity is not worth anything to oil producers until it is needed. In fact, spare capacity can be a huge economic drain, if it is maintained when not needed, particularly in an oil kingdom with a massively corrupt extended royalty, and a need to placate the unruly masses.

Are high oil prices "bad?" No, if high oil prices would only stay high, the proper investment in substitutes and unconventional fuels would be made, and we would enter a new era of liquid fuels supplies (and a higher use of nuclear power) -- at a stable but higher level of fuel prices than we have been used to. But such a transition requires a huge investment, which will not be made until it is clear that it is necessary. Capital intensive industries such as CTL, GTL, KTL, BitTL, BTL, etc. can be easily wiped out by the type of oil price drop that occurred in 2008 / 2009.

The huge price drop of oil in late 2008 and early 2009 was no accident. It was the natural aftermath of the same investment bank policies which are being used currently to artificially boost prices, but which are unsustainable due to significant changes which are beginning to occur on both the supply and demand sides.

Smart investors and investment bankers can ride these artificially generated waves to high profits. But the majority of investors and investment brokers are not that smart, and will lose huge amounts of money once again.


Tuesday, March 20, 2012

Sandia Labs Fusion Simulation Points to Promising New Approach to Magnetic Inertial Confinement Fusion

Sandia Labs has published results of simulations for a novel approach to fusion which appears promising for high gain fusion energy production, at this early stage.
High-gain nuclear fusion could be achieved in a preheated cylindrical container immersed in strong magnetic fields, according to a series of computer simulations performed at Sandia National Laboratories.

The simulations show the release of output energy that was, remarkably, many times greater than the energy fed into the container's liner. The method appears to be 50 times more efficient than using X-rays—a previous favorite at Sandia—to drive implosions of targeted materials to create fusion conditions.

"People didn't think there was a high-gain option for magnetized inertial fusion (MIF) but these numerical simulations show there is," said Sandia researcher Steve Slutz, the paper's lead author. "Now we have to see if nature will let us do it. In principle, we don't know why we can't."

...In the simulations, the output demonstrated was 100 times that of a 60 MA input current. The output rose steeply as the current increased: 1,000 times input was achieved from an incoming pulse of 70 MA.

Since Sandia's Z machine can bring a maximum of only 26 MA to bear upon a target, the researchers would be happy with a proof-of-principle result called scientific break-even, in which the amount of energy leaving the target equals the amount of energy put into the deuterium-tritium fuel.

This has never been achieved in the laboratory and would be a valuable addition to fusion science, said Slutz.

...The MIF technique heats the fusion fuel (deuterium-tritium) by compression as in normal inertial fusion, but uses a magnetic field to suppress heat loss during implosion. The magnetic field acts like a kind of shower curtain to prevent charged particles like electrons and alpha particles from leaving the party early and draining energy from the reaction.

The simulated process relies upon a single, relatively low-powered laser to preheat a deuterium-tritium gas mixture that sits within a small liner.

At the top and bottom of the liner are two slightly larger coils that, when electrically powered, create a joined vertical magnetic field that penetrates into the liner, reducing energy loss from charged particles attempting to escape through the liner's walls.

An extremely strong magnetic field is created on the surface of the liner by a separate, very powerful electrical current, generated by a pulsed power accelerator such as Z. The force of this huge magnetic field pushes the liner inward to a fraction of its original diameter. It also compresses the magnetic field emanating from the coils. The combination is powerful enough to force atoms of gaseous fuel into intimate contact with each other, fusing them.

Heat released from that reaction raised the gaseous fuel’s temperature high enough to ignite a layer of frozen and therefore denser deuterium-tritium fuel coating the inside of the liner. The heat transfer is similar to the way kindling heats a log: when the log ignites, the real heat—here high-yield fusion from ignited frozen fuel—commences. _R&D
This approach to fusion is not likely to provide useful commercial power for many decades yet, if ever. But it opens a window onto the new world of high energy physics, which begins with computer simulations, and progresses step by experimental step toward proof or falsification of the underlying ideas.

This is quite different from the politicised world of climate science, where poorly vetted computer simulations are used to steer public policy on a national and international scale. In the world of climate science, contrary opinions are suppressed, and any research which does not toe the orthodox line is either not funded or not published.

Fortunately, most areas of science have not descended so far into politicised corruption as climate science. We should hope that it never does.


Unlimited Supplies of Renewable Jet Fuel On the Way

The global shale oil & gas bonanza has pushed back "peak oil" and the need for large scale biofuels production. But the technology which will allow large scale future production of renewable fuels, chemicals, polymers, and other materials, is pushing ahead anyway, financed by governments and a few venture capitalists.

There is no practical limit to the amount of biomass that the Earth's bio-system can produce, other than limits to sunlight and atmospheric CO2. The planet can produce massive amounts of biomass on marginal soils, on saline soils, in deserts, and on oceans, without the need to displace food production from prime cropland.

Scientists are developing better ways of converting non-food biomass to valuable chemicals and fuels, which will increasingly reduce demand for petroleum feedstocks in those areas, as processes become more economical, and economies of scale begin to kick in when needed. Here is one approach being promoted by the US Navy:
Cobalt converts non-food feedstock such as woody biomass into renewable butanol for both chemicals and fuels, including jet fuel. The combined science team from Cobalt and the NAWCWD focused on scaling and optimizing the dehydration chemistry for the conversion of bio n-butanol to 1-butene, followed by oligomerization of the bio-butene into jet fuel, based on the process developed at NAWCWD in China Lake, CA. (Earlier post.)

Alcohol to Jet
Alcohol is attractive as a feedstock for the production of renewable jet fuel partly because all the steps required are currently in use at commercial scale in the petrochemical industry.

The ATJ process broadly consists of four main steps: dehydration of the alcohol; oligomerization; distillation; and hydrogenation. Key to the cost-effectiveness of ATJ is reducing the production cost of the alcohol, as well as of the ATJ process itself.
Just as there are many types of crude oil that can be refined to produce petroleum jet fuel, and just as there are many types of feedstocks that can be used in Fischer-Tropsch and natural oil hydrogenation processes to produce renewable jet, so are there different alcohols produced by a variety of pathways and feedstocks that can be converted into renewable jet.

ATJ is one of the alternative jet fuel pathways being supported by the Federal Aviation Administration, and ASTM has formed an ATJ task force.

Once the team completed its initial research, the search for a large-scale processing partner began, which resulted in the awarding of the contract to Albemarle. NAWCWD said that Albemarle was the only contractor that had the expertise, materials and facilities necessary to provide this large scale synthesis in the amount of time required. Specific production activities covered under the contract include:

Dehydration. Utilizing the reactor rig constructed in an prior stage of work, selective dehydration of bio-butanol to 1-butene shall be conducted utilizing a supplied catalyst operating at a temperature of approximately 380 °C. This step will occur in the High Pressure Laboratory (HPL) section of the Process Development Center (PDC) and will be performed over a duration of 1 week.

Butene Drying. The butene will be dried over molecular sieves, in a small packed bed set up. This shall be done in the HPL section of the PDC immediately following completion of the previous dehydration step and shall be performed over a duration of 1 week.

Oligomerization. Using a Ziegler-Natta type catalyst system that will be supplied by NAWCWD and activated at the PDC, for the oligomerization of 1-butene to the ethyl branched higher olefins. This step shall be conducted in the South Lab section of the PDC in a 30-gallon reactor system and will be performed over a duration of 1 week.

Stripping / Olefin Mixture Recovery. The dimer product 2-ethyl-1 hexene will be stripped out of the olefin mixture. This shall be done in a 30 gallon reactor system and shall be performed over a duration of 1 week.

Dimer Oligomerization. The recovered C8 liquor shall be treated with Dow Amberlyst-15 catalyst (protonated form, dry). This step shall occur in the High Pressure Laboratory (HPL) section of the PDC and will be performed over a duration of week.

Hydrogenation. The olefin mixture shall be hydrogenated to yield paraffins. A Raney Nickel catalyst system will be used. This step shall occur in the SPU-North section of the PDC in a 50-gallon glass lined steel reactor system and shall be performed over a duration of 1 week.

Distillation. The paraffins shall be vacuumed and distilled to remove C28 and C32 paraffins to obtain jet fuel that meets the standard navy specifications. This step shall occur in the kilo lab section of the PDC using a small wiped film evaporator distillation system and shall be performed over a duration of 1 week. _GCC
Interestingly, some butanol producers are getting closer to competitive production, compared to butanol from petroleum. The cost of industrial butanol is similar to the retail cost of gasoline, although butanol has lower energy density than gasoline. Expect the price of renewable butanol to continue to drop, as costs of biomass production become somewhat more de-linked from the cost of oil in the future.

Biomass is produced in dispersed form, with relatively low energy density compared to oil or coal. The energy density of biomass is particularly low in comparison to nuclear energy. But biomass has the advantage of convertibility to a wide range of valuable chemicals, polymers, and fuels -- and biomass can be grown virtually anywhere on the planet. This is in contrast to hydrocarbon resources which cannot be found virtually anywhere, but must be shipped to more remote locations.

It is crucial that this type of technology continue to be developed, as a type of backstop alternative fuel, should geo-political conditions drive the costs of oil into a dangerous economic zone.

We will never see the type of peak oil that the acolytes of doom imagine. Political peak oil is an altogether different can of worms.

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Monday, March 19, 2012

Canada as Energy Superpower II

In an earlier blog post, Canada as Energy Superpower?, we looked at Canada's growing energy clout on the world stage. And finally, years later, the rest of the world is beginning to understand the kind of energy punching power that Canada brings to the world stage.
Canada's aim is to counterbalance Opec by pumping more oil...and catering to Opec's best customers in China and other fast-growing economies.

"It's going to have geopolitical implications," says Mr Oliver. "The future energy supply is going to be profoundly affected by what are now called unconventional sources. The influence of Opec on a relative basis is likely to decrease. And I think overall this is going to be positive for the West." _National
But oil is not the only rich energy resource which Canada can bring to the marketplace. Canada has vast uranium resources, is rich in coal, possesses large reserves of natural gas, and may have more gas hydrates than all its other hydrocarbon resources put together (PDF). To top it off, Canada is very well endowed with hydro-power -- currently the cheapest and most reliable of the renewables.

South Africa's Sasol -- in many ways the world leader in the Fischer Tropsch approach to coal to liquids (CTL) and gas to liquids (GTL) -- is acquiring significant assets in Canada, with an eye toward a future where unconventional liquids are more important than at present. Other energy companies, some based in Europe and Asia, are starting to think along the same lines, and are grabbing up Canadian energy assets when they can.

Whether the near and intermediate future of world energy is based on oil, natural gas, nuclear power, coal, or unconventional liquids, Canada is well positioned to supply an economically significant proportion of global energy needs.

Excess Canadian crude oil produced from oil sands is expanding at a rate of one million barrels a day every five years. The more that's produced, the less of a market there will be for oil from Venezuela and some other OPEC member countries with similar-quality oil, requiring them to either curtail production or lower prices. Even if oil prices rise in the medium term, we expect 2020 prices to be no more than $85 per barrel, compared with today's prevailing global price of $125.

The economic consequences of this supply-and-demand revolution are potentially extraordinary._WSJ_via_GWPF


Saturday, March 17, 2012

Climatologist Judith Curry Interviewed by Demon Coal

A Canadian Broadcasting Company radio special, "Demon Coal", interviewed Georgia Tech U. climatologist Judith Curry on the topic of IPCC climate models. Here is Dr. Curry (just past the 3 minute mark) in the 3rd segment of CBC Radio's Demon Coal:

Demon Coal Part III / IV

Demon Coal Part IV / IV

Dr. Curry's interview continues in segment 4 of the 4 segment program, above.

Judith Curry is one of the more scrupulous among those climatologists who are well known on the public stage. She has performed the role of "go-between", spanning the chasm between the more sceptical world-class climatologists such as Richard Lindzen and Roger Pielke Sr., and some of the more orthodox alarmist climatologists who have the most to lose should the IPCC's scare tactics fall short.

Extra Bonus: Judity Curry's interview with (via, "The IPCC May Have Outlived Its Usefulness" What are your personal beliefs on climate change? The causes and how serious a threat climate change is to the continued existence of society as we know it.

Judith Curry: The climate is always changing. Climate is currently changing because of a combination of natural and human induced effects. The natural effects include variations of the sun, volcanic eruptions, and oscillations of the ocean. The human induced effects include the greenhouse gases such as carbon dioxide, pollution aerosols, and land use changes. The key scientific issue is determining how much of the climate change is associated with humans. This is not a simple thing to determine. The most recent IPCC assessment report states: “Most [50%] of the warming in the latter half of the 20th century is very likely [>90%] due to the observed increase in greenhouse gas concentrations.” There is certainly some contribution from the greenhouse gases, but whether it is currently a dominant factor or will be a dominant factor in the next century, is a topic under active debate, and I don’t think the high confidence level [>90%] is warranted given the uncertainties.

As I stated in my testimony last year: “Based upon the background knowledge that we have, the threat does not seem to be an existential one on the time scale of the 21st century, even in its most alarming incarnation.” You have said in the past that you were troubled by the lack of cooperation between organizations studying climate change, and that you want to see more transparency with the data collected. How do you suggest we encourage/force transparency and collaboration?

Judith Curry: We are seeing some positive steps in this regard. Government agencies that fund climate research are working to develop better databases. Perhaps of greatest interest is the effort being undertaken by the Berkeley Earth Surface Temperature project, which is a (mostly) privately funded effort to compile and document a new data base on surface temperatures, in a completely open and transparent way. Do you feel climatologists should be putting more effort into determining the effect of the sun on our climate? As the IPCC primarily focuses on CO2 as the cause of climate change – Is the importance of CO2 overestimated and the importance of the sun is underestimated?

Judith Curry: I absolutely think that more effort is needed in determining the effect of the sun on our climate. The sun is receiving increased attention (and funding), and there is a lively debate underway on interpreting the recent satellite data record, reconstructing past solar variability, and predicting the solar variability over the 21st century. Nearly all of the solar scientists are predicting some solar cooling in the next century, but the magnitude of the possible or likely cooling is hotly debated and highly uncertain. You are well known in climate and energy circles for breaking from the ranks of the IPCC and questioning the current information out there. What do you see as the reasons for the increase in skepticism towards global warming over the last few years.

Judith Curry: Because of the IPCC and its consensus seeking process, the rewards for scientists have been mostly in embellishing the consensus, and this includes government funding. Because of recent criticisms of the IPCC and a growing understanding that the climate system is not easily understood, an increasing number of scientists are becoming emboldened to challenge some of the basic conclusions of the IPCC, and I think this is a healthy thing for the science. What are your views on the idea that CO2 may not be a significant contributor to climate change? How do you think such a revelation, if true, will affect the world economy, and possibly shatter public confidence in scientific institutions that have said we must reduce CO2 emissions in order to save the planet?

Judith Curry: Personally, I think we put the CO2 stabilization policy ‘cart’ way before the scientific horse. The UN treaty on dangerous climate change in 1992 was formulated and signed before we even had ‘discernible’ evidence of warming induced by CO2, as reported in 1995 by the IPCC second assessment report. As a result of this, we have only been considering one policy option (CO2 stabilization), which in my opinion is not a robust policy option given the uncertainties in how much climate is changing in response to CO2. There has been quite a bit of talk recently on geo-engineering with entrepreneurs such as Bill Gates and Richard Branson pushing for a “plan B” which utilizes geo-engineering to manipulate the environment in order to cool the atmosphere.

Geo-engineering could be much cheaper than reducing emissions, and also much quicker to produce results and scientists are lobbying governments and international organizations for funds to experiment with various approaches, such as fertilizing the oceans or spraying reflective particles and chemicals into the upper atmosphere in order to reflect sunlight and heat back into space. What are your thoughts on geo-engineering? Is it a realistic solution to solving climate change or is it a possible red herring?

Judith Curry: With regards to geo-engineering, there are two major concerns. The first is whether the technologies will actually work, in terms of having the anticipated impact on the climate. The second is the possibility of unintended consequences of the geoengineering. You have been noted to criticize the IPCC quite openly in the past on several topics. Even going so far as to say:”It is my sad conclusion that opening your mind on this subject (climate change controversy) sends you down the slippery slope of challenging many aspects of the IPCC consensus.”

Do you believe that the organization as a whole needs to be assessed in order to better serve progress on climate change? What suggestions do you have on how the organization should function?

Judith Curry: The IPCC might have outlived its usefulness. Lets see what the next assessment report comes up with. But we are getting diminishing returns from these assessments, and they take up an enormous amount of scientists’ time. Would renewable energy technologies have received the massive amounts of funding we have seen over the last few years without global warming concerns?

Judith Curry: I think there are other issues that are driving the interest and funding in renewables, including clean air and energy security issues and economics, but I agree that global warming concerns have probably provided a big boost. What do you believe are the best solutions to overcoming/reversing climate change; is a common consensus needed in order to effectively combat climate change?

Judith Curry: The UN approach of seeking a global consensus on the science to support an international treaty on CO2 stabilization simply hasn’t worked, for a variety of reasons. There are a range of possible policy options, and we need to have a real discussion that looks at the costs, benefits and unintended consequences of each. Successful solutions are more likely to be regional in nature than global. I saw an interesting comment on another site regarding climate science that i thought i’d get your opinion on as it raises some very interesting arguments:

Climate science has claimed for 30 years that it affects the safety of hundreds of millions of people, or perhaps the whole planet. If it gets it wrong, equally, millions may suffer from high energy costs, hunger due to biofuels, and lost opportunity from misdirected funds, notwithstanding the projected benefits from as yet impractical renewable energy.

Yet, we have allowed it to dictate global policy and form a trillion dollar green industrial complex – all without applying a single quality system, without a single performance standard for climate models, without a single test laboratory result and without a single national independent auditor or regulator. It all lives only in the well known inbred, fad-driven world of peer review.

Judith Curry: I agree that there is lack of accountability in the whole climate enterprise, and it does not meet the standards that you would find in engineering or regulatory science. I have argued that this needs to change, by implementing data quality and model verification and validation standards. Do you believe that the language used in papers and at conferences is a problem? The public just wants straight answers to questions: Is the climate warming, By how much, and what will the effects be? Scientists need to step out from behind the curtain and engage the public with straight answers and in their own words. Is this achievable, or is climate science too complex to be explained in laymen’s terms? Or is it because even climate scientists can’t agree on the exact answers?

Judith Curry: I think the biggest failure in communicating climate science to the public has been the reliance on argument from consensus. We haven’t done a good job of explaining all this, particularly in the context of the scientific disagreement What resources would you recommend to people who wish to get a balanced and objective view on climate science and climate change.

Judith Curry: There is no simple way to get a balanced and objective view, since there are so many different perspectives. I think my blog Climate Etc. at is a good forum for getting a sense of these different perspectives.

Interview by. James Stafford, Editor


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