Reduce Crude Oil with Coal To Liquids (CTL)

The National Defense Council Foundation, the DOE, numerous other agencies and organizations have calculated the "real" cost of imported crude oil. Their estimates range from an additional 25¢ to $2.00/gallon at the pump. Most refer to this hidden cost at the fuel pump as a "Security Cost". Using the DOE estimate of 50¢/gal and the generally accepted EIA number of 12 million barrels per day of U.S. transport gasoline and diesel sales (over 500 million gallons per day), the American economy is paying over $90 billion per year to support our current National Energy Policy.

Let's assume that this number is too high, lets cut it in half, so we only pay $45 billion per year. What would $45 billion per year buy the U.S. in the form of domestic produced synthetic motor fuels from coal and bio-mass? Coal based synthetic fuel plants (CTL) have been in operation since the 1950's; natural gas based synthetic motor fuel plants (GTL) since the early 1990's and bio-mass/bio-renewable based synthetic motor fuels (BTL) since 1998. We commonly refer to these three technologies (CTL, GTL and BTL) as Fischer-Tropsch or F-T as it is the F-T technology, common to all three that produces the ultra clean synthetic transportation fuels.

Today a crude oil refinery built in the U.S. could cost approximately $40,000 per installed barrel (bbl) of output; although we haven't built a new refinery in the U.S. since the 1970's and crude refineries don't make ultra clean fuels like the F-T process does. A new crude oil refinery would not reduce imports but it would address another "cost" Americans pay each year - the run up in price at the pump each driving season by the big petroleum companies to create Economic Conservation according to ExxonMobil's past Chairman. This cost, "refinery penalty" estimated to be $30 billion per year goes directly to the refiners profits as we have seen in 2007-08.

Generally speaking an "alternative fuel" or synthetic fuel plant such as the F-T plant costs from 1.5 to 6 times more than a crude oil plant but the raw material or feed stock (coal, natural gas or bio-mass) costs less than crude oil on an energy basis. World scale GTL plants built in 2006-07 in Qatar cost approximately $35,000 per installed bbll (2007 number). CTL plants built 40 years ago cost $45,000 per installed bbl but advances in technology and efficiencies have kept these costs to approximately $90,000 per installed bbl, today (2008 estimate) to be conservative we will use $100,000 per installed barrel. BTL plants because of the economics of delivering bio-mass to a central location are smaller in size cost between $150,000 to $200,000 per installed bbl of capacity. Let's use $175,000. BTL is at an economic disadvantage due to the smaller size of the BTL refinery but the feed stock is renewable and CO₂ emission neutral. Once paid for, these alternative fuel plants (GTL, BTL and CTL) F-T refineries are competitive against $20-$25 crude oil.

So how much new "domestic refining" capacity or reduction in imported crude can you get from GTL, CTL and BTL plants if you spent $45 billion per year on them. GTL, 1,200,000 bbl per day each year. In 10 years that is almost 100% of U.S. imports. CTL, 450,000 bbl per day each year. In 10 years that is 4.5 million bbl per day each year. In 10 years that is 4.5 million bbl per day or as much crude that is imported from OPEC countries, over $130 billion/yr in balance of payments reduction @$80 crude oil. What would these numbers look like if the "security cost" is really $90 billion per year using the DOE estimate or if you use the NDCF number of $2.00/gallon at $300 billion per year.

It seems Congress just doesn't care and our past Presidents haven't taken the lead either.

We have the natural resources to do this, especially in western U.S., I just wonder if we have the political resolve to accomplish it.

What better legacy for President Obama than to begin a long term program to reduce U.S. dependence on foreign crude while at the same time creating millions of job opportunities for Americans - jobs that can not be outsourced to India or China.


					DO YOU WANT TO REDUCE U.S. IMPORTS OF CRUDE OIL ? WE HAVE THE NATURAL RESOURCES TO DO IT BUT DO WE HAVE THE POLITICAL WILL?


		Reduce Crude Imports Web Pages: NATIONAL SECURITY ALASKA CLEAN DIESEL GTL THE ANSWER CONTACT US Home BULLET LINE & GTL PLANT PDF Files: F-T Diesel Clear as Water GTL Value vs Efficiency GTL Value Added Making F-T Transport Fuels GTL's for Alaskans LINKS to other sites			IN THE 1960's THE RUSSIAN SPUTNIK CAUSED THEN PRESIDENT KENNEDY TO ANNOUNCE A NATIONAL OBJECTIVE OF "TO THE MOON BY THE END OF THE DECADE". 9-11 SHOULD HAVE BEEN THE WAKE UP CALL TO THE U.S. FOR A NATIONAL ENERGY POLICY TO REDUCE OUR DEPENDENCE ON FOREIGN CRUDE BY THE END OF THIS DECADE. The National Defense Council Foundation, the DOE, numerous other agencies and organizations have calculated the "real" cost of imported crude oil. Their estimates range from an additional 25¢ to $2.00/gallon at the pump. Most refer to this hidden cost at the fuel pump as a "Security Cost". Using the DOE estimate of 50¢/gal and the generally accepted EIA number of 12 million barrels per day of U.S. transport gasoline and diesel sales (over 500 million gallons per day), the American economy is paying over $90 billion per year to support our current National Energy Policy. Let's assume that this number is too high, lets cut it in half, so we only pay $45 billion per year. What would $45 billion per year buy the U.S. in the form of domestic produced synthetic motor fuels from coal and bio-mass? Coal based synthetic fuel plants (CTL) have been in operation since the 1950's; natural gas based synthetic motor fuel plants (GTL) since the early 1990's and bio-mass/bio-renewable based synthetic motor fuels (BTL) since 1998. We commonly refer to these three technologies (CTL, GTL and BTL) as Fischer-Tropsch or F-T as it is the F-T technology, common to all three that produces the ultra clean synthetic transportation fuels. Today a crude oil refinery built in the U.S. could cost approximately $40,000 per installed barrel (bbl) of output; although we haven't built a new refinery in the U.S. since the 1970's and crude refineries don't make ultra clean fuels like the F-T process does. A new crude oil refinery would not reduce imports but it would address another "cost" Americans pay each year - the run up in price at the pump each driving season by the big petroleum companies to create Economic Conservation according to ExxonMobil's past Chairman. This cost, "refinery penalty" estimated to be $30 billion per year goes directly to the refiners profits as we have seen in 2007-08. Generally speaking an "alternative fuel" or synthetic fuel plant such as the F-T plant costs from 1.5 to 6 times more than a crude oil plant but the raw material or feed stock (coal, natural gas or bio-mass) costs less than crude oil on an energy basis. World scale GTL plants built in 2006-07 in Qatar cost approximately $35,000 per installed bbll (2007 number). CTL plants built 40 years ago cost $45,000 per installed bbl but advances in technology and efficiencies have kept these costs to approximately $90,000 per installed bbl, today (2008 estimate) to be conservative we will use $100,000 per installed barrel. BTL plants because of the economics of delivering bio-mass to a central location are smaller in size cost between $150,000 to $200,000 per installed bbl of capacity. Let's use $175,000. BTL is at an economic disadvantage due to the smaller size of the BTL refinery but the feed stock is renewable and CO₂ emission neutral. Once paid for, these alternative fuel plants (GTL, BTL and CTL) F-T refineries are competitive against $20-$25 crude oil. So how much new "domestic refining" capacity or reduction in imported crude can you get from GTL, CTL and BTL plants if you spent $45 billion per year on them. GTL, 1,200,000 bbl per day each year. In 10 years that is almost 100% of U.S. imports. CTL, 450,000 bbl per day each year. In 10 years that is 4.5 million bbl per day each year. In 10 years that is 4.5 million bbl per day or as much crude that is imported from OPEC countries, over $130 billion/yr in balance of payments reduction @$80 crude oil. What would these numbers look like if the "security cost" is really $90 billion per year using the DOE estimate or if you use the NDCF number of $2.00/gallon at $300 billion per year. It seems Congress just doesn't care and our past Presidents haven't taken the lead either. We have the natural resources to do this, especially in western U.S., I just wonder if we have the political resolve to accomplish it. What better legacy for President Obama than to begin a long term program to reduce U.S. dependence on foreign crude while at the same time creating millions of job opportunities for Americans - jobs that can not be outsourced to India or China.