The Oil Drum: Local

It seems as though I have inhabited two different worlds in the past 24 hours. I went from the relatively small (500 folk) meeting in Sacramento where Peak Oil is viewed as imminent, to the halls of the Convention Center in Las Vegas, where the Quadrennial MinExpo is showcasing the latest machines to over 41,000 folk involved in the Mining Industry. It overflows that very large (600,000 sq. ft) building and extends out into the parking lot. Here, with an industry in considerable profit, the displays were large and much more optimistic than I have seen them in previous years. The two meetings were, however, joined by a common complaint that the human resource, the engineers and scientists needed by both communities, are in critically short supply.

Wandering the booths, with only one day to catch all the new and different products, I did come across a couple of items that are, I believe, worth a brief comment before I write a concluding post to wrap ASPO-USA 4. In that post, I will give some of my own interpretation of the conference.

Day three of the ASPO-USA Conference in Sacramento was focused on where we go from here with fuels other than oil. It began with a session on coal and natural gas reserves and the potential of biofuels. There was considerable information on each of the slides that each of he presenters provided, and so I encourage you to go and look at the presentations which should be up soon on the ASPO site.

David Hughes had the first slot, and talked of the issues that are raised by coal consumption. David began by contrasting a quote by Emerson that

Coal is a portable climate. It carries the heat of the tropics to Labrador and the polar circle; and it is the means of transporting itself whithersoever it is wanted. Watt and Stephenson whispered in the ear of mankind their secret, that a half-ounce of coal will draw two tons a mile, and coal carries coal, by rail and by boat, to make Canada as warm as Calcutta, and with its comfort brings its industrial power.

with the more recent pronouncements of James Hansen that coal is the enemy of the human race.

Energy Minister Martin Ferguson has been talking about gas to liquids (a subject covered here previously) as part of a strategy to address Australia's dependence on imported fuels. The minister has also previously expressed enthusiasm about coal to liquids projects (declaring at a recent CTL and GTL Conference "I regard this industry as the key to securing Australia's energy future"), so in this post I'll have a look at a few CTL projects currently at various stages of development around the country.

MARTIN FERGUSON: Just think about the competitive difficulties at the moment confronting Australian industry and the ordinary motorists given the price of oil. If we don't actually come to terms with investing in our future, then this is going to raise serious questions about our competitive position internationally in a tough global market in a very short period.

GREG HOY: According to the Minister, the best hope may lie in applying a new technology to Australia's vast reserves of natural gas and coal to create a new fuel for Australia's motorists and transport fleet.

GREG HOY: Crucial trials at Queensland's Linc Energy will begin before the end of the month, where a coal seem at Chinchilla, north-west of Brisbane, will be ignited underground like so, with compressed air forced through the seem to form a synthetic gas of steam and carbon, which as it exits will be converted from gas to a clear liquid diesel, with enormous production potential, the same technology we are told, can be applied to natural gas reserves.

MARTIN FERGUSON: So it's about exploration, plus encouraging investment in downstream processing in Australia on gas liquids and coal liquids and thereby creating synthetic alternative fuels.

GREG HOY: Once again, the sceptics do not share the Government's optimism that a solution to Australia's oil crisis is at hand.

JIM BUCKEE: The conversion of coal and gas, gas to liquids, for example, are quite energy expensive of themselves.

The handwriting has been on the wall on this issue for a couple of years. In fact, I first mentioned it in March 2006 in Improving the Prospects for Grain Ethanol. Here is an excerpt of what I wrote:

This is an option that most environmentalists will abhor. However, it is the one most likely to take place in the short-term. The natural gas input into ethanol production is a serious long-term threat to economic viability. Since natural gas is a fossil fuel, and supplies are diminishing, it will put upward pressure on the price of ethanol over time. However, if the energy inputs could be produced from coal, ethanol prices would be insulated from escalating natural gas prices.

Using coal might also lessen the significance of the EROEI debate. If you take 1 BTU of (cheap) coal, and you get back 0.8 BTUs of (more valuable, liquid) ethanol, then EROEI doesn't have the same significance as when you use natural gas to produce ethanol. You converted the BTUs into a readily usable liquid form. This argument may be valid from an economic point of view, but it ignores the fact that coal is still an inherently dirty energy source. If coal remains abundant and cheap, coal economics will beat natural gas economics, but coal will increase the rate at which we put carbon dioxide into the atmosphere. If we come up with a viable method of sequestering the carbon dioxide produced at the power plant, then we might have a temporary economic solution (although we are still using up a non-sustainable fuel in the process).

There has been a fair amount of discussion about the need to form liquid fuels from coal. As the more conventional liquid fuels get more expensive, and less easy to find and produce, an alternative source of fuel has been suggested in the Fischer Tropsch conversion of coal into diesel and gasoline. Can I ask why?

No, not in the sense of do we need the fuel, but rather why go through this long, complex and relatively inefficient process of making the liquid, when, for just the price of grinding it down to micron size, you can mix the coal with water and happily drive your vehicle away. “Preposterous !” I can almost hear the splutters from here, but no, actually it is not, and I thought I would revisit a program that General Electric and others carried out in collaboration with the Department of Energy, between 1982 and 1993, which explains what some of the problems were and how they were resolved.

This is a guest post by Dr Michael R. Smith of Energyfiles Ltd. Dr Smith gave an excellent presentation to The Oil Depletion Conference hosted by The Energy Institute in London last year and this post is an abridged version of what he had to say. If you like the post, then please use the "tip jars" or send the link to a friend.

I have been writing on oil supply issues since 1995, in particular the imminent supply gap and the looming new energy era; forecasting a peak in global supply arriving between 2010 and 2020 depending on demand growth. The Energyfiles report “Oil & Gas – Global Ten-Year Projection” (now in its 2007 edition) was published in response to queries about the data used to arrive at these conclusions.

Nonetheless, despite new evidence in the form of higher than expected demand, capacity squeezes and price rises, there remains a view amongst some geologists and economists that the peak is many years away and even that technology, new energy sources, and new efficiencies will make it irrelevant. Although I believe such views are driven by wishful thinking, I do not want to digress on this subject here. Instead I want to address energy supplies after peak; the size of the so-called supply gap and how it might - or might not - be filled by alternative transport fuels and by efficiencies.

Kangerdlugssuaq Glacier

I've been trying this week to get a grip on the science of the Greenland Ice Sheet. It's a complex and poorly understood business, but there seems to be enough meat here that I think it should be on The Oil Drum agenda.

We might do worse than start with with a report from the BBC. They covered a talk at the American Geophysical Union meeting in San Francisco this last week. (I didn't get to go, alas).

Kangerdlugssuaq Glacier on the east coast of Greenland has been clocked using GPS equipment and satellites to be flowing at a rate of 14km per year. It is also losing mass extremely fast, with its front end retreating 5km back up its fjord this year alone. The glacier "drains" about 4% of the ice sheet, dumping tens of cubic km of fresh water in the North Atlantic.

"We've seen a 5km retreat of the terminus, we've see an almost 300% acceleration in the flow speed and we've seen about a 100m thinning of the glacier - all occurring in the last one or so years," said Dr Gordon Hamilton, of the Climate Change Institute at the University of Maine.

There are many potential definitions of Peak Oil: peak conventional, peak non-opec, date of maximum production, date of 50% Qt, peak liquids etc. We care about Peak Oil because we want to approximate the timing and estimated quantity of less liquid fuel available to a globally connected society in order to initiate mitigation and planning. Typically, this site has used EIA data to puzzle out the 'cigar' posts with moving averages, new production records (Dec 2005), etc. The March EIA Report came out recently and showed March daily production of 84,047,000 barrels per day, a decrease from the heretofore peak (Dec 2005) of 652,000 barrels per day.

On this site and others, we spend a lot of time dissecting the monthly and yearly production numbers looking for signs of a peak. But it appears that unless the EIA changes their definitions, what we are currently calling "Peak Oil" will be obfuscated (and delayed) by increasing amounts of alternative energies that are definitionally included as 'oil' in the headline number.

As long as we use EIA production numbers as the benchmark, Peak Oil will silently morph into Peak Liquids. This is relevant because the definitional layers we add on top of 'crude oil' are not equal in what they provide to society. It is also relevant in that the logistical heuristic used by M. King Hubbert was not intended to include corn and sugar cane derived ethanol in its predictive theory of oil basin depletion. The concept of Peak Oil, already not widely believed, will start to be very confusing. In essence, we need to either a) eventually adjust EIA numbers to exclude growing biofuel and coal liquid inputs or b) recognize that for practical 'peak oil societal impact' purposes, we really do primarily care about 'peak net liquid fuel', which would require categorical adjustments and a bit of algebra.

This must needs be a short note since old Heading Out is off on his travels again for a few days. But I noted that there was some comment on the imminence or otherwise of CTL plants, and I had mentioned that last week Roger Bezdek had commented that one of the solutions to our coming energy shortage would be that each year would see five 100,000 bd of CTL plants constructed in the United States. Since there is some comment on whether we have any, I draw your attention to a story in the Energybiz insider that comments on the situation.

The company has a project in East Dubuque, Illinois, which it expects to be the first commercial coal-to-liquids plant in the United States by 2010. Even before that, it expects to show the project is doable. A demo plant in Colorado will be producing 10 barrels of coal-based oil a day by the first quarter of 2007, says Ramsbottom.

"The future of coal-to-liquids in the United States is no longer a theoretical, what-if, conversation," says Ramsbottom. "We plan to have a fully commercial, fully operational coal-to-liquids plant up and running by 2010.

After having tackled tar sands and climate change, 60 Minutes took on coal liquefaction:

The governor of Montana says he can turn the billions of tons of coal under his state into enough diesel fuel to greatly reduce America's dependence on foreign oil.

And there's an added benefit, says Gov. Brian Schweitzer: the United States will be sticking it to the "rats and crooks" who run the countries that sell oil to us.

We've discussed Mr. Schweitzer and the Fischer-Tropsch method before:

• Montana could supply the whole US with fuel!
  
• Brian Schweitzer replies
  
• A Discussion with Governor Brian Schweitzer
  

(Hat tip: Daily Kos)