What if the long term forecasts for our domestic crude production turn out to be wrong and foreign suppliers, such as OPEC, beome unreliable suppliers or, worst case, refuse to sell us oil for political reasons . Suppose, in other words, that we have to rely mainly on natural gas as our main hydrocarbon fuel to run our cars and trucks. What are our options?
Well, fortunately, we will be able to keep our vehicles on the road, though some time and considerable investments will be needed. Technology is available to make gasoline diesel, jet fuel and kerosene from natural gas ( e.g. Shell GTL), and gasoline from natural gas (e.g. Exxonmobil). Also, new cars can be designed to operate on natural gas instead of gasoline (covered in my May 22, 2012 blog). And a third option is to make a lot more ethanol from natural gas or biomass — half of the cars in Brazil run on alcohol!
The GTL process is based on Fischer Tropsch (F-T) technology developed by Germany in World War II. It used coal as the feedstock to make the “synthesis” gas (CO and Hydrogen) that is converted into the liquid fuel listed above. However, natural gas is a better and less polluting feedstock than coal. Sasol plans to build a large plant based on this technology in Louisiana using natural gas. It will have a price tag of over ten billion dollars. The company has long made liquid fuels from its very inexpensive coal in South Africa, since the company has no crude oil resources.
Inteerestingly, DKRW, a Houston-based energy firm, plans to build a coal-to-gasoline plant in Wyoming using the Exxon-Mobil technology and is partnering with Sinopc (China) on this project. Sinopec is already building synthetic gasoline plants in its home country with this technology, gasifying domestic or imported coal .
Quick reflection will recognize that there is always a large existing fleet of trucks and cars that need the fuel they are designed for. New Cars can be designed to run on natural gas or alcohol. The existing fleet needs gasoline or diesel fuel. Therefore, planner must consider both new and existing vehicles.. This indicates that the GTL and other F-T-based processes may be needed for diesel fuel for the existing fleet (though it can be argued that if natural gas and alcohol become the preferred fuels for cars, refiners will just make more diesel than gasoline, as is the case in Europe. In any case, lots of options exist, though there would be enormous investment consequences.