As a break from our somewhat relentless barrage of science journal articles demonstrating the pragmatic reality of coal-to-liquid transformation technologies, herein is acknowledgement of that CTL reality, and a brief review of the technology's economic implications, from a general-audience investment and money-management journal.
The excerpt:
"In addition to petrol, diesel and avgas, the process (Sasol's coal-to-liquid conversion technology) produces a wide range of by-products such as petrochemicals, waxes, feedstocks for plastics manufacture, and fuel gas.
While it’s forecast that the world will run short of conventional oil within a century, with most of the remaining large deposits in politically unstable regions, there is little recognition that coal is an abundant substitute. Enough for more than a thousand years.
The US has the world’s largest coal deposits, with 268 billion tons of recoverable reserves. HSBC says that at a standard conversion rate of two barrels of synthetic fuels from one ton of coal, those reserves are equivalent to the 20 times the nation’s current crude oil reserves.
At capital costs of $700 million for capacity of 10,000 barrels/day and a 30-year life, operating costs of $15/barrel and current coal costs, breakeven for a coal-to-liquids plant in the US would be in the range $39-44 a barrel, assuming no tax incentives.
However, the new Highway Act provides a subsidy of $21 a barrel for commercial-scale CTL projects. Taking that into account, with oil at $50 a barrel (that is, well below current prices around $70), the internal rate of return on such a project would be in the mouth-watering range 22-25 per cent.
It would also be environmentally friendly, as the technology converts dirty coal into “ultra-clean” synthetic diesel and jet fuel that can be used in current engines without adaptation. And “the fuels are easily transportable and marketable, as they are compatible with existing petro-fuel distribution infrastructure” (unlike ethanol-blended petrol, bio-diesel and more radical alternative fuels).
The world isn’t going to run out of oil while there’s all that coal that can be turned into liquid fuels."
An investment in Coal-to-Liquid sounds pretty good, downright "mouth-watering", doesn't it? And, we have enough coal to last for "more than a thousand years".
Moreover, the "US has the world’s largest coal deposits, with 268 billion tons of recoverable reserves... (and) at a standard conversion rate of two barrels of synthetic fuels from one ton of coal, those reserves are equivalent to the 20 times the nation’s current crude oil reserves".
We'll note that, some coal conversion processes posit 3 barrels per ton of coal, rather than the 2 barrels per ton suggested in this article, depending on the coal's grade; and, there's no mention of the commercial by-products that can be co-produced.
We are not going to run out of oil while we have "all that coal that can be turned into liquid fuels". IF WE get off our butts and START turning that coal into oil.
Way past time we did just that.
