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WSJ reports B-1 syngas flight May 26, 2008

Posted by OldGuy in Alternatives, Fischer-Tropsch.
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On Wednesday, the Wall Street Journal finally reported that the USAF is converting its fleet to synthetic fuels. The subject of the article is the March test flight of a B1 on 50-50 syngas/JP8.

I say finally because this blog reported the flight in March, shortly after it happened. (See it here.) In that post, I made mention of the fact that the AF intends to certify all its aircraft by 2011, and has already certified the C-17, B-52 and B1.

They chose a 50/50 blend because the FT syngas burned too clean, and the existing jet engines were optimized to burn the existing jet fuel blends, which are “dirtier”. This is a point missed by WSJ, who looked at the carbon emissions of raw coal and assumed that FT fuel was the same. It is not the cleanliness of FT that keeps it from production, but rather issue of sequestering the surplus CO2 that is extracted during refinement.

I’m glad the WSJ reported the AF’s progress. Their chart was instructive in showing the effect of rising fuel prices on the AF budget.  I’m told that the AF spends an additional half a billion dollars a year every time the price of oil goes up $10 a barrel.  That’s why the cost of fuel has more than doubled (from $5B to $12B) from 2004 to 2007, following only a 2% rise from 2003 to 2004.   (You can imagine the havoc that’s having on the AF budget!)

Watch this site to stay up with how the AF Research Lab is leading industry in creating alternatives in energy technology.

Natural Gas to Liquid (GTL) March 24, 2008

Posted by OldGuy in Alternatives, Fischer-Tropsch.
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According to the ads, creating diesel from natural gas – a process called Gas to Liquid (GTL) – is a clean option for reducing world oil consumption.

So I went to Shell Oil’s website.  All the benefits were stated in terms of comparison to oil-based diesel, and in  creating diversity of options.

GTL Fuel has a large number of benefits for both regulators and fleet operators. It can be used in conventional diesel engines, but provides significantly lower emissions of local pollutants, such as particulates, carbon monoxide, hydrocarbons and nitrogen oxides, even when compared to so-called ‘sulphur-free’ diesel.

Shell’s approach is to use a proprietary low-temperature Fischer-Tropsch process, called Shell Middle Distillate Synthesis – SMDS,  that uses an improved catalyst to produce its liquid fuels.  They have been operating in Bintulu, Malaysia since 1998, and is capable of producing 14,700 bbl/day.   A new plant is under construction in Qatar that will produce up to 140,000 bbl/day GTL by the end of the decade.

Shell says that creating Fischer-Tropsch from agricultural feedstocks (or even coal) has greater technical challenges than using natural gas.  It says “the low-temperature, cobalt catalyst-based Fischer-Tropsch GTL process, however, produces an extremely clean synthetic fraction of gasoil called GTL Fuel that is virtually free of sulphur and aromatics.”

Shell already sells GTL at retail outlets in Greece, Thailand, Germany, Netherlands, Austria, Italy and Switzerland.

Shell has partnered with Audi  to use Shell GTL (R10) fuel – based on Shell V-Power Diesel technology.  In its first competitive race in March 2006, the Audi R10 TDI won a maiden victory at the Sebring 12 hour race in Florida, and won the 24-hour La Mans race in June 2006.

“Not only was it the first diesel car to ever finish the race, but it also completed the most laps (380), 4 laps ahead of its gasoline rival. With the help of Shell V-Power Diesel technology continuously cleaning the fuel injection system, the winning Audi R10 was able to sustain this great performance right through to the end of the race, and was noticeably quieter than the gasoline cars. This remarkable result was due in part to the inclusion of high cetane Shell GTL Fuel in the race formulation, enabling the fuel to burn more cleanly and efficiently than conventional diesel.”

I’m concerned about consumption of Natural Gas for fuel, instead of creating new fuels, but I glad Shell is creating both demand and infrastructure for FT fuels.

Who’s Making Money in SynGas? March 23, 2008

Posted by OldGuy in Fischer-Tropsch, gassification.
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Coal gassification is gaining press.  Now that the US Air Force has proven modernized processes for improved Fischer-Tropsch production, commercial firms are being lined up to create this alternative to oil.

 So how can you make money on this boom?  Aside from choosing to use SynGas in your fleet, you can choose to invest in the companies that are leading the way in gassification manufacture.

According to CTLtech Asia 2008 Technology Conference, the leaders in the industry are:

Sasol Synfuels International

Rentech Inc.
China Shenhua Coal Liquefaction Corp Altona Resources
Synfuels China, Institute of Coal Chemistry CIC Energy
Ministry of Energy & Mineral Resources, Indonesia US-China Energy Center, West Virginia University
Shenhua Baotou Coal Chemical Co Alstom Power
Beijing Coal Chemical Research Institute Haldor Topsoe
Sojitz Corp Johnson Matthey
Sud-Chemie Rothschild (London)
Veolia Water  

I don’t know anything about any of these, but I think I’m going to start looking.  I expect FT syngas to make major dent on the world oil needs.  And I want to own stock while I can still get in at a reasonable price.

 If you know (without marketing hype, please!) which ones have solid value fundamentals, please let me know.  I look for low PE and low price-book ratios, as well as solid earnings potential and market respect.

FYI – the conference was organized by the Centre for Management Technology (CMT),  a world leader in petrochemical conferences.

AF Pushes for SynGas Production March 22, 2008

Posted by OldGuy in Alternatives, Fischer-Tropsch.
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Now that the technology has been proven successful, the USAF is ready to transfer the technology to someone who can begin to make production quantities.

Yesterday, I wrote that the Air Force plans to fuel all its jets with 50/50 syngas by 2011. Today we learn that the AF wants to fuel half its North American ground fleet with a synthetic-fuel blend by 2016. To do so, it would need 400 million gallons of coal-based fuel annually.

And they want the private sector to help them do it. The AF wants to create a market for some enterprising companies to fill. (The market would be shared by commercial air fleets, long-haul trucking companies, and others.)

“Because of our size, we can move the market along,” he said. “Whether it’s (coal-based) diesel that goes into Wal-Mart trucks or jet fuel that goes into our fighters, all that will reduce our dependence on foreign oil, which is the endgame.”

Technology transfer has always been an issue for the military research labs. The labs have the authority to push the state of knowledge beyond what the commercial marketplace has been willing to tackle. In the past, military labs have created or funded the development of the transister, the compact disk, widespread use of the precursor to the internet, online file sharing, and many of the core technologies under the social networking ond mapping software applications.

Air Force Assistant Secretary William Anderson. eplains. “Coal producers have been unsuccessful in prior efforts to cultivate such a market. Climate change worries prompted Congress last year to turn back an attempt to mandate the use of coal-based synthetic fuels.”

The Air Force would not finance, construct or operate the coal plant. Instead, it has offered private developers a 700-acre site on the base and a promise that it would be a ready customer as the government’s largest fuel consumer.

A 2006 report from the National Coal Council said a fully mature coal-to-liquids industry serving the commercial sector could produce 2.6 million barrels of fuel a day by 2025. Such an industry would more than double the nation’s coal production, according to the industry-backed Coal-to-Liquids Coalition.

Read more here.

USAF Conversion to F-T Syngas Continues March 21, 2008

Posted by OldGuy in Fischer-Tropsch.
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Progress continues in certifying Fischer-Tropsch process of producing synthetic fuels. 

On Wednesday, March 19, a B1 bomber became the US Air Force’s first aircraft to fly at supersonic speed using a 50/50 blend of synthetic and petroleum fuel. The flight occurred over the White Sands Missile Range airspace in south-central New Mexico but took off from Dyess AFB, Abilene , Texas .The certification process so far has detected no significant differences in performance, flight safety, durability, ground handling or storage between synfuel and conventional JP-8. 

This is the fourth USAF aircraft to be certified to use syngas, and keeps them on schedule to convert the entire fleet to the 50/50 blend by 2011. 

In other news, the U.S. Air Force team that has developed this blend of petroleum and synthetic fuel for the B-52 Bomber received the Federal Aviation Administration’s 2007 Excellence in Aviation Research Award at a ceremony March 14.

Barry Scott, director of the FAA Research and Technology Development Office, said that “in the 10 years we’ve given it, this was the first unanimous choice.”

Development of synfuel is a significant effort in the Air Force’s quest to find a source of domestically produced, assured fuels, which would be sufficient for the Air Force to perform its national defense mission if current, overseas petroleum sources are threatened. Other motivations include fuel prices and environmental concerns. (FT syngas burns cleaner and is cheaper to make than JP-8.) The research and certifications are also useful for certifying commercial jet engines.  The long-range effects should be cleaner airwaves and more stable energy prices.

Who says synthetic fuels won’t fly? March 13, 2008

Posted by OldGuy in Fischer-Tropsch.
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Sorry for the bad pun, but I’ve learned that the US Air Force is testing the use of synthetic fuels in its larger jet aircraft.

According to the US Air Force News Service, the Air Force flew a C-17 transport aircraft on Oct 22, 2007 using a Fischer-Tropsch/JP-8 fuel blend.

“There was no discernible difference between JP-8 and Fischer-Tropsch,” said Maj. Scott Sullivan, the mission pilot.

The USAF plans to convert the entire C-17 fleet to the synthetic blend, starting in early 2008. The final steps for C-17 certification include a service evaluation out of McChord Air Force Base, Wash., completion of material compatibility tests and final supplier qualification of the engine, auxiliary power unit and fuel quantity measurement system with the Fischer-Tropsch/JP-8 blend. The C-17 holds around 30,000 gallons of fuel, and is refueled several times a day.

This is the second type of AF aircraft to use this blended fuel. Last summer, the B-52 Stratofortress bomber was certified to use the FT/JP8 blend. The B-52 is the oldest aircraft type in the inventory, delivered to the AR in 1961 and 62, making them all over 40 years old. It’s 8 engines consume a large amount of fuel; it has a maximum capacity of 312,197 pounds (48,030 gallons), and often uses at least that much on each flight, plus in-flight refueling.

If FT can be produced for the estimated $35 a barrel (There are about 42 gallons per barrel of FT.) In that oil currently sells for over $100 a barrell, the cost savings of a FT blend would be substantial: for the B-52, the savings would be over $100k per sortie . And although the C-17 engines are more efficient, flown more each day, and they, too, would save over $100k per day.

FT fuel is also a cleaner fuel, with less pollution.

In accordance with the Secretary of the Air Force’s Assured Fuels Initiative, all USAF aircraft will be certified by 2011. An office has been created at the Aeronautical Systems Center, Wright-Patterson Air Force Base, Ohio, to manage this unparalleled effort.