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US Coal to Gasoline Plant Will be the Largest in the World
Al Fin, OilPrice
TransGas Development Systems, LLC announced an agreement with SK Engineering & Construction Co., Ltd (SKE&C) leading to engineering, procurement and construction of its first US coal-to-gasoline plant—Adams Fork Energy—to be located in Mingo County, West Virginia. _GCC
US coal deposits contain 12 X as much energy as all known oil in Saudi Arabia. The gasification process to be used in the new West Virginia CTL plant could cleanly utilise coals of any grade — including the cheapest and dirtiest coal. By moving US coal reserves into the liquid fuels arena, the prospects for peak oil continue to remain slight — unless the Obama administration decides to shut down all coal, even clean coal projects. Obama has promised to bankrupt coal companies, and all his other policies are consistent with an “energy starvation” approach to shutting down US industrial production. Time will tell.
The Adams Fork Energy project will convert regional coal into premium-grade gasoline, producing 18,000 barrels per day (756,000 gallons US, 2.86 million liters). When fully developed, the Adams Fork project will be the largest coal-to-gasoline project in the world, according to Adam Victor, President and CEO of TransGas Development Systems.
(1 November 2010)
New Exxon talking points:
Good Energy Policy Makes For Good Economic Policy No Matter Who Is In The Majority
Ken Cohen, Huffington Post
Ken Cohen is Vice President of Public and Government Affairs, Exxon Mobil Corporation
… In the U.S. and around the world, we’re facing an epic energy challenge: meeting rising energy needs while also reducing emissions from energy use.
No matter which side of the aisle you support, I think that facing this dual challenge requires a framework of energy policy fundamentals to help guide our course. Regardless of the political complexion of the House or Senate, there are some key policy principles that should be considered not only for energy legislation, but also for any efforts aimed at our economic recovery:
1. Support all economic energy sources to meet growing demand: With global demand for energy projected to be about 30 percent greater in 2030 than it is today, we can’t afford to rule out any economic energy sources. We must continue to support production of oil, natural gas and coal, which collectively meet about 80 percent of the world’s energy needs. We also must support the development of alternative energy sources when and where they hold economic potential.
2. Promote fair, stable and predictable tax and regulatory policies: Investments in energy resources are measured in decades, not years. The success of these long-term projects depends on consistency in our tax and regulatory structures. Additionally, U.S. energy security depends on a fair tax structure that promotes investment in energy supplies around the world. A recent 10-country study found that the U.S. government takes a larger share of oil and gas earnings abroad than nearly all other countries in the study — and potential new tax rules could make the U.S. the least competitive among this group, except for India.
3. Don’t burden taxpayers with unnecessary energy business risks: Continuing long-term subsidies for alternative energy supplies that are not sustainable in the marketplace is a misuse of valuable taxpayer funds.
(4 November 2010)
This is labelled as “Sponsor-generated content,” which I guess means that Exxon pays Huffington Post something — a sort of “truth in advertising” label. In any case, this post looks like the new set of talking points from Exxon Mobil, at least when addressing a liberal audience. As such, the post is required reading for energy activists and reporters. Exxon Mobile is minimizing climate change, making a nod to it, but advocating policies (like coal) that are insane if one accepts the scientific consensus. They are also insisting that alternatives to oil not be subsidized, in contrast to the direct and indirect subsidies that have long been lavished on the fossil-fuel industries. No mention of peak oil or problems with supplies.
One should not underestimate the money and talent of the Exxon Mobile PR effort. -BA
SCSU professor eyes oil deposits in study
David Unze, St. Cloud Times
… “Deepwater is basically our last frontier,” said Richard Heinberg, senior fellow-in-residence at the Post Carbon Institute. “We’ve gone about oil extraction using the low-hanging fruit principle. That means we went after the highest quantity with the lowest cost resources first.”
Heinberg is an expert on peak oil, which is when the world reaches the maximum rate of oil extraction. Recent studies have opined that the world is near that peak production point, or could be within a few years, and that significant new oil repositories must be located to replace the old, diminishing oil fields.
Deepwater oil exploration and extraction has gained worldwide attention since the April explosion on the Deepwater Horizon offshore oil drilling rig in the Gulf of Mexico killed 11 and spewed millions of gallons of oil into the Gulf. The government imposed a moratorium on deepwater drilling that since has been lifted.
Increasingly, the search for oil reserves is moving farther away from land and into deeper water. Although drilling the ocean floor at depths of 5,000 feet or more was rare 20 years ago, about 6 percent of the world’s oil production now comes from deepwater wells, according to research from IHS Cambridge Energy Research Associations. Offshore oil is expected to make up 40 percent of world production at the end of this decade, according to that study.
(29 October 2010)
Energy analyst Charles Maxwell: brace for $300/barrel oil
Olivier Ludwig, Index Universe
When IndexUniverse.com Managing Editor Olivier Ludwig caught up with Charles Maxwell, Weeden & Co.’s senior energy analyst, it was to talk about so-called “peak oil,” the theory that holds that the day when oil production around the planet is no longer sufficient to meet demand is nearly upon us. Maxwell, who has been involved in the oil industry for more than half a century, speaks with the slow cadence and easy charm of a man who has mastered his subject. The problem is that if you take his message seriously—and there are plenty of reasons to believe it unreservedly—it can pretty much ruin your day. From having to eat more root vegetables in winter instead of enjoying oranges from Chile, to watching oil prices spike to $300 a barrel by 2020, a world of slowly but steadily dwindling supplies of petroleum would be very different indeed. But there is an upside, once the shock of it sets in: Peak oil will undoubtedly unleash a wave of technological innovation, most importantly in energy efficiency.
… Ludwig: It seems like [the peaking of oil fields is] a pretty ubiquitous phenomenon, from Mexico’s biggest field to Saudi Arabia, where it’s the deepest, darkest secret in the whole kingdom.
Maxwell: Yes. Globally, I believe we’re quite close to the peak, simply because we’ve gone from 6 percent increases in production to 3 percent per year increases, to half a percent per year increases. I think peak will come between 2015 and 2017. So, we’re nearly on it.
Ludwig: Is this going to dawn on the market quickly, or is this something that looks clearer in the rearview mirror?
Well, it will look clearer in the rearview mirror. But I think we’ll have a lot of people beginning to see this only when the world economy recovers. What I’m saying is that at the rate at which we were chewing up oil between 2000 and 2008, we would have reached peak oil peak somewhere around 2013 or 2014. But now that we’ve had a very definite drop in the rate of growth related to this great worldwide recession, it will take longer before we can see the peak. And if it turns out to be 2018, I wouldn’t expect anyone to stand up and call me a liar.
… Ludwig: This all seems sensible and yet there’s been no response. You talk to the typical citizen and there’s really no sense of urgency, let alone awareness. How do you explain that?
Maxwell: It’s a good question, and I’ve often struggled with it. Given that we’ve created a world that needs a lot of oil to run it, it’s not a happy message that we may be near the point where we cannot produce oil at an increasing rate. By the way, when we get there it will probably be a plateau lasting three or four years—say between 2015 and 2020 when supply and demand are more or less in balance. But once production starts to fall, it’s going to be bad news for an awful lot of people.
Ludwig: What are the overall prospects for working our way out of this upcoming energy crisis?
Maxwell: Well, there are a few ways out of this problem. The first is that when there’s more demand for oil than supply to meet it, rationing of oil will have to take place. And since internationally there isn’t any group or country large enough to do this, it will have to be done by the market, which is just another way of saying the price of oil will have to rise.
The next way out is to particularly expand production of fuels that compete with oil, particularly in advance of when oil might make that peak. That means we utilize a lot more nuclear power, produce a lot more natural gas and use our large reserves of coal. But when you hear me talking about coal, you’re probably already thinking that’s not going to be possible, and that’s correct.
(3 November 2010)
