Thursday, August 25, 2005

With Oil Prices so High it's Alternative Fuels to the Rescue

With the price of crude oil nearing $70 a barrel, forcing gasoline prices to record highs, there are those who wonder if the doom-and-gloom forecasts that say we’ll run out of petroleum sometime between 2012 and 2030 might be coming true even sooner.

One of those gloomy scenarios, the Olduvai theory, was first introduced by Richard Duncan in 1989. It claims industrialized civilization can last no longer than 100 years. Duncan put the starting point of industrialized civilization at 1930.

It predicts modern society will reach an “Olduvai cliff” by the year 2012, with continual rolling blackouts and permanent gas shortages, leading to economic collapse. So far, each pre-cliff event predicted by the theory has come true.

A similar prediction is the Hubbert peak oil theory, although it lacks such exact dates as the Olduvai theory. Introduced by geophysicist M. K. Hubbert, the peak oil theory states that world oil production will form a steep bell-shaped curve, with decline in production mirroring the rapid increase in oil production seen in the twentieth century.

Many oil experts place the year of peak oil production at 2007, although some say it will be next year.

Of course, most of these predictions assume that there will be no new technologies coming down the pike that will create alternatives to petroleum, which is the main source of the world’s energy now and has been for more than 100 years.

But alternative fuel sources have existed for years. Until now, however, they have been too expensive to be taken seriously.

Between 1920 and 1970, the price of oil remained fairly constant, even dropping slightly. It peaked sharply in 1973 and again in 1980. In fact, the 1980 spike was more dramatic than this year’s increase in oil prices.

But on average, the price of oil has remained generally too low to justify any large-scale production of alternative fuels.

During World War II, however, Germany did rely on an alternative fuel production method. It is called the Fisher-Tropsch process in honor of the two Germans who invented it in the 1920s.

The process produces synthetic petroleum by cooking hydrogen gas in the presence of carbon monoxide to yield long-chain hydrocarbons, which can then be refined into diesel fuel, kerosene, and gasoline. South Africa also used this process during the apartheid years.

Both South Africa and Germany were cut off from petroleum imports, so they had to use their vast supplies of coal as the feedstock for the production of the raw ingredients needed for the Fisher-Tropsch process. Although expensive, it supplied these countries with all the oil they needed.

The world has vast reserves of coal. The U.S. also has rich deposits of coal in many areas, including Indiana.

While crude oil was hovering at less than $25 per barrel, in 1999 dollars, for much of the last century, the gasification of coal for use in the Fisher-Tropsch process was not economical. A barrel of oil produced from that process would cost about $32.

But now that the price of crude has risen to more than twice that price, some oil experts, and some politicians, are taking another look at synthetically-produced oil.

Last week Gov. Brian Schweitzer of Montana announced a plan that would use Montana’s vast coal reserves to power the United States for the next 40 years. And his plan is attracting the attention of oil analysts from all over the U.S.

Schweitzer claims his plan can produce gasoline for about a dollar per gallon. He said Montana is sitting on more usable energy resources than the whole of the Middle East.

Of course, Montana is not the only state with coal reserves. The main problem, other than the initial investment capital, is that nobody wants a coal mine in his back yard. If we really do elect to use coal gasification to produce synthetic oil, it would mean an increase in strip mining of coal across the country.

But Schweitzer said it could be accomplished without any major environmental impact, at least for the foreseeable future. And if the world is to avoid the Olduvai cliff, we may not have much choice.

1 comment:

Unknown said...

Hello Jerry,
I went through your paper on Fisher-Tropsh technology appreciated your comments.
Do you have any leads or info on this technology using Biomass or agriculture feedstock isntead of coal or NG as primary source of raw material?
Being in green energy fields and structuring credit carbon for global clients I am interested in such alternative source of energy production.
Daniel Christian
Asia carbon international.
The Netherland.