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Sasol, the world's largest coal-to-liquids (CTL) and gas-to-liquids (GTL) producer, has stated that GTL becomes financially viable at $10-$20 a barrel while CTL

by Maktab 16y ago

Sasol, the world's largest coal-to-liquids (CTL) and gas-to-liquids (GTL) producer, has stated that GTL becomes financially viable at $10-$20 a barrel while CTL reaches the same level at $50-$60 a barrel. So with the current price of oil at over $70, it's reasonable to assume that CTL, supplemented by GTL, could maintain prices at close to current levels.

Tichy 16y ago
I must admit I don't understand what this means? So Sasol could provide a replacement for oil that only costs 10-20$ per barrel? Why isn't everybody using their stuff now, instead of the 70$ "real" oil? Also, in my mind "peak oil" was actually just "peak fossile fuels" - how much more coal and gas is there than oil?
- eru 16y ago
  There's lots and lots of coal in all sorts of places. Wikipedia should give you the details.
- hga 16y ago
  "So Sasol could provide a replacement for oil that only costs 10-20$ per barrel?" With sufficient natural gas feed stocks, yes. As to why it's not being used now, until the very recent fracking revolution the supply of gas had been pretty tight, at least at where it's needed for consumption. See e.g. Russia's regular fights with the Ukraine. Probably the only places where it might make sense to build GTL plants are in relatively unstable oil producing nations that are currently flaring off their gas instead of doing anything else. There's also the issue of your confidence in predicting the future. These are expensive plants, and if e.g. a world-wide recession eventually leads to a crash in demand then you may not be able to service your debt on what you're able to sell your product at (there are plenty of people who suspect oil might crash to $10 a barrel, e.g. what if the PRC's demand sharply drops?).
- Maktab 16y ago
  It just means that it's profitable for them as a company to make it at that price, but their volumes are still relatively tiny compared to the overall fuel market. Presumably were we all to switch to gas-to-liquids to increased demand on liquid natural gas supplies would push the price up quite significantly. So it's not likely that we could replace oil with a $20 a barrel substitute, but it's plausible that coal-to-liquids and gas-to-liquids could serve as relatively affordable substitutes even on massive scales. And I'm not sure how much gas there is, but there's enough coal to last for 50-140 years, depending on demand.
sparty 16y ago
The Game Changer is the recent successful combination of the two processes by a small Australian company, Linc Energy, that has lead to previously stranded coal, either too deep or too remote to mine economically, being now both economically viable and environmentally friendly for energy extraction, with one ton of coal producing between 1.5 - 2 barrels of oil equivalent. LINC Energy ASX:LNC an underground coal gasification company that has demonstrated that coal can be burnt underground and the resultant gas, SYNGAS, can be converted to a range of ultra-clean liquid fuel products including diesel and kerosene. The process is named UCG-GTL meaning Underground Coal Gasification Gas to Liquids. Both technologies have a long and successful history. LNC's UCG project has been running for 10 years and its UCG-GTL project for 3 years. Linc Energy have several billion tons of UCG suitable coal (Arckaringa, South Australia) and a suite of projects around the world. Moreover LNC's Arckaringa coal is both deep and in a dry arid region of Australia far away from agriculture. Linc Energy is currently developing a cookie cutter design for UCG-GTL plants designed to produce 20,000 B.O.E per day and is currently building a 20,000 BOE per day plant in South Australia. Another exciting, much lesser known, emerging UCG play is Central Petroleum ASX: CTP who have around a trillion tons of proven UCG suitable coal in the even more remote, dry and arid and very sparsely populated Perdika Region that just happens to have a railway line stretching from Adelaide to Darwin nearby. The railway gives them access to S E Asia via the Port of Darwin and the Australian domestic market via Adelaide. CTP have a long term interest in both UCG and above ground coal gasification and the conversion of the resultant Syngas to liquid fuels and fertilizers. While LINC has a respectable market cap of $890m and a lot of cash, Central Petroleum has over a trillion tons of coal, approx. 250,000 sq kms of unexplored coal and oil prospective basins across central Australia and a market cap of just on $58m and about $20m cash making CTP one of Australia's best speculative investments. If LNC and CTP were to team up Australia would rapidly become both a major oil exporter and liquid fuel independent. (I hold LNC and CTP) For more information about UCG and GTL please see www.ucg-gtl.com.

by Maktab 16y ago

Tichy 16y ago

I must admit I don't understand what this means? So Sasol could provide a replacement for oil that only costs 10-20$ per barrel? Why isn't everybody using their stuff now, instead of the 70$ "real" oil? Also, in my mind "peak oil" was actually just "peak fossile fuels" - how much more coal and gas is there than oil?

eru 16y ago
There's lots and lots of coal in all sorts of places. Wikipedia should give you the details.
hga 16y ago
"So Sasol could provide a replacement for oil that only costs 10-20$ per barrel?" With sufficient natural gas feed stocks, yes. As to why it's not being used now, until the very recent fracking revolution the supply of gas had been pretty tight, at least at where it's needed for consumption. See e.g. Russia's regular fights with the Ukraine. Probably the only places where it might make sense to build GTL plants are in relatively unstable oil producing nations that are currently flaring off their gas instead of doing anything else. There's also the issue of your confidence in predicting the future. These are expensive plants, and if e.g. a world-wide recession eventually leads to a crash in demand then you may not be able to service your debt on what you're able to sell your product at (there are plenty of people who suspect oil might crash to $10 a barrel, e.g. what if the PRC's demand sharply drops?).
Maktab 16y ago
It just means that it's profitable for them as a company to make it at that price, but their volumes are still relatively tiny compared to the overall fuel market. Presumably were we all to switch to gas-to-liquids to increased demand on liquid natural gas supplies would push the price up quite significantly. So it's not likely that we could replace oil with a $20 a barrel substitute, but it's plausible that coal-to-liquids and gas-to-liquids could serve as relatively affordable substitutes even on massive scales. And I'm not sure how much gas there is, but there's enough coal to last for 50-140 years, depending on demand.

sparty 16y ago

The Game Changer is the recent successful combination of the two processes by a small Australian company, Linc Energy, that has lead to previously stranded coal, either too deep or too remote to mine economically, being now both economically viable and environmentally friendly for energy extraction, with one ton of coal producing between 1.5 - 2 barrels of oil equivalent. LINC Energy ASX:LNC an underground coal gasification company that has demonstrated that coal can be burnt underground and the resultant gas, SYNGAS, can be converted to a range of ultra-clean liquid fuel products including diesel and kerosene. The process is named UCG-GTL meaning Underground Coal Gasification Gas to Liquids. Both technologies have a long and successful history. LNC's UCG project has been running for 10 years and its UCG-GTL project for 3 years. Linc Energy have several billion tons of UCG suitable coal (Arckaringa, South Australia) and a suite of projects around the world. Moreover LNC's Arckaringa coal is both deep and in a dry arid region of Australia far away from agriculture. Linc Energy is currently developing a cookie cutter design for UCG-GTL plants designed to produce 20,000 B.O.E per day and is currently building a 20,000 BOE per day plant in South Australia. Another exciting, much lesser known, emerging UCG play is Central Petroleum ASX: CTP who have around a trillion tons of proven UCG suitable coal in the even more remote, dry and arid and very sparsely populated Perdika Region that just happens to have a railway line stretching from Adelaide to Darwin nearby. The railway gives them access to S E Asia via the Port of Darwin and the Australian domestic market via Adelaide. CTP have a long term interest in both UCG and above ground coal gasification and the conversion of the resultant Syngas to liquid fuels and fertilizers. While LINC has a respectable market cap of $890m and a lot of cash, Central Petroleum has over a trillion tons of coal, approx. 250,000 sq kms of unexplored coal and oil prospective basins across central Australia and a market cap of just on $58m and about $20m cash making CTP one of Australia's best speculative investments. If LNC and CTP were to team up Australia would rapidly become both a major oil exporter and liquid fuel independent. (I hold LNC and CTP) For more information about UCG and GTL please see www.ucg-gtl.com.