Posted on 08/21/2014 8:50:09 AM PDT by ckilmer
The clear liquid flowing from a collection of pipes and wires in a Hayward industrial park smells just like gasoline, and for all practical purposes, it is.
But it wasn’t made from crude oil. Instead, it came from natural gas, the fuel whose sudden abundance in America is reshaping the country’s energy landscape.
Siluria Technologies says it can produce large quantities of gasoline, diesel, jet fuel and chemicals at a lower cost than traditional refineries and chemical plants. At today’s natural gas prices, Siluria’s technology could make gasoline at roughly $1 per gallon, according to the company.
The oil industry has taken notice. Siluria reported Wednesday that its latest, $30 million fundraising round was led by Saudi Aramco, the world’s largest oil company.
For Aramco, the move may seem counterintuitive, since Siluria’s technology could turn natural gas into a competitor for crude oil. But Siluria, headquartered in San Francisco, sees it as a natural fit.
“Their business isn’t just oil,” said Ed Dineen, Siluria’s chief executive officer. “It’s oil and gas and petrochemicals and power. And when they look across that spectrum, they have a strong interest in increasing the value of their gas. This will allow them to do that.”
Aramco will join Siluria’s board of directors and has put together a team studying ways to deploy the technology in Saudi Arabia. Founded in 2008, Siluria has now raised $96 million from such investors as Bright Capital, Kleiner Perkins Caufield & Byers and Lux Capital.
The company has also built a short but impressive roster of partners, including the Linde Group, a global company specializing in industrial gases and engineering. Braskem, a petrochemicals giant based in Brazil, is installing Siluria’s system at one of its plants in La Porte, Texas, with operations expected to begin later this year.
Those alliances will help Siluria make the leap from tiny pilot plants, such as the one crafting small-batch gasoline in Hayward, to full production. And they reflect the company’s approach. Siluria wants to partner with oil and chemical companies, not supplant them.
“What we’ve done with these partnerships, with Aramco and Braskem, is we’ve essentially brought the customers into the company,” said Rahul Iyer, vice president of corporate development.
The ability to make liquid fuels from natural gas isn’t new, dating back to the 1920s. But the most common way of doing it, a process known as Fischer-Tropsch, is neither cheap nor easy, requiring high heat and pressure to work. Royal Dutch Shell last year shelved plans for a $20 billion “gas-to-liquids” plant in Louisiana, in part due to the cost.
Siluria’s process doesn’t require intense pressure and heat. It uses a chemical catalyst to take methane molecules from natural gas and combine them into ethylene, a hydrocarbon widely used in the chemical industry. The ethylene can be sold as its own product, or it can be processed with other catalysts to produce liquid fuels. The catalysts stitch together carbon atoms from the ethylene to create gasoline or diesel or jet fuel.
“With a refinery, you’re essentially boiling oil and separating it out,” Iyer said. “We’re building new molecules that weren’t there before.”
The controversial practice of hydraulic fracturing, or fracking, has flooded the United States with inexpensive natural gas, pried from shale formations beneath Pennsylvania, Ohio and West Virginia. Siluria’s technology represents one way to take advantage of that surge.
But it can have other uses. Oil companies often burn off, or “flare,” the natural gas that comes out of oil wells if they don’t have a pipeline to carry the gas to market. Siluria’s technology, deployed at oil fields, could create a valuable liquid commodity that would be easy to transport.
“If you’ve got stranded gas on the North Slope of Alaska or Kazakhstan, if you’ve got gas flaring in North Dakota or coming off of landfills, those are all opportunities for our technology,” Dineen said.
Siluria’s method for making fuel produces fewer greenhouse gas emissions than traditional refining, according to the company. There are no emissions of sulfur dioxide or mercury, either. And the carbon dioxide given off by Siluria’s methane-to-ethylene process is pure enough to be sold as its own product.
But Siluria’s version of gasoline still comes from fossil fuel. That limits its appeal as an alternative to oil, at least in the eyes of researchers concerned about global warming.
“My view is, it’ll make some people some money, but it’s not much of a solution, because you’re still burning fuel and creating emissions,” said Daniel Kammen, director of the Renewable and Appropriate Energy Laboratory at UC Berkeley. “It’s a good business deal.”
Some is more expensive, some is less:
Refiner Petroleum Product Prices by Sales Type
http://www.eia.gov/dnav/pet/pet_pri_refoth_dcu_nus_m.htm
I’d like to see them do a commercially-viable coal to gasoline process.
..............
there’s already a number of goal gasification projects projects around the world.
https://www.google.com/?gws_rd=ssl#q=coal+gasification&spell=1
The trick would be to turn coal to gas and then use this process to turn gas to gasoline.
Coal to Liquids
http://www.worldcoal.org/coal/uses-of-coal/coal-to-liquids/
Converting coal to a liquid fuel (CTL) – a process referred to as coal liquefaction – allows coal to be utilised as an alternative to oil. There are two different methods for converting coal into liquid fuels:
Direct liquefaction works by dissolving the coal in a solvent at high temperature and pressure. This process is highly efficient, but the liquid products require further refining to achieve high grade fuel characteristics.
Indirect liquefaction gasifies the coal to form a ‘syngas’ (a mixture of hydrogen and carbon monoxide). The syngas is then condensed over a catalyst – the ‘Fischer-Tropsch’ process – to produce high quality, ultra-clean products.
An array of products can be made via these processes – ultra-clean petroleum and diesel, as well as synthetic waxes, lubricants, chemical feedstocks and alternative liquid fuels such as methanol and dimethyl ether (DME).
Where is it Used?
South Africa has been producing coal-derived fuels since 1955 and has the only commercial coal to liquids industry in operation today. Not only are CTL fuels used in cars and other vehicles, South African energy company Sasol’s CTL fuels also have approval to be utilised in commercial jets. Currently around 30% of the country’s gasoline and diesel needs are produced from indigenous coal. The total capacity of the South African CTL operations now stands in excess of 160,000bbl/d.
CTL is particularly suited to countries that rely heavily on oil imports and that have large domestic reserves of coal. There are a number of CTL projects around the world at various stages of development. Liquid fuels from coal can be delivered from an existing pump at a filling station via existing distribution infrastructure and used, without modification, in the current vehicle fleet.
So what would you estimate the real cost of producing 1 gallon of gas is these days?
Another question only a guy like you would know, how many cubic ft of gas does it take to create a gallon of gas using these methods and what is the cost of that gas.
I’m not being cute, really am wondering about the comparisons.
What I don’t get is why Sasol isn’t in talks with American coal producers about setting up such a facility stateside. Instead of acquiring mines willy nilly, shouldn’t US coal producers have been thinking about CTL, especially in view of all the flak they’re getting from the EPA?
The prices are very seasonal aren’t they?
For the same reason they are not expanding it in their own country. It isn’t the economic choice.
Combine with O2 (burn it) to create energy. H2 does not remain left over long.
What I've read is that the break-even price of oil for CTL is around $40 per barrel. Given that oil is now selling for around $100, what am I missing here?
Do you really believe South Africa can do CTL for $40, have an abundance of coal, a lack of oil, have decades of experience with CTL, and they spend their money building GTL?
$40 is not true.
So it's SSL stock analyst fairy dust. Figures. Still, I remain curious as to what the actual breakeven oil price is for CTL. You'd think that since coal can be burned to provide energy for the process, such a number exists.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.