- $20 per Gallon
- Beginnings and Endings
- Book Update
- Carbon Nanotube Structural Composites
- Alt Fuels
- GM's Driverless Car Announcement
- Thermelectric and Thermionic Devices
- Green Auto Racing
- Of Mileage and Markets - the Politics of Fuel Efficiency
- Thought Provoking Green Vehicles
- Renewable Energy and Energy Storage
- Renewables and Finance
- Structural Nanotubes Now?
- Two Timely Books
- Advanced Biofuels USA
- Alternative Fuels Redux
- Altfuels Industry Directory
- Alt Fuels Manifesto
- Clean Energy Journal Biofuels Forum
- Fossil Fuels
- Tech & Scientific Developments
- Green Infrastructure & Environmental Initiatives
- UOP's New Biofuel Tech (Strangled In The Cradle II)
- Alternative Fuel Paradigms
- Alternative Fuel Paradigms, Part II
- STRANGLED IN THE CRADLE?
- Coal and Uranium Reserves Running Out?
- Nanotechnology and Alternative Fuels
- Electricity vs. Alt Fuels
- Energy Transitions and Industrial Policy
- Industrial Policty II
- In Situ Coal Gasification
- Commentary & Analysis
- Coal-to-Liquids Controversy
- STATE OF THE INDUSTRY - PART II
- The Heartland Institute's Environmental Journal
- The War of the Alcohols
- Transportation Revolutions Transposed
- Twin Peak - Coal & Uranium
- World Agricultural Forum's Biofuels Initiatve
- Alt Fuel Options
- The Next Bubble
- Finance & Markets
- Legislative & Regulatory
- Tech & Scientific Developments
- Weekly Roundups
- The Structure of Transportation Revolutions
- Bio Fuels
- Fossil Fuels
- Heat Engines
- Toward the Renewable Sources Power Grid Part I
- Alternative Fuels - Competitive Landscape
- The Great Illusion or Why the Hydrogen Highway Never Got Built
- The Great Illusion, Part II
- Lightweighting -Saving Fuel by Saving Weight
- Lightweighting - Part III
- Maritime Transport in an Energy Constrained Future
- Maritime Transport and Energy - Part II
- The Future of Aviation
THE UNIVERSE OF ALTERNATIVE FUELS, PART I
Submitted by Dan Sweeney on Thu, 2007-01-18 17:17.
Much of the material in this article is also available in the tutorials, but my purpose here is to consider the market penetration and acceptance of the various alternative fuels rather than to dwell upon their performance characteristics or the manner in which they are manufactured.
Alternative fuels include, in rough order of current commercial significance, the following: natural gas and liquid petroleum gas (in
transportation); heavy oils; ethanol; synfuels; methanol; biodiesel; bio-crude; DME; and hydrogen. Only the first five or six are of any real economic importance at present.
Natural gas, which is essentially methane, is undeniably a conventional fuel in the context of heating and electrical generation, but arguably unconventional as a transportation fuel. Indeed, natural gas is close to being the incumbent alternative fuel at present.
Natural gas is hugely important in today’s energy industry, though it plays largely in heating and electrical generation, and, only to minor extent in transportation. Governments have promoted natural gas as a fuel for both commercial and public sector fleets though the fuel has tended to be favored more for heavy trucks, buses, and even earth moving equipment. Some of the vehicles in these fleets are special models from the major auto makers, while others are vehicles whose conventional gasoline or diesel engines have undergone costly conversions to enable them to operate on natural gas.
In the past natural gas has been promoted for many of the same reasons as hydrogen, and to favor natural gas was to favor the environment. But today, when concerns about the buildup of CO2 in the atmosphere have tended to displace concerns about local air pollution, natural gas proponents’ arguments have lost some of their force in as much as natural gas, while cleaner burning than gasoline or diesel, is still not carbon neutral.
Natural gas vehicles may be said to have proliferated during the nineteen nineties and the first two or three years of this decade, and several million are in operation throughout the world, but the category has scarcely grown over the course of the last three years on a global basis, and has actually declined in the U.S. If present trends continue, the promotion of natural gas within the transportation industry may assume the status of a failed experiment.
Natural gas still retains a strong constituency which includes a contingent favoring production of methane from biomass, and a much smaller segment favoring the generation of methane from coal, either in situ or in above ground plants.
The economics of producing methane from biomass with advanced anaerobic digesters appear favorable at this time, but lacking large scale implementations, such a statement is highly provisional. Because production of methane from coal has occurred on such a small scale to date, we cannot assess the cost effectiveness of any of the several extant production processes.
Natural gas is still highly abundant, but the easily recoverable and transportable resources appear to be seriously depleted. In order to maintain current production levels and meet the anticipated strong demand for natural gas, producers are going to have to seek this resource in remote place and in difficult terrain. Considerable risk and uncertainty must accompany the transition to stranded and unconventional natural gas resources, and such uncertainties will strongly affect the natural gas vehicle industry, such as it is.
Internal combustion engines running on natural gas represent a proven technology, and unquestionably the design problems are minimal compared to those associated with hydrogen burning engines, but at present the natural gas vehicle industry lacks impetus. There is little investment going into it, and little effort to expand existing infrastructure or improve products. These are not good signs for the future health of any industry, and it is our judgment that natural gas is probably not the transportation fuel of the future, though we could be surprised.
Liquid Petroleum Gas
LPG is a low cetane fuel which is unsuitable for use, at least in pure form, in compression ignition engines, but which may be used in spark ignition engines, though not without modification. The constituent gases, mostly butane and ethane, will liquefy at room temperature under moderate pressures and can be safely stored indefinitely in fairly low pressure tanks. Energy density by volume is about half that of the gasoline they replace.
LPG vehicles occupy approximately the same market niches as those running on natural gas with a couple exception; LPG has made some small headway in the marine market.
The progress of LPG almost exactly profiles that of natural gas in the transportation marketplace—recent resounding success followed by profound stagnation, especially in the key U.S. market.
On this basis one would be inclined to write LPG off as another of the numerous also rans in the alternative fuel marketplace, among them methanol, natural gas, hydrogen, and stored electricity, but LPG has a couple of points in its favor. First of all, it is extremely abundant, though the economics for recovery of stranded resources need investigation and may not ultimately prove highly favorable. Second, it can be blended with either conventional diesel fuel or biodiesel or combinations thereof, and in fact the market for such LPG injection engines is growing rapidly. Third, LPG is quite inexpensive in today’s marketplace because not only is it superabundant, it is not highly sought after by the public utilities and the chemical industry as is the case with natural gas.
Rather recently a number of companies have developed technologies for mixing LPG with diesel fuel, a procedure which markedly improves fuel economy and results in a much cleaner and more complete burn with minimized emissions. I believe that this technology is promising and is apt to become fairly common in the trucking industry, although the fact that it is currently confined to the aftermarket and thus involves expensive engine modifications will surely limit its acceptance.
One should note that a comprehensive infrastructure for distributing LPG is absent, and it lacks powerful and committed advocates. Both deficiencies must be considered serious.
In the longer term, who knows? Low price and abundance surely count for something in a generally energy constrained future, and the engines themselves pose few design challenges. A bright future for LPG is not out of the question, but at the same time, it is not altogether likely.
Heavy oils are just what the name implies, forms of petroleum of thick consistency that are difficult or impossible to pump and therefore must be mined or liquefied by heating them in situ. The largest deposits of these substances are found in Canada and in Venezuela. They currently contribute a couple of percent of the total petroleum extracted from the ground. Total reserves of heavy oil in its various forms are immense, probably surpassing in energy content all of the remaining conventional oil in the ground, and this fact gives great comfort to energy optimists. Unfortunately, about a third of the total is not economically recoverable at all with current technology, and whether anything close to 100% of the remainder is recoverable is doubtful.
Heavy oils are generally expensive both to extract and to process, and all processes associated with their exploitation tend to produce much more pollution than is the case with the drilling and refining of conventional oil.
I expect heavy oil production, particularly in Canada, to ramp up fairly quickly in the years to come, but unless breakthroughs occur in extraction techniques, it is unlikely to account for more than a small fraction of total petroleum production.
Since our next issue has ethanol for its focus we will limit our remarks here to a few observations.
Ethanol has been subject to explosive growth during the current decade, especially in the U.S. While use of the fuel in E85, a blend of 85% ethanol and 15% gasoline, has received the most publicity, the real action is in the fuel additives market where 5% ethanol blends are slowly becoming the norm in the U.S. An increase to 10% can easily be accommodated by most engines, and much higher concentrations are possible with flex-fuel engines.
I see much growth ahead for the ethanol industry, and I expect current volumes to double before the end of the decade, but I also see the distinct possibility of the industry hitting a wall. If all of the gasoline produced in the world were to be blended with five per cent ethanol, approximately 60 billion gallons would have to be manufactured per annum. The current annual production is about 5 billion gallons, so we’re looking at a twelve fold increase, and that’s assuming that petroleum production will not increase much beyond current levels—that is, that the peak of production is near. If petroleum production increases by more than 50%, the best case scenario advanced by Exxon-Mobil and other energy optimists, then we’re looking at correspondingly more ethanol.
Unless techniques for producing from cellulose and municipal wastes prove out, then there is little likelihood of such a demand for ethanol being met. With the world population still rapidly increasing, there is simply no way that ethanol can be produced in sufficient quantities from food crops unless the industrial nations are willing to tolerate extreme privation and even outright famine in the developing world. True, ethanol could be produced from coal, but development of production facilities would take considerable time, and economies of scale would dictate truly immense coal to ethanol plants—much larger than today’s ethanol distilleries. Needless to say, such plants would be difficult to finance.
It should be noted here that for all the talk of cellulosic ethanol today, all but a couple of the dozens of new ethanol facilities being built around the world will make use of traditional technologies. Almost no one, it appears, is willing to bet big on cellulosic ethanol. Something to think about when contemplating one’s energy future.
Fuels that are chemically close or indistinguishable from refined petroleum products can be made in various ways today. Fischer Tropsch processing of syngas derived from coal, natural gas, or biomass to produce distillate fuel, kerosene, and naptha has been known since the teens of the century and used in mass production since the 1940s. Other processes exist as well including hydrogenation of coal slurries and pyrolysis oil, catalytic production of aromatics from methanol via the Mobil process, and the catalytic cracking of certain petroleum-like long chain molecules from certain strains of algae and from the aptly named petroleum plant. To date, no technique using biomass apart from municipal wastes has proven itself economically.
Synfuel derived from both coal and from natural gas has been continuously produced in South Africa for decades by Sasol Corporation, but only within this decade has production been attempted elsewhere. Currently synfuel, mostly diesel fuel, is produced in Qatar and in Malaysia.
The future of synfuels is cloudy. All production processes using coal pose serious carbon emissions problems, and, although various carbon sequestration and carbon utilization techniques have been proposed as palliatives, none has been attempted on a commercial scale, and so the economics remain conjectural. Even without sequestration, which certainly increases cost, the real costs of production remain open to dispute, although the consensus is that coal based synfuel is probably competitive with petroleum at current pricing. Hydrogenation of coal slurries is probably the most cost effective production method, but it is also said to be the most polluting.
Production of synfuel from natural gas is only cost effective where very large resources are ready at hand, as is the case with Qatar. Buying natural gas from suppliers at current pricing is not cost effective. In the future, production of synfuel from stranded natural gas deposits may prove economical, but capitalizing such production will require bold investors.
I am cautiously optimistic regarding the longer term future of synfuels derived from coal, but much will hinge on the subsidized production ventures currently taking place in China. If these prove out, other nations will follow suit. If they appear uneconomical, synfuel’s progress could be severely retarded. I see coal based synfuel enjoying a heavy advantage over bio-based ethanol, however, simply because the feedstock is so concentrated and so abundant. The only biomass feedstock that can conceivably approach coal in energy density is algae, and the economics of algae cultivation are somewhat uncertain at present.
In the past methanol has been used pretty extensively in commercial and government fleets, especially in the U.S. Right now it is in steep decline. If progress occurs in methanol fuel cells, methanol could make a comeback as a fuel. That is by no means certain, however.
Methanol may be easily and cheaply produced from coal, and arguably exhibits the best economics of any alternative fuel today. On the other hand, energy density is fairly low, half that of gasoline, and it is highly corrosive, and quite toxic. Skin contact can cause serious damage to the human central nervous system.
Recently China issued standards for methanol motor fuel (see last month’s article on Methanol in China), indicating perhaps that the government might be settling on coal based methanol as the interim solution to that nation’s transportation fuel problems.
I see methanol as dark horse, and probably more important as a precursor to DME or synfuel than as motor fuel in and of itself.
Pyrolysis oil, also known as bio-crude, is a viscous dark brown liquid created by vaporizing woody biomass under pressure. Exact chemical composition will vary considerably according to feedstock and processing parameters, and generally the liquid contains dozens of distinct hydrocarbons. Bio-crude is roughly equivalent in energy content to residual petroleum oil, also known as heating oil, but it is highly corrosive and unstable and therefore difficult to transport and store. Most bio-crude is produced on the spot in industrial settings to fuel boilers, using various wood wastes.
Pyrolysis oil may be converted into synfuels by either gasification followed by Fischer Tropsch processing or via hydrogenation. The economics of either process are a matter of dispute, and no commercial production currently takes place.
I see pyrolysis oil as likely to be confined to small niche markets for the foreseeable future.
Oil shale is a huge resource which to date has exploited on only the most limited scale. Its potential to make a major contribution to America’s energy security is a matter of heated debate.
Oil shale is a black sedimentary rock, actually a type of marl, which is suffused with a kind of petroleum precursor known as kerogen. Yields on the order of 100 gallons a ton are entirely possible. Most of the oil shale in the world is located in a very restricted geographical area in the Rocky Mountains at the juncture of Colorado, Utah, and Wyoming. Many geologists believe that as much as two trillion barrels of crude could be produced from the kerogen residing in those rocks.
Pilot production of motor fuel from oil shale goes back to the nineteen thirties, and many false starts have been made by major oil companies to develop the fields, the latest ending in the early eighties. The economics of excavation and production, however, have always proven unfavorable. Now with oil prices exceeding $50 per barrel, the equation may have changed.
Oil shale recovery methods are somewhat similar to those utilized for heavy oils, although the consistency of the rock is such as to permit roof and pillar mining techniques which are ill suited to most tar sand deposits. As is the case with heavy oil recovery, oil shale extraction appears to have a high potential for polluting ground water and produces extensive tailings which are apt to blight the pristine wilderness areas in which much of the oil shale is found. Extraction and refining generally occur in close proximity, in some cases in situ underground. Many new production techniques have recently been developed, but none has been proven economically.
In the U.S. a dozen companies have filed with the Federal Government, which directly owns much of the resource base, for permission to work claims. Some are startups boasting new technology while others are large established oil companies.
Because oil shale consists of relatively hard, impermeable rock, and because the kerogen itself requires more processing to yield refined petroleum products than does bitumen, it would appear to represent a poorer resource, but the fact that this resource is so concentrated and that dense rock lends itself to conventional mining techniques may actually tip the scales in its favor. I believe that oil shale will be extensively exploited in the future and the considerable fortunes will be made in so doing.
Currently, commercial oil shale operations are extremely limited, however. In Estonia, which has relatively large deposits, crushed oil shale is used as a coal substitute and has been for decades. Mining has also begun in Australia but has sparked a pitched battle between mining companies and environmentalist whose eventual outcome is still unclear.
Biodiesel, which is chemically quite distinct from the petroleum distillate fuel we call diesel oil, does not yet account for a significant fraction of the distillate fuel market, but production is growing at an exponential rate, and the fuel has been eagerly embraced by governments in Europe and Asia if not in the U.S. Nevertheless, biodiesel produced from oil seed crops such as rape seed and sunflower seed and from soy beans is not cost competitive with petroleum diesel.
Biodiesel is easy if not inexpensive to produce, and quite small scale production facilities can operate profitably, at least with moderate subsidies. The barrier to entry for startups and entrepreneurs is much lower than is the case with most alternative fuels.
As is the case with ethanol, the biodiesel manufacturers are going to have to migrate to much lower cost feedstocks in order to make biodiesel a major presence in the marketplace. Some of the candidates include oil palm, jatropha, the Chinese tallow tree, and euphorbia. The Chinese tallow tree appears to support the highest oil yields while requiring the least cultivation, but it is highly invasive, which may limit its acceptance. Certain strains of algae also appear promising, but the economics of algal cultivation are not well established.
Biodiesel’s ultimate fate depends upon whether compression ignition engines achieve greater penetration into the personal transportation market. Currently compression ignition accounts for approximately 50% of sales in Europe, but sales are poor across most of the rest of the world. The decision of major Japanese auto makers to introduce passenger diesels is encouraging, but their acceptance factor remains unknown, and the major American auto makers have no plans of following suit.
I like the entrepreneurial ardor of the biodiesel sector, and I think it bodes well for its members. I am cautiously optimistic concerning the prospects of this industry.
Di-methyl either is a hydrocarbon gas that liquefies at room temperature under moderate pressure, and is somewhat analogous to LPG. Unlike LPG, DME is a high cetane fuel that is extremely well suited to use in compression ignition engines. Energy density is about half that of diesel fuel but noxious emissions of all types are extremely low. When DME is mixed with ethanol, the already excellent emissions profile is further improved. Existing diesel engines can easily be modified to run on DME.
DME can easily be produced from coal, stranded natural gas, or biomass, and the economics of production appear good at current petroleum prices. In short, this dark horse has a lot going for it. Nevertheless, the use of DME as a motor fuel is confined to a few pilots in China and Iran. A small amount of DME is used for heating purposes in the Orient, but mostly the gas is used as a propellant in aerosol cans. No extensive infrastructure exists for DME fuel.
I am ambiguous regarding DME. Were I to pick an alternative fuel having the best mix of performance and environmental characteristics and which offered the overall best production economics including an absence of baneful “externalities” commonly neglected in such analyses, DME would probably be the top candidate. In short, DME is the informed public policy choice for best alternative fuel within our present market and technological context.
Unfortunately, DME lacks many influential backers. Aker Kvaerner and Haldor Topsoe, two giant plant engineering companies, have recently introduced some new technology for producing the gas, which may be said to represent a certain degree of commitment, while the governments of Japan and Australia have published studies favorable to the adoption of DME in transportation. And one small company in the U.S. is already doing engine conversions. But there’s no place to get the stuff, and nobody going after niche markets that could help to build an industry. There’s no real entrepreneurial base.
I don’t think DME can succeed on a small scale like biodiesel. Some very large corporate entities will have to get behind it if it is to have any hope of prevailing. Right now I don’t see anything on the horizon.
Hydrogen was hyped enormously as the transportation fuel of the future in the nineties and at the beginning of this decade. While the major auto manufacturers continue to promote the hydrogen vision, most energy analysts appear to have gotten the word that hydrogen fuel is not going to happen anytime soon, if at all.
I produced a book length study of the hydrogen industry in 2006, and I can claim to be an expert. Hydrogen is currently produced in greater volumes than any other industrial gas, and most of it is used in oil refining. Such usage will grow considerably in the future, and that will be the principal role hydrogen will play in the transportation fuel business. It will not be used directly as a fuel to any extent because it is expensive to produce, very difficult to transport and store, and because hydrogen fuel cells, the preferred power plants, are not achieving the price and performance targets that would lead to mass adoption.
Now it is true that hydrogen has figured in many pilot fleet projects in the U.S. and Europe, but all of these have been heavily subsidized by government agencies and/or hydrogen producers. The only real commercial market for hydrogen fuel today is rocketry which is not likely to grow appreciably.
The heavy alcohols include butanol, heptanol, sexanol, septanol, octanol, etc. The molecules comprising these compounds are larger and more complex than those constituting methanol and ethanol, and the combustion characteristics are different. Butanol, on which most of the attention has been focused, has three quarters the energy density of gasoline, has an octane rating approaching 100, is noncorrosive, relatively nontoxic, and has a relatively low vaporization temperature permitting its use in aircraft. Emissions are also well controlled. Certain mixtures of heavy alcohols are said to have even more favorable performance profiles.
The problem with heavy alcohols is the lack of any proven low cost method for producing them. Several startups claim breakthroughs, but conclusive, independently validated demonstrations are still lacking. One company, Standard Alcohol Incorporated, is selling blended alcohols in small quantities under the Envirolene brand name, and a very limited amount of butanol is selling to racing enthusiasts as a fuel additive, but overall the industry may scarcely be said to exist.
I believe that heavy alcohols have a shot at achieving widespread acceptance. Overall performance characteristics exceed those of ethanol, and some new production techniques may reveal a superior cost structure. But that remains to be seen.
A Final Perspective
No alternative fuel stands out as a clear successor to refined petroleum products. I believe that petroleum-like synfuels are the most likely to achieve early dominance because they fit well into existing distribution channels, are produced with fairly well proven technologies, and because they draw upon abundant, energy dense feedstocks. They are not renewable, however, and, in the longer term, bio-fuels are likely to assume greater importance. Ultimately, political decisions will have a major bearing on who succeeds and who fails in this marketplace, but for now such decisions have tended to be tentative and inconclusive. Figure on a very turbulent but exciting market now and for at least a decade to come.