Fri Mar 2nd, 2007 at 05:38:11 AM EST
The Christian Science Monitor just ran an article about planned Coal To Liquids refineries. Of course the proponents of the technology are pushing it as the saviour of Business As Usual. Meanwhile, the environmentalists are all in a tizzy about the GHG emissions of CTL. Both sides are liars of course since even the best-case figures they produce show there is no future in CTL.
Here's what they have to say:
If all nine plants were built, they could produce about 3 billion gallons of fuel a year - not enough to meet the president's goal. But if federal tax incentives and state subsidies kick-start the industry, coal-based fuel production could soar to 40 billion gallons a year by 2025 - or about 10 percent of forecast oil demand that year, the National Coal Council reported to the Department of Energy (DOE) last year.
10% of oil demand? That isn't "soaring", that's not even hovering 30 centimeters above the ground! Oil imports are going to plummet more than 10% every two years come 2025. We're supposed to be reassured by a technology that will in 18 years build up enough capacity to make up a shortfall of only two years' oil depletion?
But it gets even worse when we look into the finances:
The $800 million project, which would make 5,000 barrels of CTL fuel a day in Gilberton, Pa.
5000 barrels a day, eh? Multiplied by 365 days in a year and 60 USD per barrel oil that's still only 109 million dollars in yearly revenue. So in 8 years this refinery will have made enough money to cover its capital investment. But not the interest on that capital and not its operating expenses.
As comparison, a hypothetical 1000 megawatt Nuclear Power Plant operating at 91% capacity produces just shy of 8 million megawatt-hours of electricity. Sold at 30 USD per megawatt-hour that's 239 million dollars in yearly revenue. Meaning, in 6 years an NPP has covered its capital investment.
Of course, this is in no way comparable since a CTL plant has to pay for coal whereas an NPP only has to pay for uranium. And coal is expensive and limited whereas uranium is practically free and inexhaustible.
The conclusion is obvious, CTL is nothing but a smokescreen. For whom? Well there's the business as usual crowd of course, but let's not forget the eco-zealots. After all, we wouldn't want to forget the big deal that's made out of the A1FI (fossil fuel intensive) scenario in the IPCC report. A scenario that assumes 1) peak oil never happens, 2) "unconventional" oil materializes out of nowhere, and/or 3) CTL (and a massive increase in coal mining) magically becomes feasible.
The reality is there aren't going to be any fossil fuels by 2050. No petrol, no natural gas, no tar sands, no oil shales, and no coal. Except as reducing agents in the production of steel, copper and concrete. But burning hydrocarbons for fuel? No way.
So when environmentalists predict that world CO2 emissions are going to rise in the future, don't believe them. They are going to fall. If CO2 emissions stay at current levels in 2025 or fall less than 60% in 2050, I will be very surprised. And it will be no thanks to politics or the environmental lobby either, but due only to geology.