[ragged]

I've been looking around for more information about Siluria (the first company I mentioned). I recently came across the following article:

ICIS.com: S Siluria starts ethylene-to-fuel pilot plant: http://www.icis.com/Articles/2014/03/21/9764336/us-siluria-starts-ethylene-to-fuel-pilot-plant.html

$this->bbcode_second_pass_quote('', 'H')OUSTON (ICIS)--Siluria held on Thursday a grand opening for a pilot plant that uses a unique two-step process that converts methane into gasoline, a technology that could lower the typically high costs of gas-to-liquids production, the CEO said.
Siluria uses a process distinct from the Fischer-Tropsch technology typically associated with producing fuel from methane, said Ed Dineen, CEO. "We do it in a much more direct and efficient way."

[ROCKMAN]

Interesting ragged. But: "Dineen estimates that its operating costs will be about $15/bbl, excluding gas.". That's nice but I could how much NG it would take to make a gallon of fuel. So $15/bbl would be $0.36/gallon. So does it take 1/10 of an mcf of NG...another $0.45/gallon. Or 1 mcf per gallon...another $4.50/gallon? Or whatever NG sells for in the future. Let us know if you dig up the answer. BTW I live 10 miles from the pilot plant in La Port.

Not accusing these folks of anything but I've seen folks make $millions by running "pilot projects" that they had little expectation of success.

[ragged]

Here's a link, but there's probably a better one out there: http://www.oilandgaslawyerblog.com/2009/07/gas-measurement-101.html

$this->bbcode_second_pass_quote('', ' ')For comparison, a barrel of oil contains approximately 5.8 MMBtus (depending on the constituency of the oil). Therefore, a barrel of oil is roughly equal in heating value to 5.8 mcf of methane. When companies report their production or reserves in "barrels of oil equivalent" or "boe," they are converting their reserves of gas into barrels of oil on this 5.8-to-one ratio.

[Graeme]

Shale gas: The demand side of the equation

$this->bbcode_second_pass_quote('', 'N')atural gas has traditionally served the needs of three major types of customers: manufacturers, power generators, and residents using gas for heating and cooking. The transportation industry now considers expanding the use of natural gas to power automotive vehicles; this creates another avenue for natural gas application.

Among all uses, those for residential customers’ are most predictable. Heating needs are affected largely by seasonal changes in weather (good weather forecasts make it easy to adjust gas supply) and less to the state of economy; hence, the impact of heating on demand for natural gas can be foreseen with more certainty, especially in the long term. Meanwhile, increased use of natural gas by the power industry and manufacturers is driven primarily by economics: the price of gas. The price is not the only factor affecting decisions on expanding its use: power utilities have to consider environmental regulations and other power resources in their generation portfolio, and manufacturers ponder over sustainability of expanding production capacity.



Conclusion

Ever since the U.S. natural gas industry was opened to competition, high volatility of natural gas prices has remained steady. Unexpected natural gas price fluctuations have been caused mostly by weather, natural disasters, and transportation disruptions. At the same time, a closed system of pipelines with known capacities and demand projections that are developed and updated on an ongoing basis by government agencies have been leaving not much room for guesswork. Still, with not so many inputs, price forecasts have proven to be a difficult task; forward curves developed on exchange-traded futures have not been following spot prices accurately. Analysts, risk managers, and decision makers found it difficult to predict market movements.

Now we are facing even more challenging times. An increase in natural gas supplies, boosted by expansion of shale plays exploration, poses more questions and creates more uncertainty for those businesses and industries that rely on natural gas for their operations. In some cases uncertainty contributes to changes in supply of shale gas, and in other cases it affects demand for the growing volume of this fuel.

The U.S. government sees natural gas expansion from shale plays as a solution for achieving energy independence that it has sought for 40 years. However, government support alone will not determine the future of the natural gas supply, the need for more natural gas is affected by many factors. The major driver of accelerating demand is the degree to which it can be exported in a liquefied form, LNG. This venture, so attractive for gas producers, faces growing opposition from those who believe that exports will exhaust supplies sooner and push domestic prices up. Calls for imposing government control over volumes of LNG exports are getting louder in Congress. If government control is imposed, it will have a dampening effect on gas production.

Aside from potential restrictions imposed on gas supply, the global nature of LNG has its own constrains and concerns. Given that the primary target buyers in Asia are remote markets, U.S. natural gas will remain competitive globally if its production is cost efficient. Global prices, unpredictable political events and shifts in LNG trading patterns have to be examined closely to avoid over or under production, as well as to ensure that trade partnerships remain profitable. As well, the cost of production, which encompasses several components (delivery, liquefaction, shipping, storage and regasification), infrastructure and the rate at which LNG terminals are being constructed also affect the volume of LNG exports.

Another source of growing demand for natural gas is its use as an alternative fuel by the transportation industry.

The popularity of vehicles fueled by natural gas in its condensed or liquefied form is growing; however, costs for these vehicles remain high. Besides, the expansion of natural gas-fueled vehicles is restricted by a limited infrastructure of filling stations. An inherently high cost of retrofitting, as well as a lack filling infrastructure, can be offset by government subsidies. Moreover, the use of natural gas as a transportation fuel is primarily driven by the cost of petroleum, which currently remains high. But, will the oil stay expensive forever? Crude oil price projections, with multiple factors and shortage of publicly available information, are a topic for a separate analytical research.

Some manufacturers and power industry representatives are looking at cheap gas as a panacea; however, a long history of price volatility keeps many of them hesitant to expand production capacities fueled by natural gas.

Shale gas production itself faces constraints and uncertainties. Reserve estimations prepared by different parties, government and industry, differ dramatically and have been questioned and criticized by opposing sides. As uncertainty remains about actual reserves, the cost and rate of production can be affected by applied technologies and cost of compliance with regulations on fracturing.

To cap it all, environmental regulations, those in effect and in the making, as well as those being considered, will affect both sides of the equation. Depending on which are approved and implemented, the power generation mix, natural gas recovery, and use of natural gas as an alternative fuel can be altered dramatically and shifting input parameters into unknown territory.

It is not so easy to predict the expanse and direction of the future of natural gas use given the interrelationship of future price movements by market participants, investments in natural gas-supported sectors, and government subsidies for the industry. For now, these are the factors arising from shale gas expansion that have or might have an impact on natural gas prices.

[ralfy]

Likely, various technologies will not lead to energy returns that are high enough to maintain a global capitalist economy. In which case, they will be used by military and police forces to secure remaining resources and control civilian populations.

[ROCKMAN]

"The major driver of accelerating demand is the degree to which it can be exported in a liquefied form, LNG. This venture faces growing opposition from those who believe that exports will exhaust supplies sooner and push domestic prices up. Calls for imposing government control over volumes of LNG exports are getting louder in Congress. If government control is imposed, it will have a dampening effect on gas production."

Another strange statement either rooted in ignorance of simply propaganda. So concerns over exporting LNG "are getting louder in Congress." But Congress hasn't expressed any concern over exporting US NG via pipelines. That's seems odd since in 2013 the US exported 1,569,000 million cubic feet of NG via pipelines to Canada and México and exported 3,000 million cubic feet of LNG. IOW of the NG the US exported in 2013 about 0.2% was in the form of LNG. Which means that if the industry increases its LNG export capability 50 fold as much as 10% of our NG exports could be in the form of LNG. The horror...the horror. LOL. And all of that ignores the fact that the US imported more NG in 2013 then we exported via pipeline and LNG combined. And why? Because the US produces on 93% of the NG we consume. And that's after the "great surge" in production from all the shale plays.

And continues to amaze me: never ending propositions of the US exporting our "abundant oil and NG resources" to achieve one goal or another and completely ignoring the simple and undeniable fact that the US is a net importer of both oil and NG. But have no fear America: we are a net exporter of one fossil fuel...coal. And the folks in China and India send you their heartfelt thanks.

[Graeme]

I take this paragraph as the key one not whether ng will be exported.

$this->bbcode_second_pass_quote('', 'S')ome manufacturers and power industry representatives are looking at cheap gas as a panacea; however, a long history of price volatility keeps many of them hesitant to expand production capacities fueled by natural gas.

[Carnot]

Ragged, I picked this thread up and laughed. Just be careful with your excitement.

I will give a quick view on GTL, in particualr the Shell Middle Distillate Process (SMDS).

The SMDS has a thermal effeciency of 63% (their literature: Handbook of Petroleum Refining Processes- Robert Myers)

There 1 metric ton of natural gas would produce a product of equivalent themal content of 630kg.
(1 mt NG is equivalent to around 50000 scf or 50 million BTU)

In the case of methane the heating value is about 50 GJ per tonne. The equivalent diesel product would contain the same energy adjusted for the diffrence in energy density.

Mass of diesel = 630kg x 50(methane GJ/t)/ 44 (FT diesel GJ/t) = 715 kg FT diesel. ~872 ltrs (230 US galls)

It is absolutely simple if you stick with SI units.

Oxidative coupling of methane is nothing new. It has been around for decades and a lot of money has been sunk into it with not much success. The biggest challenge is stopping the methane reacting with the oxygen to form carbon dioxide. The real drawback is controlling the reaction selectivty at high temperature. The reaction is an equilibrium reaction that has to take place at high temperature. Siluria claim, and that what it is , a claim, that by growing the catalyst on a virus they can somehow improve the selectivity. Let us say that within my company we are somewhat pessimistic about such claims. The patents that they have published tend not to support any significant improvement over the work of others.

We doubt if they could achieve an economic cost process that would firstly beat current ethane steam cracking technology. Cracking ethane is highly developed.

Coupling methane is not easy, and converting this into hydrocarbon fuels will be far more challenging than expected. So far all of the GTL process have turned out to be seriously capital intensive and there are few actual plants in the world. Less than 10 and most are Bonsai. Shell abandoned their GTL plant for the US citing that it was uneconomic. No surprise there. If the process were any good there would be many more plants.

Looking at the potential for fuel production from this process does not fill me with much hope. It illustrates the lack of commerical knowledge of the developers. Why would anyone want to devalue a product, which is effectively what would happen if, they managed to produce ethylene in commerical quantities at a cost lower than at present. Ethylene is a primary building block that carries a premium over bulk fuels. Turn it into gasoline or diesel and you would have some very angry investors.

To me this reads like another of the many not so bright ideas that come across my desk every week. Gullible investors are snared by the promise of some pixie dust solving the worlds energy crisis. Two years ago we had Solaslime and Kior. Kior is all but bust and Solaslime plods on making high value but small volume fatty acids. A long way from the promise of cheap fuels, and even further from making a profit, and meanwhile burning through their cash pile at an alarming rate.

Rockman nailed it when he said some people make a lot of money from research projects. As for Brakem do not be fooled. They are just a big stupid mullet who wandered into the chum circle. Not the first time they have bought into a real can of worms. It never ceases to amaze me how many large companies get suckered, ignoring the laws of thermodynamics, burning their investors money.

Who am I. I work for a large multinational chemical company and evaluate chemical processes. My main interest is is refinery tecnhologies, especially catalytic cracking, steam cracking for olefines, Fischer Tropsch processes and alternate routes to fuels (still looking). We have extensively looked into MTO, MTP and MTG and made one conclusion. Money pit. Better back the horses if you want a winner.

Here is a link to OCM http://www.us-egyptasi.com/Presentations/Nasrallah.pdf I hope that you can follow it or at least get the gist of the content.

[ROCKMAN]

Outstanding cannot! A real keeper. But ragged remember: "Basically at today's price, the same amount of natural gas to equal the energy in a barrel of oil would cost $26.05." But remember this isn't a story about using NG as a fuel. It's about using a liquid fuel as a sub for gasoline. The cost of the NG is just one component.

[StarvingLion]

Of course there cannot be much hope when the so-called credentialed people within the chemical industry do not even understand quantum mechanics correctly. The "solution" is always some ridiculous darwinian exercise of "expert" principal investigators guiding hordes of postdocs doing mindless empiricism at a physical scale that is irrelevant to begin with. This system has not worked for the past 40 years but the happy process of monetizing papers for the worthless publishers marches forward to oblivion.

If I actually had some IP worth more than a dime why would I bother going to Carnot and his multinational to get stripped bare? There is no bottom-up pathway to commercialization except for the various scam operators who get access to free funds.

[Graeme]

Methane Emissions Questions Gas Being ‘Bridge’ Fuel

$this->bbcode_second_pass_quote('', 'N')atural gas as a means to produce electricity is being hailed by the Intergovernmental Panel on Climate Change as the fuel that can act as a “bridge” between carbon-heavy coal and zero-carbon renewables, helping to reduce humans’ impact on the climate.

The idea is that burning natural gas involves fewer greenhouse gas emissions than burning coal. The IPCC in its Working Group III report says natural gas as a bridge fuel will only be effective if few gases escape into the atmosphere during natural gas production and distribution.

But a study published Monday adds to the growing evidence those escaping gases, called “fugitive” emissions, are numerous, especially methane emissions while a well is being drilled, a phase of well development previously thought to emit little if any methane. Over a 100-year timeframe, methane is about 35 times as potent as a climate change-driving greenhouse gas than carbon dioxide, and over 20 years, it’s 84 times more potent.

Natural gas drilling could emit up to 1,000 times the methane previously thought, possibly significantly increasing the greenhouse gas footprint of the production of natural gas, the study shows.

The study, conducted by researchers at Purdue and Cornell universities and other institutions, is one of numerous studies conducted over the past several years that have discovered methane leaking from oil and natural gas wells, pipelines and hydraulic fracturing operations. The studies generally agree that methane leakage is significant in many areas, but some question the overall impact to the climate.

[rockdoc123]

Graeme
Once again I will draw your attention to a post I made awhile ago when you tried this the first time.
In the states where all the gas drilling activity has been intense recently with the shale evolution the CH4 monitoring stations have shown absolutely no increase in rate of gain since that activity started (I use 2008 as the set point having been there when it all started to kick in). I posted graphs from some of the stations to illustrate this.

As Rockman has pointed out a couple of times (and on this subject you should listen to him because he is out in the field and understands what happens) leakage of methane during drilling is an absolutely ridiculous proposition, leakage after a well is cased is a bit of a head scratcher given most of these wells now are monitored for wellhead and casing pressures on a continuous basis.

[Graeme]

I don't have any confidence in statements from the oil industry. This is a very recent study published in PNAS (March 2014).

$this->bbcode_second_pass_quote('', 'T')he identification and quantification of methane emissions from natural gas production has become increasingly important owing to the increase in the natural gas component of the energy sector. An instrumented aircraft platform was used to identify large sources of methane and quantify emission rates in southwestern PA in June 2012. A large regional flux, 2.0–14 g CH4 s−1 km−2, was quantified for a ∼2,800-km2 area, which did not differ statistically from a bottom-up inventory, 2.3–4.6 g CH4 s−1 km−2. Large emissions averaging 34 g CH4/s per well were observed from seven well pads determined to be in the drilling phase, 2 to 3 orders of magnitude greater than US Environmental Protection Agency estimates for this operational phase. The emissions from these well pads, representing ∼1% of the total number of wells, account for 4–30% of the observed regional flux. More work is needed to determine all of the sources of methane emissions from natural gas production, to ascertain why these emissions occur and to evaluate their climate and atmospheric chemistry impacts.

[Carnot]

Starvinglion, why have a dig at me.I might work for a multinational but let us remember out is the large multinationals that have brought us the fuels, metals , fertilisers and polymers that keep the world population fed and watered(almost). What would you like to forego. I somewhat disagree that we strip inventors bare. However you or anyone else look at it we are not a charity and we have to answer to our investors- people like you. Too often the so called IP turns out to be anything but. Certain companies have managed to cash in their so-called IP only to fleece investors who bought into their so called idea. Many examples come to mind. But one example stick in my mind as I was part of the team that carried out due diligence. This was some novel de-sulphurising process that was anything but. These scamsters pumped up the prospects, ran an IPO and raised $170 million and then pumped the share price to levels that valued the company over $1 billion. The scammers then dumped shares every day until it finally went bust a few years ago, without selling 1 process, not one. The head scam artist is still scamming with a new process. By and large most companies of the type that I work for are more likely to be scammed than we are to rob would be IP owners. Frankly there is very little IP in our business that I have ever seen developed by small companies or private individuals that is worth anything. Last year I visited a company with a plan to make diolefines from a bio route. Nice guys but clueless when it comes to business. The intention was to sell the IP, but apart from being very risky, they thought that this undeveloped and under performing process was worth hundreds of millions. I do not think so. Worse still they forgot that the product is cyclical and their price estimations focused on the top of the market. Worse still I doubt if the process would scale or ever achieve the yield they claimed was possible.
So have a crack at me if you wish bit remember your pension fund is probably invested in companies such as the one I work for and we are expected to make a profit.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I') don't have any confidence in statements from the oil industry

[ragged]

$this->bbcode_second_pass_quote('Carnot', ' '). . . Siluria claim, and that what it is , a claim, that by growing the catalyst on a virus they can somehow improve the selectivity. Let us say that within my company we are somewhat pessimistic about such claims. The patents that they have published tend not to support any significant improvement over the work of others.

. . .

[Carnot]

Ragged,

As I said. Magic Pixie Dust. Beware of the snake oil salesman. The claims are not necessarily supported by the facts. The yield is no better than existing and why produce bulk fuels when you could produce higher value ethylene. If it worked they would not have to pump on YT. Believe me, they would have ethylene producers beating a track to licence it.

[basil_hayden]

$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'I') don't have any confidence in statements from the oil industry

[Graeme]

As usual, you don't provide a link. Besides the more recent aerial survey invalidates and supercedes previous work.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'A')s usual, you don't provide a link.