Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

Issues in Focusammonia plants, and most are relatively mature;however, the suite of integrated GTL technologieshas not been used on a commercial scale. One loominguncertainty with regard to GTL is whether a provenpilot plant can be scaled up to the size of a commercialplant while reducing capital and operating costs. Akey engineering goal is to improve the thermal efficiencyof the GTL process, which is more complexthan either LNG liquefaction or petroleum refining.The leading GTL processes include those developedby Shell, Sasol, Exxon, Rentech, and Syntroleum. Atthis time, there is no indication as to which technologywill prevail. Currently, the proponents of thesevarious processes have nearly 800,000 barrels per dayof first generation capacity under development inQatar.AEO2006 projects domestic GTL production originatingin Alaska, reflecting a longstanding proposal tomonetize stranded natural gas on the North Slope.GTL liquids would be transported to the lower 48refining system. In 2030, domestic GTL productiontotals 200,000 barrels per day in the high price case,even though it competes directly with the Alaska naturalgas pipeline project. In AEO2006, both investmentsare feasible simultaneously. What will actuallyoccur depends on how and where Alaska natural gasstakeholders ultimately decide to make their investments.GTL production worldwide exceeds 1.1 millionbarrels per day in the reference case and 2.6million barrels per day in the high price case in 2030.Biomass-to-Liquids. BTL encompasses the productionof fuels from waste wood and other non-foodplant sources, in contrast to conventional biodieselproduction, which is based primarily on food-relatedcrops. Because BTL does not ordinarily usefood-related crops, it does not conflict with increasingfood demands, although crops grown for BTLfeedstocks would compete with food crops for land.BTL gasification technology is based on the CTL process.The resulting syngas is similar, but the distributionof the hydrocarbon components differs. BTL useslower temperatures and pressures than CTL. LikeGTL, the BTL reaction is exothermic and requires acatalyst [67]. There are at least 13 known processescovering directly and indirectly heated gasifiers forthis step.BTL originates from renewable sources, includingwood waste, straw, grain waste, crop waste, garbage,and sewage/sludge. According to a leading processdeveloper, 5 tons of biomass yields 1 ton of BTL [68].One hectare (2.471 acres) of land generates 4 tons ofBTL. A modestly sized BTL plant under sustainedoperation would require the biomass of slightly morethan 12,000 acres [69]. Unlike biodiesel or ethanol,BTL uses the entire plant and, thereby, requires lessland use.BTL fuels are several times more expensive to producethan gasoline or diesel. Without taxes and distributionexpenses, a leading European developerestimates BTL production costs approaching $3.35per gallon by 2007 and falling to $2.43 per gallon by2020 [70]. This equates to a crude oil equivalent pricein the high $80 per barrel range at current capital costlevels.BTL technology is at the pilot-plant stage of development.The capital cost of a commercial-scale BTLplant could approach $140,000 (2004 dollars) per barrelof capacity, according to a study conducted forDOE by Bechtel in 1998 [71]. The estimated initialinvestment level is comparable with those for earlyCTL and GTL plants, which have since declined by 50percent or more. Technological innovations over timeand economies of scale could further reduce BTLcosts. The first commercial-scale BTL plant, with acapacity just over 4,000 barrels per day. is planned tobegin operation in Germany after 2008, followed byfour additional facilities. About two-thirds of a BTLplant’s capital cost is related to biomass handling andgasification. BTL front-end technology is new andevolving and has parallels with cellulose ethanoltechnology.Large BTL plants require huge catchment (staging)areas and incur high transportation costs to movefeedstocks to a central plant. From a process standpoint,the main challenge for BTL is the high cost ofremoving oxygen. It is unclear whether gasificationand other processing steps can achieve the cost reductionsnecessary to make it more competitive. Catalystcosts are high, as they are for other Fischer-Tropschprocesses. Without additional technological advancesto lower costs, BTL could be limited to the productionof fuel extenders rather than primary fuels.Renewable BiofuelsNot to be confused with BTLs are the renewablebiofuels, ethanol and biodiesel. These fuels can beblended with conventional fuels, which enhancestheir commercial attractiveness. Biofuels have highproduction costs and are about 2 to 3 times moreexpensive than conventional fuels. Renewable biofueltechnology is relatively mature for corn-based ethanolproduction, and future innovations are notexpected to bring its costs down substantially. Future56 Energy Information Administration / Annual Energy Outlook 2006