Arabian Alchemy: Shell makes black gold in Qatar
PJ contributor Leon de Winter mailed us an article from The Volkskrant, which Leon calls the New York Times of the Netherlands (which seems damning with faint praise to me, but never mind that). The title of the article is (roughly) “Shell’s magic makes black gold from natural gas.” Frustratingly, I can’t get the Volksrant website to deliver me a link to the original article, but I was able to find it on Lexis, and between my small ability to read Dutch (see, you learn how the Dutch spell things, then read it out loud — if you speak both English and German, you can make sense of it) and Google Translate, I was able to get the gist.
And it’s a pretty interesting gist, I’ll tell you what.
Here’s the basic story: In a June 4th story, Michael Persson reports that the first product is coming from the Shell-Qatari joint project a half-hour out of Doha. The project is called “Pearl” and its function is to transform natural gas into synthetic replacements for petroleum products. In other words, turning natural gas into oil.
Conceptually the process is simple. Natural crude oil is a mix of a variety of hydrocarbons, which of course are simply molecules made of hydrogen and carbon. (This is distinct from carbohydrates like sugar, which also include oxygen.) A lot of the hydrocarbons in crude oil are long chains — they have many carbon atoms joined together. When crude oil is refined, the refinery basically does two things: first, it separates out any naturally-occurring shorter chains, which includes things like pentane, hexane, heptane, and octane. We call a misture of those things (and some other stuff, this is a bit oversimplified) “gasoline.” This isn’t sufficient to provide as much gasoline as we’d like, so a catalytic process is used to convert other fractions into the right components for gasoline. Natural crude usually contains some other compounds, like sulfur compounds. When you hear the TV business people talk about “sweet crude”, they mean crude with relatively little sulfer. “Sour” crude, naturally, has more sulfur. The sulfur compounds have some commercial uses, but they present processing problems, so “sour” crude is less desirable” than “sweet” crude.
The effect is that long-chain hydrocarbons are broken down into shorter chains; this process naturally releases some energy, so it’s “downhill”.
What Shell is doing, through a process called GTL (“gas to liquid”, aren’t scientists just poets?), is running a refinery backwards. Natural gas is primarily methane, the simplest hydrocarbon; the GTL process pushes it back up the hill to form longer hydrocarbon chains. This process consumes some energy, so it’s a little bit counter-intuitive why you’d want to do such a thing, but there are some real advantages. First off, natural gas is hard to handle — you can’t run a pipeline across the Pacific, and storing it in tankers means either storing it under very great pressure, or cooling it to very low temperatures to make it a liquid.
This is really just a modified Nazi/South African coal liquefaction (google “Fischer-Tropsch) process, where they make the CO/H2 synthesis gas from natural gas instead of coal. The reformer is a lot cheaper when it runs on gas. This isn’t magical new technology, it’s a different arrangement of very mature technology. IOW, it’s going to work, and there won’t be any economic surprises.
And yes, we could be doing this in the US, too. Easily. We also could be running large commercial vehicles on liquefied and compressed natural gas. Many municipal bus systems have been running CNG for decades.
Switching out oil for gas is straightforward and economical. No wonder the greens oppose it.
Did you actually read the original report, or are you going on what it looks like?
Well, if he didn’t read the actual report, he did a helluva job on “looks like”. But the key here is they have the process efficiency up. If you follow the GTL link it will take you to Wiki for the Fischer-Tropsch process.
To be clear, Shell HAS been improving the efficiency of the FT process, regardless of the feedstock. They’ve also improved shale oil (not to be confused with fracking) technology. That’s all proprietary.
The main point was that even without the proprietary technology, at $80-$100 per barrel, this is economical, and the reason why it’s not in current plans in the US is the green opposition. The greens in the west are hell bent on a wind/solar final solution now, regardless of economics or even technical feasibility.
As a related aside, I once tried to convince some staff at municipal sewage treatment plants to generate electricity from their digester gas instead of flaring it off. The economics penciled out. They didn’t want to be bothered. Only the private sector cares enough about money to want to save it by reclaiming waste gas.
Hi Snork! How have you been?
I’ve mostly been hanging out at Blogmocracy. Hope to see you there soon!
Sasol is a big SA company that has been doing coal-to-liquids for years; they are experimenting with GTL now. Syntroleum and Rentech are two small-cap US companies working on CTL, the former say they have an improvement on the Fischer-Tropsch process which can use air instead of oxygen. These processes are not a mystery. Thirty years ago, Jimmy Carter was a proponent of synfuels but the program faded away when the price of crude oil fell in the 1980s.
Unfortunately now that the economics are becoming more viable, the main problems may be political. The Democrats all wanna be like “the perfesser” on Gilligans Island and make cars (or high-speed choo-choos) with sails on them. The progressives once again impede progress.
This is the difference between the crony capitalist government sponsored research of Carter’s synfuels project with that of the private sector working to develop its own technology. The former is doomed to inefficiencies. And, apropos, the price of oil dropped after Reagan abandoned the Carter-era old oil/new oil regulatory regime.
Please note the “natural gas as waste product” aspect of this process. How many barrels of gasoline were produced world wide in 1890? We don’t know for sure, we can only make educated guesses. The reason being we were using oil to produce kerosene and gasoline was considered a waste product. We have detailed knowledge of how much kerosene we made, but, man, getting rid of that gasoline was chore enough – why bother logging its quantity?
It’s “de Volkskrant”, with another K in it (“volk” is Ducth for “people”, “krant” for “newspaper”)
See also http://en.wikipedia.org/wiki/De_Volkskrant
Sure enough, thanks.
I thought it was Volks meaning:People’s, and rant meaning: rant.
I actually thought about the same word play, which is probably why my eyes fogged over the correct spelling.
I thought it was Volks meaning: People’s, and rant meaning: rant.
I tried to post the following information a few times in the past, in response to a number of articles on PM, but my post never made it. I finally realized that the reason was that I had more than one link in my post. Here goes with only one link:
http://news.nationalgeographic.com/news/2006/04/0418_060418_coal_energy.html
This is a quote from the above article, which is about a chemical process for converting coal to diesel:
“The United States, for example, has 40 times as much energy in coal than we do in oil, and we have even more than that in oil shale,” Goldman said.
Here is the first line from an “energy-dot-gov” website:
Coal is one of the true measures of the energy strength of the United States. One quarter of the world’s coal reserves are found within the United States, and the energy content of the nation’s coal resources exceeds that of all the world’s known recoverable oil.
It is truly significant to “run a refinery in reverse” and produce liquid fuel from natural gas. But, wouldn’t it make more economic sense to convert abundant coal to diesel? The processes are still nascent and not scaled up, but it would certainly be a game changer if the price per barrel gets close to the going rate.
I have long thought that the benefits of so much technology lies dormant and untapped. Ben Franklin said something like “You will observe with concern how long a useful truth may be known before it is generally received and acted upon.” The scientists got Nobel prizes for their chemical process in 2006.
I read about the Qutar GTL plant several years back, it required an enormous investment and took many years to construct. Qutar doesn’t have much in the way of oil reserves, they do have large amounts of natural gas.
The estimates at the time were that Qutar would be able to supply 1/2 the diesel fuel requirements for Europe.
Another advantage was that the technology can use NG from any source. Petroleum refineries must be supplied with oil from a particular source, there is little flexiblity. In spite of the fact that oil is a global market, an individual refinery is locked into a given grade and must be modified to use a different source.
Let’s built ‘em and start driving TDI diesels – they get better mileage than a hybrid, they are half the price, last longer, don’t need batteries on and on.
5 years ago, my employer was working diligently on this project before walking away. My employer was working very hard to woo the Qatar royals/officials. In the end, there was concern that the natural gas reserves were not as extensive as first thought, which put the project at risk. I imagine there was also some negotiation that could not be finalized, but I wasn’t privy to that part.
The article states that Shell is saying that oil needs to stay above $20 per barrel, but the economics are not that simple. $20 does not seem realistic, even if the NG reserves would allow for 3+ decades of production.
I’m not sure, but I think that $20/bbl is the cost of processing only, to be added to the cost of the feedstock gas. IOW, for this to be viable long term, the spread between gas and oil has to remain above $20/bbl equivalent. This could happen.
Okay, second try. I’ve tried to post this information on Pajamas Media before, related to other energy articles, tried to do so a few hours ago, and it never got through. What am I doing wrong, does my post contain too many links? This post only contains one link:
http://news.nationalgeographic.com/news/2006/04/0418_060418_coal_energy.html
Here is a quote from the above article about a Nobel prize-winning chemical process for making diesel from coal:
“The United States, for example, has 40 times as much energy in coal than we do in oil, and we have even more than that in oil shale,” Goldman said.
The quote below is from an “energy dot gov” site:
Coal is one of the true measures of the energy strength of the United States. One quarter of the world’s coal reserves are found within the United States, and the energy content of the nation’s coal resources exceeds that of all the world’s known recoverable oil.
That quote refers, I would like to add, to KNOWN reserves, for both coal and oil for the whole world. Known unknowns, as they say.
“Running an oil refinery in reverse” is surely significant and makes sense for that part of the world. Wouldn’t converting abundant coal to diesel be a game-changer for the US, if the cost per barrel were below the going rate? The process described in the article hasn’t been scaled up, but is at least as important, conceptually as the related subject of this article.
I often think Ben Franklin was right when he said something like “You will observe with concern how long a useful truth may be known before it is generally received and acted upon.” The chemists in the above article got their Nobel prizes for the process to convert coal to diesel in 2005.
MORE OF THE SAME!!! And we all wonder why the whole world hates America! Constant exploitation of the Earth, constant exploitation of other people (why are we constantly taking form the Arabs that which is theirs, even for a price!?), constantly finding “energy” to fuel our monstrous war machine. And now “fracking” has been conclusively shown to poison water supplies. So I guess it’s better to poison a bunch of Arab kids than American children at home? Brilliant. Constant, constant exploitation. We have solar and wind power in abundance, but you can’t make a profit off of that, can you America? Mother Earth is going to lose Her patience with America at some point, unless we change our ways now!
Troll!! Please do not feed it. I could refute every statement made in it’s post, but I would be ignoring my second sentence in that case.
OK, I’ll bit the troll bait. LovelyEarth: If we don’t help the Arabs to do something with what they have in the ground, they will have nothing. No kidding. They’re prohibited by the Koran from studying agriculture, and the only way they have ever been able to survive for centuries is by kidnapping westerners to do for them what they’re unable to do for themselves. So, if we did things to suit you, the Arabs would starve.
WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!
Oh jeez. Look, you ninny:
(1) Neither Shell nor the Qatari government (duh) is a US concern.
(2) Neither of them is “taking” anything from anyone: they are making something useful out of natural gas that isn’t currently useful. What’s more, they’re turning methane into CO2 and water, and methane is about a factor of 20 worse as a greenhouse gas than CO2. So if you’re a thoughtful AGW-ist you should like it.
(3) If you really feel so strongly about this, shut down your computer and go out to your main breaker box. Throw the main breaker and cut off the power to you house.
(PS. Even the current EPA administrator says the opposite about fracking.)
I call Loki troll.
To repeat what everyone else said: obvious troll is obvious.
Charlie,
Natural gas is a game changer for the US, if the politico’s/greenies will allow it. Saudi Arabia understands this, admitting that with oil at $100/barrel countries will find an alternative. Look for the price of oil to drop $20-30/barrel in the coming weeks?
You may find this interview with Saudi Prince Talal interesting.
http://edition.cnn.com/2011/WORLD/meast/05/29/us.saudi.prince.oil/
Everyone reads what they want to into “alternatives”. The leftmedia thought that it means wind, solar, etc. In fact, you’re right; he means oil and synthetic products.
Of course that is what he means. Of course it is an anathema to the greens who see alternatives as something completely non scalable and as such worthless. Of course they were happy to tout natural gas a few years ago when the technology wasn’t around to make it practical. Now that fracking has made it’s use applicable they can’t condemn it fast enough.
We still can’t get a crack at the marcellus shale formation in New York because of a moratorium that seems never ending.
“…If the politico’s/greenies will allow it”? That’s the problem. Who died and made the greens dictator of America? We will never have a viable economy as long as we keep listening to those idiots.
With apologies to the Hank Thompson classic, “Mama Don’t Allow”:
We don’t care what Greenies don’t allow
Gonna keep frackin’ anyhow
Greenies don’t like no freakin’ frakin’ round here
UH, you’re absolutely correct, and that’s such a good point I’m going to Tattle it separately.
Charlie, I have written a lot on natural gas over at punditpress.blogspot.com, if you are interested. Search the energy/hydrofracking tags.
Thanks for the mention on your most recent post!
Charlie,
This is incredibly important news, even if natural gas conversion to POL is feasible only at $40+ a barrel oil. The Fischer-Tropsch process was tweaked a year or two ago to make coal gassifaction feasible at $80 a barrel oil.
I agree, even if it looks like I may have to move back to Toronto to get the cheap gas.
Pearl has been in the works for a long time. Its supposed to be fully online sometime next year. Here are a few more:
Gas to Methanol to Gasoline proposed for Alaska
http://www.greencarcongress.com/2011/05/janus-20110501.html#more
unlike the F-T process, which is geared more towards making diesel, this method is geared to making gasoline.
Also, about 5% of the worlds nat. gas production is flared off. The F-T refiners are being scaled down to fit on off-shore rigs. What is flared off is equal to just under 1/4 of the USA’s annual consumption of natural gas.
http://nextbigfuture.com/2011/04/5-of-annual-production-of-natural-gas.html
From my own research, the floor for oil prices to make GTL viable is about $40 per barrel. You need at least $60 to justify additional capital projects to boost output.
Even without that, making gasoline out of the diesel-heavy F-T product is pretty straightforward. That’s what cat crackers do. This is all mature stuff.
http://en.wikipedia.org/wiki/Fluid_catalytic_cracking
Thank you for the info !
This could change all the game.
And besides the Marcellus shale, there has been the discovery of enormous reserves of natural gas off-shore Israel.
Wow ! Amazing times !
Hah! GTL means “Gym Tan Laundry”! Don’t you know anything?
~
Dude, anyone who ever saw me in person knows “tan” is not in my vocabulary. In fact, I have a tee shirt that says “keep out of direct sunlight.”
The entire market is susceptible to major political price manipulation and so people not only have to make sure the engineering is right but also to protect themselves from major shareholder lawsuits if they go all in with this technology and then the price of gasoline craters to below that needed to run these plants profitably (shades of Carter/Reagan gas price curves).
The EIA runs the official prediction figures in the US and you’ll notice that industry started making major moves to get into this field just after the first EIA projection that oil will stay above $45 per bbl for their entire prediction horizon (15 years if I recall right). Any moves done prior to that publication would have just been begging for major legal action.
I saw an attack against fracking on CSI the other night. When the Greens start demonizing specific words in popular culture, something’s up.
Could the Saudis have some of the culture making elite on the payroll?
God forbid America becomes energy independent and the Saudis start having to do honest work for a living. And wouldn’t it be awful if the Saudis were no longer able to bankroll radical Wahhabi mosques that cultivate and harbor Western-hating terrorists. God forbid, if you’re a Green.
I work for one of the major oil companies and I’d like to correct one point in the post. Not all natural gas is “sweet”. Most natural gas has some level of hydrogen sulfide (H2S) making it “sour” also. Most gas processing plants have sulfur plants (SCOT, or Shell Claus Offgas Treating) that remove the sulfur from the gas before further processing.
Thanks!
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