conversion ratio

Good afternoon good people of the CTP threads,

In relation to Oracle's excellent post, just a clarification on the ratio of one ton of coal to one barrel of oil.

CTL has been around since the early 20thC. The Fischer Tropsch technique utilized today by SASOL amongst others, was developed in the 1920's. In the latter stages of WW2 Germany's CTL was supplying 92% of air fuel and over 50% of Germany's petroleum needs.

South Africa developed their CTL program with the government backed SASOL in the 1950's due to the oil blockade. And to protect the country's balance of payments from dependence on foreign oil.
This program now supplies 30% of the nations fuel demand.

Now China has started signaling a new era.

Now in relation to conversion ratios, different coal feedstock produces different amounts of synthetic oil. Some coal has high ash content and is less efficient for this purpose.

SASOL uses Indirect Coal Liquefication (ICL) which utilizes a complete breakdown of coal into other compounds via gasification.
SASOL over 50 years has produced over 1.5 billion barrels using this technique. (The total proven reserves of Saudi Arabia are 260 bbls).

There is different temperatures required for different versions of the FT system, ie HTFT and LTFT.

Direct Coal Liquefication (DCL) requires heat energy and (usually metal catalysts).

CTL requires a lot of water for oil production about 1 ton of H20/ 1 ton coal.

Production in the U.S. is estimated to cost $25-$40/bbl. dependent on whether CO2 capture is used, due to the high levels of CO2 released during the process.

Chinese DCL is estimated to cost $24/bbl. Two 80,000 bbl/day plants are currently underway in Shaanxi and Ningxia, the cost of which is $5billion per plant.

With DCL The National Petroleum Council (U.S.) has given the conversion ratio as 1-2 bbl/ton coal, but estimates of 3 bbls of unrefined syncrude are theoretically possible using bitumenous coal. (The same type in the Pedirka Basin as well as in South Africa).

SASOL currently uses 0.73 to 1.04 tons of bitumenous coal to 1bbl oil, ie 1-1.4 bbl/ton.

The Annual Energy Outlook 2009 ( AEO2009) expects a CTL production scenario of 0.26m bbl/day by 2030 with a conversion of 2.9bbl/ton.

The problem is that whilst currently the U.S. is considered to be the worlds largest holder of coal reserves ( I believe this is wrong, and I believe it should be world news that Australia will take this mantle with CTP's Pedirka Basin ).
The coal requirements for AEO2009 require 400-500million tons per year using the SASOL model.

This will cause a premature depletion of coal reserves in the U.S. and would deplete all coal reserves by 2100 ( if Oil imports were replaced entirely).
This report concludes for this reason alone CTL cannot replace shortages created by peak oil.

The annual decline in crude oil production is around 4%-8% or the equivalent to a decrease in 3-7 Mbbl/day.

To summarize good peoples, CTL has been used throughout the ages in times of necessity (wars and blockades), but has been susceptible to bbl price drops.

It is now basically impossible for CTL to be unviable ( Innablility of crude bbl price to go below $24-$30 bbl).

So whilst the SP is currently a bit down good peoples (on micro volumes now I might add). These are very early days, and I can't tell you how happy I am to be in CTP's Top 20 holders !!!! We are sitting on something special here !!!

Best wishes
M61