the Fischer-Tropsch process. It generates liquid hydrocarbons from coal at a rate which is economically feasible with sustained non-futures prices of oil at over ~$80/barrel, with coal at ~$20/ton.
Where do you get those numbers?
Traditional plants are 10% efficient. The Chinese plant is 20% efficient. The numbers I’ve seen suggest that the operating costs aren’t much more than materials. A ton is about 6 barrels, so if coal/ton is about the same as oil/barrel, the Chinese plant is profitable. Indeed, those prices have been the same for the past ten years. However, the capital expense was about $1000 per annual ton of capacity, which is an awful lot to pay off. At the prices you mentioned, there’s $60 of annual profit. I guess this matches your claim of long-term viability, though I haven’t taken into account the years of delay in the construction.
A traditional plant would never have been profitable, even in 2007 when coal was $40/ton and oil $60/bbl. I think its capital expense is about $200 per annual ton of capacity, a much smaller risk. If prices ever did touch those you mention, you could use the highly liquid futures market to buy coal and sell oil 5 to 10 years in the future, spend 5 years building the plant and make a profit. So I think your “sustained non-futures prices” disclaimer is not necessary.
Coal liquefaction only makes sense if the price of oil/coal rises. But it hasn’t changed much in the past decade. So rising prices are not special to oil and thus do not indicate peak oil.
Previous research on the topic. I don’t know where you’re getting that 10%/20% “efficient” thing from; F-T conversion of coal into liquid hydrocarbons requires roughly 4x the amount of hydrogen that coal has. That’s the reason why CO2 output is so high for F-T process, unless you somehow include large quantities of external hydrogen to the mix, which would bring down the costs of the product significantly (assuming a sufficiently cheap source of hydrogen.)
A traditional plant would never have been profitable, even in 2007 when coal was $40/ton and oil $60/bbl.
“even” ? Sir, you just suggested a patently abysmal set of circumstances for the viability of coal to oil conversion via F-T process. With coal at $40/ton, oil would need to be almost 3x the price you listed before F-T would be economically viable.
So I think your “sustained non-futures prices” disclaimer is not necessary.
It’s entirely necessary because we’re talking about current deliverables. F-T ‘oil’ products would also have to face a futures market as well, as their output would be fungible to oil. The futures market, furthermore, is extremely volatile whereas the fixed deliverable isn’t nearly so much so.
Where do you get those numbers?
Traditional plants are 10% efficient. The Chinese plant is 20% efficient. The numbers I’ve seen suggest that the operating costs aren’t much more than materials. A ton is about 6 barrels, so if coal/ton is about the same as oil/barrel, the Chinese plant is profitable. Indeed, those prices have been the same for the past ten years. However, the capital expense was about $1000 per annual ton of capacity, which is an awful lot to pay off. At the prices you mentioned, there’s $60 of annual profit. I guess this matches your claim of long-term viability, though I haven’t taken into account the years of delay in the construction.
A traditional plant would never have been profitable, even in 2007 when coal was $40/ton and oil $60/bbl. I think its capital expense is about $200 per annual ton of capacity, a much smaller risk. If prices ever did touch those you mention, you could use the highly liquid futures market to buy coal and sell oil 5 to 10 years in the future, spend 5 years building the plant and make a profit. So I think your “sustained non-futures prices” disclaimer is not necessary.
Coal liquefaction only makes sense if the price of oil/coal rises. But it hasn’t changed much in the past decade. So rising prices are not special to oil and thus do not indicate peak oil.
Previous research on the topic. I don’t know where you’re getting that 10%/20% “efficient” thing from; F-T conversion of coal into liquid hydrocarbons requires roughly 4x the amount of hydrogen that coal has. That’s the reason why CO2 output is so high for F-T process, unless you somehow include large quantities of external hydrogen to the mix, which would bring down the costs of the product significantly (assuming a sufficiently cheap source of hydrogen.)
“even” ? Sir, you just suggested a patently abysmal set of circumstances for the viability of coal to oil conversion via F-T process. With coal at $40/ton, oil would need to be almost 3x the price you listed before F-T would be economically viable.
It’s entirely necessary because we’re talking about current deliverables. F-T ‘oil’ products would also have to face a futures market as well, as their output would be fungible to oil. The futures market, furthermore, is extremely volatile whereas the fixed deliverable isn’t nearly so much so.