No free lunch!!!

In other words, everything has a cost...................frequently the average Joe (or any other name you want to use) doesn't have any, or perhaps limited, awareness of it.

With the thread on Gas Pricing flourishing, and the "news" all abuzz with stories, there is lots of discussion about ways to "get even", or "show those evil oil companies", or "stick it to them Opeckerheads", whatever, we're hearing folks clammer for some of the proposed alternatives again.

We often hear we're entering the "Information Age". The notions of the world getting smaller, the internet, satelite communications and the instant "news" transference that begets, and the general adoption of English as the default international language all contribute to a flood of ideas that sometimes becomes overwhelming. For those that can't cope denial sets in and they take the position equivalent to sticking their head in the sand. Others will study diligently to find out as much info as they can so that they can make viable decisions. Pick which group you want to be with and live with the results. But beware of your political or social biases blinding you to undercurrents that will punish you.

Just gonna throw out some random info on a few of the ideas that pop up and see if there's any decent discussion.

All decisions flow from a basic fact or assumption. For the sake of a discussion of our automotive fuel needs I think we need to start from how much we use/need. Burn these numbers in your head, think about them, and realize the enormity of the issue at hand.......................................or stick your head in the sand, whichever feels better for you.

Current usage of gasoline is 9.1-9.4 million barrels per DAY. A barrel is 42 gallons. At the low end, that's about 382 million gallons per DAY.

The last new refinery built in this country was completed in 1976. The general concensus is that environmental restrictions, building code hurdles, and public sentiment (NIMBY-not in my back yard) essentially preclude the economic construction of new plants.

Our existing refineries when operating at 100% capacity (meaning no down time for break downs, maintenance, refitting, improving......no interuption at all) can produce around 8.8 million gallons per day.

Our current refining and distribution system for motor fuels (gasoline and diesel primarily) has been developed over a 100 year period. This includes not only the refineries, but distribution pipelines, interim storage terminals, truck/barge transportation systems, local storage terminals, and the local fueling facility (so called gas stations and private fueling facilities). Nearly all of this, except the local station, is "invisible" to the average consumer. But just because they don't have an awareness of it doesn't mean it's not necessary.

Our country consumes about 12% of the worlds crude oil production. The largest national user. We are also the most productive, and largest economy. We run that economy on fuel. Without fuel, we stop producing. Since we are the most productive, we make better use of each unit of fuel we consume compared to the other's. Trying to make us feel guilty about the amount of fuel we use implies to me that there is another agenda. Can and should we try to do better? Sure, besides it's still in our nature, despite attempts to drag us down to the other's level in the name of "fairness". If you think the Kyoto Accords is about anything other than dragging the power of the USA down then go read the thread on the UN voting records again. But we have nothing to be ashamed of where we are until someone of significance moves ahead of us.

Alternative fuels

First and foremost don't lose site of the production and distribution comments above. Most current discussion of alternatives largely ignores the significance of distribution and storage. Most alternative fuels require new facilities and equipment to handle them. Those that don't, require current systems to be upgraded (e.g. alcohol fuels are more corrosive than straight gasoline). Where does the capital (primarily money) come from to do this?

Ethanol. Gasohol contains 10% ethanol, 90% gasoline. E85 is 85% ethanol, 15% gasoline. Rah rah says it's grown in America and is a "renewable" resource. Car enthusiasts are excited about the 100-105 octane rating of it. Doing research on this you find more sites promoting it, mainly in the Midwest where corn is an abundant source for raw material to produce ethanol. A few things to keep in mind. Ethanol is more sensitive to water contamination. It's also more sensitive to contamination by other fuels in the handling system (pipelines, transport trucks and barges). It has poor cold start characteristics (that's mainly why there's still 15% gasoline in E85) and is more prone to vapor lock (although with tank mounted electic pumps that's a minor consideration). The most undisclosed "issue" of ethanol is it's lower energy content. A gallon of ethanol contains about 2/3 the energy of a gallon of gasoline. This is where it starts to get tricky. Let's say a gallon of gasoline costs $2.10. That means that in order to be "fair", for an equivalent amount of work (mileage, distance traveled, material moved by powered equipment, etc.) E85 would need to be priced at 2/3 of what gasoline is, say $1.40 in this example. Doing an internet search the best range of pricing I could see is $1.60-1.80 for E85. Since these sites weren't dated I have no idea what time frame this is. But for people concerned about price, just looking at the pump numbers isn't enough. In the example above the E85 buyer is paying 20-40 cents MORE per gallon than the gasoline user in REAL cost. Maybe some of our midwest friends can give us a more accurate picture of today's street price for E85. But here's another kicker. The price of ethanol fuels is further distorted by the heavy hand of government. The only way that ethanol is any kind of price competitive is through two forms of tax manipulation. The producers of the alcohol get government "hand outs" in the form of tax credits, and the feds/states often waive a portion of the fuel tax. Of course the things that the fuel tax is supposed to pay for still exist and cost the same, so that money has to come from some other taxing source. See what I mean by no free lunch? Since most sites I found were pro-alchohol, it's virtually impossible to find out what the real premium paid for a gallon of E85 is once all the hidden costs are considered. If I had to guess it's at least 50 cents.

But let's say we're willing to pay that premium in the interest of "energy independence". An honorable goal. Attainable? Let's do some math. Again, since most sites I found were pro-alchohol I'm going to assume that they present a best case scenario. I was only able to find one figure for a per acre yield of alcohol, I didn't really have a lot of time to dig much deeper. That source said 2.7 gallons. Given planting, growing, harvesting, and processing time I'm going to assume only one crop per year. That means it takes a year for one acre to produce 2.7 gallons. Remember the number at the top I suggested you burn in your brain? To meet just ONE DAY of current demand would require 141,000,000 acres of corn. That's before taking into consideration the lower energy content of ethanol, add another 70,000,000 for that. My calculator doesn't have enough digits for me to figure what a year would take, but I think you get the idea.

Part of the reason that alcohol fuels need subsidies to compete with fossil fuels it the cost of producing that acre of corn. In order to have that "renewable" raw material you need seed, meaning more acres dedicated to growing seed corn that doesn't get processed into fuel, or any other of the food products we get from corn. Beyond the land necessary, there's the cost of planting, maintaining, fetilizing, harvesting, and transporting the corn to the processing plant. BTW, where's the capital come from to build enough processing plants to meet the need?

Methanol is another alcohol that's used for motor fuel. It has similar 10% blends, up to 85% which is called M85. It's mainly made from natural gas. Another nasty little secret is that we're already stressing our natural gas supplies, and again, governmental regulation has caused severe disincentives to natural gas exploration and production. So where's the "raw material" to make sufficient quantities of methanol. Methanol has many of the handling short comings of ethanol, and has an even lower energy content. It takes 1.7 gallons of methanol to equal one gallon of gasoline.

Alternative power sources. Most of these technologies are in their infancy. It takes time to develope them to the level necessary to be safe, reliable, and cost effective replacements for current gasoline powered, otto cycle engines. Where does the capital come from to do that developement? If your first thought was "the federal government" then where do they get it. We're already spending in a deficit to take care of all the other "needs" we have. And that subject would dwarf this one for scope of discussion. Suffice it to say that we're already wasting too much of our federal budget on non productive, non national defense things and can't really afford to pay for advancing these technologies. And blaming Bush alone is stupid because this problem has been with us for 60 years at least. A nanny state is too costly, allocates resources ineffectively, and undermines the advancement of our culture and civilization.

Fuel cell technology.

Great idea, it's day may come, the way it's presented in most discussions erroneously leaves the impression that it's almost free. First, see the points about developement costs. Since hydrogen is the most often promoted fuel for these cells where do we get that? The most often cited source is water (H2O). How do you get the hydrogen out of the water? It takes a process that requires equipment to split the hydrogen from the oxygen. Where do you get the capital to build this equipment? Then where do you get the capital to build the infrastructure to store and transport the hydrogen? Then you need unique facilities to dispense the hydrogen. Where's the capital for that come from? Pesky damn question isn't it?? And once the developement of this technology is funded and completed, it will take more capital to convert our gasoline engine production facilities to fuel cell production. Need more of that damn capital stuff. Oh, I forgot to mention that the raw material for hydrogen production, that water stuff, we have supply problems there too! We're already stressing "clean" water supplies in some areas. True, the earth is 3/4 covered with water, but the vast majority of that is SALT water. Desalination is a possibility, but there's a huge cost to that. And do you really believe the NIMBY's in California or New York are going to want huge plants built near their shores to do that??

Hybrids

Ah yes, our old friend electricity!! Great idea. But remember, it takes energy to produce energy. The single most abundant, direct fuel source we have in this country is coal. We are the Saudi Arabia of coal reserves. Nope, can't use that, it's too dirty! We can barely mine enough of it to fuel the few electricity plants permitted to use it now. Besides, mining is raping the earth!!!!! Okay, another way to produce electricity is hydro dams. Nope, gotta stop plugging up those rivers and killing those fish. BAAAADDDD American. Hmmmm, oh yeah, nuclear......................yeah right!!!!!

Myths

We only have a 20 year supply of oil left. Those of us that were around in the early '70's should remember hearing that then too. Gee, 30 years later we STILL only have 20 years left. If you went back to the early 20th century you'd find that then too they were predicting known reserves at somewhere between 10-20 years. The key terminology there (geez there he goes with that terminology thing again :rolleyes: ) is KNOWN reserves. Since we've been seeing 20 year known reserves for over 100 years do you think there's a pattern here? If you were one of those evil oil company scum would you wastey your resources to locate more than 20 years out, especially when you know that you've only explored a very small percentage of the earth's innards? Well, obviously in addition to being evil, oil guys are stupid too!! That explains Nancy Pilosi's railings yesterday. Bush is a former oil guy right? And that's basically what she said, he's both stupid and evil!!

Which brings me to what our real energy problem is. We aren't holding our politicians responsible for doing their jobs properly. Because of our own political biases we fall on one side or the other and forget about what our objective should be. And because the issues involved are so complicated (this long diatribe mearly scratches the surface). If you hate whoever is the President at the time, you blame him. If you hate the other party from your preference you blame them. We give too much credibility to crackpots because their message sounds like they care so much, and they've become very adept at manipulating our inner most guilts. We go through life basing our decisions on the shallow education that our school systems grudgingly dump on us, and fail to dig deeper on our own to find out more. We lazily look for quick answers that are plausibly presented without context because "we're so busy". A lot of that is true, we are busy. Especially those of us who work for a living, because we've engendered a society that thinks it's "entitled" to so much even when it's not earned.

I spurn politicians of both principle parties because they believe we're stupid and pander to our basest desires. They all operate in the short term. And we are complicit in that because we let them get away with it. We allow them to distract us with silly, guilt driven, programs.

Despite the doom and gloom that appears above, I believe that the issues can be solved if good people are aware of reality. I suspect most here don't really care to know all that's said here, but it's my hope that enough will learn how complex the issues are and might contribute some positive discussion with their friends the next time someone blames an evil oil company for our problems. Again I will state that I am not an appologist for the oil industry. They are not saints. But they do have an enormous investment in exploration, production, transportation, distribution, technology, and have done a very good job of supply the lifes blood of our economy at comparatively reasonable prices over the long haul. The day may come when they become obsolete, and if that happens, that's progress. But don't sit there and think foolishly that it can be done with the stroke of a pen, or the punch of a ballot. It's going to take time, effort, and a bunch of money. There is no magic pixie dust.

That's exactly what I was going to say. Very informative Bob, thanks.

There are a tremendous amount of great points made in what you have said Bob, and I agree with 99% of it. I have said many times that everyone has arguments but no-one has offered up any ideas for solving any of them.
I do disagree with not blaming the oil companys. If they are spending so much to stay ahead of the problems then why haven't they been pushing forward to get more refinerys up and running? Even if thier refinerys can't keep up, leaving them to have to buy overseas gasoline, does not that fuel go out through thier distribution systems? Do they not have ownerships in the oversea's plants? Why can't the NIMBY's be bypassed by using some of our national wilderness like parts of Eastern Washington or say area 51 in New Mexico? Sooner or later they will have to to keep up with the demand or let the fuel system calapse and destroy the economy thus destroying thier own companys. I feel that they know they can ride a wave right now and pump up the prices and enjoy the highest profits in thier history's, isn't that capitalism at it's finest! Meanwhile we the working minority suffer from another corperate bodyslam!

I agree that the we have to inspire our politicains to strive to take on these problems in true ernest and that the sooner the better. I agree that our heads have been in the sand too long. I have wrote my congressmen and I really don't feel, even though they answered me, that they listen or care. So, what is our alternative? Our Vote? I don't know but it is something that has to be thought about.

MHO

brick, gotta love your passion on this. That's how things get started.

I would like to know if you have hard data on the highest profit ever comment. I can't find any other than veiled implication (and again, let's not confuse numbers with real value in adjusted dollars). Here's how I evaluate that notion. If you go to www.bigcharts.com and enter the oil company (ies) of your choice and bring up a 5 or 10 year chart, you'll see that their stock price today is approx what it was two years ago (varies somewhat from company to compay, but in general I'll stand by my statement). True, it's going to be up significantly from a year ago, but that was a very down time frame for the oil industry. That's why I prefer to look at a time span to even out the short term affects of market cycles. The charlatins in the media play that info cherry pick game for distortion sake, fries my nuts!!! I consider the stock market value as a good indicator of true profit performance since the market tends to reward stock value by that yardstick. To that point I will stay with my earlier comment in another thread that the oil industry enjoyed it's greatest profits (at least for the "modern" era) during the period of Federal Government controls (read market distortion) during the '70's. In that period of approx 7 years many oil company stocks went through multiple splits as their stock prices escalated routinely.

As for their building more refineries I don't think you know just how difficult that would be. Look at what's happened with nuclear power plant construction, it's the same type of deal. I agree with you that there should be a point where we come to a realization that we must do it or strangle our own economy for it. But in this era of over-regulation in the name of environmental control building something like a refinery is virtually impossible. Even in the remote areas you mention I seriously doubt that it could happen unless we had a protracted period of consumers standing in line for gasoline. Even then we'd have to live through the name calling and blame game until reality finally settled in and people really did believe that more refining capacity was necessary. You need to keep in mind that the numbers of Americans who are unaware of the numbers I've posted here is probably somewhere around 99%, even though it's all in the public domain. And even if we could build in those remote areas, we'd still have to have pipelines to move the product to where the consumers are. Again, we're talking HUGE amounts of capital expense. If you owned an oil company I'd bet you'd have the wrassle of your life trying to find investors to pony up. And lastly, building something usefull in a remote location is still anethema to at least half our politicians, and too many of our uninformed citizenry. On that let me just say; ANWR!

Your last question is precisely why I felt compelled to express my views. Given the lack of leadership, and/or will, in the political arena, it needs to perk up. This is my small contribution to trying to get more folks informed. Perhaps we'll find the will.

As for the politicians, I'm sadly reminded of an old saying; A politician looks to the next election, a statesman looks to the next generation. That's what makes me frustrated about this election year. In my opinion, on the war on Islamofascist terror Bush is a statesman, on most everything else he's a politician. Even more unfortunate, Kerry strikes me as a politician on everything.:CRY:

Bob, What you say makes a lot of sense and I don't believe that there is a media outlet in this country that would be willing to delve into this issue in a complex manner. I do believe however that at the present time there is just not enough incentive for any of the major oil companies to pursue constructing new refineries regardless of the cost. If that was the case I would think that their lobbyists would be beating down doors even though all of the snail darters in this country would be lined up a**hole to bellybutton to stop them.

I have to admit that I have nothing to back up my point on oil profits because it was something that came across the wire and was on our local radio for a day here about a month ago. I know that is lame but I didn't hear a word about it in any of the other media outlets, as a matter of fact your not hearing anything about it except for a few fat congressman getting up on thier soap boxes and feeding the people what they think they want to hear. In all reality there is nothing we can do but quit driving and to a car guy, that hurts.

I am fearful of our countrys future under any of the current school of politicans because I too don't believe they have our interests in mind. As usual, nothing will be done untill everything has hit the fan and we are in dire needs as you said. It's like putting a light up at a dangerous intersection, unless a certain amount of people die, nothing is ever done.

I appreciate you putting this up here and I hope that it's gets people thinking, it has to start somewhere and maybe eventually some really smart people will get together and solve some of these problems.:cool: ;)

Wow I think that's longer than the bible... I can't even sit still long enough to read all that.

Another well thought-out topic and subsequent posts. You are "dead-on" with your observations.

There is one alternative to coal for our electric power plants. It's called coke, petcoke, petroleum coke, etc. Its the ONLY thing left unused from a barrel of crude oil after we refine it. We sell it by the millions of metric tons for shipment to Europe. The good news is that the EPA is now allowing it to be burned in a few locations stateside (one power plant in Florida that I know of for sure). There are even plans in the not-so-distant future to build a new electric plant at our refinery to burn some of it on-site. We are currently The Southern Company's largest retail customer. Building the new plant (in conjunction w/ TSC) would allow us to power the refinery (ChevronTexaco's largest, BTW) and create enough excess electricity to sell it back to "the grid".

FMXhellraiser's response is precisely what's wrong with this country today. We want it all, and we want it NOW! Don't bore me with the details.....

You're correct, Streets. Petcoke is only useful as a source for electric power plants (I thought that's what I said...). It's not an alternate fuel for cars but an alternate source to coal which, while plentiful, is difficult to obtain due to the NIMBY factor and others. We ALREADY make it, it'd be nice to be able to USE it, instead of shipping it to Europe.

It does nothing to decrease our dependence on foreign oil. Only tapping our own (ANWR, etc.) will allow us to do that. If you want less expensive gasoline (it's already the cheapest on the planet) and the option of giving OPEC the middle finger when they want to "squeeze down on the valve" and jack up the price of crude oil, vote early (vote often:eek: !) for those candidates who favor domestic oil exploration and production.

I do my best to conserve electricity but my bill this month was $150. If I could buy some solar panels and produce enough electricity for my own use I wouldn't mind a $150 a month payment knowing that it will eventually be paid for. Whoever develops a complete solar setup for home use would become a billionaire. We could get rid of all these ugly poles and power lines that are the cause of many deaths every year.
That's my vision of the future. Power plants can still be used to power cities with underground cables and urban areas would all be on solar power. The tree huggers would love it. Every pole used to be a tree. So we would be conserving our resources there too.

I'll keep this short for those of you with a short span of attention.

Bob A very informative post and I'll admit I learned some interesting facts from it. Now I have a question for you. The Alaska pipeline started up in 1977 and it pumps Approximately on a average 988,984 barrels of crude per day. Now that oil is pumped to Valdez, Alaska where its loaded on to tankers to ship to the USA. Is the Alaska pipeline pumping 100% of the crude or if not why? Would it be that the cost is to prohibitive because of the tankers that have to ship the crude to the USA or is it because of the cost involved in distilling the crude. If the last refinery was built in (1976?) and since we seem to have unlimitive money resources, even if it cost billions to build another refinery, why not put that money to good cause instead of buying our oil from other countries. Sure in the short run we would be in a hole, but in the long run it seems that we would be ahead.

Good questions 37, I have no particularly unique insight into North Slope production or the pipeline. Just what I can learn on the internet and figure logically. For any others interested here's a link to the pipeline site; http://www.alyeska-pipe.com/about.html

In other reading it's claimed that the North Slope is responsible for 17% of U.S.domestic production, and that they spend (2001 dollars) $150 million a year on maintenance alone. There are 20 state and federal agencies that regulate operations! But then, that shouldn't surprse me as businesses in our state are regulated by 28 agencies under 58 sets of regulations. The last few years they've been fighting to get a 30 year renewal of the land lease for the route the pipeline takes. Predictably, the local working population is in favor of it, the environmental types are scratching for the slimmest negatives they can find. Even though the pipeline has a remarkable record over the past 27 years.

Why they aren't producing at 100% capacity, I don't know. I'm not even sure they aren't from what I've been able to read. I can tell that they're producing at about half what they did at first, but not sure what that means. Did they take advantage of the "easy", high producing wells first, and now they're into the higher cost, higher effort, lower producing part of the field? I didn't find any commentary on that. Perhaps there's a clue in a story on OPEC I read this morning. Some of the Opeckerheads are concerned that the price is getting too high when it gets to that $42.00 area. Is this because they have such a love and concern for the folks in the rest of the world?:rolleyes: No, because at that level it becomes economically feisible for Russia and Mexico to up their production. Since the article was written by your typical news service writer, they didn't go into the kind of detail I'm interested in, but if I had to decipher that comment, that tells me that Russia and Mexico don't start making money on some part of their reserves until the price goes over that point. There's probably a lot of oil around the world that's in that range. So it could be the same for the North Slope. Production costs have to reach a certain point before it's worth pulling the oil out. Or, maybe they're just shrewd. Pump enough to keep the system going, but use up the foreign stuff first. Nah, that would make sense. Interesting idea to contemplate though. What would the Arabs sell if they didn't have oil? Sand? Camel dung? Old loped off body parts? Hmmmmm. Maybe they've figured that out too and that's why they're spreading themselves around the world. The latest figures I've seen indicate that middle easterners make up about 10% of the population of Europe. Maybe they have a long range plan.

As for there being an "unlimited supply of money" I don't think so. Just thinking about basic investment philosophy, investors need to be assured of a return within a period of time. The lower the return, or the longer the time, or combinations of the two and it gets real difficult to find people to pony up money. There are too many other places to put their dough that pay better and sooner. Speculative investing is a small part of the total investment world. And heavily regulated industries/operations make investors nervous because of the uncertainty of somebody changing the rules "tomorrow" and killing the investment. There's competition for everything. Resources, dollars, old hot rod parts..................rational people go where they get the best deal (maybe I should take the hot rod part thing out of there...........I'm not so sure we're really rational.):LOL:

I figure part of the reason that we even buy from opec instead of just using our own oil is an agreement we have with them so they stay our allies. I can't really think of anything else that would concern us with Saudi Arabia except keeping them off Isreal's back. Of course that is a whole other issue, but it would explain not tapping our resourses %100 like we could.

This is the year 2004 we got hollywood computers that show us the unreal and make it look real i think people really believe the magic pixie dust will save them or the invisible guy in the sky will save us at the last second are we really ?! lost and crazy?! distorted and confused or is it lies and mis information if we point our fingers we never look back at ourselves there fore its ur problem not mine and people dont get exicted as they should about bogus things. we say that doesnt effect me.its not my problem . for all those people i say go drink ur redbull and watch some more unreality tv u will forget about it and as long as were not aware of it it doesnt matter like ol boy said put ur head back in the sand ,or the beer ,or the drugs whichever is your form of sand!

bob lots to digest , lots of good points, one thought for the capital needed for whatever: oil companies should be developing the alternative fuels it would be to their advantage to keep things going and stay profitable. One other thought
should anyone out there be of a scientific mind , is science fiction all fiction , remember jules verne wrote of a power source with the energy of the sun. yes there is an answer nothing is impossible

Good point on the AFs, and i think that it would also make sense for the companies to begin making plants for depolomorazation too. That way, they dont have to buy of other nations. They make the oil and claim 100% of the profit! Or would that make too much sense?

Well nobody picked up on the syn-fuel idea. Dept. of Energy researchers have been working on this for many years and the technology is known. South Africa developed the "Sasol" technology which is an improvement on the old German methods using Ni and Fe calalysts to make liquid fuels from "baked coal" gas. If you heat coal in the absense of oxygen and spray water into the hot carbon you get "water gas" which is a mixture of hydrogen and carbon monoxide. That gas can be sent through special zeolite catalysts such as the famous ZMS5 which is a special form of aluminum oxide with special porous holes and "Shazam" out comes methanol, ethanol, propanol, etc., ie alcohols which are liquid fuels. When the price of gas gets up to what they pay in Europe you need to write to your Congressman and tell them to support building a "Sasol" pilot plant in the U.S. and get ready to switch over to coal as a fossil fuel which can be converted to liquid fuels. Perhaps you do not know there is an extreme rat race for science researchers to get federal grant money AND then when those researchers discover something practical, the U.S. Gov. owns the patent rights and that there is an agency whose sole job is to distribute those new processes to various companies. Do you see any potential for insider trading there? Anyway the North American continent is set with lots of coal but the U.S. needs to set up large scale pilot plants for conversion of coal to liquid fuels in the near future as well as open up the Alaskan oil fields.

Don Shillady
Retired Chemist/teenage rodder

glenn, the oil industry is in fact doing quite a bit in the developement of alternative fuels. As you point out, they see the implications to their long term survival. If you notice some of the current ads from BP, & Exxon/Mobil, they both talk about their working in that area. In doing some research on Don's comments about the Sasol process I see where Chevron has partnered with Sasol. And I'm sure there are others. I suspect that their priority is in liquid fuels since they already have a storage, and distribution system in place which would make the outcomes more practical.

Don, part of the point of this thread is for others, such as you've done here, to bring up other concepts and technologies. But as the thread title extolls, to each of these technologies there is cost and, in some cases, impediments to developement. Also, you cause me to do research into less familiar areas which I enjoy. Based on what I've read about Sasol's process it's fairly expensive comparitively. They have stated objectives of figuring out ways to lower the processing costs to be more competitive. The biggest bugaboo they point to recently (obviously prior to the current upswing in crude prices) was the low cost of crude. I didn't dig deep enough to find where the price of crude needs to reach to make their current configuration competitive, but maybe we're near that point. Two situations that need to be kept in mind though. It appears that natural gas is needed in their feed stream in addition to coal. Plus they need to produce oxygen. While technically feasible, all of these extra steps increase the production cost of the finished product. And we've already talked about our domestic limitations on natural gas supplies. Which in turn means their plants need to be where the gas is, which means more transportation cost for the finished product. Also, it seems that 80% of the output of their process is diesel fuel. Albeit high quality, low sulphur diesel fuel, but, at current market conditions, not our highest priority.

Now that's not necessarily a bad thing. It contributes to part of the message I've tried to get across by starting this thread. There is no silver bullet. No single process, no magic potion that will instantly cure our needs. Very likely our future energy requirements will be satisfied by a variety of these alternatives, used as a mix to meet market demand. Most likely costs will be higher because the technology to produce these alternatives is higher by a variety of multiples than the traditional crude processing mechanisms. As many of the sites I visited indicated, the Sasol process, for example though not alone, so far, hasn't been competive cost wise on a large scale. They too have operated with government subsidy. And that's still the key. There can be an infinite number of wonderful and creative solutions, but will they be cost competitive?