Exciting analysis here from the NYT on the big picture behind the Sasol acquisition in Alberta of earlier this week. This is the time of year that people like to make predictions. Any that I made this time last year were wrong: they were too conservative. But in 2011 to 2015, this is going to get bigger and bigger:
Diesel and jet fuel are usually made from crude oil. But with oil prices rising even as a glut of natural gas keeps prices for that fuel extraordinarily cheap, a bit of expensive alchemy is suddenly starting to look financially appealing: turning natural gas into liquid fuels.
The technology takes “a lot of money and a lot of effort,” said Michael E. Webber, associate director of the Center for International Energy Environmental Policy at the University of Texas, Austin. “You wouldn’t do this if you could find easy oil,” he said.
But oil, as the Peak Oil crew like to say is hard. But what they didn't figure on is that gas is easy. It's far mroe easier, and far cheaper than oil. And by using old technology now getting even better, gas to oil is simply turning one hydrocarbon into another.
But with the huge spread between oil and gas prices, and predictions of oil topping $100 a barrel next year, the conversion technology could be a “a money-maker for whoever is a first mover in that space.”
Which makes Peak Oil past it's peak. My presentation on February 8, 2011 at 6.30 in the Grand Committee Room of the House of Commons to the All Party Parliamentary Group on Peak Oil and Gas (!!!) is called "The Energy Crisis is Over. Get Over It."
No one has to pay to attend. The Mother of Parliaments allows anyone to stroll in (after significant police security naturally). Details on how to attend willl be here in the New Year. Look forward to seeing you there. But I'm not trying to convince my readers: that battle was mostly won a while back. But I'm not scared of the Peak Oil crowd. Someone has to stand up to them, it may as well be me.
The next battle will be over the economics, cash and carbon wise, of natural gas to liquids. I would venture that using natural gas instead of oil is going to be at least marginally efficient carbon wise and more than that when the entire energy chain is included.
Mr. Mogerman, of the Natural Resources Defense Council, said that given the historical market prices for oil and natural gas, only countries with no other choice had pursued the conversion process. “The only ones who’ve done it are people with their backs against the wall, and who had no financial considerations,” he said.
But if oil prices stay high and gas prices remain low because of shale gas, that view could be history.
People needn't bring up the Nazi and Apartheid past of gas to liquids here - I've already done that. But what we have to move on to is the promising future of this technology.