Synthetic fuel

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Synthetic fuel or synfuel is any liquid fuel obtained from coal, natural gas, or biomass. It can sometimes refer to fuels derived from other solids such as oil shale, tar sand, waste plastics, or from the fermentation of biomatter. It can also (less often) refer to gaseous fuels produced in a similar way.

The process of producing synfuels is often referred to as Coal-To-Liquids (CTL), Gas-To-Liquids (GTL) or Biomass-To-Liquids (BTL), depending on the initial feedstock. The best known synthesis process is the Fischer-Tropsch synthesis which was used on a large scale in Germany during World War II. Other processes include the Bergius process, the Mobil process and the Karrick process. An intermediate step in the production of synthetic fuel is often syngas, a stoichiometric mixture of carbon monoxide and hydrogen, which is sometimes directly used as an industrial fuel.

The leading company in the commercialization of synthetic fuel is Sasol, a company based in South Africa. Sasol currently operates the world's only commercial coal-to-liquids facility at Secunda, with a capacity of 150,000 barrels a day [1]. Other companies that have developed coal- or gas-to-liquids processes (at the pilot plant or commercial stage) include Shell, Exxon, Statoil, Rentech, and Syntroleum [2]. Worldwide commercial gas-to-liquids plant capacity is 60,000 barrels per day [3], including plants in South Africa (Mossgas), Malaysia (Shell Bintulu) and New Zealand (Motor-fuel production at the New Zealand Synfuel site has been shut down since the mid nineties, although production of methanol for export continues [4]. This site ran on the Mobil process converting gas to methanol and methanol to gasoline).

Numerous US companies (TECO, Progress Energy, DTE, Marriott) have also taken advantage of coal-based synfuel tax credits established in the 1970s, however many of the products qualifying for the subsidy (for example slurries or briquettes) are not true synthetic fuels since they are not the portable, convenient, end-user liquids that the credit was established for. The coal industry currently uses the credit to increase profits on coal-burning powerplants by introducing a 'pre-treatment' process that satisfies the technical requirements, then burns the result the same as it would burn coal. Sometimes the amount gained in the tax credit is a major factor in the economic operation of the plant. The synfuel tax credit has been used primarily in this manner since the cheap gas prices of the 1980's killed any major efforts to create a transportation fuel with the credit, and its continuation is seen as a major 'pork project' win for coal industry lobbyists, to the tune of $9 billion per annum.^[1]The total production of such synfuels in the US was an estimated 73 million tons in 2002.

The United States Department of Energy projects that domestic consumption of synthetic fuel made from coal and natural gas will rise to 3.7 million barrels per day in 2030 based on a price of $57 per barrel of high sulfur crude (Annual Energy Outlook 2006, Table 14, pg52). Synthetic fuels require a relatively high price of crude oil in order to be competitive with petroleum-based fuels without subsidies. However, they offer the potential to supplement or replace petroleum-based fuels if oil prices continue to rise. Several factors make synthetic fuels attractive relative to competing technologies such as biofuels, ethanol/methanol or hydrogen:

The raw material (coal) is available in quantities sufficient to meet current demand for centuries
It can produce gasoline, diesel or kerosene directly without the need for additional steps such as reforming or cracking
There is no need to convert vehicle engines to use a different fuel
There is no need to build a new distribution network

While at present synthetic fuels are primarily produced because of subsidies, they are a proven technology that offers the potential to solve the energy crisis due to the depletion of oil (Hubbert peak), at least for the next hundred years.