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p ace p nt flet Ic =lr OIL SHALE 0 COAL 0 OIL SANDS 0 NATURAL GAS VOLUME 30- NUMBER 4- DECEMBER 1993 QUARTERLY Tell Ertl Repository r Lakes Library :::o:'zco School of M.Es ®THE PACE CONSULTANTS INC. Reg. U.S. Pot, OFF. Pace Synthetic Fuels Report is published by The Pace Consultants Inc., as a multi-client service and Is intended for the sole use of the clients or organizations affiliated with clients by virtue of a relationship equivalent to 51 percent or gieater ownership. Pace Synthetic Fuels Report Is protected by the copyright laws of the United States; reproduction of any part of the publication requires the express permission of The Pace Con- sultants Inc. The Pace Consultants Inc., has provided energy consulting and engineering services since 1955. The company's experience includes resource evalua- tion, process development and design, systems planning, marketing studies, licensor comparisons, environmental planning, and economic analysis. The Synthetic Fuels Analysis group prepares a variety of periodic and other reports analyzing developments in the energy field. THE PACE CONSULTANTS INC. SYNTHETIC FUELS ANALYSIS MANAGING EDITOR Jerry E. Sinor Pt Office Box 649 Niwot, Colorado 80544 (303) 652-2632 BUSINESS MANAGER Ronald I. Gist Post Office Box 53473 Houston, Texas 77052 (713) 669-8800 Telex: 77-4350 CONTENTS HIGHLIGHTS A-i I. GENERAL GOVERNMENT DOE Fossil Energy Budget Realigned for 1994 1-1 U.S. DOE and Russian Federation to Cooperate in Fossil Energy 1-2 ECONOMICS MITRE Estimates Synthetic Transport Fuels to Cost $36 Per Barrel 1-3 TECHNOLOGY Hot Gas Cleanup Studied for Biomass Gasificatiop 1-6 INTERNAI1ONAL Methanol Tested as Turbine Fuel in Japan 1-9 1(3CC Project in the United Kingdom Could Use Both Orimulsion and Coal 1-9 RESOURCE U.S. Reserves of Gas and Oil Declined in 1992 1-10 COMING EVENTS 1-11 II. OIL SHALE PROJECT ACTIVITIES LLNL Retort Project Without Funds—Status Reviewed 2-1 Nahcolite Mine Producing From Oil Shale Basin in Colorado 2-4 Petrosix Project Status Updated 24 New Paraho Reports Favorable Results From Ongoing Test Program 2-7 Southern Pacific Petroleum Reports Continued Progress on Stuart Project 2-12 GOVERNMENT Corrective Action Plan Released for Naval Oil Shale Reserves 2-14 ECONOMICS Economic Parameters for Shale Oil Production Listed 2-15 Baltic Shale Oil Produces Commercial Non-Fuel Materials 2-16 Potential Seen for Byproducts From Eastern Oil Shale 2-18 Shale Oil Value Enhancement Research Targets Byproducts From Western Oil Shale 2-19 TECHNOLOGY Oil Shale Could Be Feedstock for Carbon Materials 2-23 First Hot Runs Reported With 50-Pound Per Hour KENTORT Unit 2-23 Combined Retorting/Upgrading Process Could Cut Costs 2-26 Concrete Formulated With Oil Shale Ash Shows Good Properties 2-27 SYNTHETIC FUELS REPORT, DECEMBER 1993 INTERNATIONAL Substantial New Oil Shale Deposit Defined in Israel 2-31 Nitrogen-Containing Compounds in Chinese Light Shale Oils Identified 2-31 DOE and World Bank Reports Analyze Oil Shale Position in Estonian Energy Sector 2-33 Chinese Geological Atlases Completed, Cooperation Sought 2-35 OIL SHALE PUBLICATIONS STATUS OF OIL SHALE PROJECTS 2-38 INDEX OF COMPANY INTERESTS 2-54 M. OIL SANDS PROJECT' ACTIVITIES CIM Reviews Syncn'de Story 3-1 Bitmin Resources Building CCDS Pilot Plant 3-2 Suncor Takes Position in lilt Project 3-3 New Funding Pending for NewGrade Upgrader 3-4 CORPORATIONS Murphy Oil Buys Interest in Syncrude 3-6 Express Pipeline Withdraws NEB Application 3-6 Suncor Oil Sands Profitability Improves 3-6 Solv-Ex Pursuing Mineral Extraction 3-7 Buenaventura Resources Plans to Develop New Tar Sand Extraction Process 3-9 GOVERNMENT Oil Sands Orders and Approvals Listed 3-11 Utah Tar Sands Development Potential Affected by Diamond Mountain Plan 3-11 ECONOMICS Product Shift Increases Value at Suncor Plant 3-16 Economic Advantage Seen for AOSTRA Taciuk Process 3-17 TECHNOLOGY Coal Used as Adsorbent for Bitumen Recovery From Fine Tailings 3-21 Novel Bitumen Upgrading Concepts Being Studied at CANMET 3-23 INTERNATIONAL Venezuela Approves Orinoco Joint Ventures 3-27 Orimulsion Makes Marketing Progress 3-27 ENVIRONMENT Technologies for Reducing Environmental Impact of Fine Tails Cataloged 3-29 OIL SANDS PUBLICATIONS 3-31 STATUS OF OIL SANDS PROJECTS 3-33 INDEX OF COMPANY INTERESTS SYNTIIEI1C l-'IJELS REPOItF, DECEMBER 1993 IV. COAL PROJECT ACTJVrFIES Coal-to-Methanol Project Moves to Eastman Site in Tennessee 4-1 North Dakota Provides Funds for Byproduct Development at Great Plains 4-1 ThermoChem Will Demonstrate Gasification/Pulsed Combustion at Wyoming Site 4-2 Agreement Reached on Healy Clean Coal Project in Alaska 44 IGTfKerr-McGee Mild Gasification Pilot Plant Will Produce Value-Added Coproducis 44 Morgantown PyGas Facility Described 4-5 ABB Combustion Engineering's Technology for City Water Light and Power Project Described 4-7 Design and Permitting Issues Detailed for Pinon Pine Project 4-10 Duke Energy Project Will Use BGL Gasifier 4-11 DOE/SCS Power Systems Development Facility Reaches 50 Percent Completion 4-14 CORPORATIONS Fossil Fuel Liquefaction Consortium Tackles Coliquefaction of Coal and Waste 4-16 SO! is Expanding Its Clean Coal Refineries Programs in Asia 4-17 GOVERNMENT GAO Reviews the Magnetohydrodynarnics Program 4-20 ECONOMICS Coal-Derived Alcohols Deemed Competitive With MTBE for Transport Fuels 4-24 TECHNOLOGY Coliquefaction of Waste Plastic With Coal Tested 4-27 Foster Wheeler Studying Partial GAsification Combined-Cycle System 4-28 Scrap Tires Could Serve as Hydrogen Donors for Coal Liquefaction 4-30 Diinethyl Ether Route for Syngas-to-Gasoline Improves on Methanol-to-Gasoline Process 4-31 Evolution of HRI's Coal Liquefaction Technologies Described 4-34 Coproduction of Iron and Methanol Proposed 4-36 LEA Coal Research Sees Potential for Coal in Fuel Cells 4-38 INTERNATIONAL North Dakota Researchers to Explore Underground Gasification Possibilities in Thailand 4-40 European THERMIE Program Supports IGCC Technology 4-40 China's Coal Mining Sector Hopes to Diversify 4-42 GSP Dust Pressure Gasification Process Available for Development 4-42 Eight Coal Gasification Projects Listed in China 4-44 Development of CRE Topping Cycle Summarized 4-44 Repowering of Polish Powerplants With IGCC Under Study 4-47 IGCC Plants Found Advantageous if Carbon Dioxide Capture is Required 4-52 In Situ Bioremediation Promising for Cleanup at Old Gas Manufacturing Plants 4-53 COAL PUBLICATIONS 4-57 STATUS OF COAL PROJECTS INDEX OF COMPANY INTERESTS 4-98 SYNTHETIC FUEIS REPORT, DECEMBER 1993 Ill V. NATURAL GAS PROJECT ACTIVITIES New Zealand Synfuel Plant Cuts Bad 5-1 Shell's Gas to Distillates Plant Back On Line 5-1 CORPORATIONS Amoco and Argonne Initiate Joint Project for Methane Conversion Research 5-2 Rentech Gas-to-Liquids Technology Makes Progress 5-2 GOVERNMENT PElt's Natural-Gas-to-Liquids Program Reviewed 5-3 ENERGY POLICY AND FORECASTS HERA Forecast Sees Gas Prices Falling, Then Rising to 2005 5-5 RESOURCE Shell Profile Details World Natural Gas Resources 5-7 NATURAL GAS PUBLICATIONS 5-8 STATUS OF NATURAL GAS PROJECTS 5-9 SYNTHETIC FUELS REPORT, DECEMBER 1993 iv HIGHLIGHTS Capsule Summaries of the More Significant Articles in this Issue DOE Fossil Energy Budget Realigned for 1994 The Fiscal Year 1994 budget for the United States Department of Energy realigns fossil energy spending in a number of ways. As detailed on page 1-1, spending on natural gas and coal will in- crease while coal and oil shale activities will decline. The budget for oil shale research is totally eliminated. MITRE Estimates Synthetic Transport Fuels to Cost $36 per Barrel Investigators at the MITRE Corporation have been working with computerized simulation models of coal liquefaction for several years. Recent results, discussed on page 1-3, indicated a required selling price for gasoline and diesel of about $46 per barrel. This translates into an equivalent crude price of about $36 per barrel. Hot Gas Cleanup Studied for Biomass Gasification A team led by Westinghouse Electric will conduct a Hot Gas Cleanup (HGCU) program with the goal of the validating the process for operation of a combustion turbine with a pressurized fluidized-bed air-blown biomass gasifier. As reported on page 1-6, the HGCU filter system and tar cracker will first be operated at a 9.1 tonne per day RENUGAS process development unit. A scaled-up plant will then be demonstrated. LLNL Retort Project Without Funds—Status Reviewed Researchers at Lawrence Livermore National Laboratory (LLNL) have been investigating Hot- Recycled-Solid oil shale retorting through fundamental research, operation of a pilot plant, and development of an Oil Shale Process mathematical model. As of late November, it appears that no funds will be appropriated for the work in 1994. The status of the project is reviewed on page 2-1. Petrosix Project Status Updated The Petrosix technology has been exhaustively tested for Petrobras at its oil shale facilities, the Oil Shale Industrialization Superintendence (SIX) in Sao Mateus do Sul, Parana, Brazil. The opera- tion of the complex, operating costs, environmental protection, research and development programs and byproducts in development at SIX are discussed on page 24. New Paraho Reports Favorable Results From Ongoing Test Program The technical performance characteristics of a shale oil modified paving product called SOMAT, have been evaluated by the New Paraho Corporation. As is discussed on page 2-7, SOMAT com- pared favorably with conventional and polymer-modified asphalts. Southern Pacific Petroleum Reports Continued Progress on Stuart Project Recent activities of Southern Pacific Petroleum N.L. and its associate Central Pacific Minerals N.L. have been reported in their June and September quarterly reports. In particular, a new financing structure for Stage 1 of the Stuart Oil Shale Project was developed.