23 0 cLO°7 fneJits ellsc.JIr OIL SHALE 0 COAL 0 OIL SANDS 0 NATURAL GAS VOLUME 28 - NUMBER 3 - SEPTEMBER 1991 QUARTERLY Toll Eat Repository PL'L•r Lakes Library School of MThzs 0 THE PACE CONSULTANTS INC. ®Reg . U.S. Pat. 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 greater 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 Post Office Box 649 Niwot, Colorado 80544 (303) 652-2632 BUSINESS MANAGER Horace 0. Hobbs Jr. Post Office Box 53473 Houston, Texas 77052 (713) 669-7816 Telex: 77-4350 CONTENTS HIGHLIGHTS A-i I. GENERAL GOVERNMENT Economic Growth, Environment Cited as Key to National Energy Strategy 1-1 LEA Ministers Note Need for Diversified Energy Supply 1-1 ENERGY POLICY AND FORECASTS CERI Price Projection Puts Oil Slightly Over $25 Post-2000 1-3 Case Made for Higher Oil Demand in the Future 1-4 Rising Oil Prices Predicted by A.D. Little Study 1- Energy is the Master Resource 1-7 EERC White Paper Calls for Increased Coal, Natural Gas Use 1-8 TECHNOLOGY Dimethyl Ether from Syngas Demonstrated at Texas Pilot Plant 1-10 INTERNATIONAL DOE Hosts Soviet Fossil Energy Experts 1-11 ENVIRONMENT What is the Real Cost of Energy? Asks UCS 1-12 GENERAL PUBLICATIONS/PATENTS 1-14 COMING EVENTS 1-15 II. OIL SHALE PROJECT ACTIVITIES Northiake Leases Utah Tract, Plans Retort Development 2-1 CORPORATIONS New Paraho Considers Coprocessing Oil Shale and Scrap Tires 2-2 SYNTHETIC FUELS REPORT, SEPTEMBER 1991 GOVERNMENT LLNL Projects $50 Million Total for Retort Scaleup Project 2-3 Colorado Governor Romer Supports Oil Shale Funding 2-3 Bureau of Mines Outlines Conceptual $113 Million R&D Effort 2-4 ENERGY POLICY AND FORECASTS Oil Shale Future Discussed at Council on Alternate Fuels Seminar 2-6 ECONOMICS Product Value of $90 Per Barrel of Shale Oil Hypothesized 2-8 Road Tests of Shale Oil Modified Asphalt Yield Encouraging Results 2-8 TECHNOLOGY Full Scale Blasting Tests Conducted for Emulsion/ANFO Blends 2-12 Oil Shale Breakage Proves Complex 2-13 Asphalt Research May Lead to Understanding How Shale Oil Modifiers Work 2-14 Siemens Patents Fluidized Bed Retort 2-15 INTERNATIONAL Esperance May Develop Australia's Second Oil Shale Project 2-18 Stuart Project Gets Critical Tax Break 2-18 ENVIRONMENT Reverse Combustion Tested as MIS Cleanup Technique 2-19 Recarbonation Process Stabilizes Spent Shale 2-20 WATER Oil Shale Companies File for Changes in Water Rights 2-21 RESOURCE Marathon Gets Patent to Oil Shale Claims 2-22 SOCIOECONOMIC Unocal Shutdown has Small Regional Effect to Date 2-23 OIL SHALE PUBLICATIONS/PATENTS 2-24 STATUS OF OIL SHALE PROJECTS 2-25 INDEX OF COMPANY INTERESTS 2-40 SYNTHETIC FUELS REPORT, SEPTEMBER 1991 III. OIL SANDS PROJECIr ACTIVITIES Underground Test Facility Moving to Pre-Commercial Pilot Phase 3-1 Oil Sands Plants Operating at High Levels in 1991 3-3 Sceptre Reports Expansion at Tangleflags 34 Husky Upgrader May Start Up Ahead of Schedule Nat Year 34 Hangingstone Project has Problems with Steam Control 3-6 LC-Fining a Success in Bitumen Upgrading at Syncrude 3-7 Horizontal Wells Studied for Peace River Project 3-8 OSLO Would Use Evolutionary, Not Revolutionary Technology 3-10 Kearl Lake Uses Steam Override to Advantage 3-12 Texaco Will Test Electromagnetic Heating at Frog Lake 3-13 CORPORATIONS Suncor Oil Sands Group Achieves Second Quarter Improvement 3-16 Alberta Research Council Notes Progress in Oil Sands Research 3-16 Syncrude Cutting Back Employment After Reaching 500 million Barrels 3-16 Canadian Companies Institute Layoffs 3-17 GOVERNMENT ERCB Lists Oil Sands Orders and Approvals 3-18 Alberta Writes Off Syncrude Expansion Loan 3-18 ECONOMICS Regional Upgrader Concept Could be Economical 3-20 Byproducts Could Improve Oil Sands Profitability 3-21 Hydrogen the Key to Heavy Oil Upgrading 3-25 TECHNOLOGY Tar Sand Dredging Said Viable for Canada 3-28 Fluid Analysis Proves Effective in Monitoring Thermal Processes 3-29 INTERNATIONAL Natural Bitumen Will be Used for Roads in Mongolia 3-31 Taciuk Process Studied for Application in Trinidad and Tobago 3-33 Venezuela Developing Orinoco Reserves 3-35 Iranian Bitumens Described 3-36 Extraction Feasible for Indonesia Bitumen Deposit 3-37 RESOURCE New Tenure Option for Alberta Oil Sands Explained 3-40 Canadian Petroleum Association Tabulates Drop in Oil Sands Reserves 3-41 Heavy Oil Deposits Defined in Midcontinent Region 3-42 ICF Forecasts U.S. Heavy Oil Production to Reach 700,000 Barrels Per Day in 2000 343 OIL SANDS PUBLICATIONS/PATENTS 3-46 STATUS OF OIL SANDS PROJECTS 3-53 INDEX OF COMPANY INTERESTS 3-79 SYN'lllE'flC FUELS REPORT, SEPTEMBER 1991 IV. COAL PROJECT ACTIVITIES CTC Expands Production, Marketing of Coal Liquids 4-1 Great Plains Sells Cresylics and Surplus Methanol 4-1 DOE Drops Ohio Clean Fuels 4-1 Sierra Pacific Power Proposal Would Use KRW Gasifier 4-2 lOT Mild Gasification Team Wins DOE Funding for Pilot 4-2 Coal to Methane Project Moves to Cool Water Site 4-3 Kellogg to Build Generic Liquefaction Facilities for DOE 4-4 North Dakota Lignite to Motor Fuels Will be Studied 4-4 SGI Reaching Commercialization of LFC Process 4-4 Freetown Energy Park Applies for Round 4 Funds 4-5 Carbontec Syncoal Process Would be Demonstrated at Cordero Mine - 4-5 Frontier Energy Proposes Coprocessing Plant in Ohio 4-6 MTCI Pulse Combustion Gasifier Proposed at Paper Company Plant 4-6 Calderon Proposes Coal/Corn/Tire Feed for Coproduction Process 4-7 Funding Sought for Full Scale K-Fuel Facility 4-8 COREX Process Demonstration Proposed at Geneva Steel 4-9 Char-Fuels Applies for Round 4 Funding 4-9 PSI and Destec Propose Wabash River Coal Gasification Project 4-10 Gasifier Based on Cat Cracking Technology Proposed by Len 4-11 TAMCO Partners Combine for IGCC Plant in Virginia 4-12 Coal Technology Corporation Applies for Funding for Mild Gasification Plant 4-12 Sierra Pacific Submits Proposal for 1(3CC Plant in Nevada 4-13 TVA Asks Funding for Combined 1(3CC and Fertilizer Plant 4-14 Manitowoc Project Would Demonstrate Combined Carbonizer-PFBC System 4-14 Combined Carbonizer-PCFB Repowering Proposed at Iowa Power 4-15 GOVERNMENT MElt Will Fund Cooperative Gasifier Development Facility 4-18 DOE Announces Academic Coal Research Grants 4-18 ENERGY POLICY AND FORECASTS ELk Sees U.S. Coal Production at 1.5 Billion Tons in 2010 4-20 lEA Says Coal Demand to Rise 13 Percent by 2000 4-21 INTERNATIONAL Chinese Trigeneration Project Moves Ahead 4-24 ENVIRONMENT Environmental Externalities Must be Considered for Gasification Projects 4-25 COAL PUBLICATIONS/PATENTS 4-26 STATUS OF COAL PROJECT'S 4-31 INDEX OF COMPANY INTERESTS 4-77 SYNTHETIC FUELS REPORT, SEPTEMBER 1991 iv V. NATURAL GAS PROJECT ACTIVI11ES Record Methanol Production Rate Achieved at New Zealand Synfucls Plant 5-1 ENERGY POLICY AND FORECASTS Conventional Expectation of Natural Gas Price Increases Doubted 5-2 TECHNOLOGY Methane Can be Oxidized to Synthesis Gas Using Carbon Dioxide 5-3 One-Step Conversion of Synthesis Gas to Gasoline Studied 5-3 New Methanol Synthesis Catalyst Reported 5-4 STATUS OF NATURAL GAS PROJECTS 5-5 SYNThETIC FUELS REPORT, SEPTEMBER 1991 HIGHLIGHTS Capsule Summaries of the More Significant Articles In this Issue lEA Ministers Note Need for Diversified Energy Supply The ministers of the 21-member International Energy Agency (lEA), in assessing long-term energy options, said special emphasis should be placed on those technologies which enhance diversity, ef- ficiency and safety, extend and improve prospects for using reserves of conventional fossil fuels, and make available new and alternative energy sources. A discussion of theft outlook on a diver- sified energy supply begins on page 1-1. CERI Price Projection Puts Oil Slightly Over $25 Post-2000 The Canadian Energy Research Institute (CERI) has predicted that world oil prices will top $25 per barrel after the year 2000. As discussed on page 1-3, a recently released CERI study at- tempts to capture the effects of the world's fourth oil price shock on long-term industry trends through an analysis of six possible scenarios. Case Made for Higher Oil Demand in the Future A study performed by the United Nations Institute for Training and Research presents an alterna- tive method of projecting future oil demand. This alternative approach, as detailed onpage 1-4, assumes that future oil demand is influenced by the underlying relationships between oil and gross domestic product and looks at those relationships over the past 40 years. The study projects growth rates for world oil consumption of either 2.8 or 3.8 percent. Rising Oil Prices Predicted by A. D. Little Study A new study by Arthur D. Little, "The Long-Term Outlook for Crude Oil and Petroleum Products," is discussed on page 1-6. The study predicts a few years of moderate energy prices before rising oil demand in developing countries and static oil production in non-OPEC countries will cause oil prices to rise.