pace syntfletic fne its report OIL SHALE 0 COAL 0 OIL SANDS VOLUME 25 - NUMBER 4 - DECEMBER 1988 QUARTERLY Tsll Ertl Repository s Library ; Jhoi of M:cs ®THE PACE CONSULTANTS INC. Reg. U.S. P.I. 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 F V.1 I V1t'J 1 1 [tU :4i] j Jerry E. Sinor Pt 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 HIGHLIGIrFS A-i I. GENERAL CORPORATIONS Davy Buys Dravo Engineering 1-1 New Zealand Synfuels Plant May Sell Methanol i_I Tenneco Dismembers Its Oil and Gas Operations 1-1 GOVERNMENT Alternative Motor Fuels Act of 1988 Becomes Law 1-2 DOT Develops Alternative Fuels Initiative 1-2 U.S. President-Elect to Raise Status of Science Staff 1-2 ENERGY POLICY AND FORECASTS U.S. Petroleum Demand Reaches 8-Year high 1-4 GAO Report Acknowledges Potential Role of Synthetic Fuels 1-4 API Energy Security Paper Calls for Drastic Changes i-C Energy Policy of Reagan Administration Detailed in DOE Report 1-9 ECONOMICS Energy Economists Debate Energy Effects and Futures 1-13 TECHNOLOGY Radiation Promotes Solvent Extraction Processes 1-17 Advances in Methane Conversion Technology Said Possible 1-19 INTERNATIONAL China Oil Demand to Rise Faster Than Supply 1-21 Options Study Outlines Course of Canadian Energy 1-22 Materials and Energy Needs of Developing Countries to Dominate the Future 1-24 ENVIRONMENT Adaptation to Carbon Dioxide Effect said Likely 1-27 RECENT GENERAL PUBLICATIONS/PATENTS 1-30 COMING EVENTS 1-31 SYNTHETIC FUELS REPORT, DECEMBER 1988 II. OIL SHALE PROJECT ACTIVITIES Water-Jet-Assist Mechanical Mining Program Outlined for Oil Shale 2-1 Ramex Activity Continues in Indiana 2-4 Petrosix Continues Emphasis on Gas Production 2-4 Unocal Parachute Creek Project Approaches Break-Even 2-5 New Paraho Lays Out Development Plan for Shale Oil Asphalt 2-5 CORPORATIONS Synfuels Engineering and Ecocure to Reactivate TOSCO Retort 28 GOVERNMENT DOE and Indiana Embark on Shale Oil Asphalt Program 29 TECHNOLOGY Technology of Oil Shale Cement Reviewed 2-10 Chevron Patents Recycle Shale Conditioning Process 2-11 Solv-Ex Patents Oil Shale Extraction Process 2-13 Unocal Patents Shale Cooler 2-14 Addition of Olefin and Catalyst Improves Shale Oil Yield 2-16 INTERNATIONAL German Study Shows Jordan Oil Shale Economical at $15 Per Barrel 2-19 Plant Growth Stimulators Developed From Shale Oil 2-20 New Upgrading Scheme Proposed for Fushun Shale Oil 2-20 Shale Oil Sludge Process Adopted for Refinery Use 2-22 WATER Piceance Basin Water Rights Attract Bids 2-23 Indian Water Rights Settlement Clears Way for Colorado Water Project 2-23 Oil Shale Companies File Water Rights Applications 2-23 RESOURCE His Tribe Imposes 10 Percent Severance Tax 2-27 Geokinetics, Magic Circle, Win Utah Shale Leases 2-27 BLM Starts Planning for Diamond Mountain Resource Area 2-28 SOCIOECONOMIC Exxon to Sell Battlement Mesa 2-30 County Gives Unocal Tax Refund 2-30 RECENT OIL SHALE PUBLICATIONS/PATENTS 2-31 STATUS OF OIL SHALE PROJECTS 2-36 INDEX OF COMPANY INTERESTS 2-52 it SYNTHETIC FUELS REPORT, DECEMBER 1988 III. OIL SANDS PROJECT ACTIVITIES Shell Puts Peace River Expansion Project on Hold 3-1 91-Provincial Upgrader Project Breaks Ground 3-1 Tangleflags Begins Continuous Steam Injection 3-1 Syncnide CAP Surpasses Budget and Schedule Targets 3-2 Suncor Reports Record Production for Quarter 3-2 Illinois Oil Mining Project Reaches Pay Zone 3-2 Government Aid Approved for OSLO Project 3-3 Amoco Completes Elk Point Expansion 34 Esso Defers Cold Lake Expansion 3-4 Progress Reported at Underground Test Facility 3-4 CORPORATIONS Hydrocarbon Mining Company Proposes Oil Mining Project 3-10 Solv-Ex Targets Byproduct Metals Recovery a-ia ORS Pursue Applications in Europe 3-14 ENERGY POLICY A FORECASTS Alberta Policy to Emphasize Upgrading 3-15 ECONOMICS Fiscal Treatment has Influenced Oil Sands Development 3-17 TECHNOLOGY Fracture Stimulation Unsuccessful in the GLISP Tar Sands Pilot 3-22 Amoco Patents Water Displacement Method for Extraction 3-24 OP Patents and Tests Borehole Mining Techniques 3-27 OSLO Optimistic on Borehole Hydraulic Mining 3-29 Natural Bitumens can Provide Multiple Product Slate 334 INTERNATIONAL Economics of Heavy Oil in China and Canada Compared 3-36 USSR/Hungary Develop Downhole Steam Generator 3-39 China Targets 200,000 Barrels Per Day of Heavy Crude 3-41 ENVIRONMENT Sludge Problem Reduced by Oleophilic Sieve Coprocesslng 3-43 RESOURCE USGS Analyzes Mineral Content of Natural Bitumen Deposits 3-47 BLM Issues Draft RMP/EiS for San Rafael Resource Area 349 Utah Lowers Royalty Rates on State Lands 354 RECENT OIL SANDS PUBLICATIONS/PATENTS 3-55 STATUS OF OIL SANDS PROJECTS 3-57 INDEX OF COMPANY INTERESTS 3-82 III SYNTHETIC FUELS REPORT, DECEMBER 1988 IV. COAL PROJECT ACTIVITIES Cool Water Plant Likely to Close 4-1 Eastman Gasification Complex Averages 07% Onstream for 3-Year Period 4-2 Basin Subsidiary Takes Possession of Great Plains 4-4 CORPORATIONS lOT Steps Up Fuel Cell Research 4-7 Kellogg to Study hybrid Cashier, Fluid Bed Combustor 4-8 GOVERNMENT Western Participation Urged in Clean Coal Technology Program 4-10 More Fuel Cell Work Under Way 4-10 DOE Develops Gasification Desulfurization Sorbents 4-10 DOE Selects 16 Winners in Round 2 Clean Coal Technology Program 411 ECONOMICS Amoco LP Predicts $15 Million/Year Byproducts Profit at Great Plains 4-14 Advances In Direct Liquefaction Would Compete with $25 Oil 4-16 Mild Gasification of Coal to Offer Attractive Economics 4-18 TECHNOLOGY Lurgi Develops CFB Coal Gasifier 4-22 Coal Liquids May be Valuable as Asphalt Additives 4-24 Advancd 10CC Concepts Analyzed 4-26 INTERNATIONAL Greece Abandons Lignite Gasification Plan 4-31 Mongolian Energy Center to Include Fertilizer from Coal 4-31 Brazil Develops CIGAS Gasification Process 4-31 Target Liquefaction Yields Achieved by NEDOL Process 4-33 Sweden Drops Possibility of Coal Gasification Power Plant 4-35 Dutch Utility Orders Gasification Study 436 Joint Japanese/English Effort Develops MRS Process 4-36 East German Pilot Plant Gasifies High Salt Coal 4-37 Ammonia from Peat Plant to be Build in Finland 4-39 ENVIRONMENT Pilot Tests Point to Partial Solutions for Great Plains Emissions 4-41 Coal Gasifier Proposed for Hazardous Waste Destruction 4-44 Cleanup of Old Utah Coal Gasification Site Under Way 4-44 RESOURCE Interior to Share Interest on Late Royalties with States 445 Interior Rule Affects Readjustment of Terms for Federal Coal Leases 445 Powder River Regional Coal Team Meets 445 China Faces Acute Coal Shortage 4-46 RECENT COAL PUBLICATIONS/PATENTS 4-48 STATUS OF COAL PROJECTS 4-54 INDEX OF COMPANY INTERESTS 4-90 IV SYNTHETIC FUELS REPORT, DECEMBER 1988 HIGHLIGHTS Capsule Summaries of the More Significant Articles in this Issue New Zealand Synfuels Plant May Sell Methanol The New Zealand government is considering diverting part of the plant's crude methanol stream to produce commercial grade methanol. The approximate dou- bling of world methanol prices has apparently made methanol more attractive. Please see page 1-1. Alternative Motor Fuels Act of 1988 Becomes Law The Alternative Motor Fuels Act of 1988, summarized on page 1-2, is now law. The bill provides $18 million, beginning in fiscal year 1990, for a demonstration program to encourage production and use of trucks and buses capable of run- ning on alternative fuels. GAO Report Acknowledges Potential Role of Synthetic Fuels In a report issued to Congress titled "Energy Security--An Overview of Changes in the World OH Market," the General Accounting Office notes that United States oil production has declined and imports have increased in the past two years, raising concern about another oil crisis. The report assesses current United States energy security and recommends policy action (page 1-4). API Energy Smutty Paper Calls for Drastic Change The American Petroleum Institute presented its "Energy Security White Paper: U.S. Decisions and Global Trends" to President-Elect Bush and the 101st Con- gress in November. The API says present demand and production trends are setting the United States up for another severe oil price shock. A summary of the report and its recommendations may be found on page 1-6. Energy Economists Debate Energy Effects and Futures A selection of papers presented at the Tenth Annual International Conference of the International Association of Energy Economists provides a model of cur- rent thinking on energy economics and the future (page 1-13). Advances in Methane Conversion Technology Said Possible A report prepared for the United States Department of Energy suggests that appreciable improvements in methane-to-liquids technology are feasible. Results of the screening study may be found on page 1-19. Emphasis was placed on direct conversion processes, avoiding the use of synthesis gas.