230.5'02 o pace SrntfletIc fne]its report OIL SHALE 0 COAL 0 OIL SANDS VOLUME 26 — NUMBER 4 — DECEMBER 1989 QUARTERLY Toil Eril Repository • 1Lr Lakes Library Sch',ol of M!:ts (S)THE PACE CONSULTANTS INC. ®Reg . U.S. Pot. OFF. Pace Synthetic Fuels Rqiiat 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 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 HIGHLIGHTS GENERAL CORPORATIONS lOT Notes Synthetic Fuels Research Efforts 1-1 NCA Urges "Marshall Plan" for National Energy Strategy 1-3 ORNL Sets Up Center for Global Environmental Studies 1-3 GOVERNMENT DOE Warns of Deteriorating Domestic Oil and Gas Production 1-5 DOE Makes New Round of Phase I Awards In SBIR Program 1-5 New SBIR Solicitation Targets Synfuels Technologies 1-8 National Energy Strategy Hearings Chug Along 1-10 ENERGY POLICY AND FORECASTS EtA Short-Term Outlook Sees Rapid Decline In U.S. Oil Production 1-11 EtA Records Drop in Oil and Gas Reserves for 1988 EEPC Lowers Oil Price Projections But Still Expects Much Higher Prices 1-12 NERC Says Reliability of U.S. Electric Generating System Will Fall 1-13 World Oil Price to Peak in 2004 1-16 15W Poll of Price Forecasters Shows Increase for First Time In 8 Years 1-18 ECONOMICS Economics of the Greenhouse Effect Explored 1-20 INTERNATIONAL BP Statistical Review Demonstrates increasing World Energy Demand 1-25 European Community Will Continue to Face Energy Challenges 1-26 ENVIRONMENT CO 2 Injection Could Make Hydrogen from Fossil Fuels Acceptable 1-30 Global Warming Study Panel Formed 1-32 Idso Book Puts Geologic Perspective on Carbon Dioxide Greenhouse Effect 1-32 COMING EVENTS 1-36 SYNTHETIC FUELS REPORT, DECEMBER 1989 II. OIL SHALE PROJECT ACTIVITIES Western Slope Refining's Environmental Problems Continue 21 CORPORATIONS Ramex Diversifies In Search for Operating Income 2-2 Unocal Touts Future of Oil Shale 2-3 New Paraho Completes Six Shale Oil Asphalt Test Strips 25 LLNL Envisions 100 TPD and 1,000 TPD Pilot Plants 2-5 ECONOMICS Fluidized Bed Retorting of Eastern Oil Shale Feasible at Less Than $35/BBL 2-7 Oxy Thinks Fluid Bed Combustion Will Improve Oil Shale Economics 2-11 TECHNOLOGY Unocal Improves Drilling Technology 215 Superiority of Shale Oil Asphalt Demonstrated In Lab Tests 2-18 LLNL Reviews Progress In Oil Shale Technology 2-21 Spent Shale Tested as Pavement Subgrade Stabilizer 2-25 INTERNATIONAL Oil Shale Resources Present In Arab Countries 2-27 USSR Shale Tar Distillation Practices Detailed 2-27 Israel Nears Completion of Oil Shale Combustion Unit 2-30 ENVIRONMENT Environmental Monitoring Shows Improving Performance at Parachute Creek 2-32 WATER Recovery Plans Issued for Endangered Colorado River Fish 2-34 Shell Western Files for Change of Water Rights 2-34 RESOURCE BLM Recommends Against Wilderness Designations Near Oil Shale Region 2-36 Oil Shale Lease Assigned to Cliffs 2-38 Marathon Files Suit Over Portland Claims 2-38 Reverse Boomtown Effects Chronicled 239 Data Base System Monitors Impacts of Alternative Fuels Development 2-41 RECENT Oil. SHALE PUBLICATIONS/PATENTS 2-42 STATUS OF OIL SHALE PROJECTS 2-45 INDEX OF COMPANY. INTERESTS - 2-60 ii SYNTHETIC FUELS REPORT, DECEMBER 1989 IILOIL SANDS PROJECT ACTIVITIES Oil Mining Project Set for Louisiana 3-1 Caribou Lake Pilot to Proceed 3-2 Husky Expands Lloydminster Area Steam Project 3-2 Site Work Under Way for Biprovincial Upgrader 3-2 Three Star Oil Mine Abandons Snake Pattern Drilling Technique 33 NewGrade Upgrader Passes First Year of Operation 3-3 OSLO Carrying Out Diversified R&D Program 3-4 [€1IU1ifli['XP BP Canada Wants to Sell Wolf Lake 3-5 Tar Sands Drilling Proposed In Whiterocks Canyon 35 C-H Dredging Project to be Extended 35 Improved Results at Suncor Buoy 3rd Quarter Profits at Sun 35 Taciuk Processor Gets Waste Cleanup Job 3-6 AOSTRA Publishes New Oil Sands Handbook 3-6 Canadian Energy Developments Promoting 28,000 BPD Coprocessing Facility 3-7 AOSTRA Reviews Oil Sands Development Program 37 GOVERNMENT Alberta May Sell Interest In Syncrude Plant 3-12 Alberta Energy Minister Optimistic On Upturn for Heavy Oil and Oil Sands 3-12 ENERGY POLICY a FORECASTS CERI Predicts Rising Oil Imports for Canada 3-15 Outlook for Tar Sands and Heavy Crudes Clouded by New Environmental Concerns 3-16 ECONOMICS Wide Variations In Production Casts Found for in Situ Bitumen Projects 3-18 TECHNOLOGY Kentucky Tar Sand Bitumen Tested In Coprocessing Mode 3-22 CANMET Hydrocracking Process Continues to Advance 3-24 Equipment Choices Defined for Solvent Extraction of Tar Sands 3-26 Model Results Good for Electric Preheat Process In Athabasca Oil Sands 3-28 RESOURCE Asphalt Ridge Tar Sands Unit Terminated 3-31 ACECs Identified for Diamond Mountain Resource Area 3-31 RECENT OIL SANDS PUBLICATIONS/PATENTS 3-33 STATUS OF OIL SANDS PROJECTS 3-36 INDEX OF COMPANY INTERESTS 3-61 lfl SYNTHETIC FUELS REPORT, DECEMBER 1989 IV. COAL PROJECT ACTIVITIES Frontier Energy Project Will Use CCLC Coprocessing Technology 4-1 Peabody CCT Project Based on IGT Mild Gasification Process 4-1 Midland Cogeneratlon and California Carbide Propose ugh-Temperature Flash Gasification 4-2 M-C Power Proposes Coal Gas Fired Fuel Cell Demonstration 4-3 Geneva Steel to Demonstrate Gasifier-Based COREX Ironmaking Process 43 Air Products and Dakota Gasification Team Up for Liquid Phase Methanol Demonstration 4-4 Byproduct Development Efforts Continue at Great Plains Plant 45 Calderon Applies for Third Round CCT Funding 45 WRI Starts Up New-Design Mild Gasifier 45 CORPORATIONS SGI and Shell Form TEK-KOL, ENCOAL and Other Units to Develop LFC Process 47 Tampella Licenses U-GAS Process 4-8 GIN Phases Out Coal Gasification Efforts 4-8 Texaco to Buy Cool Water, Use it to Burn Sewage Sludge 4-11 GOVERNMENT Energy Secretary Promises to Expedite Clean Coal Program Clean Coal Technology Projects Shift Westward 4-13 ENERGY POLICY AND FORECASTS Research Needs Assessment Panel Points Way for Liquefaction Research 4-15 ECONOMICS SASOL Economic Performance Linked to Byproducts 4-18 TECHNOLOGY Exxon Studying Catalytic Hydropyrolysls 4-20 Electrochemical and Electrothermal UCG Process Proposed 4-21 Hydrocarb Process Could Produce Clean Fuels from UCG 4-23 HYCOL Pilot Plant Described 4-24 INTERNATIONAL Coal Conversion and MilD Projects Under Way In USSR 4-27 Progress Made on CIVOGAS Process In Brazil 4-28 Coal Gasification Cheaper Than Imported Natural Gas In East Germany 4-30 Extensive Chinese Coal Gasification Efforts Summarized 4-31 ENVIRONMENT Final EIS Issued for Clean Coal Technology Program 433 BLM Recommends No Wilderness Designation In Montana Powder River Area 4-33 RESOURCE lEA Projects Demand for Coal to Rise 33 Percent by 2000 4-36 Black Thunder Mine Nears 25 Million Tons Output 4-36 SOCIOECONOMIC PRB Supplemental EIS Predicts Severe Socioeconomic Impact on Cheyenne Tribe 438 RECENT COAL PUBLICATIONS/PATENTS 4-45 STATUS OF COAL PROJECTS 4-58 INDEX OF COMPANY INTERESTS 4-100 IV SYNTHETIC FUELS REPORT, DECEMBER 1989 HIGHLIGHTS Capsule Summnries of the More Significant Articles in this Issue DOE Warms of Deteriorating Domestic Oil and Gas Production Deputy Secretary of Energy W.H. Moore recently told Congress that it was time for all concerned to work together to stop the deterioration of the oil and gas industry. Excerpts from his testimony appear on page 1-5. MA Short-Term Outlook Sees Rapid Decline in United States Oil Production The Energy Information Agency's new Short-Term Energy Outlook projects a continued decline in United States crude oil production. After an estimated drop of 470,000 barrels per day in 1989, ETA sees a fall of an additional 300,000 barrels per thy in 1990. Highlights from the Outlook are presented on page 1-11. MA Records Drop in OR and Gas Reserves for 1988 United States proved reserves of natural gas declined sharply in 1988 due to large revisions in Alaska for economic reasons, says the EIA (page 1-11). Ad- ditions to oil reserves in 1988 were the second lowest since the ETA has been collecting data. Total discoveries in 1988 would be sufficient to replace only 20 percent of the oil consumed In that year. EEPC Lowers Oil Price Projections But Still Expects Much Higher Prices Harvard University's Energy and Environmental Policy Center has for several years been predicting future oil prices to be higher than most other orecasters. In the article on page 1-12, EEPC re-examines its forecasting as- sumptions and methodology. Although they have lowered their prediction some- what, EEPC still feels that historical data do not support the low oil prices forecast by most analysts. NERC Says Reliability of United States Electric Generating System Will Pall According to surveys by the North American Electric Reliability Council, most electric utilities appear to be underestimating the rate of growth in demand for electricity, and they are not planning enough new capacity to handle the demand likely to materialize in the 1990s.