2SO yntfletic fne]R OIL SHALE 0 COAL 0 OIL SANDS 0 NATURAL GAS VOLUME 28 - NUMBER 4- DECEMBER 1991 QUARTERLY Tsit Ertl Repository Artur Lakes Library C3orzdo School of M.ss © 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 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 L. Gist Post Office Box 53473 Houston, Texas 77052 (713) 669-8800 Telex: 77-4350 CONTENTS HIGHLIGHTS A-i I. GENERAL CORPORATIONS CSIRO Continues Strong Liquid Fuels Program 1-1 GOVERNMENT DOE Fossil Energy Budget Holds Its Ground 1-3 New SBIR Solicitation Covers Alternative Fuels 1-3 USA/USSR Workshop on Fossil Energy Held 1-8 ENERGY POLICY AND FORECASTS Politics More Important than Economics in Projecting Oil Market 1-10 Study by Environmental Groups Suggests Energy Use Could be Cut in Half 1-10 OTA Reports on U.S. Oil Import Vulnerability 1-14 Energy Secretary Decries Failure of Energy Strategy Bill 1-18 B? Statistical Review Notes Lack of Growth in World Energy Reserves and Use 1-19 TECHNOLOGY Flexible Fuel Conversion Plants Proposed 1-21 INTERNATIONAL Continuation of Australian Energy Exports Recommended 1-23 COMING EVENTS 1-25 IL OIL SHALE PROJECT ACI1VI11ES Stuart Project has Definitive Construction Cost Estimate 2-1 Northlake Industries Demonstrates Shale Extraction Process 2-1 CORPORATIONS Paraho Announces Loss for Year 2-2 GOVERNMENT BLM Developing Resource Management Plan for White River Area 2-3 MTCI Wins SBIR Grant for Oil Shale Retorting 2-3 SYNTHETIC FUELS REPORT, DECEMBER 1991 ECONOMICS Paraho Projects 30 Percent Return on Shale Oil Asphalt 2-5 Use of Spent Shale in Cement Manufacture Offers Economic Benefits 2-6 TECHNOLOGY Amoco Patents Shale Oil Syncnide Dedusting Process 2-9 Fifty Pound Per Hour Cold Flow Tests Carried Out on Kenton Design 2-11 ENVIRONMENT Creation of Low Permeability Layers Could Retard Leaching from Shale Piles 2-14 WATER Unocal Files for Water Rights 2-16 RESOURCE Moratorium Put on Patenting of Oil Shale Lands 2-17 Proposal Made to Lease Naval Oil Shale Reserve for Gas Development 2-17 NaTec Resources Producing Nahcolite in the Piceance Basin 2-17 OIL SHALE PUBLICATIONS/PATENTS 2-20 STATUS OF OIL SHALE PROJECTS 2-22 INDEX OF COMPANY INTERESTS 2-37 III. OIL SANDS PROJECT ACTIVITIES OSLO Winding Down 3-1 Biprovincial iJpgrader Requires Additional Funds 3-1 Suncor Reports Earnings Increase, Record Oil Sands Production 3-1 Oil Sands Production Figures Updated 3-2 CORPORATIONS Solv-Ex Still Looking for Financing for Bitumount Project 34 Nova to Sell Husky 3-5 Imperial Considering Heavy Oil Upgrader 3-6 Petro-Canada Sells Part of Syncrude Interest to Mitsubishi 3-6 Murphy Cites Favorable Heavy Oil Results with Horizontal Drilling 3-6 GOVERNMENT DOE Calls for Advanced Oil Recovery Proposals 3-7 ERCB Issues Orders and Approvals in Oil Sands Areas 3-8 SYNTHETIC FUELS REPORT, DECEMBER 1991 ENERGY POLICY AND FORECASTS National Energy Board Predicts Increasing Bitumen Production 3-9 UNITAR Director Notes Importance of Heavy Oil and Tar Sands 3-10 TECHNOLOGY Clean Coal Technology May Find Use in Heavy Oil Applications 3-12 Horizontal Wells Becoming Viable for Heavy Oil and Tar Sands 3-14 VCC Technology Ready for Commercialization 3-17 INTERNATIONAL Nigeria Tar Sands May be Developed 3-20 Oriznulsion Making Progress in European Markets 3-21 AOSTRA Annual Report Outlines International Efforts in Heavy Oil and Oil Sands 3-22 Soviet Production of Natural Bitumen and Bituminous Rocks Covers 20 Years 3-25 Oriinulsion Tested in Italy and Florida 3-27 Taciuk Process Finds New Environmental Applications 3-22 OIL SANDS PUBLICATIONS/PATENTS 3-32 STATUS OF OIL SANDS PROJECTS 3-36 INDEX OF COMPANY INTERESTS 3-62 IV. COAL PROJ WE ACTIVITIES Wabash River Project Will Demonstrate Coal Gasification Repowering 4-1 CrC to Test Char in Electric ARC Furnace 4-3 ENCOAL on Schedule for Startup in First Half of 1992 4-6 Preliminary Design for Combustion Engineering IGCC Project to be Finished Next Year 4-8 Mitt Indirect Gasifier Yields High Hydrogen Concentration 4-10 Production at Great Plains Continuing at High Level 4-12 TECO Energy Relocates Round 31(1CC Project 4-13 Eastman Expands Chemicals from Coal 4-14 UCG Project Proposed for Pennsylvania Anthracite Region 4-17 Joint Research Teams Attack Oil from Coal Challenge 4-18 Status of CCr Projects Updated 4-19 SGI Activities Multiply 4-22 DGC Shows $10 Million Profit in 1990 4-22 SYNThETIC FUELS REPORT, DECEMBER 1991 in GOVERNMENT Nine New Clean Coal Projects Selected 4-24 DOE Tells Congress No Additional Work Needed on Coal Refineries 4-26 Ca Round 5 Delayed 4-30 Two SBIR Grants Given for Coal Liquefaction 4-31 ENERGY POLICY AND FORECASTS CERI Sees Big Role for 16CC in Canada 4-33 ECONOMICS Mild Gasification to Produce Formcoke in Pennsylvania Shows Promise 4-36 Economic Impact of Coal in Canada Assessed 4-38 TECHNOLOGY ENCOAL Solid Product Shows Favorable Combustion Properties 4-41 Vortex Fluidized Bed Gasifier Under Development 4-43 Advantages Seen for COREX Process 4-45 Direct Coal-Fired Gas Turbine Tested 4-48 Coal Hydrogen Controls Catalyst Deactivation in Hill Coprocessing 4-48 INTERNATIONAL IGCC Based on Biomass and Peat Under Study in Finland 4-51 China Plans More Coal Gasification Plants 4-53 SASOL to Expand Chemicals Production 4-53 200 TPD 16CC Pilot in Operation in Japan 4-54 ENVIRONMENT CIAB Sees Opportunity to Reduce Carbon Dioxide Emissions from Coal 4-56 ELM Affirms Montana Leases with Cultural Stipulations 4-59 COAL PUBLICATIONS/PATENTS 4-60 STATUS OF COAL PROJECTS 4-64 INDEX OF COMPANY INTERESTS 4-111 V. NATURAL GAS PROJECT ACTIVITIES New Zealand Synfuels Produces Record 6-Month Output 5-1 SYNTHETIC FUELS REPORT, DECEMBER 1991 GOVERNMENT DOE Outlines Proposals to Help Gas Industry 5-2 Gas-Fired Liquefier Gets SUIR Award 5-2 ECONOMICS Liquid Fuels from Natural Gas Should be Competitive at Oil Prices of $25 to $30 5-4 TECHNOLOGY 5-5 Exxon Develops New Process for Synthetic Liquids from Gas New Method Discovered for Converting Methane to Higher Alkanes 5-6 INTERNATIONAL Gas Production and Reserve Additions Up in 1990 5-7 STATUS OF NATURAL GAS PROJECTS 5-8 SYWFIIEI1C FUELS REPORT, DECEMBER 1991 HIGHLIGHTS Capsule Summaries of the More Significant Articles In this Issue CSIRO Continues Strong Liquid Fuels Program The annual report from CSIRO says that it is necessary to develop economic processes to produce synthetic fuels. CSIRO's Coal and Energy Technology Division has established a program to im- prove the processes and equipment used to produce liquid and gaseous fuels from sources other than crude oil. See page 1-1 for a brief summary and progress report on this program. DOE Fossil Energy Budget Holds Its Ground The United States Department of Energy's (DOE) budget for fossil energy research and develop- ment for fiscal year 1992 amounts to $449.6 million, only a slight decrease from the previous year's budget amount. As detailed on page 1-3, the budget for petroleum research and development was increased, while the agency's budget for oil shale research and development was significantly reduced. The overall budget for coal research and development was slightly reduced. New SBIR Solicitation Covers Alternative Fuels The United States Department of Energy's tenth annual solicitation for the Small Business In- novation Research program (SBIR) lists a large number of technical topics that involve processes for producing, improving and enhancing utilization of alternative fuels. A selected number of these topics are discussed in the article beginning on page 1-3. DOE anticipates making ap- proximately 150 grant awards in amounts up to $50,000 for projects of about 6 months duration. Politics More Important Than Economics in Projecting Oil Market C.H. Tahmassebi of Ashland Oil, Inc. says oil market projections will require a good deal of politi- cal knowledge in addition to the usual economic background and trends. In addition to Ashland Oil's crude oil supply/demand outlook to the year 2000, the article on page 1-10 summarizes the role that political events will play in attempting to accurately project worldwide crude oil market conditions. Study by Environmental Groups Suggests Energy Use Could be Cut in Half A 2-year study conducted by scientists, engineers and economists from four environmental groups says that the United States could cut its projected energy consumption nearly in half, quadruple its renewable energy use, and save consumers $2.3 trillion by the year 2030. The analysts evaluated more than 100 energy technologies and mapped out four possible future energy scenarios. A sum- mary of this work is presented on page 1-10. OTA Reports on U.S. Oil Import Vulnerability The congressional Office of Technology Assessment (OTA) has released its revised estimates on oil replacement capability in the United States.