oil S nit flet ic fneis llt OIL SHALE 0 COAL 0 OIL SANDS 0 NATURAL GAS VOLUME 29 - NUMBER 3 - SEPTEMBER 1992 QUARTERLY Tell Ertl Repository . .: L?'(os Library School of ML'cs (K)THE PACE CONSULTANTS INC. Req. 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 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 Pct 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 GOVERNMENT DOE Announces SBIR Grants in Fossil Energy 1-1 ENERGY POLICY AND FORECASTS Conoco World Energy Outlook Promotes Diversification of Energy Sources 14 U.S. Environmental Laws Will Reduce Refining Capacity, and Open the Door to Alternative Fuels 1-10 LLNL Rates Importance of Different Technologies for Energy Security 1-11 TECHNOLOGY MTCI Patents Pulse-Tube Gasifier for Wide Variety of Feedstocks 1-16 INTERNATIONAL Outstanding Opportunities Seen for Energy Investments in Russia and the Republics 1-19 RESOURCE Uinta Basin is America's Energy Storehouse 1-20 GENERAL PUBLICATIONS/PATENTS 1-21 COMING EVENTS 1-22 II. OIL SHALE PROJECf ACFIVITIES LLNL Reports HRS Pilot Plant and Modeling Results 2-1 GOVERNMENT DOE Solicits Shale Oil Value Enhancement Research 24 ENERGY POLICY AND FORECASTS Declining Oil Shale Output Forecast for Estonia 2-5 ECONOMICS Report for Occidental Says Shale Oil Native Products Extraction is Feasible 2-7 Use of Retorted Devonian Oil Shale to Make Cement Appears Practical 2-9 SYWFIIETIC FUELS REPORT, SEPTEMBER 1992 TECHNOLOGY Amoco Patents Process for Acid Treatment of Kerogen-Agglomerated Oil Shale 2-11 Biotechnological Process for Upgrading Shale Oil Patented 2-12 Solid Substrate Affects Coking of Hot Shale Oil in KENTORT Reactor 2-14 Combustion Kinetics of Retorted Western Oil Shale Resolved 2-17 Shale Ash-Layer Thickness Measured 2-18 Unocal Patents Process and Catalyst for the Dewaxing of Shale Oil 2-21 INTERNATIONAL Pollution Problems at Estonian Oil Shale Powerplants Outlined 2-23 RESOURCE House Version of Energy Strategy Bill Includes Prohibition on Oil Shale Land Patents 2-25 SOCIOECONOMIC Unocal Money Will Train Former Workers 2-26 OIL SHALE PUBLICATIONS/PATENTS 2-27 STATUS OF OIL SHALE PROJECTS 2-28 INDEX OF COMPANY INTERESTS 2-44 III. OIL SANDS PROJECT ACTIVITIES Burnt Lake Project Recovering Cold Lake Bitumen Without Steam 3-1 Bi-Provincial Upgrader Encounters Big Cost Overruns on Way to November Startup 3-3 Oil Sands Production Figures Updated 3-3 Suncor Targets $0.50 per Barrel Decrease in Operating Costs for This Year 34 China National Petroleum Corporation Joins IJTF Project 3-6 CORPORATIONS Amoco Canada to Rely More on Heavy Oil 3-7 AOSTRA Oil Sands and Heavy Oil Commercial Successes Updated 3-7 GOVERNMENT DOE Picks 14 Winners in First Phase of New EOR Program 3-10 ERCB Issues Orders and Approvals in Oil Sands Areas 3-10 ENERGY POLICY AND FORECASTS New Refinery Capacity Will be Needed for Heavy Oil and Bitumen 3-12 New CERI Analysis Projects Declining Production of Crude Oil in Alberta 3-15 ECONOMICS In Situ Recovery Should Complement Open Pit Mining in Athabasca Deposit 3-17 SYNTHETIC FUELS REPORT, SEPTEMBER 1992 TECHNOLOGY MTBE Proposed as Carrier for Bitumen Transport and Viscosity Reduction 3-21 Computer Simulation Yields Insights on Steam/Foam Injection in Athabasca Tar Sands 3-22 History of South Beiridge In Situ Combustion Reviewed 3-24 Quality of Products During In Situ Combustion Analyzed with New Tool 3-26 Electric Preheating for SAGD Process Modeled 3-28 Chevron Patents Combined HASDrive and In Situ Upgrading Process 3-29 Shell Patents Electrical Preheat Steam Assisted Gravity Drainage Process 3-30 INTERNATIONAL PDVSA Continues to Line Up Foreign Partners for Heavy Oil Development 3-33 Nigerian Bitumen Study Planned 3-33 Texaco Gasifier Selected for Two Gasification Projects in Italy 3-33 Texaco and Bitor America to Promote Gasification of Orimulsion 3-33 Japanese Activities and Points of View in Oil Sands Summarized 3-34 ENVIRONMENT Progress Being Made in Solving the Fine Tails Problem 3-37 OIL SANDS PUBLICATIONS/PATENTS 3-39 STATUS OF OIL SANDS PROJECTS 3-42 INDEX OF COMPANY INTERESTS 3-67 IV. COAL PROJECI' ACTIVITIES Louisiana Gasification Observes Fifth Anniversary 4-1 ENCOAL Project in Startup—Not Affected by Sale of Shell Mining Company 4-I DOE Approves Shift of Tallahassee Clean Coal Project to Pennsylvania 4-1 Toms Creek Project Hits Roadblock 4-2 Texaco Gasifier Selected for Tampa IGCC Project 4-2 Wyoming Turns Down Char-Fuels Request for More Money 4-3 Carbondry Process Headed for Pilot Demonstration 4-4 Custom Coals Lines Up Financing 4-6 MC Power Achieves Fuel Cell Scale-Up 4-6 Energy International Sees Promise in Underground Gasification 4-7 GOVERNMENT DOE Completes Agreements on Two Gasification Projects 4-10 DOE Issues Solicitation for Clean Coal Technology Round V 4-10 DOE Names University Coal Research Winners 4-I1 ENERGY POLICY AND FORECASTS Late 90s Will be a Key Period for Gasification Technology 4-13 DOE Outlook for Direct Liquefaction is Optimistic 4-15 SYNTHEI1C FUELS REPORT, SEPTEMBER 1992 ui ECONOMICS WRI CompCoal Process Looks Feasible 4-18 TECHNOLOGY 4-21 Technology of Drying Low-Rank Coals Reviewed Second Law Analysis Shows BGL Gasifier to be the Most Efficient 4-23 4-25 British Coal Topping Cycle Shows Promise Simulated Coal-Derived Methanol Tested in Diesel Engine 4-27 4-28 Nippon Kokan Patents Two-Stage Gasifier Best Method of Extracting Air From Turbines for IGCC Cycles Being Researched 4-29 Coprocessing of Coal and Used Tires Shows Promise 4-30 4-31 Solid-Phase Coal Refining May Lead to New Products IGOR Process for Coal Liquefaction Described 4-33 INTERNATIONAL SGI Studying Coal Refineries in Southeast Asia 4-35 Coal Gasification to Contribute to Environmental Cleanup in Chinese City 4-35 COAL PUBLICATIONS/PATENTS 4-36 STATUS OF COAL PROJECTS 4-38 INDEX OF COMPANY INTERESTS 4-85 V. NATURAL GAS ENERGY POLICY AND FORECASTS Worldwatch Institute Sees Natural Gas as a Bridge to Clean Energy 5-1 TECHNOLOGY Exxon Natural-Gas-To-Liquids Process Revealed 5-4 RESOURCE Hydrates Could be Huge Source of Natural Gas in Alaska 5-6 STATUS OF NATURAL GAS PROJECTS 5-9 SYNTHEflC FUELS REPORT, SEPTEMBER 1992 rur HIGHLIGHTS Capsule Summaries of the More Significant Articles in this Issue DOE Announces SBIR Grants in Fossil Energy The United States Department of Energy (DOE) has selected 202 grant applications from small, high technology firms in 26 states for funding under its Small Business Innovation Research (SBIR) Program. The 60 applications selected for Phase I funding in the fossil energy categories are listed on page 1-1. Funding for each project will average $50,000 over 6 months. Conoco World Energy Outlook Promotes Diversification of Energy Sources The latest version of Conoco's "World Energy Outlook" through the year 2000 is reviewed on page 1-4. In the outlook, Conoco stresses the importance of developing alternative energy tech- nologies and the further use of existing cleaner-burning fuels such as propane and compressed natural gas. Conoco also encourages abroader base of investments in international oil and gas resources and diversification of crude oil supply sources. U.S. Environmental Laws Will Reduce Refining Capacity, and Open the Door to Alternative Fuels Environmental laws in the United States will reduce refining capacity by as much as 1.5 million barrels per day, with some 65 small refiners closing down because of their inability to comply with the provisions of the Clean Air Act Amendments of 1990. As discussed on page 1-10, alternative fuels may be a real threat to gasoline's market share beyond the year 2000. LLNL Rates Importance of Different Technologies for Energy Security An evaluation by the Lawrence Livermore National Laboratory (LLNL) rates the importance of different technologies for their ability to contribute to national energy security. The specific criteria against which the various technologies were evaluated are discussed on page 1-11. The high leverage areas are oil and gas supply increase and transportation demand reduction. Outstanding Opportunities Seen for Energy Investments in Russia and the Republics In spite of a climate of instability and insecurity, Russia and the Republics are the most promising place for energy investments in the world.An overview of energy industry investment oppor- tunities in Russia and the Republics, as well as the risks involved in such investments, is presented on page 1-19. Foreign investments are sought as a tool for development, but knowledge about the basic concepts of the free-market system is lacking. Uinta Basin is America's Energy Storehouse There is 10 times more oil in the Uinta Basin than has been produced by the entire United States in the last 140 years. As outlined on page 1-20, the hydrocarbon resources in the Uinta Basin are composed of movable oil in place, tar sands and oil shale.