EPA-460/3-74-009-a
June 1974
                  FEASIBILITY  STUDY
             OF ALTERNATIVE FUELS
                    FOR  AUTOMOTIVE
                    TRANSPORTATION
  VOLUME I  - EXECUTIVE SUMMARY
   U.S. ENVIRONMENTAL PROTECTION AGENCY
      Office of Air and Waste Management
   Office of Mobile Source Air Pollution Control
   Alternative Automotive Power Systems Division
        Ann Arbor, Michigan 48105

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                                         EPA-460/3-74-009-a
             FEASIBILITY  STUDY
          OF  ALTERNATIVE FUELS
FOR AUTOMOTIVE TRANSPORTATION
  VOLUME I  -  EXECUTIVE SUMMARY
                       Prepared by

           F. H. Kant, R. P. Cahn, A. R. Cunningham,
           M. H. Farmer, W. Herbst, andE. H. Manny
              Exxon Research and Engineering Co .
                       P.O. Box 45
                  Linden, New Jersey  07036
                   Contract No. 68-01-2112


                    EPA Project Officer:

                        C. E. Pax


                      Prepared for:

           U.S. ENVIRONMENTAL PROTECTION AGENCY
               Office of Air and Waste Management
            Office of Mobile Source Air Pollution Control
           Alternative Automotive Power Systems Division
                 Ann Arbor, Michigan 48105

                        June 1974

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This report is issued by the Environmental Protection Agency to report technical
data of .interest to a limited number of readers.  Copies are available free of charge
to Federal employees, current contractors and grantees, and nonprofit organizations
as supplies permit - from the  Air Pollution Technical Information Center, Environ-
mental Protection Agency, Research Triangle Park,  North Carolina 27711; or may be
obtained, for a fee, from the National Technical Information Service, 5285 Port
Royal Road, Springfield,  Virginia  22151.
This report was furnished to the U.S. Environmental Protection Agency by Exxon
Research and Engineering Co. in fulfillment of Contract No. 68-01-2112 and has
been reviewed and approved for publication by the Environmental Protection
Agency. Approval does not signify that the contents necessarily reflect the views
and policies of the Agency. The material presented in this report may be based
on an extrapolation of the "State-of-the-art."  Each assumption must be carefully
analyzed by the reader to assure that it is acceptable for his purpose.  Results
and conclusions should be viewed correspondingly.  Mention of trade names or
commercial products does not constitute  endorsement or recommendation for use.


                        Publication No. EPA-460/3--74-009-a
                                     11

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                                  FOREWORD.
          For convenience, the material covered in this report is divided
into three volumes.  Volume I is an executive summary comprising the re-
port summary, highlights of the various sections and a list of conclusions,
Volume II is the technical section, which is a complete description of the
work carried out under this contract.  It includes the sections bound sep-
arately in Volume I.  Volume III includes the appendices, which deal with
supplementary material for some of the topics discussed in Volume II.

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                             TABLE OF CONTENTS
SUMMARY
HIGHLIGHTS
                                    iii
                                                                     Page
CONCLUSIONS	  20

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                                   SUMMARY
          This study identifies feasible and practical alternatives  to
automotive fuels derived from petroleum for the 1975-2000 time period.
The alternative fuels are liquids derived from domestic coal and oil
shale — specifically, gasolines, distillates, and methanol.  While  many
uncertainties remain, initial production of the new fuels is likely  within
the next five to seven years.

          The United States has vast resources of coal and oil shale,  suf-
ficient to permit large scale production of synthetic fuels.  However,
other factors such as the availability of skilled manpower and water are
expected to constrain the rate at which the resources can be developed.
Complete replacement of petroleum with synthetic fuels is therefore  im-
probable until after the turn of the century.  Rather, it appears that
the alternative fuels will begin to be used in conjunction with petroleum,
that usage will expand as availability increases, and that the approach  to
complete replacement will be evolutionary.

          The study shows that there is an excellent chance of developing
alternative automotive fuels, or blending components, that can take  ad-
vantage of the existing distribution and marketing system for automotive
fuels.  Additionally, the new products may satisfy the fuel requirements
of conventional vehicles as well as the anticipated needs of several types
of automotive power plants now under development.  Not surprisingly, fuels
similar to petroleum, derivable from both coal and oil shale, present the
least difficulty and uncertainty.

          While differing in estimated cost, the individual fuels examined
in detail may all be producible at a cost level or range projected for petro-
leum fuels.  Indeed, the shale fuels may be significantly lower in cost.
Nevertheless, the estimates of cost are sensitive to more than technological
uncertainties.  For example, costs are sensitive to assumptions that concern
inherently unpredictable matters such as surface mining legislation, leasing
policy, and required level of investment return.

          Early in 1974 consumption of automotive fuel was just over six
million barrels/day (MMB/D) or 12 x 1015 BTU/year, and this may be taken
as a lower bound of future consumption.  Upper limits are estimated  to be
about 9.5 MMB/D or 19 x 1015 BTU/year in 1985 and 12.5 MMB/D or 25 x lO*5
BTU/year in the year 2000.  The total output of synthetic fuels, for all
purposes, including automotive fuels, could reach 25 x 1015 3TU/year by
the year 2000, but will only be about 4 x 1015 BTU/year in 1985, which is
about a third of the minimum projected automotive fuel demand.

          Fuels were screened on the basis of economic, technical, and per-
formance criteria, with consideration given to the way in which each new
fuel could be brought into general use.  Consideration was also given to
the environmental impact of producing and using the fuels.  From a fairly
comprehensive list of initial candidates, feasible and practical alterna-
tive automotive fuels were identified:
                                    - 1 -

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           •   gasoline-type and distillate-type fuels from
              oil  shale

           •   gasoline-type, distillate-type, and methanol
              fuels  from  coal.

Each of  these  five  fuels was then evaluated'in detail.

           For  the shale-derived fuels, the analysis began with mining,
crushing and  retorting of the oil shale.  The raw shale oil was upgraded,
and then transported by  pipeline to a plant capable of converting the
shale syncrude into automotive fuels.  The latter were then fed into a
distribution and marketing system, ending at a fuel pump in a service
station.   Investment and operating costs were estimated for the entire
system for three points  in time:  1982, 1990 and 2000.

           The  same procedure was applied to the petroleum-type fuels de-
rivable  from  coal, except that mining was followed by liquefaction rather
than retorting.  Methanol from coal was made by gasification, followed by
methanol synthesis.  In  this case, the methanol product entered the dis-
tribution  and  marketing  system without additional processing steps other
than keeping the  fuel dry throughout the system.

           Based on 1973  constant dollars, the costs per million BTU esti-
mated for  the  five fuels were*:  (including a 10% discounted cash flow
return on  investment)
                                        1982
          Shale:
          Coal:
gasoline

distillate

gasoline

distillate

methanol
$/MMBTU
2.65
2.05
3.35
2.75
3.85
C/Gal.
31.5
26.5
39.5
36.5
22.
                                   1990   2000
                                   - $/MMBTU -
2.60

2.00

3.15

2.50

3.40
2.15

1.65

2.65

2.10

2.95
                          1973 $, ex tax at pump
          Because internally consistent assumptions were used, the cost
estimates are more reliable on a relative rather than on an absolute basis.
However, the differential between the gasoline-type and distillate-type
fuels depends on a "prudent" refining scheme in which the ratio of gasoline
   It must be stressed that these are 1973 costs.  As of May 1974, costs
   for capital projects have escalated substantially in excess of general
   inflation.
                                     - 2 -

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to distillate is not less than about 2:1. .The shale-derived fuels  are
projected to be cheaper than coal-derived fuels over the entire time-
frame of the study.  However, the quantitative development of shale oil
will probably be limited environmentally and by other resources,  such as
manpower and water, rather than by economics and potential demand.

          The ranking of fuels was not changed by consideration of  user
economics, i.e., the total cost of vehicle operation as opposed to  fuel
cost alone.

          Potential product quality problems, related to the aromaticity
of coal-derived fuels on the one hand and the paraffinicity of shale-
derived fuels on the other, can most easily be dealt with by blending
with petroleum fractions, or with each other.  Product quality consider-
ations with methanol depend on whether it will be used alone or in  gas-
oline blends.  In the former case, significant efficiency improvements in
a spark-ignition engine seem possible if the engine is modified.  However,
such a modified engine would not be compatible with gasoline fuel.

          Methanol appears to be an excellent gas turbine fuel.  In partic-
ular, it could find growing application in stationary turbines where bulk
deliveries minimize the relatively high distribution costs of methanol vs.
hydrocarbon fuels.  Methanol is also a leading candidate for fuel cells,
used either directly or via reforming to hydrogen.

          The use of methanol/gasoline blends in spark-ignition engines
could lead to performance problems due to water sensitivity, vapor  lock,
and excessive leaning out of the engine.  On the other hand, use of these
blends would result in improved octane quality and could lead to signif-
icant fuel economy savings, in miles/BTU.

          The uncertainties about the performance of methanol have  to be
resolved before its merits relative to hydrocarbons can be established.
On balance, however, the compatibility of shale and coal hydrocarbons
with petroleum is a key point in favor of these fuels.

          There is a critical need for product quality and performance
data on fuels from coal and shale, alone and in blends.  This is one of
the research data gaps identified in a separate phase of the study.  Other
data or technology gaps include:

          New or improved technology for:

          •  in-situ recovery of shale oil

          •  hydrogen production for coal liquefaction

          •  selective removal of S, N, and 0 from coal and shale

          •  coal gasification plus methanol synthesis
                                     - 3 -

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       -  Large-scale demonstration of environmentally acceptable  disposal
          of spent shale and reclamation of surface-mined coal  areas.

          General studies dealing with:

          •  alternative automotive fuels in the context of the entire
             economy, based on utilizing all-resources including petroleum

          •  water availability in the Western states

          The future availability of capital will have a strong influence
on investment priorities.  This is an argument in favor of alternative
fuels, such as shale and coal gasolines and distillates, which  are compat-
ible with the existing petroleum-based system.  Major investments  are be-
ginning to be made in these synthetic fuels.  For example, about $450
million was bid on the first four shale tracts recently leased  by  the
government.  Research and development programs on coal liquefaction by
industry and government, including construction of various demonstration
units, will probably total over one billion dollars in the next five years.
Some products of such shale and coal conversion plants will surely find
their way into the automotive fuel market.  There is therefore  beginning
to be a commercial underpinning of the technological and economic  feasibil-
ity conclusions drawn in this study.
                                     - 4 -

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                                 HIGHLIGHTS
          The highlights that follow reflect the contractor's  judgment  of
what are the most important points in each of the detailed sections  of  the
report.

Objectives (2.1)

          Identify feasible and practical automotive fuels that  are
          producible from non-petroleum sources.

          Define the alternative automotive fuels in terms of:   when?
          how much?  at what cost?

          Consider safety, toxicity, reliability, compatibility  with
          different engines, and convenience of use.

          Identify R&D and other information gaps.

Approach (2.2)

          Select alternative fuels with a reasonable chance of being
          feasible and practical within the 1982-2000 time-frame which
          is the most important with regard to potentially new fuels.

       -  Use preliminary screening to permit concentration of effort
          on a small number of the most promising fuels to get maximum
          information on cost, availability, and performance.

Relationship to Energy Supply/Demand in General (3.2)

       -  Automotive fuel questions should not be divorced from  energy
          matters in general.

          Detailed analysis of "externalities" is beyond the scope of
          the study, but identification and rough quantification of
          the most important externalities is possible.

          With some modification, the Department of Interior's energy
          forecast of December 1972 may be used quantitatively as an
          energy context for alternative automotive fuels.

Automotive Fuel Demand (3.3)
          The goals of "Project Independence" probably set upper limits
          on automotive fuel consumption of about 9.5 MM B/D in 1985 and
          12.5 MM B/D in the year 2000.  Consumption of just over 6  MM B/D,
          early in 1974, may be taken as a lower limit.
                                     -  5  -

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Domestic Resource Base (3.4)

          The principal domestic fossil fuel resources are petroleum,
          coal and oil shale.  Nuclear energy tiiay facilitate the
          utilization of these resources.

          Other energy resources can lessen the industrial or stationary
          demand for the principal fossil  fuel resources,  thereby in-
          creasing their potential availability for automotive purposes.

U.S. Coal Resources (3.4.1)
       -  The domestic coal resource base is very large and,  per se,  will
          not be the factor that limits the production of synthetic fuels
          for several decades.

          Western coal resources, recoverable by surface mining, appear
          best suited economically to the production of alternative fuels.

          The Federal government controls the mineral rights  to much  of
          the Western coal.  This important part of the resource base can-
          not be utilized until the coal lands are leased.

U.S. Oil Shale Resources (3.4.2)

       -  The oil shale resource is very large and very important.   How-
          ever, environmental considerations and other factors such as
          water availability are likely to limit the rate at  which  shale
          oil can be produced.

       - , Possible production levels during the next several  decades  are
          more important than the ultimate "reserves" of shale oil.

          Government leasing policy will be very important since the
          government holds the mineral rights to about 80% of the richer
          oil shale properties.

U.S. Petroleum Resources (3.4.3)
       -  Conventional petroleum supplies for the production of motor fuel
          are likely to be available from domestic resources beyond the
          year 2000.

       -  Production of domestic petroleum is likely to be higher in the
          1980's than it is today.  Even so, synthetic fuels from other
          domestic resources will be needed.

U.S. Natural Gas Resources (3.4.4)
          Production of domestic natural gas is also likely to increase,
          thereby freeing liquid fuels, such as distillate, from stationary
          uses .
                                     -  6  -

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U.S. Nuclear Resources (3.4.5)

       -  Nuclear electricity capability is behind schedule,  and available
          capacity will be fully required for satisfaction of conventional
          demands for electricity until about 1985.

       -  Eventually, nuclear energy may be applied to the production of
          synthetic fuels and, possibly, in the long run to the  production
          of hydrogen fuel.

Capacity Build-Up (3.5)

       -  The rate at which resources can be brought into production must
          be considered as well as the size of the resource base.

       -  Various constraints on the building of synthetic fuels plants
          are expected to limit production in 1985 to products containing
          the energy equivalent of about 3.7 x 1015 BTU/yr.  This estimate
          is for the total of all types of synthetic fuels including what
          may be used as automotive fuels.  By the year 2000, total output
          could reach 25 x 10^5 BTU/yr.  These estimates of synthetic fuel
          supplied are equivalent to 4.2% and 18% respectively of the total
          U.S. energy demand by final consuming sectors as forecast by the
          Department of the Interior in 1972.

Criteria for Fuel Selection (3.6)
       -  Economic criteria include the ex. tax cost of fuel at the pump,
          the operating cost of the vehicle that would use a particular
          fuel, and the implied capital requirements of given fuel/vehicle
          systems.

       -  Technical criteria include fuel availability, prudence in re-
          source utilization and associated environmental impacts.

       -  Performance criteria include compatibility (i.e., the suitability
          of a given fuel for use in a given vehicle), toxicity and safety,
          efficiency of fuel use, environmental impact in use, and the con-
          venience and acceptability of a given system as perceived by the
          user (driver).

       -  Consideration must also be given to the way in which a new fuel
          could be brought into general use, to interactions with the exist-
          ing vehicle population and fuel delivery system, and the impact
          on availability of resources.

Initial List of Fuels (4.1)

          A list of fuels was prepared containing all candidates which
          could conceivably become viable automotive fuels by 2000.
                                    -  7 -

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       -  The list included (1) coal-derived fuels:  gasoline,  middle
          distillate, methanol, higher oxygenated compounds,  and hydrogen;
          (2)  shale-derived fuels:  gasoline and middle distillate;  (3)
          ethanol by fermentation; (4) hydrogen from water;  (5)  ammonia
          from coal or water-based hydrogen, and (6)  hydrazine.

Physical and Chemical Properties (4.2)

       -  A detailed literature search yielded information on the proper-
          ties of the above fuel candidates, but indicated that many  data
          gaps exist.  These gaps reflect the fact that the fuels either
          have not been available (coal and shale derived hydrocarbons)
          or have not been completely evaluated in internal combustion
          engines (methanol, hydrogen, ammonia).

          The physical property data were analyzed in terms  of their  rela-
          tion to combustion, storage and handling, automotive maintenance,
          and "driveability".

Cost of Manufacture and Distribution (4.3)
          The technology for fuel manufacture was reviewed in order to
          choose a basis for estimating manufacturing economics.

          Published information allowed such estimates to be made.   Dis-
          tribution costs were based on analyzing similarities to,  and
          differences from, the system presently used for petroleum prod-
          ucts .

          The following first generation costs (ex. tax, at the pump)  were
          estimated in terms of 1973 $/MMBTU (including a 10% DCF return):

                         Fuel                               Cost
            Gasoline from Shale                             2.65
            Middle Distillate from Shale                    2.05
            Gasoline from Coal                              3.35
            Middle Distillate from Coal                     2.75
            Methanol from Coal                              3.85
            Methane from Coal                               5.65
            Oxygenated Compounds from Coal                  4.60
            Ethanol by Fermentation                         7.10
            Hydrogen from Coal                              9.90
            Hydrogen from Water                            10.20
            Ammonia                                         7.65
            Hydrazine                                       20+
                                     - 8 -

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Fuel-Vehicle Compatibility (4.4)

       -  A brief assessment was made of the compatibility of the above
          fuels with various engine types including the conventional Otto
          cycle, stratified charge, diesel, gas turbine, Stirling, Rankine,
          and fuel cell.

       -  The compatibilities range from high (e.g., for coal and shale
          hydrocarbons in all of the engines) to moderate (e.g.,  alcohols
          and methane in Otto cycle engines) to low (e.g., hydrogen in all
          engines or ammonia in Otto cycle engines).

Environmental Impact (4.5)

          Coal and shale mining will have substantial environmental im-
          pacts.  In order to keep these to a manageable level,  it will
          be necessary to (1) permanently revegetate spent shale dispersal
          areas with a minimum amount of water, (2) reclaim surface-mined
          Western coal lands, (3) plan effectively for the influx of a
          large number of people into sparsely populated areas.

       -  Information is very limited on exhaust emissions for the alter-
          nate fuels.  Coal and shale-derived hydrocarbons are expected
          to result in emissions similar to petroleum fuels.

Toxicity and Safety (4.6)

       -  Hydrazine and ammonia are the most toxic of the fuels  examined,
          considering skin penetration, inhalation, and ingestion.  Methane
          and hydrogen are the least toxic.  Shale and coal hydrocarbons
          and alcohols are intermediate.

          Consideration of safety in manufacture, handling, and use indi-
          cate that hydrogen, methane, ammonia, and hydrazine present the
          most serious problems.  Shale and coal gasolines, as well as
          methanol, are safer to handle.  Shale and coal distillates and
          ethanol are the safest of the fuels considered.

Ranking of Fuels (4.7)

       -  The fuels were ranked using the criteria described in Section 3.5.

       -  The following five fuels were judged most promising and were ex-
          amined in detail:

              (1)  gasoline from shale
              (2)  distillate from shale (as coproduct with gasoline)
              (3)  gasoline from coal
              (4)  distillate from coal (as coproduct with gasoline)
              (5)  methanol from coal
                                     - 9 -

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Cost of Automotive Fuels From Shale Oil (5.1)

       -  Economic estimates were prepared for manufacturing gasoline and
          distillates from shale using the following sequence:

             (1)  mining and crushing.

             (2)  retorting, using the TOSCO design based on recycled
                  hot solids.

             (3)  upgrading of raw shale oil to high quality syncrude
                  by hydrogenation and coking at the mining site.

             (4)  pipelining of syncrude to a refinery.

             (5)  refining of syncrude to gasoline and distillates  by
                  conventional processes, such as catalytic cracking
                  and reforming.

             (6)  distribution of products the same as for petroleum.

       -  The economics for steps (1), (2), and (3) were adapted from
          those prepared by the National Petroleum Council (NPC) , adjusted
          to the bases used in this study.

       -  The following costs in 1973 $, were estimated for the period
          1982/1985 (including a 10% DCF return):

            Shale Syncrude:    ca. $5.50/Bbl (includes value of lease
              bonus payment).  The sensitivity of syncrude cost to  in-
              vestment level, rate of return, and oil content of shale
              was calculated, e.g., with a 15% DCF return the syncrude
              would cost $7.05/Bbl and would result in proportionate
              increases in gasoline and distillate costs.

            Shale Gasoline:    $2.70/MMBTU ex. tax at pump.

            Shale Distillate:  $2.10/MMBTU ex. tax at pump.

       -  The distillate cost is applicable only to a case where distillate
          and gasoline are co-products in the ratio of ca. 1:2.

       -  Cost projections were made for the 1982-2000 period allowing for
          effects of new technology (see Section 5.4).

Cost of Hydrocarbon Fuels From Coal (5.2)

       -  The cost of gasoline and distillate from coal was based on the
          following sequence:

             (1)  Surface-mining of Western coal.
                                     - 10  -

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             (2)  Hydrogenation at the mine to syncrude using the HRI
                  "H-Coal" process; other processes were considered but
                  were rejected on the basis of insufficient available
                  information; hydrogen was supplied via gasification
                  (Lurgi process).

             (3)  Pipelining of syncrude to a refinery.

             (4)  Refining of syncrude to gasoline and distillate by
                  conventional processes, such as hydrocracking and
                  catalytic reforming.

             (5)  Distribution of products same as for petroleum.

       -  The following costs were estimated for the period 1982/1985  (1973  $)

            Coal Syncrude:    ca. $8.00/Bbl, based on $3/ton coal.  The
              sensitivity of this cost to changes in coal price,  invest-
              ment, and return level was calculated, e.g.,  with a 15%  DCF
              return and $5/ton coal the syncrude would cost $11.40/Bbl.

            Coal Gasoline:    $3.35/MMBTU ex. tax at pump.

            Coal Distillate:  $2.75/MMBTU ex. tax at pump.

       -  As with the shale fuel economics, the distillate/gasoline ratio
          was ca. 1:2.

          Cost projections for the 1982-2000 period reflected changes  in
          coal price as well as new technology (see Section 5.4).

Cost of Methanol From Coal (5.3)

          The cost of methanol from coal was based on coal  gasification
          with the Lurgi process followed by methanol-synthesis from CO  +
          H£•  This scheme produces methanol and methane (SNG)  as co-
          products.  Other gasification processes seem to be less effi-
          cient for this application, but information on these alternates
          was very limited.

       -  Methanol distribution is significantly different  from distrib-
          uting petroleum products for two reasons:

             (1)  if used in a 10-15% gasoline blend, blended at  the
                  pump, methanol must be distributed dry to avoid phase
                  instability.

             (2)  methanol has about 50% of the energy content of hydro-
                  carbon fuels, which results in higher distribution costs,
                  on a BTU basis.
                                    - 11 -

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       -  The methanol cost at the pump, for the 1982-1985 period,  was
          estimated at $3.85/MMBTU.

       -  As with the other fuels, cost projections were made for the
          1982-2000 period.

Comparison of Costs (5.4)

          From the cost information developed in Sections 5.1-5.3,  the
          following projections were made:

                                       1982
                                  1990   2000
               $/MMBTU   c/Gal.    - $/MMBTU -
          Shale:  gasoline
                  distillate
          Coal:
gasoline
distillate
methanol
2.65
2.05

3.35
2.75
3.85
31.5
26.5

39.5
36.5
22.0
2.60
2;00

3.15
2.50
3.40
2.15
1.65

2.65
2.10
2.95
                         1973 $, ex tax at pump
          Due to the many uncertainties in these estimates,  +10% limits
          on the costs seem reasonable.  Nevertheless, relative costs
          are felt to be fairly reliable.

          Shale-derived fuels are projected to be cheaper than coal-
          derived fuels over the entire time-frame of the study.  The
          development of shale fuels, however, will not be governed
          solely by these economics.  It will probably be controlled by
          environmental, manpower, and resource limitations.

          Methanol is slightly more expensive than coal liquids, reflect-
          ing the greater contribution of distribution costs for methanol.
          Methanol would therefore be more attractive in applications such
          as transportation fleet accounts, or, more generally, in fuel
          uses other than transportation.

          Distillates are cheaper than gasolines, as long as a prudent
          refining scheme is used, in which the two are co-products with
          roughly 30-40% distillate.

          A comparison among these fuels on the basis of capital intensity
          gives the following:
                                    - 12 -

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                                        $/Barrel/Day
                        Production
                        of Syncrude     Refining     	Total	

     Shale

       Gasoline            6,700        •  2,000       8,700
       Distillate**        6,500            400       6,900

     Coal

       Gasoline           11,600          2,600      14,200
       Distillate**       12,200          1,300      12,500
       Methanol         	5,900 (11,800)*	      5,900 (11,800)*


      * On equivalent BTU basis.
     ** As co-product with gasoline.
          The relative capital intensities parallel the relative costs at
          the plant gate.

          Another comparison was made of the relative efficiencies of
          manufacturing these fuels:
                             Energy in Total Product/Total Input Energy
     Auto. Fuel Product:

     Shale

     Coal Hydrocarbons

     Methanol
     *  If Lurgi process by-products cannot be used as process fuel.


       -  Efficiencies for producing shale fuels are a little lower than
          for coal fuels, reflecting losses in shale retorting.  Methanol
          production is less efficient than coal liquefaction unless the
          gasification by-products can be used as a source of process
          heat.

User Economics (5.5)
Gasoline
0.55
0.65



(0
Gasoline + Distillate
0.65
0.70
.55)*
          An attempt was made to compare the cost of owning and operating
          a vehicle over its life as a function of fuel type.  This was
          done by estimating the effect on vehicle weight and cost due to
          fuel-connected factors related to compatibility, environmental
          effects, toxLcity and safety.
                                     - 13 -

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       -  Based on reference data for cost and weight of a 1973 model,
          3500 Ib. vehicle, the following comparison was made for the
          relative cost of fuel vs. other operating and fixed costs:


                      10 Year Life, 100,000 Miles
                                              Relative Cost*
  Engine
Otto Cycle
Diesel
Gas Turbine
      Fuel
Shale Gasoline
Coal Gasoline
Methanol

Shale Distillate
Coal Distillate

Shale Distillate
Coal Distillate
Methanol
'uel

i.o|
1.3
1.5
1.3
iTo]
1.3
2.0
0,M,R,Tt
1.2
1.2
1.2
2.6
2.7
1.7
1.7
1.7
Fixed**
2.9
2.9
2.9
6.5
6.7
4.1
4.2
4.2
Total
5.1
5.4
5.6
10.0
10.7
6.8
7.2
7.9
 *  Reference point for each engine designated by  |l.0|
    engines not valid.
 t  Oil, mainenance, repairs, tires.
**  Depreciation, insurance, license, and registration.
                                          comparison among
       -  The data indicate that, for a given engine type, changes in
          relative fuel cost are dampened by other costs unrelated to
          fuel, so that total vehicle operating cost is not changed much.

       -  Another comparison of relative fuel cost per mile for the three
          time periods and engine types indicates that these costs parallel
          the relative ex. tax pump costs.  This reflects the assumption
          that, for the fuels examined, engine efficiency is not a signif-
          icant function of fuel.

Performance of Gasolines and Distillates From Shale and Coal (6.1)

       -  High Research octane gasoline fractions based on catalytically
          reformed coal and shale syncrude fractions will be quite aro-
          matic but no more so than petroleum fractions reformed to the
          same Research octane level.  Comparable data on Motor octanes
          are generally not available for these synthetic fuels.

       -  Due to the aromatic nature of coal vs. shale syncrude, naphtha
          Ounreformed) and distillates based mainly on coal will have a
          higher aromatics content.  If, however, the coal-derived fuels
          are blended either with shale or petroleum fractions, as is
          likely to be the case, the aromaticities of the blends will be
          similar to those in current use.
                                     - 14 -

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       -  If gasolines rich in coal-based fractions are used,  consideration
          must be given to factors such as:'

             (1)  front-end volatility adjustment.

             (2)  maximum safe benzene concentration.
                                            J
             (3)  materials of construction of the  fuel system.

       -  It should be possible to make a good quality diesel  fuel  from
          shale syncrude.  However, more information is needed on cloud
          point to determine if it should be reduced — e.g.,  by  the use
          of additives.

       -  There are almost no product quality data  on distillates from
          coal.  Based on their composition,  however,  it is  likely  that
          such fractions will be deficient in cetane number.   If  this is
          confirmed, the options available for correcting the  deficiency
          are:  (1)  blending with shale or petroleum fractions  (the best
          alternative), (2) use of cetane improvers, or (3)  more  severe
          hydrogenation.

       -  The suitability of coal distillates as a  gas turbine fuel has
          to be determined.  High aromaticity could lead to  excessive
          flame luminosity and smoking.

Performance of Methanol and Methanol/Gasoline Blends (6.2)

       -  Pure methanol could be an attractive motor fuel for  an  Otto
          cycle engine, based on its high octane number (106 Research and
          92 Motor unleaded).  It should be possible to operate  at  in-
          creased compression ratio, leading to improvements in  thermal
          efficiency.  However, the vehicle and engine have  to be modified
          to take account of the low volatility, high heat of  vaporization,
          and low heat of combustion of methanol.  Methanol  should  be a
          very good fuel for continuous combustion  engines.

       -  The use of methanol/gasoline blends brings up a number  of po-
          tential problem areas :

             (1)  Water sensitivity:  Methanol/gasoline blends are  sus-
                  ceptible to phase separation in the presence of small
                  amounts of water.  Unless a cost-effective solution is
                  demonstrated for this problem, it will be  necessary to
                  insure that the customer receives a dry blend.  The only
                  realistic chance for doing this depends on distributing
                  dry methanol and gasoline separately, and  blending at
                  the pump.

             (2)  The non-ideality of methanol/hydrocarbon systems  results
                  in excessive gasoline vapor pressure in the  presence of
                                     -  15  -

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                  5-10% methanol.  Unless the automotive fuel system is
                  modified to handle a more volatile blend,  methanol ad-
                  dition requires displacing butanes from gasoline,  which
                  is economically undesirable.

             (3)  The use of methanol/gasoline blends results in operation
                  at a higher air equivalence ratio.  It is  important to
                  determine if such a change causes any driveability prob-
                  lems .

       -  The use of methanol/gasoline blends could also lead to some
          practical benefits:

             (1)  Very limited data suggest some improvement in fuel econ-
                  omy, measured in miles/BTU, by blending 15% methanol into
                  gasoline.  More information is required to define  fully
                  the extent of such improvements.

             (2)  Exhaust emissions can be reduced.  The emissions data
                  can be rationalized by considering changes in air/fuel
                  ratio.  Whether CO, hydrocarbons, or NOX in the exhaust
                  increase or decrease depends on whether the initial
                  operation is leaner or richer than stoichiometric.

             (3)  Methanol is expected to have good octane blending char-
                  acteristics, but more data are needed on blending octanes
                  as a function of gasoline pool octane level.

Evolutionary Considerations (7)

       -  It is necessary to see an approach path from the present to a
          new condition in the future.

       -  Although a given path may be technically possible, it is not
          likely to be followed if easier or better paths are available.

New Engine/New Fuel Dilemma (7.1)

       -  Highway vehicles must be able to obtain suitable fuel wherever
          they are driven.  The general public will not purchase a vehicle
          for which fuel is not readily available.  This poses a special
       :   problem in the hypothetical case of introduction of new engine
          and fuel products that are not compatible with existing engines
          and fuels.

The Compatibility Scenario (7.2)

       -  Full compatibility of new fuels with existing fuels and engines
          has numerous advantages.  Nationwide distribution of new fuels
          can evolve as availability increases, and the transition from
          100% petroleum to 100% alternative fuels can be accomplished
          without any discontinuity.
                                     -  16  -

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Automotive Fuel Blends (7.3)

       -  The most likely way that automotive fuels  from coal  and  oil
          shale will be marketed will be as blends with petroleum  fuels
          and, perhaps, with each other, until the early part  of the 21st
          century.

Automotive Distillate Fuels (7.4)

       -  There may be both physical limitations and economic  penalties
          associated with increasing the ratio of distillate-type  to
          gasoline-type automotive fuels.  This will be examined in an
          amendment to the contract, and will be covered in  a  separate
          report.

       -  There will be some difficulty in introducing automotive  distil-
          late fuels other than automotive diesel.   Although an introduc-
          tory strategy is available, the incentive  for using  it will
          depend on the capacity of the new fuels to improve upon  the
          cost and performance of diesel fuel.

Fleet Account Stratagem (7.5)

       -  New fuels may be introduced to operators of fleets of commercial
          vehicles.  This builds operating experience and defers the prob-
          lem of how to introduce a new fuel to the  general  public.  The
          maximum potential of the fleet market is about 5%  of total auto-
          motive fuel demand.

Automotive Hydrogen (7.6)

       -  It is very unlikely that the automotive transportation system
          will evolve of its own accord in the direction of  using  hydrogen
          as a fuel for private vehicles before the  year 2000.

Labor Force Requirements and Implications (7.7)

       -  Through 1985, it seems likely that the manpower needed to design
          and construct synthetic fuel plants will be a limiting factor.

       -  Longer range, beyond 1990, the balance of  natural  resources  in
          the Mountain states may be the limitation.  Richness in  mineral
          resources may not be adequately matched by water availability
          for all of the demands, direct and indirect, of a rapidly growing
          synthetic fuels industry.

Capital Availability and Investment Implications (7.8)

          Capital availability will set investment priorities; unnecessary
          investments will be avoided.  One implication is that the exist-
          ing distribution and marketing system will not be duplicated to
                                    - 17 -

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          permit the introduction of fuels not compatible with  the  exist-
          ing system — since new compatible, fuels  can accomplish the
          same objective at lower cost.

Research Data Gaps (8.1)

       -  Research data gaps were classified according to fuel  type.

Fuels From Shale Oil (8.1.1)

       -  The disposal of spent shale in an environmentally acceptable way
          has to be demonstrated for a commercial-scale operation.

       -  In situ retorting of shale is  very important to large scale
          growth of shale oil production beyond the 1985-1990 period.  An
          efficient, environmentally acceptable process has to  be developed.

       -  Alternatives should be developed to severe mine-mouth upgrading
          of raw shale oil to syncrude.   One possibility involves mild
          treatment with heat and/or hydrogen to make it pumpable to  a
          remote refining site.

       -  A complete spectrum of product quality and engine/vehicle per-
          formance data is required, for shale oil gasoline and distillate
          fractions alone and in blends  with petroleum or coal-derived
          materials.

Hydrocarbon Fuels From Coal (8.1.2)

       -  The permanent reclamation of surface-mined land has  to be demon-
          strated on a large scale.

       -  Long range, there is a need for an underground coal  liquefaction
          process, as an alternate to underground mining.

       -  More efficient methods are needed to generate hydrogen from coal
          for use in hydrogenation processes.

       -  Liquefaccion processes must be improved to give more selective
          molecular weight reduction with the minimum hydrogen consumption
          — e.g., by developing better catalysts.

          Coal syncrude refining has to be demonstrated with feedstocks
          from a variety of different coals to give fuel products with
          acceptable sulfur, nitrogen, and oxygen content.

       -  The Fischer/Tropsch process could be an interesting candidate
          for coal liquids if the selectivity and thermal efficiency of
          the process were substantially improved.

       -  Complete product quality and performance data are required for
          coal gasoline and distillate fractions alone or in blends with
          petroleum or shale-derived materials.

                                     - 18 -

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Methanol From Coal (8.1.3)
          Improved coal gasification technology is needed to produce the
          CO + H2 for methanol synthesis.

          The methanol synthesis reaction could be improved by a more
          active catalyst (lower temperature and/or pressure)  and by the
          development of selective techniques for separating methanol
          from unreacted CO 4- H2.

          With regard to methanol/gasoline blends, complete information
          is needed on water sensitivity,  volatility, corrosion, exhaust
          emissions, fuel economy  and driveability.

          With pure methanol fuel, data are needed on the maximum effi-
          ciency improvement possible with various engines, making use
          of the desirable combustion properties of methanol.

          Methanol is potentially  an important fuel cell fuel.  Impurity
          effects have to be defined both for direct fuel cell use and
          as a feedstock to a reformer for fuel cell hydrogen.
Other Information Gaps (8.2)
          Automotive fuel alternatives must be considered in the context
          of the economy as a whole.

          The future availability of water in the coal and shale regions
          of the West requires a careful study.  This study should be
          part of a broader assessment of the the impact of coal and shale
          mining and conversion industries in sparsely populated areas.

          On-going studies should address the proper utilization of all
          domestic resources including petroleum.
                                     - 19  -

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                               9.  CONCLUSIONS


          The conclusions of  this  study can be classified  into  four
types:

(a)  Virtual certainty; Where  the  evidence and logic are so persuasive
     that it may be concluded  that something will happen.

(b)  Dependent on assumptions  used; The conclusion is valid only if the
     assumptions are valid, e.g.,  that surface mining will be permitted
     or that the cost of automotive fuels may be adequately compared on
     an ex-tax basis.

(c)  Dependent on contractor's Judgment; Many factors affecting long
     range projections are not forecastable in a rigorous way and must
     be dealt with by judgment.

(d)  information gaps; One objective of the study is to identify un-
     certainties that can be resolved by additional work.  In effect,
     such conclusions are recommendations that the necessary work be
     done.

          The conclusions that follow are identified by (a), (b), (c),
or (d) to indicate the type of uncertainty associated with it.  Unless
otherwise noted, the conclusions apply to the 1982-2000 time-frame.

(1)  It is feasible and practical  to make petroleum-type fuels from coal
     and oil shale.  They are  the  most attractive alternates to
     petroleum over the time frame of the study.                (a),(c)

(2)  Initial production of these petroleum-type fuels is likely within
     the next 5-7 years.                                            (a)

(3)  Automotive fuel components from coal and oil-shale will be blended
     with petroleum fractions.                                       (c)

(4)  For practical purposes, if petroleum-type products from coal and
     oil shale are blended with petroleum, no product quality problems
     will be experienced by customers.  However, at present, there are
     many data gaps which will have to be filled.               (c),(d)

(5)  The potential for product quality problems is greater if unblended
     coal or shale gasoline distillate is marketed:                 (c)

     - early determination of product quality and other performance data
       would be essential,  but -                                    (d)

     - the scenario of unblended fuels is unrealistic               (c)
                                  -  20 -

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(6)  Methanol from coal:

     - is a feasible automotive fuel for spark-ignition engines, gas
       turbines, and fuel cells.                                    (a)

     - in spark-ignition engines will require engine and vehicle modifi-
       cation for optimum performance.                              (a)

     - is an excellent gas turbine fuel, particularly suited for
       stationary turbine applications.                             (c)

     - if used widely as an automotive fuel, in the near and mid-term
       future, would have to enter the market as a blend with gasoline
       but, eventually, would be used unblended.                    (c)

     - if used in a modified spark-ignition engine could lead to im-
       proved efficiency relative to hydrocarbon fuels.             (c)

     - used in blends with gasoline could lead to driveability problems
       unless the system is kept dry, the gasoline is debutanized and
       the fuel system is modified.                                 (c)

     - is a sufficiently probable product that vehicle performance data
       should be obtained using both methanoI/gasoline blends and neat
       methanols.                                                   (d)

(7)  Synthetic fuel production  from coal and oil shale:

     - will not be limited by the size of domestic coal and oil shale
       resources.                                                   (a)

     - will be limited initially by the availability of skilled man-
       power and eventually by  water availability and environmental/
       ecological considerations.                                   (c)

     - will make only a minor contribution  to automotive fuel supplies
       in 1985, but has the potenti-al for becoming a major factor by
       the year 2000.  Realization of this  potential is critically
       dependent on a satisfactory resolution of the previous item, (c)

(8)  Estimates of fuel costs;

     - In the 1982/85 time-frame the cost of shale and coal syncrudes,
       including a 10% DCF return, will be  about $5.50/bbl and $8.00/
       bbl respectively in 1973 constant dollars.                   (b)

     - At the pump, on an ex-tax basis, the potential alternative auto-
       motive fuels are estimated to cost:
                                    - 21 -

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                         1982       1990  '         2000
                    $MMBTU   c/gal  	$MMBTU	
 Shale  - gasoline    2.65    31.5   2.60           2.15
       - distillate  2.05    26.5   2.00           1.65
 Coal   - gasoline    3.35    39.5   3.15           2.65
       - distillate  2.75    36.5   2.50           2.10
       - methanol    3.85    22.0   3.40           2.95

                    1973 $,  ex tax at pump

    -  The  absolute values projected are sensitive  to  the  underlying
       assumptions.                                                  (b)

    -  The  lower cost projected for distillate  than for  gasoline  depends
       on a gasoline/distillate ratio of about  2:1.                  (c)

    -  The  present average level of Federal plus  state gasoline  taxes
       (about $0.90 per MM BTU) is comparable to  the cost  differences
       projected above.  Therefore,  future taxation of automotive fuels,
       particularly if different fuels are taxed  differently,  could  have
       a major impact on what the customer decides  to  purchase.   (b),(c)

  (9) The total cost of operating a vehicle of  a  given size and  type
      throughout its useful  life depends on fuel  cost.  However,  dif-
      ferential taxation of  vehicles and fuels  could result in a dif-
      ferent ranking than that obtained from cost calculations that
      exclude this factor.                                       (b),(c)

 (10)  Trends in fuel costs:

    -  after an initial period of high cost, synthetic fuels from coal
       and  shale are expected to decline in cost  on a  constant dollar
       basis, reflecting new and improved technology.                 (c)

    -  eventually, the more  economic synthetic  fuel resources  will be
       depleted and costs will rise again.                           (c)

    -  the  long-term trend in the cost of domestic  petroleum is  upward.
                                                                     (c)

(11) Petroleum from domestic resources will be  available at least
     through the year 2000 and probably, although to a declining extent,
     through the year 2025.                                          (c)

(12) Other  supplies and forms of energy, such as  nuclear power,  have the
    potential for displacing liquid fuels from non-transportation
    uses.                                                           (a)

(13) When such displacement  occurs, particularly after 1985, liquid
     fuels  will be released  for transportation  use.                 (c)
                                     -  22 -

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(14)  Automotive fuel questions should not be divorced from energy
     supply/demand in general,  the future"demand for aviation fuels  is
     particularly pertinent.                                    (c),(d)

(15)  On-going studies should address the optimum utilization of all
     domestic resources, including petroleum.  It is impossible to
     properly evaluate the impact of alternative fuels without con-
     sidering petroleum as an integral part of domestic energy
     supplies.                                                        (a)

(16)  Many research data gaps were identified.  The most important  of
     these point up the need for:                                    (d)

     - product quality and performance data on shale and coal-derived
       fuels,  alone or in blends with petroleum, in various types  of
       engines and vehicles.

     - an improved process for producing hydrogen from coal.

     - a more selective coal hydrogenation process.

     - an improved coal gasification process, operating at elevated
       pressure, which maximizes CO-HU.

     - commercial demonstration of spent shale disposal.

     - longer-range,  an underground shale retorting process, which
       minimizes environmental problems.

(17)  The relative overall attractiveness of coal and shale-derived fuels
     requires more than the technical feasibility analysis presented  in
     this study.  However, this issue will be addressed in an EPA
     sponsored alternate fuels impact study.                          , <.
                                   - 23 -

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TECHNICAL REPORT DATA
(Please read Instructions on 'the reverse before completing) .
1.
4.
7.
9.
REPORT NO. 2. 3. RECIP
EPA-460/3-74-009-a
TITLE AND SUBTITLE 5. REPO
Feasibility Study of Alternative Fuels for Automotive June
Transportation - Volume I, Executive Summary 6. PERF<
AUTHOR(S) 8. PERF
F. H. Kant, R. P. Cahn, A. R. Cunningham, M. H. Farmer,
W. Herbst, E. H. Manny
PERFORMING ORG '\NIZATION NAME AND ADDRESS • 10. PRO
Exxon Research and Engineering Co. i^j
P.O. Box 45 11. CON
Linden, New Jersey 07036
68-
12. SPONSORING AGENCY NAME AND ADDRESS 13. TYP
Environmental Protection Agency FinaJ

Office of Mobile Source Air Pollution Control i4.spor
Alternative Automotive Power Systems Division
2929 Plymouth Road, Ann Arbor, Michigan 48105

lENT'S ACCESSION-NO.
RT DATE
i 1974
DRMING ORGANIZATION CODE
3RMING ORGANIZATION REPORT NO.
GRAM ELEMENT NO.
!017
TRACT/GRANT NO.
-01-2112
E OF REPORT AND PERIOD COVERED
June 1973- June 1974
MSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
This study identifies feasible and practical alternatives to
automotive fuels derived from petroleum for the 1975-2000 time period. The
alternative fuels are liquids derived from domestic coal and oil shale —
specifically, gasolines, distillates, and methanol. While many uncertainties
remain, initial production of the new fuels is likely within the next five
to seven years.
17
a.

18
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS b. IDENTIFIERS/OPEN ENDE
Automotive fuels Automotive fuels
Substitutes Non-petroleum fue
Feasibility Synthetic gasolir
Forecasting Coal liquids
Oil-shale
Methyl alcohol
Gasoline
. DISTRIBUTION STATEMENT 19. SECURITY CLASS (This 1
Unclassified
Release unlimited 20. SECURITY CLASS ^«,
Unclassified

D TERMS c. COSATI Field/Group
13 B
.Is
les
leportf 21. NO. OF PAGES
30
lage) 22. PRICE
EPA Form 2220-1 (9-73)
                                                       -24-

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