E PA-420-R-80-108
METHANOL AS A MAJOR FUEL
Paul W. Spaite Co.
Cincinnati, Ohio 45213
Project Officer
Dr. John O. Smith
U.S. Environmental Protection Agency
Industrial Environmental Research Laboratory
Research Triangle Park, North Carolina 27711
December 8, 1980
-------
CONTENTS
Page
Conversion and Equivalency Factors iii
Introduction 1
Background 3
Methanol as Fuel: Environmental Implications 5
Status of Development of Methanol Fuel Production Processes 8
Cost and Efficiency of Methanol Fuel Processes 10
Potential Markets for Methanol Fuel 14
Fuel for Motor Vehicles 14
Fuel for Electric Utility Boilers 15
Fuel for Residential and Commercial Space Heat 16
Fuel for Industrial Boilers and Direct-Fired Processes 16
Prospects for Commercialization of Methanol as Fuel 19
Methanol Versus Natural Gas 20
Methanol Versus Low- and Medium-Btu Gas from Coal 23
Methanol Versus Gasoline from Coal (Fischer-TropschJ 23
Methanol Fuel Versus Gasoline from Methanol
(M-Gasoline) 24
Methanol Versus Ethanol from Fermentation of Crops 25
Methanol Versus Fuel From Oil Shale 26
Conclusions 27
References 29
TABLES
Table Page
1 Efficiency and Investment Cost-
Indirect Coal Liquefaction 11
2 Cost Comparison for Alternative Processes
for Production of Liquid Fuels from Coal 12
3 Methanol Substitutable Oil Consumption (1979) 17
4 Estimated Unconventional Gas Resources
for the U.S. 21
ii
-------
CONVERSION AND EQUIVALENCY FACTORS
1 bbl (barrel) = 42 gallons
1 bbl gasoline = 5.4 x 10^ Btu
1 bbl methanol = 2.7 x 10^ Btu
1 ton methanol = 20 x 10^ Btu
1 ton methanol = 7.4 bbl methanol and is equivalent to 3.7 bbl
gasoline
1 Tcf (trillion cubic feet) of natural gas = 10"^ Btu
3 9
1 Km (cubic kilometer) of natural gas = 35.3 x 10 cf (cubic
feet)
3 12
1 Km of natural gas = 35.3 x 10 Btu
Density of gasoline = 5.8 lb/gal
Density of mehtanol = 6.6 lb/gal
A 25,000 ton/day methanol plant produces 8.2 x 10^ ton/yr
¦which is equivalent to 30.3 x 10^ bbl of gasoline.
Motor gasoline consumption for the U.S. was 2,566 x 10^ bbl
in 1979. This is equivalent to 13.48 x lO^""* Btu. This amounts
to 7.0 x 106 bbl/day.
&
Oil imports for 1979 were 8.3 x 10 bbl/day. This included
refined petroleum products (much of which is residual..ail.)
amounting to 1.9 x 106 bbl/day (3.8 x 1015 Btu/yr) and crude oil
amounting to 6.4 x 10^ bbl/day (12.8 x 10^""* Btu/yr) .
Natural gas consumption in the United States in 1979 was 20
Tcf, which is equivalent to 20 x 10^"* Btu or 10 x 10^ bbl/day of
crude oil.
-------
INTRODUCTION
The objective of this investigation of methanol as a major
fuel was to provide perspective for officials of the U.S. Envi-
ronmental Protection Agency's Industrial Environmental Research
Laboratory at Research Triangle Park regarding possibilities for
commercialization and the environmental implications associated
with wide use of methanol as a substitute for petroleum-derived
fuels.
It is recognized that the future of methanol fuel will
ultimately be determined by economics. To gain widespread ac-
ceptance, methanol will have to be cheaper than competitive fuels
after all advantages and disadvantages have been considered. No
attempt is made here, however, to assess the competitiveness of
methanol fuels at present prices for crude oil or to project the
price at which they could be competitive. Such evaluations would
be far beyond the scope of the study. Instead, the methanol
fuels are considered relative to other fuels that might be used
if an effort is launched to apply available technology to dis-
placement of petroleum fuels as soon as possible.' The major
factors considered are:
1) Potential environmental consequences of introducing
methanol.
2) Status of development of methanol fuel technology.
1
-------
3) Cost and efficiency of synfuel processes.
4) Potential markets.
5) Prospects for commercialization of methanol fuels.
The intent is to develop an overview perspective by identi-
fying all important factors in each category and presenting
enough quantitative data to permit relative comparisons, without
excessive detail.
2
-------
BACKGROUND
At present there is concern over the rate of progress in
development of advanced coal conversion processes for a synthetic
fuels industry. One of the principal impediments is the infla-
tion associated with a cost-spiral driven by continuing increases
in the cost of oil and other fuels, including coal.
Because of the inflationary trend, many believe that plants
that could be built now to use available technology will be
cheaper to operate than plants built later to use improved
processes that might come onstream in a few years. Also there is
an increasing concern over America's continuing dependence on
foreign oil. These factors have combined to create widespread
interest in utilizing immediately applicable coal conversion
technology.
The only proven coal conversion technology is indirect
liquefaction; that is, the conversion of coal to synthesis gas
and subsequent conversion of this gas to liquid fuel. The proven
routes for coal conversion include (1) the Fischer-Tropsch
process, which converts synthesis gas directly to gasoline and
other byproducts, and (2) a number of catalytic processes, which
convert synthesis gas to methanol. Althouth the Fischer-Tropsch
process has the advantage of producing gasoline directly, it has
-------
the disadvantage of producing many coproducts and byproducts,
which must be marketed. Methanol may be used directly, as a
premium fuel, in some applications, but may have to undergo
subsequent conversion to gasoline, at some added cost, for use as
a transportation fuel.
If a decision is made to begin a synthetic fuels industry
with presently available technology, the Fischer-Tropsch process
and methanol fuel processes will likely be used. The Fischer-
Tropsch products are essentially the same as petroleum-derived
fuels, so that their introduction into commerce would not require
significant adjustment. In contrast, the introduction of methanol
as a major fuel would require significant adjustment.
4
-------
METHANOL AS FUEL: ENVIRONMENTAL IMPLICATIONS
Although some testing has been carried out to evaluate the
use of methanol as a major fuel for automobiles and stationary
sources, work to evaluate the potential environmental effects has
not been extensive. Whereas some properties of methanol mafce it
attractive as a fuel, others present problems. Experimental work
to date has been encouraging, but many questions remain unanswered.
Following are sortie of the more important en.vvcot\?\efvt.al considera-
tions.
1) Methanol has a lower flame temperature than petroleum-
derived products. It also has wide limits of combustibility.
These properties combine to make either automobiles or
stationary source? that are deisgned for methanol fuel£
relatively lower emitters of nitrogen oxides.
2) .Methanol combostion is essentially particulate-fre#. Ko
caxbon-to-carbon "ponds are present to promote soot formation,
which is associated with burning of petroleum-derived fuels.
3) Because sulfuf in the feedstocks for methanol is removed
in processing, combustion of methanol generates no sulfur
emissions.
4) Because of its high octane rating, methanol can be used
in motor vehicles without additives, eliminating the emis-
sions associated with additives to petroleum-derived fuels.
5) Methanol's low heat content (about half "that of gasoline
on a volumetric basis} necessitates the use of twice the
volume and over twice the weight of fuel when it is substi-
tuted for gasoline or distillate oil.
6) Some methanol properties such as corrosivity, toxicity,
and explosivity call for careful consideration. Although
5
-------
they have not caused problems in the closely controlled
situations where methanol has been used as a commercial
chemical, they must be given careful attention if it is
widely used as a major fuel.
1J Other environmental considerations that have not been
evaluated are the reactivity, persistence, and sensory
detectability of methanol in the environment. These factors
could be of great importance for a chemical with potential
for release in large amounts to the environment, as illus-
trated by the experiences with oil spills. The high solu-
bility of methanol in water suggests that spills of methanol
would not persist as oil spills do. On the other hand, the
contamination of lakes or major rivers with a toxic material
that disburses into water could cause fish kills and also
could produce water contamination that would not be readily
detected without special precautions.
The most extensive body of experimental work on methanol as
a fuel has dealt with its use as a gasoline substitute. Most
attention has been given to methanol-gasoline mixture, but con-
sideration has also been given to the use of 100 percent methanol
fuel for automobiles. Although it has been established that
methanol could be substituted for gasoline, there is considerable
controversy over advantages and disadvantages of doing so. Some
researchers expect that methanol will give higher efficiency,
improved performance, and reduced pollution.* Others claim the
2 3
opposite on all or some of these points. ' It is generally
accepted, however, that the use of methanol in engine s~d.es-igned
to take advantage of its high octane and unusual combustion
characteristics would give performance as good as, or superior to
that of gasoline on an equivalent Btu basis.
Experimental work with methanol as a fuel for use by sta-
tionary sources has been encouraging. Tests in which methanol
fuel was fired in a utility boiler designed to burn natural gas
6
-------
or distillate oil showed methanol to be a superior fuel.^ Concen-
trations of pollutants in the combustion gases were very low (no
particulates, no sulfur oxides, and low nitrogen oxides). Also,
the methanol fuel burned efficiently with a stable flame, and
carbon previously deposited by oil burning was burned off of heat
transfer surfaces with a resultant improvement in heat transfer.
Tests of methanol fuels in commercial combustion turbines were
also promising. Performance was excellent, and nitrogen oxide
emissions were lower than those produced by firing natural gas.
Studies of methanol as a turbine fuel for combined-cycle plants
were also promising, and it has been suggested that such plants
5
could be designed to be virtually pollution free.
Consideration of methanol as a fuel for nonutility stationary
sources led to the conclusion that it could replace distillate
oil in home heating and would give increased efficiency. This
study also concluded that methanol fuels could replace gas or
distillate oil in commercial and industrial applications if due
consideration is given to potential problems associated with its
toxicity and flammability.^
In summary, past work indicates that methanol has potential
for wide use a a high-quality environmentally attractive fuel.
The studies also show clearly, however, that its use as a fuel
will require special measures for environmental protection.
7
-------
STATUS OF DEVELOPMENT FOR METHANOL FUEL PRODUCTION PROCESSES
All of the technology necessary to produce methanol for fuel
use is proven. At present chemical-grade methanol is produced in
amounts estimated at 30,000 ton/day. Most is produced from
synthesis gas made from natural gas. The largest plant in opera-
tion today is a 2500-ton/day single-train plant, which has been
operational for 10 years. Plants twice this large are now con-
sidered feasible. It is claimed that because of reduced quality
requirements and improvements in technology, a 5000-ton/day plant
for production of fuel-grade methanol would be only slightly
larger than the operating plant producing 2500 ton/day. It is
further suggested that methanol fuel plants should consist of 5
7
trains of 5000 ton/day each in capacity.
Technology for production of synthesis gas from coal is also
being applied widely outside of the United States. Lurgi and
Koppers coal gasifiers are the most discussed for use in commer-
cial production of liquid fuel from coal. Both types have a long
history of application in service of the general type required
for production of methanol fuels, and both have been incorporated
in planned installations.
The development of the Mobil-M process, which is claimed to
convert methanol to gasoline with an efficiency of 95 percent and
incremental cost of 5C/gal, may be the key to avoidance of
8
-------
distribution and handling problems that might otherwise impede
the application of methanol fuel technology. The process was
announced in 1976. Since then a 4-bbl/day pilot plant has been
operated. Economic comparisons with commercially established
Fischer-Tropsch units are claimed to show that the Mobil process
is the most promising route from coal to gasoline. Construction
of a plant to convert methane-derived methanol to 12,500 bbl/day
of gasoline is expected to begin in late 1981 in New Zealand.
The plant# to be completed in the mid-1980'sf will supply an
estimated 1/3 of that country's transportation fuel.
Although all major components for production of methanol
fuel from coal are proven technology, no plant has yet been
built. Construction of such a plant would involve making the
connection between coal gasifiers producing synthesis gas and
methanol plants for the first time. Also, economy of scale would
require the design of methanol trains larger than any yet built.
And coal would be gasified on a scale unprecedented except in
South Africa, where the "Sasol I" plant employing Fischer-Tropsch
technolgoy has operated since 1955. This plant employs thirteen
gasifiers, each 12 feet in diameter. Proposed pia*vfes-w-i-li be
even larger. Sasol II, scheduled to come on stream in 1980, will
g
employ 36 gasifiers- The problem associated with adaptation of
processes and large scale operation should not present serious
technical problems, but any element of risk has potential for
making investors cautios about investing in multi-billion dollar
plants.
9
-------
COST AND EFFICIENCY OF METHANOL
FUEL PROCESSES
The attractiveness of methanol fuels over fuels from al-
ternative processes will depend primarily on cost. The thermal
efficiency of the conversion process will be an important factor
in the final production cost. Comparisons of both cost and
efficiency of alternative production rutes are complicated by the
dependence of both on the quality of feed materials and the
markets for potential products and coproducts. This is illus-
trated in Table lr which shows a comparison of plants for pro-
duction of methanol, Mobil-M, and Fischer-Tropsch processes with
and without coproduction of SNG.^ The column for efficiency
shows the percentage of the input Btu that comes out as product.
The last column shows investment cost in dollars per million Btu
output per year. The lower efficiency and higher cost shown
where SNG is not a product reflect losses associated with con-
version of methane formed in gasification to synthesis gas for
conversion to additional liquid product.
10
-------
Table 1. Efficiency and Investment Cost
Indirect Coal Liquefaction^
Efficiency, Investment Costi
% $/1p6 Btu/yr/
Methanol from Syn Gas
Methanol 50.8 28.2
Methanol + SNG 60.4 21.8
Methanol - Mobil M
Gasoline 48.7 34.3
Gasoline + SNG 58.2 24.0
Fischer-Tropsch
Gasoline + diesel 35.7 45.3
Gasoline + diesel + SNG 50.8 25.2
The cost of production of liquid fuels is frequently given
in dollars per million Btu in all products. Because this ap-
proach fails to account for differences in-the value of the end
products, however, it can give a distorted perspective of the
potential for a given technology to satisfy present needs. Also,
costs are often compared without due consideration of uncertain-
ties attributable to stage of development. One recent study,
however, generated data that give some feeling for the importance
of these uncertainties in comparison of technologies.^ Data
from that report are shown in Table 2. The confidence index in
Column 1 has two components: a letter indicating stage of de-
velopment and a number indicating the estimated reliability of
the cost. The energy cost is based on the total energy value for
all products. The "reference price" is based on Btu outputs,
1L
-------
TABLE 2. COST COMPARISON FOR ALTERNATIVE PROCESSES FOR
PRODUCTION OF LIQUID FUELS FROM COALll
Confidence
index*
Energy cost,
S/10& Btu
Reference price
$/106 Btu
Fischer-Tropsch
A-2
4.99
5.52
Methanol
M-Gasoline
A-2
(c-T>
iw <-32
j 4.84
3.96
4.54
4.91
Exxon donor solvent
5.40
H-coal
C-2
3.58
4.81
SRC II
B-4
3.62
5.59
* "1
Confidence index factors:
Process development
D - Exploratory stage - not beyond
simple bench tests
C - Development stage - operated on
small integrated scale only
B - Pre-commercial - successful
pilot plant operation
A - Complete - process demonstrated
sufficiently to insure commercial
success
Economic reliability
4 - Screening estimate, very
approximate
3 - Incomplete definition for
estimates used
2 - Firm basis for values developed
1 - Values considered to be satis-
factory for Gfiffmerc+aJ-venture
12
-------
adjusted downward in proportion to their value relative to
gasoline for all products that are less valuable.
Data such as these must be considered approximations subject
to'variation not relating to the skill or objectivity of the
estimators. They do, however, highlight several important points
that are creating pressure to use presently available technology
as a basis for beginning the development of a synthetic fuels
industry:
1) Fischer-Tropsch and methanol fuels are more costly than
new processes are expected to be. The estimated costs,
however, are more reliable (as indicated by the confidence
index) than those for the four developmental processes.
2) The cost advantages of developmental processes are not
great. Unforeseen circumstances or inflation during the
developmental period could cause them to be more expensive
than plants that could be built now.
3) When credits are applied for quality of product, the
relative economics change significantly. The net result is
that methanol shows the lowest reference price and a con-
fidence index better than that for any other process except
Fischer-Tropsch.
superiority of any given process. Many situation-specific factors
(type of coal, markets served, transportation modes available)
will influence process selection for commercial projects. The
results do, however, illustrate the potential advantages of
applying available technology now.
It is not inten 1 to suggest that these data indicate
13
-------
POTENTIAL MARKETS FOR METHANOL FUEL
Methanol fuels have been demonstrated in a variety of
applications:
1. Fuel for motor vehicles, alone, or in combination with
gasoline.
2. Fuel for electric utilities, to be burned as supplemental
fuel in coal-fired boilers and in combustion turbines.
3. Fuel to replace distillate oil and residual oil being
burned in boilers and furnaces for space heat in the
residential and commercial sectors.
4. Fuel to replace distillate oil for industrial boilers
and direct-fired processes.
FUEL FOR MOTOR VEHICLES
Opinions differ on the ease with which the methanol could be
introduced as fuel for motor vehicles. Many believe that methanol
could be utilized, with adaptation of the engines, in all types
of motor vehicles. Also, many believe that a fuel consisting of
up to 10 percent methanol in gasoline could be used in gasoline
engines with only minor changes in present practices.'' Even 3t
the 10 percent level, the market would be significant. Further,
even if it is determined that the use of methanol pure or at
higher concentrations in gasoline, will require time-consuming
adjustments, the feasibility of converting methanol to gasoline
with the Mobile-M process could open the way for substituting
synthetic fuels for unlimited amounts of our gasoline consumption.
14
-------
Gasoline consumption in 1979 was 2566 x 106 bbl (13.48 x
1015 Btu). Ten percent of this total is equivalent to almost 70
million tons of methanol. This demand alone would consume the
output of eight 25,000-ton/day plants* of the type that has been
suggested as an optimum size."'
FUEL FOR ELECTRIC UTILITY BOILERS
Utilities currently burn a substantial amount of both distil-
late oil and residual oil; the distillate is used mostly as a
supplemental fuel for startup and for flame stability in coal-
fired boilers or in oil-fired combustion turbines. Residual oil
is burned as a base fuel in large boilers. Methanol has been
demonstrated to be applicable as a substitute for both types of
fuel and has been used to fire utility boilers. The 1979 con-
sumption of distillate by electric utilities was 70 x 10^ bbl
(0.41 x 10^""* Btu) ^ and their consumption of residual oil was 493
x 10^ bbl (3.10 x 10^ Btu). Replacement of the distillate with
methanol would represent a valuable use as a premium fuel and
would consume about 20 x 10^ tons per year of methanol at present
levels of consumption.
Although methanol could be substituted for residual oil as a
bse fuel, this probably would not be the best application of a
premium fuel in light of other possible uses. Substitution for
the portion of residual oil that is imported would operate to
reduce dependence on foreign oil. But with refineries worldwide
^Assumed to be operated at 90 to 95 percent of capacity.
^All fuel consumption data taken from Reference 12.
15
-------
necessarily continuing to produce residual oil (as they will for
many years), outlets will be needed. Utilities and industrial
combustion may be the most effective way to utilize the residual
oil, especially that fraction produced in the United States,
which is the dominant portion.
FUEL FOR RESIDENTIAL AND COMMERCIAL SPACE HEAT
The residential and commercial sectors consume large amounts
of distillate and residual oil, which is used almost exclusively
for space heat and could beneficially be replaced by methanol.
Substitution for residual oil in these sectors would offer advan-
tages in that the more complex equipment for burning heavy oil in
commercial establishments could be eliminated, air pollution
reduced, and dependence on foreign oil reduced. Consumption
levels in the residential and commercial sectors in 1979 were
distillate, 513 x 10^ bbl (2.99 x 10^ Btu) , and residual, 152 x
10^ bbl (0.96 x 10^"* Btu). This is equivalent to 197 x 10^ tons
of methanol at present levels of consumption.
FUEL FOR INDUSTRIAL BOILERS AND DIRECT-FIRED PROCESSES
Methanol also appears to be a satisfactory substitute for
distillate oil in industrial boilers. Distillate oil burned in
the industrial sector goes both into boilers and into direct-
fired processes such as dryers and kilns. Even though direct-
fired processes are highly heterogeneous, it seems reasonable to
assume that methanol could be used in almost any situation where
16
-------
distillate is direct-fired. For reasons discussed in connection
with utility boilers, the industrial combustion of residual oil
is not included as a potential market for methanol fuel, even
though it could be used in such applications.
The industrial consumption of distillate oil in 1979 was 185
x 10^ bbl (1.11 x 10^ Btu) , the equivalent of 55 x 10^ tons of
methanol.
Table 3 shows a summary of the major applications in which
methanol appears to be substitutable.
TABLE 3. SUMMARY OF METHANOL-SUBSTITUTABLE OIL CONSUMPTION
(1979)
Methanol
Oil
Consumption,
equivalent,
equivalent
1015 Btu
106 tons
106 bbl
Distillate oil, utility sector
0.41
21
70
Distillate oil, res/comm sectors
2.99
149
513
Residual oil, res/comm sectors
0.96
48
152
Distillate oil, industrial sector
1.11
55
191
Motor gasoline (10%)
1.35
67
257
6.82
340
1183
The total consumption shown in Table 3 amounts to almost 20
percent of the total U.S. oil consumption of 37.0 x 10^"* Btu in
1979. This figure would be considerably larger if it were assumed
that methanol converted to gasoline with the Mobile-M process
could be substituted for the entire gasoline consumption of 13.48
x 10"^ Btu. Also, amounts for consumption of diesel fuel (2.43 x
1015 Btu in 1979) are not included, even thought it is said to be
replaceable with methanol with appropriate engine modifications.
17
-------
Replacement of the oil products indicated in Table 3 with
methanol would require building about forty 25, 000-ton/day plants
at a cost of about $100 billion. In terns of oil consumption,
this comes to a little over 3 million barrels per day, or about
40 percent of our imports. An additional 70 to 75 plants costing
around $175 to 200 billion would be required to produce gasoline
in amounts equal to 1979 consumption.*
*
Plant sizes assumed and costs estimated are from Reference 7.
18
-------
PROSPECTS FOR COMMERCIALIZATION OF METHANOL AS FUEL
It is widely accepted that nontechnical problems such as
lack of assured markets, unclear policies in regulatory agencies,
potential siting difficulties, and related social, economic, and
institutional problems are the main barriers to commercialization
of methanol fuel or other fuels produced by presently available
technologies. Growing pressure for the use of present technology
to replace petroleum-derived fuels should alleviate these problems.
If it does, the prospects for methanol fuels will depend primarily
on advantages they offer over competitive fuels. Following is a
discussion of methanol relative to the other fuels that might be
produced by present technology to compete, directly or indirectly,
with methanol fuels in replacement of petroleum-derived liquid
fuels. These are the principal options:
1. Natural gas.
2. Low- or medium-Btu gas made from solid fossil fuels
with existing technology.
3. Gasoline derived directly from synthesis gas from coal
using Fischer-Tropsch technology.
4. Gasoline produced by subsequent processing of methanol,
derived from fossil fuels, using the Mobile-M process.
5. Ethanol produced by fermentation of agricultural crops.
6. Shale oil.
19
-------
It might be argued that synthetic natural gas (SNG) and
fuels produced from direct liquefaction should be considered
along with those listed above. They are not, however, because
th£se technologies are in important ways not equivalent to the
others in terms of potential application. Although one SNG plant
is reported under construction, this plant will produce supple-
mental fuel for existing natural gas distribution systems and
will not be in direct competition with the fuels being considered.
Moreover, the facts do not indicate that direct liquefaction
technologies are presently utilizable in the same sense as those
used for the above fuels.
METHANOL VERSUS NATURAL GAS
Methanol and natural gas both have potential for replacement
of petroleum-derived fuels. Gas can be used directly or as a
feedstock for production of methanol. Whether or not natural gas
should be used in either way depends on the adequacy of supplies
for other critical uses. Until recently the expanded use of
natural gas would have been impossible because of short supplies.
Since passage of the Natural Gas Policy Act of 1978, which pro-
o
vides fpr progressive deregulation of natural gas. pxiaea, drilling
has been greatly increased so that supplies are no longer short.
Although the proven reserves for the lower 48 states were only
195 trillion cubic feed {Tcf} at the end of 1979 (a 10-year
supply at 1979 rates of consumption), the total remaining conven-
tional gas resources have been estimated to be 563 to 1219 Tcf.^
20
-------
The higher figure is the most recent estimate. In addition,
natural gas is known to be recoverable from "unconventional"
domestic sources, which include geopressure zones, Western "tight
sands", methane from coal seams, and devonian shales underlying
14 15
Appalachia. * Estimates of recoverable natural gas from these
resources were recently summarized; these data are presented in
15
Table 4. The wide range of values reflects our present poor
understanding of the character of the resources.
TABLE 4. ESTIMATED UNCONVENTIONAL GAS RESOURCES FOR THE UNITED STATES15
Resource
Estimated total
resource in place,
Km3 (Tcf)
Recoverable
resources,
Km3 (Tcf)
Western tight
gas sands
1,400-17,000
(49-600)
710-8,860
(25-313)
Eastern devonian
gas shales
2,100-20,000
(74-706)
280-14,300
(10-505)
Methane from
coal seams
2,000-24,000
(71-847)
450-13,800
(16-487)
Geopressured
methane
85,000-1,400,000
(3,000-49,420)
4,200-57,000
(148-2,012)
90,500-1,451,000
(3,794-51,573)
5,640-93,960
(199-3,317)
In recent months natural gas advocates have argued for "the
natural gas option" as a worldwide approach to reducing dependence
on oil. They point out that proven worldwide reserves of conven-
tional gas are 2200 Tcf. Estimated remaining undiscovered re-
serves are said to be 7 500 Tcf, giving a total resource that is
believed adequate for 50 years even if the present annual world-
wide consumption rate of 50 Tcf is doubled. Even if one accepts
21
-------
a lower estimate made in 1975 of 6000 Tcf for total recoverable
17
conventional reserves, the world supplies seem impressive.
Utilization of the worldwide gas supplies will, however, require
capture of the gas and transport to remote demand points. Some
propose that this be accomplished with pipelines and ships trans-
porting liquid natural gas (LNG). Others suggest that where
pipelines must be over 5000 miles long or ship transport exceeds
3000 miles, conversion to methanol for shipment is more economical.
In addition, the methanol advocates cite the advantages of liquid
fuels in markets such as transportation fuels, where natural gas
is not widely applicable.
In summary, it appears that natural gas may become increas-
ingly important as a direct substitute for petroleum. At the
same time, it, also seems appropriate to consider conversion of
substantial quantities to methanol by present technology to
produce direct substitutes for some of the liquid fuels that we
15
are now consuming in amounts equivalent to about 34 x 10 Btu
per year. These fuels are now produced partly from domestic oil
supplies and partly from about 17 x 10^ Btu of imported oil.
The magnitude of these numbers is illustrated by comparison with
the present natural gas consumption of 20 Tcf/y&r-whieh--represents
approximately 20 x 10^""* Btu. No single approach will provide
more than a partial solution. Even if the use of natural gas is
greatly expanded, there might still be a role for methanol fuels.
22
-------
METHANOL VERSUS LOW- AND MEDIUM-Btu GAS FROM COAL
Low- and medium-Btu gas can be produced with existing tech-
nology and used on-site. Medium-Btu gas, which can be moved by
pipeline for short distances, can be produced for use in plants
within about 100 miles. Hence, where coal is available near a
point of demand, there may be little incentive to produce methanol
from coal-derived gas rather than burn the gas directly. Sup-
plies of solid fuel in remote locations, however, night be profit-
ably gasified, converted to methanol, and shipped to distant
demand points. This is especially true of low-grade fuels, which
are expensive to ship (on a Btu basis) and are more effectively
gasified than high-grade coal. Several such plants are being
18
designed to utilize lignite in the United States. Peat, which
has little value as fuel except on-site, has also been suggested
to be an excellent gasification feedstock. One report indicates
that 11,000 and 37,000 square miles of peat bogs with thicknesses
of 5 to 25 ft are located in the U.S. and Canada, respectively.
The data suggest that the U.S. supply might be equivalent to 6.5
billion tons that could yield about 2.0 billion tons of methanol
or 80 x 10^ ton/yr for 25 years. This annual amount is almost 12
I~9
percent of our total gasoline consumption in 1979.
METHANOL VERSUS GASOLINE FROM COAL (FISCHER-TROPSCH)
Production of gasoline from coal by the Fischer-Tropsch
process might be an attractive alternative for production of
nonimported liquid fuels. This technology has been used for many
23
-------
years in South Africa and is being greatly expanded in new capac-
ity. The process, however, produces a wide variety of products
for which markets must be available. Further, the quality of the
fuel as produced is low relative to methanol fuel or Mobil-M
gasoline. Additional processing is required to produce high-
octane gasoline. Also, the Fischer-Tropsch process appears to be
relatively lower in efficiency and higer in cost, as discussed
earlier, when the value of the products is considered. The
process does, however, produce a significant amount of gasoline
directly, and unless the Mobil-M process is successful, it will
be the only currently available option for doing so.
METHANOL FUEL VERSUS GASOLINE FROM METHANOL (M-GASOLINE)
It may be debatable whether the M-Gasoline process can be
considered available technology, since no full-scale process in
in operaton. It is, however, further along in development than
other processes in that a commercial plant is to be built. Some
consider that processing of methanol in an additional step, as
this process does, is unnecessary because methanol is claimed to
be usable in amounts of 10 percent or more with gasoline in motor
vehicles of conventional design and to be usable^=ptrre-irn- motor
vehicles of modified designs. Others argue that this is an
oversimplification, claiming that certain properties of methanol,
including its corrosiveness, toxicity, and affinity for water,
constitute problems that would require time-consuming modifica-
tions of present practices if methanol is to be widely used in
24
-------
motor vehicles. The M-Gasoline process in claimed to have 95.5
percent thermal efficiency in conversion, which is said to add 5C
per gallon to the output fuel.^ if this performance is attain-
able, the technology could be quite useful in attaining faster
penetration for coal-derived fuels in the transportation fuel
market.
METHANOL VERSUS ETHANOL FROM FERMENTATION OF CROPS
Ethanol from fermentation of crops is being used as motor
fuel both in the United States and abroad. Problems and advantages
associated with its use are in many ways similar to those asso-
ciated with the use of methanol. Ethanol is, however, subject to
certain unique limitations, primarily associated with availability
of raw materials. Thus, even though ethanol production is a
useful technology, it may be more limited in applicability than
that for methanol fuels, in the long run.
Ethanol plants are expected to be relatively small so that
they can be located near raw material supplies (such as corn) and
near outlets for byproduct animal feed, the sale of which is
essential to process economics. Also they effectively remove
land from food production at a time when there jj^-a-lready-concern
over the rate at which farm land is being lost to other uses.
Experience to date suggests that ethanol will play a role in
replacement of petroleum fuels but is not likely to be a dominant
contributor.
25
-------
METHANOL VERSUS FUEL FROM OIL SHALE
Fuels from shale oil, such a-g M-Gasoline, have not been
produced commercially, but plans have been made for commercial
plants. There is a considerable body of pilot plant data to
support the scaleup of oil shale processes. The technical risk
for commercial plants appears to be minimal. Further, oil shale
deposits are very extensive and could supply our oil needs for
hundreds of years. Because of economic uncertainties, however,
developers are reluctant to make firm committments without such
incentives as guaranteed markets. Hence, prospects are poor for
near-term production of large amounts of synfuel from oil shale.
Also, crude feedstocks from oil shale are of low quality compared
with methanol. Thus, it appears that markets for methanol fuel
should exist even if shale oil ventures are highly successful.
26
-------
CONCLUSIONS
Methanol fuel technology appears to be very cost-competitive
with other technologies that could be applied in a synthetic
fuels industry today. Although the projected cost of methanol
fuels is somewhat higher than today's prices for distillate oil
and gasoline, methanol fuel plants built now could prove to be
highly profitable at prices that may prevail when they come
on stream.
The "clean burning" characteristics of methanol make it
potentially atrractive from the standpoint of combustion system
design and control of environmental impacts associated with its
use. Also, methanol is easily transportable and could be pro-
duced from abundant supplies of low-grade fossil fuels located in
regions of the United States remote from points of demand for
premium fuels. Hence, technology for production of methanol
could be applied to utilize energy supplies that would otherwise
be of limited usefulness.
Methanol fuels seem to be an attractive alternative to
premium fuels in several critical applications that are expected
to grow in importance. One of the most important involves re-
placement of gas and distillate oil fired in turbines used by
utilities for peaking, in combined cycles, or "repowering" to
increase the capacity of existing power plants.
27
-------
The use of methanol fuel technology to convert natural gas
to liquid fuels as a short-term solution for oil shortages should
be given serious consideration. Markets in which methanol fuels
could be substituted are large and represent a significant portion
of our current oil imports. The amounts of natural gas that
could be produced over the next 20 years are highly controver-
sial. The optimistic estimates suggest that allocation of sig-
nificant quantities to production of liquid fuels could be
helpful in solution of short-term problems.
A thorough study of problems associated with the use of
methanol fuels on a wide scale is needed. Such a study should
begin with analysis of gaps in the available information, which
has been developed in piecemeal studies conducted over the past
10 to 15 years. This full-scale analysis should lead to defini-
tive conclusions with respect to the policies to be adopted in
future energy programs.
28
-------
REFERENCES
1. Pefley, R.A., et al. Characterization and Research Investi-
gations of Methanol and Methyl Fuels. University of Santa
Clara for U.S. Environmental Protection Agency. EPA Grant
Mo. R803548-01, August 1977.
2. Wagner, T.O., et al. Practicality of Alochols as Motor
Fuel. Society of Automotive Engineers Technical Paper
Series, 0148-7191/79/0226-0429, March 1979.
3. Baratz, Bernard, et al. Survey of Alcohol Fuel Technology.
Mitre Corp. for National Science Foundation. NTIS No.
PB256 007, November 1975.
4. Duhl, R.W. Methanol as Boiler Fuel. Chemical Engineering
Progress, July 1976.
5. Seglem, C.E. Performance of Combined Cycle Power Plants.
Presented at 13th Middle Atlantic Regional Meeting of the
American Chemical Society, March 197 9.
6. Hayden, A.S.C. Utilization of Methanol in Stationary Source
Combustion. Canadian Combustion Research Laboratory,
Ottowa, Canada, November 1977.
7. Othmer, Donald F. Methanol: The Versatile Fuel and Chemical
Raw Material. Polytechnic Institute of New York, Brooklyn,
New York, March 1980.
B. Kuo, J.C.W., and M. Schreiner. Status of the Mobil Process
for Converting Methanol to High Quality Gasoline. Presented
at the 5th Annual Conference on Commerciali-zafion of "Coal
Gasification, Liquefaction and Conversion to Electricity,
Pittsburg, Pennsylvania, August 1978.
9. Anastai, J.L. Sasol: South Africas Oil from Coal Story.
TRW, Inc., for U.S. Environmental Protection Agency,
EPA-600/8-80-002, January 1980.
29
-------
10,
11
12
13
14
15
16
17
18
19
20
Rudolph, Paul F.H. Synfuels from Coal: How and at What
Cost? Presented at 7th Energy Technology Conference,
Washington, D.C., U.S.A.
Rogers, K.A., and R.F. Hill. Coal Conversion Comparisons.
The Engineering Societies Commission on Energy, Inc., for
U.S. Department of Energy, Contract No. EF-77-C-01-2468,
July 1979.
Energy Data Report: Annual Energy Report 1979. U.S.
Department of Energy, Energy Information Administration,
June 1980.
The Role of Natural Liquefied Gas in a Worldwide Gas Energy
Option. American Gas Association Monthly, April 1980.
Hodgson, Bryan. Natural Gas: The Search Goes On. National
Geographic, November 197 8.
Rosenberg, Robert B., and John C. Sharer. Natural Gas from
Geopressured Zones. Oil and Gas Journal, April 28, 1980.
McCormack, Wm. T., Jr. AGA Study Assesses World Natural Gas
Supply. Oil and Gas Journal, February 13, 1978.
Greatest Gas Potential is in Middle East and Russia. Oil
and Gas Journal, May 26, 1975.
Methanol-A Synthetic Liquid Fuel. Mechanical Engineering,
June 1980.
Barr, Wm. J., and Frank A. Parker. The Introduction of
Methanol as a New Fuel into the United States Economy for
Foundation for Ocean Research. March 1976.
Conversion of Methanol to High-Octane Gasoline. Contractor's
report by Mobile Research and Development Corporation to U.S.
Energy Research and Development Administration, Contract No.
E(49-18)-1773.
30
------- |