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Topic:
Oil Dependency, etc.
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Mr44
Registered:
May '02
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Date Posted:
2/16 11:59am
Subject:
RE: Oil Dependency, etc.
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On the military side of this issue, The USAF has announced that the first step in building a synthetic fuel plant at Malmstrom Air Force Base in Montana will begin before the end of February.
The plant is slated to produce Fischer-Tropsch fuel, also known as "synfuel," which is made from coal. The long term result is to move the entire US military off of foreign produced petroleum and reduce consumption to a point where all military fuel needs will be fulfilled domestically.
Does anyone have any first-hand knowledge of Fischer-Tropsch fuel?
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
2/16 12:18pm
Subject:
RE: Oil Dependency, etc.
- Date Edited:
2/16 1:08pm (4 edits total)
Edited By:
Jabbadabbado
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The Germans invented the process and used it heavily in World War 2, as did the Japanese, for obvious reasons. Illinois is a coal rich state and I read a few news articles last year about an investment group planning to build a Fischer-Tropsch processing facility in southern Illinois. I think the plan collapsed. The reason: coal prices are going through the roof. Even under the best of circumstances, Fischer-Tropsch is isn't very economical. But when the Chinese are building a new coal-fired generating plant every week, you can see where the price pressure on coal is coming from.
The U.S. military was fascinated by Hitler's synthetic fuel program, and they produced a ton of intelligence reports. In particularly the U.S. air force kept a close watch on German synfuel and was impressed by its use in keeping the Luftwaffe aloft long after the third Reich's oil supply lines had been cut off. Any military historian would see Nazi Germany as a best-in-class example of keeping a mechanized military force operational in a period of oil scarcity.
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Mr44
Registered:
May '02
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Date Posted:
2/16 2:37pm
Subject:
RE: Oil Dependency, etc.
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Interesting. I think the military's goal is more of a political one though, so the cost factor won't be as prominent as in a private venture. If the US military can become self sufficient with regards to energy needs, it would definitely support policy. Fischer-Tropsch is supposed to be quite clean as a fuel source, as all the sulfur and such associated with coal is eliminated during the process.
Along with this, the replacement for the Humvee, the FTTS (or "Fits" truck) is a hybrid which uses regenerative breaking to recharge the batteries, so I think the goal to become self sufficient could be a possibility.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
2/16 3:57pm
Subject:
RE: Oil Dependency, etc.
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"Clean" is a relative term of course. The sulfur isn't exactly eliminated but rather displaced into a different part of the process. The proposed Montana plant you mentioned will use something like a million gallons of Missouri River water every day, 1% of the entire river's flow. What happens to the river water after it's "used?" What does it contain afterwards and where does it go?
The part I liked about the proposal was the idea that the C02 released in the process (not including when the synfuel itself is burned) would be piped to oil companies so they could inject it into oil wells as part of secondary/tertiary recovery (maintaining pressure as an older well's output declines). This is the only "carbon sequestration" technique currently in existence/commercially viable.
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Blackfryar
Registered:
Aug '07
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Date Posted:
2/20 12:29am
Subject:
RE: Oil Dependency, etc.
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100 dollars yesterday and it's just the beginning
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
2/22 7:50am
Subject:
RE: Oil Dependency, etc.
- Date Edited:
2/22 7:55am (2 edits total)
Edited By:
Jabbadabbado
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Absolutely. $200 oil is no longer an absurd scenario. People assume dramatic downward pressure on oil prices if there is a serious global recession. Certainly there is truth to this. However, demand growth is only part of the picture in oil prices. There are currently a number of factors:
- demand growth (huge energy demand growth in China and India)
-resource nationalism (e.g. Russia, Venezuela)
-two decades of underinvestment in energy infrastructure (oil/energy prices were too low for too long)
-geologic constraints (oil and natural gas supplies are peaking)
-investment uncertainty (global warming policies)
-instability in oil producing nations/regions (Iraq, Nigeria, Iran)
-scaling up alternatives to oil/coal/natural gas is very difficult (costs of alternatives rise along with cost of fossil fuels
The last one is hard for people to understand. Fischer-Tropsch is one example. As energy demand increases and the cost of oil rises, alternatives like Fischer-Tropsch begin to look economically attractive. But a rising tide lifts all boats, and primary energy demand increases the cost of coal as well, and the increase in the cost of oil increases the cost of mining coal, etc. So the economic incentives of coal-based transportation fuel recedes into the horizon along with rising oil prices.
This is why a recession may not entirely kill prices. Even as the economy falters, there are still the other central factors causing potential supply shock. In this scenario, you end up with stagflation. And there are already signs of this occurring in the U.S.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
2/28 12:39pm
Subject:
RE: Oil Dependency, etc.
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From Reuters:
U.S. crude surged $3.10 to $102.74 a barrel by 2:07 p.m. EST, breaking the inflation-adjusted high of $102.53 reached in 1980.
The interesting part is this is the time of year when oil prices usually slump ahead of the summer driving season.
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Sauntaero
Registered:
Jul '03
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Date Posted:
2/28 6:25pm
Subject:
RE: Oil Dependency, etc.
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Ick.
Hey, thanks for continuing to update this, Jabba. I don't have much time to contribute anymore, but I still like to see it being discussed.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
2/29 6:47am
Subject:
RE: Oil Dependency, etc.
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You're very welcome. To everyone else I apologize if this thread looks like my own private oil blog, probably something that's against the spirit of the senate if not actually the rules.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
3/7 2:38pm
Subject:
RE: Oil Dependency, etc.
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Now that oil has passed the psychological $100 barrier, some analysts are looking ahead to the next big price spike.
Deutsche Bank predicts a possible $150 oil price this year.
Goldman Sachs famously predicted two years ago that oil prices would spike to $100/barrel. Now they're saying that a significant disruption could drive the price to $200.
Likely candidates for that kind of disruption in 2008: increased tension with Iran, terrorist acts against oil production facilities or a major Hurricane entering the gulf of Mexico.
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Darth-Ghost
Registered:
Oct '03
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Date Posted:
3/7 3:24pm
Subject:
RE: Oil Dependency, etc.
- Date Edited:
3/7 3:26pm (1 edits total)
Edited By:
Darth-Ghost
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There's also the possibility of war in South America, with the recent tensions between Venezuela/Ecuador and Colombia.
I've also heard Mexican oil production is in permenant decline, that they've passed their peak, which will make their economic troubles even worse as well as ours.
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Mr44
Registered:
May '02
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Date Posted:
3/7 3:51pm
Subject:
RE: Oil Dependency, etc.
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Actually Jabba, I'd say it's the opposite. Your posts have perfectly represented the thread ownership principle that helps strengthen the foundation of the forum.
Now, if we can just get you a Nobel...
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
3/7 10:54pm
Subject:
RE: Oil Dependency, etc.
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Well, thanks 44. After the oil apocalypse, perhaps you and I can rule over the ragtag band of scavengers living in the abandoned subway tunnels under the ruins of Chicago. Home is where the heart is.
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Mr44
Registered:
May '02
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Date Posted:
3/8 12:04am
Subject:
RE: Oil Dependency, etc.
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You have yourself a deal there...
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Peter Shoomaker
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
3/10 11:37am
Subject:
RE: Oil Dependency, etc.
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We may not have that much longer to wait. Oil touched a new high near $108 today. For weeks the price of oil seemed to go up and down with the DJIA. Is oil so inflationary now because of Indian/Chinese demand growth that its price is U.S. recession-proof? Unlikely.
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