American Energy Freedom in 10 years

Or maybe less. If we really cared.

I’d been asked to sketch out how I’d deal with the ‘oil shortage’ and our ‘energy dependence’ on the Middle East. This is a small step in that direction. It’s not the complete plan I’d follow, but one key part of it. In particular, I don’t cover the legal and tax changes I would put in place to enable this, an engineering solution, to naturally happen. ( The short from is cut taxes, expand drilling support, and stop penalizing oil companies. Eventually put some import tariffs on OPEC oil, but not on domestic production nor on NAFTA or similar free trade zone oils.)

Fleet Change

There is a core problem with most of the proposals for “energy independence”. They usually have a dependency on ‘fleet change’ in one way or another. Electric cars. Hydrogen cars. Even Alcohol fuels like methanol. The fuel will not go into our present gas tanks. To use it, you must replace the fleet of vehicles. That has an astounding cost. $Trillions.

We’re not just talking about your mini-van, we’re talking about ships, trains, airplanes, long haul trucks, earth movers, bulldozers, tractors and harvesters. The works.

ANY path that runs through Fleet Change is doomed. The present average life span for cars in America is over a decade. Ships and trains are even longer. So any such solution would take over a decade even if we were already buying them. Add in time to design, get government approval, manufacture, etc. You are looking at a 2 decade solution. Don’t know about you, but 2032 does not sound like a good “solution target date” to me.

Does that mean NOT to do E-cars or Methanol Fuelers? Not at all. In fact, I’d encourage as much “Fleet Change” as possible. In particular, the long haul commercial trucks often turn over in about 5 years. The present cost advantage of natural gas is so strong that just assuring it will stay in place would have that fleet converting to CNG or LNG all on their own in that time frame. Similar fleets, such as garbage trucks and taxis, bus fleets and even companies like UPS and FED-EX would also convert (especially those with central fueling facilities so they are not dependent on the conversion of all the gas stations.) This process is already underway, but some assurance of stability would help. (i.e. keep fracking and making loads more natural gas. Drill and Frack, baby, Drill & Frack.)

BUT, and it’s an important point, that does not help the overall picture fast enough for most folks, and it would cost way too much to replace all the vehicles. There are a large number of low usage vehicles or those in inconvenient places where such a CNG conversion is just not going to happen. (For example, a farm with a harvester out in Nebraska is better served with a large Diesel tank on the farm. The fuel usage is just not enough to justify a new harvester and buying fuel deliveries from a high pressure tank truck every time you want to fill the harvester.)

So we need a solution ‘for the rest of us’.

Fleet users and long haul folks can take the CNG / LNG route. You would need one small law changed for trains. At present, it is forbidden to have a tank of fuel near the engine. As CNG / LNG is bulky, we need to allow a ‘tender’ to have that fuel just behind the engine. Converting the engine is relatively easy and has been done. A special test was approved that let them have a fuel tank, and it was a success.

This page covers the Burlington Northern experimental trains from back in the 1990-91 era:

This article says such a train is in service in Peru. (They claim it is the first in the world, and as ‘production’ it may well be; but we had a test train run here some years back):

The first locomotive in the world powered with gas has just started to operate in Peru, managed by Ferrocarril Central Andino company. The locomotive is powered with concentrated natural gas (CNG) from the deposit of Camisea, in the central forest, and will run within the passage that unites Lima with the Peruvian central saw, transporting merchandise. The operations at the moment are only of merchandise transportation, as the lack of a tunnel……that crosses the Andes causes the trip to be too heavy for passengers: a voyage to Huancayo, for example, which is 315 kilometers from Lima, is fifteen hours long. In spite of that, the use of gas will suppose an environmental improvement in the area, allowing to reduce transportation costs, bringing power independence and reducing polluting emissions.

We could take trains and trucks, local fleets and buses all off of Oil in about 5 years via a lower cost fuel in CNG / LNG. But how about my old Mercedes? My Honda 500 cc motorcycle? My son’s BMW? The neighbor’s Mexican gardener with an old Ford pickup? No, we’re not going to buy new ones. Aside from just not having the money to pop $40,000 for new cars (and there not being any supply of non-oil burners on the used market); the simple fact is that I’m happy with my vehicles. I’m never leaving my Diesel Mercedes as long as I can drive. I’m not the only one…

So ‘fleet change’ can do a little bit for us, via the long haul truckers and local fleets. Engine Change can do some too – for things like trains. But for the bulk of the fleet, and especially if you want a solution in place in less than a decade, you simply can NOT have ‘fleet change’ in the path.

Synthetic Fuels

There are a variety of methods for turning Synthesis Gas into various fuels. Synthesis Gas is the usual intermediary between just about anything with carbon in it and whatever organic product you want. There are non-synthesis gas pathways as well. I’m not going to cover them all, as it’s a very large body of information. Just realize that you can take any of { wood, trash, coal, natural gas, grass, chicken guts } and turn them into any conventional liquid fuel you like and any “petro” chemicals you want. There is ZERO dependence on oil for making plastics and chemicals.

The US chemical and plastics industry largely converted over to Natural Gas after the Arab Oil Embargo of the ’70s. Except for Eastman Chemical that was using coal and kept on using coal. The USA is “The Saudi Arabia” of coal.

There are other interesting companies. Rentech is turning trash into motor fuels in L.A. at a profit. Syntroleum and Tyson Chicken are doing the same with chicken processing ‘waste’. Sasol in South Africa does the same with coal. And many “oil” companies are turning natural gas into liquids in many parts of the world. Mostly in places that are more friendly toward making money and having industries (and less prone to taxing them into non-profitability).

The point here is pretty simple: This is not new and it is not experimental and it does not need research. It is all COTS. Common Off The Shelf technology. It’s been around for at least 80 years, improving the whole time for sure, but mostly just waiting for a cost advantage.

At present, natural gas is so incredibly cheap that it is clearly the feedstock of choice. Realize that most of a factory for turning natural gas into motor fuel liquids (gasoline, kerosene, Diesel, methanol, ethanol, LPG) can be used with most any feedstock. Just change the front end. (Some technologies are more ‘picky’ than others, so YMMV). It is not a major risk to build Gas To Liquids GTL plants now and find that in a decade we want to use coal instead if gas prices rise. Some plant will be ‘dedicated’ and stay on Natural Gas in that case, some others would put a coal gasifier on the front end. Individuals can choose how to adapt if it is ever needed. ( I doubt that it would, we’re finding so much natural gas it’s going to be very hard to increase the prices. Presently it is selling about 20 CENTS per gallon of gasoline equivalent, so even a doubling of price is irrelevant.)

My solution would be very direct. Start building massive GTL factories right now. IF that takes a subsidy, do it, but mostly I think it would just take cutting the punitive taxes and the crazy maze of EPA and other regulations and endless ‘studies’ required.

An Example and Sizing

How ‘big’ is the problem? How much money would it take to do this? Is it a practical scale?

The short form is that it’s a lot smaller, easier, and cheaper than fooling around in the Middle East.

First off, what is the size of the problem?

Has a nice chart in it showing from whom we import oil. Assuming we’re fine with buying oil from Canada and Mexico, and that the biggest issue is just dumping the oil from the Middle East, how much oil is that?

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country	Sep-11	Aug-11	YTD 2011	Sep-10	YTD 2010

CANADA	2,324	2,240	2,157	1,937	1,971
SAUDI ARABIA	1,465	1,075	1,180	1,082	1,072
MEXICO	1,099	1,150	1,113	1,108	1,132
VENEZUELA	759	806	893	919	928
NIGERIA	529	854	826	1,107	1,018
COLOMBIA	510	365	364	308	328
IRAQ	403	637	473	422	464
ECUADOR	299	303	203	229	215
ANGOLA	283	311	323	404	413
RUSSIA	275	252	246	286	295
BRAZIL	163	213	225	177	270
KUWAIT	145	165	164	172	204
ALGERIA	139	140	204	366	337
CHAD	74	32	54	30	14
OMAN	72	52	39	0	0

Add up the numbers for Saudi, Iraq, Kuwait, and Oman, you get about 2054 Thousand-bbl/day. I’m leaving Venezuela in the ‘import still’ group due to Chavez being cancer ridden and likely on the way out. It’s all of about 900 Th-bbl/day and we can add 50% more at the end if we want to take out that consumption too.

To exit the Middle East, wash our hands of it, and tell the OPEC members there to enjoy pounding their sand, it would take about 2,054,000 bbl/day for the USA. (The rest of the world can deal with their own problems, or defend the Middle East themselves… or, heck, pay us ‘cost plus’).

How much ‘capacity’ does that take for a GTL facility and how big is one of these things?

Describes a Shell Oil facility they built in Qatar (that also has a load of natural gas. So much that for decades natural gas was just burned off in huge flares as a waste product; trash ‘in the way’ of pumping oil.)

320 kboe/d of gas resulting in:
– 140 kboe/d of gas-to-liquids products (2 trains)
– 120 kboe/d of natural gas liquids and ethane

This puppy makes 140,000 bbl/day of GTL products and another 120,000 bbl/day of things like LPG that can also be put into engines and ethane that makes a great chemical feed stock. We’ll just use the GTL portion and the rest can be ‘gravey’.

2,054,000 / 140,000 = 14.6

It would take about 15 of these to ‘kiss off’ all Middle East oil for the USA.
Zero fleet change.

What’s the cost? Well, one of these was ‘about $18-19 Billion’, per their site. Call it $20 Billion. That’s $300 Billion. Less than 1/3 of the first Stimulus Package. 6% of the ADDED deficit so far under Obama’s first term. This is NOT a large cost compared to all the other crap upon which we’re wasting our money. Just for grins, lets compare it to the cost of “the Iraq War” (whichever one it is…)

The costs of the War on Terror are often contested, as academics and critics of the component wars (including the Iraq War) have unearthed many hidden costs not represented in official estimates. The most recent major report on these costs come from Brown University in the form of the Costs of War project, which said the total for wars in Iraq, Afghanistan, and Pakistan is at least $3.2-4 trillion. The report disavowed previous estimates of the Iraq War’s cost as being under $1 trillion, saying the Department of Defense’s direct spending on Iraq totaled at least $757.8 billion, but also highlighting the complementary costs at home, such as interest paid on the funds borrowed to finance the wars and a potential nearly $1 trillion in extra spending to care for veterans returning from combat through 2050

Depending on who’s funny numbers you believe, it is somewhere between 1/6 to 1/2 of the cost of the war to ‘secure the oil supply’ and get the terrorists. I think there’s plenty of room here to substitute some GTL and CTL (Coal To Liquids) facilities for some military spending.

In Conclusion

There are many other bits of finesse I could put on this. There was a VW study from back in the ’70s (documented in a book on my shelf with a title like “Methanol and Other Ways Around The Gas Pump”) that looked a using nuclear process heat instead of burning input stock to enhance production of motor fuels. Basically, it lets you put a nuke in your gas tank via the process heat energy. They projected making methanol from coal with HTGCR (High Temp Gas Cooled Reactor) heat at a cost of about $0.60 / GGE (Gallon Of Gasoline Equivalent). So in the very long run you could make methanol fueled or ‘flex fueled’ cars and get the prices even lower, stretching out the feedstock even longer.

As we have a few hundred years to do that, I’m not ‘pushing it’ as the first step. We had 3-way flex fueled cars for sale in the early ’80s (I test drove one at VW and looked at another at the Dodge Dealer) that ran on methanol, ethanol, or gasoline in most any mix. Methanol requires some different metals in the intake system (more stainless steel, less aluminum) and you need to use an oil that’s ‘special’ to reduce crankcase acids. Added about $400 to the cost of the car. That’s why ‘flex fuel’ cars today means only ethanol and gasoline, to avoid that $400 uplift. But we could easily do it.

The only thing standing between us and $1 / GGE motor fuels is a minor redirection of some of our massive spending and debt into a few GTL and CTL facilities. As these are very well understood and made from standard COTS parts, they can be completed inside 5 years of starting construction. Most of the lag time comes out of local haggling and a variety of punishing taxes, rulings, regulations, and other obstructions. Take a ‘standard plant’ (like, say, that Shell design – though it is using a few Shell patents) from each manufacturer and have it ‘pre-approved’ with no opportunity to sue or obstruct it during construction; we could knock out these puppies ‘right quick’.

And that, IMHO, is all it takes. The will to ‘cut the crap’ and the red tape, guarantee some tax breaks and profit, and assure that the drilling and fracking can continue as at present. By 2017 we’d have a very scared OPEC and not much need to be screwing around in the Middle East other than packing up and leaving.

Total cost in the rounding error of the present porkulus and deficit frenzy.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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83 Responses to American Energy Freedom in 10 years

  1. omanuel says:

    E.M. I don’t want sound like a broken record, but . . .

    1. We are surrounded by energy (E) in the form of mass (m).

    2. Mass (m) is becoming energy (E) at the fountain of energy that sustains life, creates elements, powers the Sun and our dynamic universe. The 2nd law of thermodynamics acknowledges this unidirectional nature of Reality.

    3. World leaders reacted in fear to the man-made “nuclear fires” that consumed Hiroshima on 6 Aug 1945 and immediately began efforts to:
    _a.) Unite Nations to avoid nuclear war
    _b.) Hide information on the source of energy that causes “nuclear fires”

    4. World leaders thus became rulers rather than servants of the public. Within a few months after “nuclear fires” consumed Hiroshima on 6 Aug 1945,
    _a.) The United Nations was established
    _b.) The internal composition of the Sun changed from Fe to H

    The ~67 year history of misinformation and loss of control of government is documented here: and

  2. adolfogiurfa says:

    @E.M. So you just mentioned my country, Peru, where not only that train which reaches 4980 meters high on the andes (the high way reaches 5,050 above the sea level) and you reach that height in just 1 hour and 20,30 minutes, going from here (Lima, capital city) to the east. In the middle of our summer, we usually have 30ºC here while up there is falling snow. Here there are several thousand of cars and buses running on natural gas.

  3. adolfogiurfa says:

    Drill baby drill! , but before WE drill you got to pay more….in Peru I am paying US$7.69 per gallon of 98 octanes gasoline.

  4. E.M.Smith says:


    Easiest way to not sound like a broken record is say something different… No, I’m not bothered by your ‘thread bomb’ frequent posts to your hot button. You have it, you own it. It would be nice, though, to have a bit of ‘getting past it’ and into other things. I think you do have some valid points with it, though, so think it does need some ‘air time’.

    I suspect that the ‘leaders’ really did get their panties in a bunch when they realized that for the first time ever THEY were at just as much risk as the 18 year old kid they conned into being front line canon fodder. I think they also didn’t know what to do about it.

    FWIW, I suspect ‘the moment’ was not so much in Japan, as later. I think it was the Kennedy “Bay Of Pigs” and subsequent nuclear stand-off. ( For all the Kennedy Conspiracy Fanatics: I think Kennedy was ‘hit’ via a Mafia team with C.I.A. approval. Oswald was the cover story. A spy ‘wanna be’ who was not very good at it. There was a deaf guy who SAW the shooter on the grassy knoll and his testimony was tossed out due to his being deaf. As a partly deaf person, I can assure you that it does not reduce your ability to see and remember… FWIW #2, I suspect it was the right thing to do. Kennedy damn near got us all killed AND as son of an Irish mafia guy once again double crossed the Italian mafia guys. Just not honorable at all. If you don’t ‘get that’, read up on the Valentines Day Massacre and note the ethnicity of the names… Realize that the C.I.A. had ‘deals’ with the Italian Mafia that reached back to the landings in Sicily in W.W.II and “they’ve met”. Worked closely together is more like it. Handed over the ports to them and there was zero German Problem on the docks…)

    So when I look at the sweep of history, it looks more like we were Top Dogs in the ’40s, then grappling with a competitor in the ’50s, and it was the early ’60s where they had the ‘come to Jesus’ realization that they were just as dead in a nuclear war as the ‘peons’…

    Other than that bit of finesse, I think your thesis covers some decent ground.

    Now, back at ‘energy freedom’:

    I think there’s a similar “Aw Shit!” moment in the Arab Oil Embargo. OPEC tried to take it all and use oil as a political weapon. “We” told them “NO!” via massive inflation of their dollar holdings and plunge in their stock values (and likely explained that the oil could be pumped out from under radioactive sand just fine…) I think the “deal” that was cut was stable demand for Saudi Oil in exchange for stable supply. We would not screw with their money wealth and they would not use oil as a weapon. I think THAT is why all the proposals for “Oil Independence” focus on the non-starter ideas that run through fleet change or are not really energy supply at all (like hydrogen that must be made from some energy source, so is more a battery than a supply).

    And that, IMHO, is why we don’t do the reasonably simple things that would tell them “kiss off”. Because there’s a ‘deal’ in place. And backing out on ‘deals’ is not honorable.

    So I suspect that someone who made the ‘deal’ has to die before we can change it. Until then, we buy oil and they pump and that’s the way it is.

    Per mass as energy:

    FWIW, were I energy Czar, I’d have a ‘nuke a year’ plan. One new nuke facility of some sort every single year. Some as “Process Heat, coal to liquids”. Some as electrical power. Some as Thorium proof of concept power stations. We are, as you point out, up to our eyeballs in energy as mass. The thorium deposits in the sands of the Carolinas and on down to Florida alone are huge. I’d be mining ‘rare’ earths rich in Thorium and NOT treating it as a waste product. Put it in a CANDU type reactor or in fuel bundles in breeders (or even in LW reactors). Maybe even build a ULUM ship just to make a point.

    As I’ve said often: There is no energy shortage. There never has been. There never will be. There is only a shortage of imagination.

    But, for now, and to solve the FUELS issue, we need CTL, GTL, and similar trash to liquids. What we will get instead is a load of us defending Saudi Oil so they can get filthy rich but continue to pump oil.

  5. j ferguson says:

    I think I left a note somewhat like this on chiefio, but i expanded it a bit at Lucia’s

  6. kakatoa says:

    EM I don’t plan on getting rid of my older diesels either- 97 MB, tractor, or 4&4 Chevy long bed truck. It would cost me more in sales taxes to buy new then many years worth of fuel costs….. I believe you have come up with a workable clean coal solution by the way

  7. adolfogiurfa says:

    @kakatoa: Just make a conversion to run them with natural gas!

  8. adolfogiurfa says:

    @kakatoa: Either with NG (Methane) or with propane. Then take them to the streets and let them roar out!

  9. R. de Haan says:

    The future already has arrived.
    We now have 5000 to 15000 barrel of clean diesel a day skid mounted GTL plants.
    These plants are affordable and a perfect fit for the shale industry.
    The fast introduction of these plants is pushed by the high gasoline prices and the low gas prices.

    Click to access Hatch_Energy_Innovations_20120216.pdf

    And this is not the only project.
    I am in touch with an Austrian company that is on the brink of marketing a skid based plant with a capacity of 5000 barrel clean diesel per day.
    It takes 2 day’s to make the plant operational and one day to pack it up ready to transport it to another location.
    The delivery time for this plant is six months and this is the true strength of the project.
    Their primary target market: USA

  10. R. de Haan says:

    What I meant by “affordable” is the fact that smaller shale gas producers or syndicats of landowners now can afford to buy a mobile GTL plant.

  11. Randall says:

    I believe that only Shell and Sasol (and Chevron using Sasol tech) have operating commercial GTL plants. If an operating 100+ BBL/day skid mounted plant exists today, please supply a link. Velocys says their commercial demonstration plant will be on-line mid 2012. These companies almost always fall behind schedule.

  12. Eric Barnes says:

    E.M.Smith says:
    18 April 2012 at 10:25 pm
    Agree on JFK. I don’t think he was the best president, but what a sad period in American history. He should have seen it coming. Not sure if you’ve read it, but Richard E Sprague had a great book on the assassination

    with many excellent threads on it. IMO, Sprague’s got it about as right as you can with the information that’s available.

    The plan looks great on paper, but how do you get it past the gauntlet of special interests that would fight tooth and nail to kill it in it’s tracks?
    IMO, things have to get worse (great depression worse) before they get better.

  13. omanuel says:

    @ E.M. Smith (18 April 2012 at 10:25 pm)

    Thank you, E.M. for your patience. I will try to be less obsessive.

    For 49 years (2009-1960 = 49 yrs) before the release of Climategate emails and documents, I struggled to understand why government science was so dishonest. The careers of many students were damaged by my unwillingness to compromise with Big Brother. – OKM

  14. Sera says:

    If we converted to CNG/LNG, would not the price of these commodities go up from demand (and the price of oil go down because of resource substitution)? I think the oil producing nations would quickly lower the price of oil if faced with this threat of natgas. Which would be a good thing, perhaps.

  15. Serioso says:

    Nice analysis! I recently invested in Sasol (SSL) and CLNE (T. Boone Pickens Company) on the basis of a similar study of my own. The only problem with LNG (liquefied natural gas) (as a transportation fuel) is that users need to replace their customary diesel engines with motors that can take methane, which simply burns too hot in standard diesels, and this requires an investment in new engines as well in trust that the network of LNG service stations will continue to expand. And CLNE has been losing money (not too much!) for quite some time. On the other hand, the SSL process, while somewhat less efficient, produces an exceptionally clean diesel fuel, I think both are good investments, especially SSL, which pays a 4,5% dividend and has been consistently profitable.

    [ Methane does not ‘burn too hot’ for a Diesel engine. It has too high an octane rating to self ignite. In the Engineering library of UC Berkeley you will find a thesis on file for running stationary Diesels on methane simply valved into the air intake. (I read it about 1975 or so). I’ve done the same thing as in that paper using Propane, methanol, and several other high octane fuels, using the Diesel injection as a kind of spark plug to time the ignition. This works well on low compression Diesels with precombustion chambers, but may not do well on very high compression or direct injection Diesels – I’ve just not tried it. The compressed gas mix has to not ‘ping’ and be smoothly burned by the Diesel injection flame front. I found best operation at about 3/4 intake gas, 1/4 Diesel. That stays away from stoichiometric mix in the co-fuel. Cummins, for a while at least, made such a system commercially. They added computer control to assure the fuel mix never got to a ‘detonation’ range and that you could not ”ping’ the engine. Same basic engine as their non-nat-gas ones though. So for folks with older (i.e. non-computerized finicky beasts) Diesels, ‘conversion’ can be as simple as a tank of gas and a valve. I’ve done it. Yes, there are more complicated systems. Some do direct injection of LNG under very high pressure and use highly specialized injection pumps and injectors. Some replace the heads too. But in no case is it ‘too hot’ for a Diesel engine. That the present sellers of trucks and such want to sell whole new engines does not surprise me, but it isn’t necessary to burn methane and they could trivially make the thing run on methane or Diesel at the flip of a switch.

    I’ve owned both SSL and CLNE from time to time. Right now I think I’ve got some CLNE in the spouses account. For fleet users the availability of a fueling station isn’t much of a problem. They can just put in their own compressor. As Nat Gas is widely distributed by pipeline already, it isn’t going to go away. Stations that invest in a compressor for public use are also not going to de-invest, they would just let it wear out if sales didn’t build. Not a lot of worry. There is also a fairly widespread infrastructure of public fueling at airports and many utility companies (such as PG&E out here) so little risk of vehicles being left with no place to fuel. I checked a year or two back and even with a 150 mile range, one could drive from LA to SF with easy fueling stops. Again, not much of an issue.

    I also note that you’ve changed to your sock puppet name, Peter. Shape Shifting is discourage here… -E.M.Smith]

  16. boballab says:


    Amazing how you got from fuels to JFK in the comments!

    FWIW besides the documented ties between the CIA and the Mafia in the 60’s, the US Army had a deal with the Japanese Yakuza at the end of WWII to help control the communists in Japan.

    Also besides Miami boss Trafficante making a death bed confession to his lawyer that he set up the JFK assassination, it was a mighty strange coincidence that the guy that was the go between for Mafia and the CIA was found dead, floating in a drum, near Miami right after testifying in front of the Church committee and they wanted to recall him:

    On April 23, 1976 Roselli was called before the committee to testify about a conspiracy to kill President Kennedy.[3] Three months after his first round of testimony on the Kennedy assassination, the Committee wanted to recall Roselli. However, at this point, he had been missing since July 28. On August 3, Senator Howard Baker, a member of the new SSCIA, requested the FBI investigate Roselli’s disappearance.[3]

    On August 9, Roselli’s decomposing body was found in a 55-gallon steel fuel drum floating in Dumfounding Bay near Miami, Florida. Roselli had been strangled and shot, and his legs were sawn off. Some believed that boss Trafficante ordered Roselli’s death. According to this theory, Trafficante believed that Roselli had revealed too much about the Kennedy assassination and Castro murder plots during his Senate testimony, violating the strict Mafia code of omertà (silence).[8]

  17. Rob L says:

    GTL is tremendously expensive. The plant you quote is doing about 50 million barrels per year for about $20billion up front investment so call it about $40/barrel without the feedstock + O&M costs that probably add another $30-40/barrel. That $70-80/barrel seems to have halted most new plans for implementation – rather surprising unless the cost per barrel is higher than expected long term oil – or are there other factors at play?

    For that level of investment I think that there is an even better option: Heavy Ion Fusion:
    1 hour long google talk:

    The size of the plants need to be big to overcome the ignition requirements – end up with a 8-10km long linear accelerator with beam pulses switching between up to 20 reaction chambers each with 10GJ output pulses. Output is about 100GW and each chamber repeats at 0.5-1Hz. Total cost $20-30 billion (ie ITER level), for output of about 500,000 barrels/day equivalent of hydrogen and 20-30GW electricity.

    Targets are lead encased D-T cylinders heated then ignited by an ion beam from each end. Chambers are filled with sheets of sprayed lithium at high temperature to absorb all neutrons and eliminate first wall and neutron activation issues, lithium is collected at 1100°C and heat used in sulphur iodine cycle to make hydrogen for hydrocarbon fuels, with waste from that process making electricity – 60-70% of heat energy can be used productively.

    -High efficiency (20-30%) continuously run driver (unlike laser).
    -Single expensive heavy ion driver can be easily switched between many chambers.
    -High fusion gains of up to 1000:1
    -Relatively simple reaction chamber with only a couple of tiny beam and target apertures, no tricky optics.
    -Chambers can be individually developed, improved, maintained and swapped out over time.
    -Almost no radiological waste.
    -Almost zero potential for life-threatening accidents.
    -No proliferation risk.
    -All technology required appears to be at high readiness level (adapted from particle physics etc), the required technology has been available for 30 years.
    -Lower cost power than any other known power source.
    -Can provide $50/barrel oil using hydrogen + atmospheric CO2, eliminating oil and gas extraction industries.
    -Could be running in 10 years.
    -Hydrocarbon fuels produced are compatible with existing infrastructure (cars, planes, ships, grid) so very cheap secondary implementation costs
    -2-300 plants worldwide would supply all of humanities projected energy needs

    -sticker shock – need $10-20 billion to build a plant at sufficient scale to prove it works.
    -large size is awkward for grid integration.
    -8km long linear accelerator and 30GW heat dissipation – probably need to be next to sea, but then waste heat can also desalinate.

    For a similar investment and shorter time scale than ITER you could have something that was actually economic and would solve all of worlds power problems. Seems like a much better bet than GTL, fission or fusion proposals.

  18. R. de Haan says:

    omanuel says:
    19 April 2012 at 3:53 am
    @ E.M. Smith (18 April 2012 at 10:25 pm)

    “For 49 years (2009-1960 = 49 yrs) before the release of Climategate emails and documents, I struggled to understand why government science was so dishonest.”

    Government and policy, just think about it.
    Honesty in government policy only happens as a coincidence.

    Don’t worry about “damaging” student careers.

    Lysenkoism, eugenics, acid rain, ozone hole, catastrophic anthropogenic global warming, environmentalism, peak oil, green doctrine, chemical, biological, nuclear warfare all provided, human science experiments all provided great careers for thousands of scientists. Moral standards like honesty and integrity never played a dominant role in any of these examples.
    Just like politics.

    I get the impression you’re inner demons have put you on a hunting spree for a ghost.
    Through all times humanity has been stumbling from one natural or man made disaster to another. Empires came and went.
    Despite these disasters humanity has been flourishing, gaining knowledge and life expectancy.
    It’s a kind of miracle that we have come as far as we have come.

    As science advances most basic principles remain.
    Something works or it doesn’t work.

    What doesn’t work is tossed out, rather sooner than later.

    This is true for any field of operation from a kitchen appliance to a political system.

    This IMO is what drives humanity forward and this is where you find true honesty.

    Humans are smart apes.

    Nothing more, nothing less.

  19. E.M.Smith says:


    There’s nothing wrong with being obsessive about things that are at the core of how our society is ‘messed up’. I’m obsessive about ‘energy issues’ (have been since about 1973 when I first figured out what is in this posting, and also figured out in the ’80s that it would never be done). FWIW, I think of “them” as Big Bastard, not as big brother… Yet they have a hard job. Were I in their position I’m not so sure I’d do differently. It’s easy to criticize from a position of comfort in the Easy Chair… Were I trying to prevent W.W. III I’d be tempted to many of the same ‘solutions’… No, I have no answer. Just admire the problems that come from The Big Lie and not being so sure that absolute honesty would really work out better.

    You are among friends here. Enjoy it.


    One of the ‘odd bits’ about a classical Diesel is that they are rather omnivorous. High octane fuel can be valved into the air intake as a ‘co fuel’ with zero conversion. I know because I’ve done it. I had a Volvo-Penta Diesel engine on my live-aboard sail boat. I drizzled methanol and ethanol into the air intake (using the Diesel fuel as a ‘spark plug’ to ignite it) and rand for many miles at full knots… I’ve run propane (from a hand held cylinder) into the air intake of an old International Harvester Scout truck with a 6 cylinder Nissan Diesel turbo charged engine in it. I first ‘discovered’ this when I was part of the ‘chase crew’ of a hot air balloon. The pilot owned a Mercedes Diesel. One day we were driving to our position on the launch field and one of the balloonists had a fuel leak. He was venting propane like crazy and we crept by at an idle about 10 feet down wind. When we hit the ‘mist’ from his propane vent, the car ‘took off’ for about 5 feet until we were clear of the propane.

    So a ‘conversion’ to run methane, ethane, propane, methanol, ethanol, propanol, etc in a classical precombustiion chamber Diesel is nearly zero. Just a control valve and a feed into the air intake. I’ve done it with alcohols and propane. It is part of why I will never sell my Diesel Mercedes. ( I have 2 of them) They are the ideal “Mad Max” vehicle. I’m sorry I ever sold my IH Scout… One of my favorite ‘tricks’ with it was to turn off the ignition and take the key out, then keep driving… If you didn’t cut off the fuel or air, it didn’t stop. Once, the alternator died. I’d charge the batter every 4th day or so… After about 6 months I fixed the alternator… I’d turn on the key when I needed to use the turn signals… Sir Harry Ricardo had the design right and it needs no changes, IMHO.


    Nice suite of rides! Between Ricardo and Diesel there isn’t much more needed. FT provides injectable fuel (as long as we have trash…) and if you have high octane stuff to use up, it can be valved into the air intake. (If you have a ‘modern’ computer controlled beast or a Direct Injection thing this may not work as well for you, so a Dodge with a Cummins may not react that same nor a TDI VW. Test with care.)

    FWIW, low octane stuff can go into the fuel tank. I’ve run a 20% ‘blend’ of various vegetable oils with no problems. I’ve also run Automatic Transmission Fluid and kerosene (both of which are great fuels, BTW) and if prices stay high, I’m going to ‘cut a deal’ with my mechanic to filter the used ATF ( that he presently pays ‘hazardous waste’ fees for disposal) he collects from his shop and run on that. A ‘couple of micron’ filter is all it takes for me to have free fuel…. IIRC it’s 10 micron that’s good enough, but 5 micron is ideal. I’ve also run used motor oil, but you need to ‘cut it’ with something thinner to get the viscosity down and filter for the microns of particulates so your injector pump doesn’t have wear problems. Motor oil cut with kerosene works well or cut with Stoddard solvent… Just take a 1 inch pipe cap and drill a 1/16 inch hole in it. Time how long for #2 Diesel to drain through it. Then any ‘thick’ fuel needs a thinner such that the drain time is about the same (or heat added to make it the same viscosity via a fuel system heater…) This doesn’t work as well with the ‘modern’ computer controlled EPA target designed ‘fru fru’ crap, but the older Ricardo types are fine with it…

    @R. de Haan:

    Neat gadget! I especially like the one with a coffee cup for scale!

    As I use about a gallon of Diesel per day, I wonder how big a device I’d need to attach to my natural gas line to be personally OPEC free…. Hmmmm….

    If that company you are in contact with needs a “true believer’ to be a sales guy, let me know!


    Well, having 3 different companies with 2 different technologies seems pretty diverse to me., But see the R. de Haan comment for a link to a 3rd way.

    Also note that Rentech, Syntroleum, and Synthesis Energy corp ( RTK, SYNM, and SYMX tickers IIRC) have various facilities running or under construction in the USA and / or China)

    There are probably others, but those are the ones I know off the top of my head…

    It really isn’t hard to turn one hydrocarbon into another. We’ve been doing it for decades.

    @Eric Barnes:

    Thanks for the link, no, I’ve not read it.

    Yes, ‘special interests’ are the problem. It’s not a technical issue, it’s a political / social one…


    Yes, a supply / demand balance shift would happen. Eventually natural gas would rise from the present (about 20 CENTS per gallon of gas equivalent) to something more reasonable. As the conversion cost isn’t all that high, you could have feed stock double, and double again, and double again ( 80 cents / GGE ) and double again to $1.60 / gge and still be profitable.

    The amount of natural gas ‘found’ via fraking is astounding. Yes, we’d need to keep on drilling more, but given a ‘few years’ to build facilities, that would not be a problem.

    Per drops in oil prices. Yes, I’d expect oil to head back down to about $60 / bbl. That’s why I’d put a ‘landed oil’ tariff on any non- NAFTA oil such that the cost was about $80 / bbl. It would have zero impact today ( with oil over $100) but provide a floor price of $80 so assure the ‘alternative’ folks of a profit. IFF oil ever did drop below $80/bbl, the tariff would also generate a lot of revenue for the government…

    But folks generally don’t like variable tariffs. Government wants guaranteed money flows and industry wants known (small) penalties. So it will never happen (even if it is the right thing to do).


    Yeah, ‘topic drift’ is an interesting thing ;-)

    Nice story per the drum, BTW.

    I’ve known some “Mafia types”. Generally trustworthy folks, FWIW. A local restaurant was recently torn down to make way for some ‘redevelopment’. Wife’s Mom had a story of going in there once and somebody ‘giving her grief’ in some way. Turns out it was a Mafia hangout and she, being a tall redhead, caught the attention of a ‘guy in a booth’. He said “You don’t worry, he won’t bother you again.” or some such. Bottom line was that ‘folks had words’ and she and her kids regularly went to the restaurant without troubles…. FWIW, she worked in the District Attorney’s Office…

    There’s a peculiar morality to the Mafia that one just has to admire. Don’t know that I agree with all their tactics (such as killing folks…) but they are prone to being predictable and do keep ‘deals’ they have made. They are also rather unfriendly to folks who abuse the weak, and that’s admirable as well. (Vis the story of ‘grandma and the kids’) Some time after the JFK ‘incident’ we had the take-down of the USA Mafia families. One can only wonder to what extent the two were related.

    In some ways I miss the days of the Mafia running the criminal enterprises. It was more reliable then and more moral in some ways. The gangs are not nearly as ‘neat’ about things. Oh well.

  20. E.M.Smith says:

    @Rob L:

    $80 / bbl is much much less than $120 / bbl. That it is all proven, operational, and has zero technical risk is the major feature (i.e. zero schedule risk…)

    Yes, I’d like other tech to happen too. But that slides the schedule out to unknown distances.

    In an ideal world, one would just give the relief to ‘rules’ and let the economics sort it out via competition; but we left free market capitalism behind a few decades back.

    I suspect we’d get about 5 or 6 of the Pearl sized facilities built and then oil would come down in price to the point where more were not profitable. Likely, too, is that in 20 years or so alternatives, like you suggest, would start being competitive. But just how does one put fusion power into the gas tank of my old car? It is ‘fleet change’ that is the biggest ignored lever here.

    Unless it makes Diesel and Gasoline and Kerosene, any ‘solution’ is a many decades away thing. So ‘worth doing’ but not a solution for what we need now…

    That the tech you suggest claims to make $50/bbl oil from atmospheric CO2 is a bit, er, “much”. I’ll read the links, but suspect it’s more ‘pie and sky’ than reality. There are much better carbon sources than the air, and anyone saying they will suck it from the air sounds like agenda driven and not so much reality based to me. But I’ll take a look…

    @R. de Haan:

    I’m not so sure about the ‘smart’ part of “Smart Apes”… “Mean Apes” and “Greedy Apes” seems closer …

  21. E.M.Smith says:

    @Rob L:

    OK, I’ve watched the video and read some.

    It’s a very large, very expensive and very developmental idea. It’s at least a decade of R&D involved before large scale commercial product could be started. A very nice idea, but not a ‘decade or less’ solution.

    Just looking at the proposed method of making fuels, they start with a Sulphur / Iodine reaction that the guy claims is a done deal, but isn’t. There are many technical and materials challenges in doing it ‘at scale’ as opposed to in the lab. The wiki on it gives some flavor:

    Material challenge

    The S–I cycle involves operations with corrosive chemical at temperatures up to about 1,000 °C (1,830 °F). The selection of materials with sufficient corrosion resistance under the process conditions is of key importance to the economic viability of this process. The materials suggested include the following classes: refractory metals, reactive metals, superalloys, ceramics, polymers, and coatings.[1][2] Some materials suggested include tantalum alloys, niobium alloys, noble metals, high-silicon steels[3], several nickel-based superalloys, mullite, silicon carbide (SiC), glass, silicon nitride (Si3N4), and others. Recent research on scaled prototyping suggests that new tantalum surface technologies may be a technically and economically feasible way to make larger scale installations

    And that’s the smaller of the materials and technical challenges. Making a novel size / scale accelerator is another one, then making a reaction chamber with 50 tons of lithium metal in it is another.

    All in all, an interesting idea, but not the well proven and ready to build kind that the presenter paints it to be. IMHO it would be good to try building one to see if the problems can be worked out; but it will not be a ‘ready for prime time’ solution with a 5-10 years time scale to replace all OPEC oil with minimal risks.

  22. adolfogiurfa says:

    Mafia Let’s begin with the word itself. Although the exact origin of the word “mafia” is uncertain, some believe it originated in 1282 during the French invasion of Sicily and the saying, “Morte Alla Francia Italia Anela” (Death to the French is Italy’s Cry), or MAFIA.
    In New York italians had to defend themselves against other ethnic groups so the gathered around Mafia.

  23. p.g.sharrow says:

    Just saw a interview on fox business channel, missed the first part. They had on a businessman that was pushing Nat.Gas vehicles that his company was producing. If you bought 15 he would give you a compressing station for refueling them. He was also working on a household version that would work at about 1 gallon per hour. He also discribed modern aluminum and Kevlar fuel tanks. Too bad I was still half asleep. pg

  24. R. de Haan says:

    It is EPA that will decide if there will be energy freedom in the USA.

    The US in the mean time has become Net fossil fuel exporter in 2011 so I really wonder what the
    “energy independence” mantra really is about.

    Besides that, buying oil from the Middle East provided the basis for years of good filled order books for US companies.

    This entire idea of energy independence IMO is more a political invention and the idea of “cheap energy” to fuel your car is nothing more but an illusion now we have a predatory government
    in the USA.

    If you want cheap energy, get rid of the EPA and Federal Government in it’s current shape and form.

  25. adolfogiurfa says: Haan: If you want cheap energy, get rid of the EPA and Federal Government in it’s current shape and form.
    That will be after December 21st. 2012, provided Mayans were right… , meanwhile got to hear Jackson´s “Thriller” :-)

  26. tempestnut says:

    Coal to liquids is the way the US can go, to produce diesel or its equivalent. Gas doesn’t have the power density, so for trucks is restricted to local haul. This is a big chunk all the same and there is no loss of power or drivability. Diesel is more efficient, so another reason to keep it for the heavy long haul work, as well as being much easier to handle. Be aware that you destroy the emissions controls when you use all these alternate diesels in your vehicles. A 2010 600hp ISX Cummins is zero emissions (just N2 H2O and CO2) on diesel, but that is not so when run on rubbish and bio rubbish. Emission controls are now more complicated than the engines.

    Another measure that would greatly improve efficiency is to raise the pathetic maximum weight for interstate haulage. The US is the most pathetic in the world. You would remove 30% of your old vehicles overnight as operators invested to take advantage of increased weights. It would lower costs and improve competitiveness. This is the sort of indirect thinking that is need to achieve your aims.

  27. Richard Ilfeld says:

    Under WWII conditions — maybe 3 years max to being a major exporter, having the defecit under control, and becoming rich as snot. We won’t, I hope, fight a war. But with our debt, thre may someday be a goverment after default that can operate as a debtor in possession. Coal/Natural Gas for electricity generation: Nuclear coming online a bit after to dump the dirtier coal plants ( not really necessary — I live 2 miles downwind from a contemporary coal fired plant and virtually nothing come out of the stacks byt water). Gas or solid to liquid is straightforward & as you say, proven technology. We have a fair amount of the probable bottleneck — large turbines — in mothballed plants. Combine being a net energy exporter, and have cheap energy feedstocks for manufacturing, & a reasonable attitude toward regulations — OSHA is about unguarded saws & EPA finally looks at the cities still dumping raw sewage rather than at industires alrealdy a 1 PPMM, & its easy.
    In my mind the biggest issue is the size of crisis we need to get to rationality, and the low probility that rational as opposed to porgressive statists grab control.

  28. R. de Haan says:

    adolfogiurfa says:
    19 April 2012 at 4:07 pm Haan: If you want cheap energy, get rid of the EPA and Federal Government in it’s current shape and form.

    “That will be after December 21st. 2012, provided Mayans were right… , meanwhile got to hear Jackson´s “Thriller” :-)”

    A product, service or political system works or it doesn’t work.

    It is accepted, tossed out or collapses.
    It happened many times in the past and it will happen many times in the future.
    The Mayans have no say in this.
    They had their time in the lime light of civilizations and failed to adapt.

  29. adolfogiurfa says: Haan: The Mayans have no say in this. They had their time in the lime light of civilizations and failed to adapt.
    Toltecs say in their tradition when the “tonal” of the times changes, and civilization which fail to adapt to the new “tonal” (which I understand as the prevalent frequency EM fields around) or the new arising “paradigm” end its existence and become “diluted” under other forms: The Roman Empire people became Pasta makers or fashion designers. What our current “occidental civilization” people would become? :-)

  30. Power Grab says:

    I’m going to have to re-read this thread carefully. There’s a lot of knowledge that I’d like to incorporate into my meager store.

    FWIW, I think the feds devised the “cholesterol myth” to get rid of folks like you. Does anyone here have an unmarried brother?


  31. R. de Haan says:

    Matt Ridley: opposition shale gas is a storm in a tea cup.

    @adolfogiurfa says:
    19 April 2012 at 5:25 pm

    The Roman Empire people became Pasta makers or fashion designers. What our current “occidental civilization” people would become? :-)

    Adolfo, over time the descendants of the Roman Empire have become one the most adaptive and flexible societies in Europe and together with the Irish one of the most influential group of immigrants in the USA. Italians survive above ground as well as under ground, if you know what I mean.
    No crises can bring them on their knees. Making pasta is only the facade, people have to eat. don’t they. Behind that facade totally different activities are going on.
    Since the Italian banking system has been at the brink of collapses, the Mafia has taken over.
    This was not the first time. During the allied invasion the Italian Mafia made their contribution.
    Italians are like cats.
    You throw them in the air and they alway’s land on their feet.

    Italian industry has survived almost any form of Government dominated by socialists, fascists, communists or plain criminals.
    The governmental establishment in Italy has no roots, no real tradition and… absolutely no control.

    No wonder I regard Italy, together with Greece as the Horse of Troy of the European Union.

    Just watch the show and don’t worry about the future of humanity.


  32. Chuckles says:

    Some nice stuff there E.M., a small correction – SASOL used to do only coal to liquid, heck, they built the plant right on top of the coalfield, but for many years now they’ve been running it gas to liquid. (When the neighbours in Mocambique discover vast quantities of natural gas, you pipe the stuff to your plant and keep the coal for a rainy day)
    The plant doesn’t care where the feedstock comes from, and no it’s not ‘tremendously expensive’ SASOL is making a fortune at todays prices, and can still do so at a lot less than todays prices. They’ve had 50-60 years of practice at this.

    And While you may not be interested in the new vehicles being pushed , doesn’t mean the pushers therof are not interested in you.

  33. R. de Haan says:

    You can now buy cheap construction tools, cranes, lifts. conveyor belts. cement mixers, office inventory, you name it at public auctions that take place in Spain where even the scrap yards in the outskirts of Madrid are going bankrupt.

    A friend of mine today acquired the complete inventory of a construction company.
    Their inventory was in the books for 3.5 million euro’s and sold today in an auction for 28.000 Euro, which is less than the price of scrap metal.

    But it gets even worst.
    For sale now in Spain, completely new regional airports (One Euro), never used. Shopping centers, even entire cities, all on the market for pocket change.

    All these projects have in common is a big sign that shows the logo of the European Union with the text: Regional development with financial support from the European Union.

    Well, congratulations with that.

    And now the Spanish King who heads the Spanish devision of WWF has been caught hunting endangered elephant’s the people of Spain are in shock.

    Anger is building and the last word will will be up to the streets where the last grain of respect for the establishment, the banks, the political arena and the Royal Family just went down the drain.

    When Repsol and the Spanish Government announced harsh repercussions to the Argentina’s Government for the nationalizing it’s oil industry, drawing heavy flack from the international community:

    …the Italian Government followed the example of Argentina:

    This should be the time for the profiteers, the survivalists and opportunists where timing is everything and lack of cash is creating make and break positions.

    But the Spanish people have seen how the thieves operate and how the establishment acts if their property is stolen by a foreign Government.

    In Spain where the entire Nation is now up for grabs the people will will go to the streets to protect not only their possessions but also their old way of life.

    Popcorn times have arrived because the Eurozone won’t survive the financial collapse of Spain.

  34. Dave says:

    Ironic that you would post this. Just heard that they are considering converting our Ferry system to LNG here in Seattle. (sorry this one won’t let you read the entire article)

    Older article:

  35. E.M.Smith says:


    Hadn’t caught that Sasol had shifted feedstocks. But yes, I’d expect every facility to swap to whatever was cheapest in that place and time. Per expense, I was talking about going the other way. Adding a coal gassifier costs. If you already have the gasifier, swapping over to natural gas is basically free.

    Were I energy Czar, It’d have them all built as ‘3 way’ facilities. Trash, coal, and natural gas. (For trash you want some resource recovery steps to get the valuable metals et. al. out, for coal and trash you need a gassifier but it needs to be adjustable to the different feeds). Locate them at the ‘landfill’ or coal mine or gas field. But be able to just add a train stop or a pipeline to swap fuels.

    @R. de Haan:

    So you’re telling me it’s time to catch up on my Spanish News, eh? OK, will do.

    Yes, I’ve got that ‘something in the wind’ feeling too. Just don’t know which way it’s going to sort out. The Globalists are trying very very hard to convince everyone that everything is Just Fine. Even had the head of the IMF on TV today all smiles about the 350 Billion of new “contributions” she had bagged with more on the way and how this was going to fix things. “This time for sure!” comes to mind…

    I think the ‘pattern’ they expected was that the takedown of the USA was going to be like had been done to so many Latin American countries. Massive debt, demand reforms, take over power, bugger the money, etc. Then we all end up in debt to the power brokers.

    What’s happened instead is that folks aren’t buying it. They KNOW there’s hidden inflation (bunny feed now costs the same for 25 pounds as it did for 50 pounds just a couple of years ago. Same store. Same brand. Same bags.) I think we’re going to see a lot of countries just saying “Up Yours.” and hitting the reset button. In the past, the USA and our banks would just write off some Latin debt and move on. Can’t do that for the EU and the USA. They’ve tried to grab too big a chunk. Now there’s a scramble to try and get back on top of it.

    Latin America is integrating (into a bit too much Socialism, IMHO, but “we’ll see”. If they can hold the line at lite Lange Type, it can work fairly well, but everyone tends to overspend and eventually ends up Greece…) and is not very interested in being “Lackey to the Gringos” so I think the whole of Latin America is going to tell the IMF, World Bank, and Del Nortes to go stuff it. That Argentina was willing to do that to the Patrón of Spain is a shocker to Spain…

    My “nightmare scenario” is a very cold snap in about 5 years with a global economic collapse as nations dissolve into a scrabble for food and warmth during hyperinflation. Unfortunately, many of the needed elements are in place. I think it can still be avoided, but don’t see the right stuff being done.

    But a break up of the EU, major war in the Middle East, and a Latin Revolt look pretty much baked in. When the USA stiffs China via inflating the debt to nothing real, I expect other sparks to fly… Then there’s that Japanese debt that is greater than most countries per GDP… with an aging population expecting to cash it in for retirement. Yeah, right. Nice paper, but who is going to make the wealth in real terms to cover it? It’s a demographic bomb that’s going to explode, but folks don’t like to think about demographics. An intergenerational breaking of the social contract may well be coming.

    All because the loons handing out government driven ‘investment’ money are driven by politics and “friends of friends” and not by creation of actual physical wealth. Giving buckets of cash to folks like Acorn and NSF Climate (junk) Science instead of putting just a fraction of it into CTL and GTL.

    I can only presume that such ‘exactly wrong’ decision making is deliberate. Being “done for effect”. Just don’t understand the mind set that see that as a good thing.

    At any rate, I think the Argentine business is only the start of the repudiation of contracts and rule of law. It’s got a couple of more continents to sweep over before it’s done. Would not be surprised if a major (i.e. nearly global) spat of wars breaks out. War is often a convenient excuse for debt repudiation.

    Good news is that it’s likely to take a decade+ for the big bits to get rolling. Plenty of time for the EU to reconfigure itself first.

    If the USA continues down the present path toward a Fascist Socialist model, I’d give us about 10 to 20 years, max, to a major meltdown as in W.W.II where the Italian Fascist model was praised for working so well (as it did) just until it went over the edge and joined up with the Nazi Socialists model. Then it all imploded. We’ll see if the next election pulls us back from the brink, but I don’t expect it will. Both Republicans and Democrats are happy with Central Planning and a Corporatist Regulation model. Both are handing out lots of goodies to a population glad to take them (and vote for more). End game of that is pretty clear. Tyranny and economic collapse. Ever since Plato talked about what is wrong with Democracy, it’s been the same story. If Obama gets a second term, we’re ‘done in 4’, if Romney gets in, I doubt he will act against the wishes of GE and Buffett… and he’ll have to hand out some ‘goodies’ to the voters so don’t expect a lot of ‘fix’ to the entitlements. Easier to kick it down the road 4 years and promote corporatist friends…

    Pessimistic? Maybe. I try to stay realistic and reality based, but I’m just not seeing where the present conditions turn rosy.

    Oh, and we’re getting to a percentage of Latin Culture that puts us on the road to being a Latin American country… so watch for ever more Argentine / Spanish style in our government. The Republicans are openly planning a strategy to court Latin voters. Heck, we’ve got decent odds of a Latin VP pick. Much as I love the food, the culture, and the people; stable government and steady economic growth are not their strong points.

    Maybe Czech Republic can be the place where conservative reality based economics survives… Heck, even Canada is more on track that the USA.

    Oh well…

    For now, we’re in the faster game cycle. Things are good, economy not too bad, hope still hanging around. Some businesses still growing, some places to make money and wealth. Just hope it keeps up a few more years…

  36. adolfogiurfa says:

    @E.M.: Latin America is integrating (into a bit too much Socialism, IMHO, but “we’ll see”.

    Latin america won´t integrate. There are two latin Americas, and do not confuse them: The one like Argentina and Brazil, Venezuela and Ecuador with tightly closed markets. Where Argentina spent all their currency reserves and also all the funds from private pension funds and now goes over Repsol, because it does not have where to get more money to keep “social policies”, a la US style.
    The other Latin America, of fast growing economies,, that of Chile, Peru and Colombia, having free trade agreements with a lot of countries, with almost no custom taxes, etc.etc. summarizing: Free economies.

  37. adolfogiurfa says:

    It is something to think about: The Latin America that is in a very good shape is what it was the former Inca Empire….. Somebody said that where there has been a culture of more than 25,000 years old, some uses, customs and ethics remain in peoples´ DNA.

  38. R. de Haan says:

    E.M.Smith says:
    19 April 2012 at 9:32 pm

    E.M, It’s the banks….

    My conclusion: Global systemic crash of the financial markets this time without any Governmental bail out capacity. Those banks are zombies anyhow, canabalizing their own customer base, pension funds and laying low on financing the economy.
    I really don’t see any other scenario.
    For Europe I see a collapse of the Eurozone.

    As a consequence countries will reactivate their National banks, re-introduce their former currency and make a new star with a clean sheet.

    Any globalist scenario where the masses are kept on a short lease with long lasting austerity measure and negative or even zero economic growth won’t be accepted.

  39. R. de Haan says:

    “By 2017 we’d have a very scared OPEC and not much need to be screwing around in the Middle East other than packing up and leaving.”

    I don’t see this happening.
    There will be massive changes but in the mean time we have huge business interest in this region. Just think about Shell in Qatar, Halyburton in Dubai, financial services, trading, construction, transport, chemical industry, IT, aircraft sales and maintenance services up to McDonald’s and Starbucks, etc, etc.

  40. adolfogiurfa says:

    The remedy for the european and other crisis is a well known formula: The Washington Consensus, applied in many places with the exception of Washington itself: Privatize the majority of Government Corporations (called “Agencies” in the US), fire millions of government employees by giving them, say, twelve months of pay, lower taxes, lower custom taxes,etc. In a couple of years everything will be fixed. Printing money, bail outs, living out of plastic, does not resolves issues only the real work of producing goods does it. The sooner the better, the longer you wait the more you will suffer the consequences.

  41. adolfogiurfa says:

    Do you see?, it´s about all about cycles, but we have to accept them and not close the eyes to reality. If conditions change it is always for the better, and postponing the acceptance of such a new reality, by for example, paying people for not working , just to avoid social upheavals will worsen things.

  42. tckev says:

    My little 2 cents worth – convert old tires to fuel

    and of course all the waste made of polyethylene, and polypropylene could be made into fuels relatively easily – the hard part is identifying them and separating them from all the other gunk.

  43. R. de Haan says:

    @E.M said:
    “Even had the head of the IMF on TV today all smiles about the 350 Billion of new “contributions” she had bagged with more on the way and how this was going to fix things. “This time for sure!” comes to mind…”

    Two days ago the IMF had a totally different message…

  44. R. de Haan says:

    tckev says:
    19 April 2012 at 11:37 pm
    “My little 2 cents worth – convert old tires to fuel

    The european “old” tire mountain has been recycled and converted into low noise, high grip, low wear highway (autobahn) top layers.

  45. E.M.Smith says:

    Interesting little bit from down in that Shell Oil page:

    Pearl GTL is a large and complex project. Since the project launch in July 2006 progress has been good. The project is proceeding in line with our expectations at the time of final investment decision (FID).

    Pearl GTL will add almost 8% to Shell’s production worldwide — making it the company’s main engine for growth for 2012. It is expected to ship its first product in 2011 and reach full production in 2012.

    So they went from launch to full production in 6 years (startup in 5). Not bad.

    Added 8% to total Shell production. Nice. so a dozen of these would be a “Shell Oil”, for a price tag of about $240 B.

    puts the market cap at $240 B in 2011.

    Golly. Anyone who wanted to “make” a Shell Oil company can, and for about the market price in 2011.



    Well, I’m hoping that the “2nd Latin America” can serve as a good example, but the political integration into a single block is being actively pushed. (Treaties already signed, capitol being built…)

    Like I said “We’ll see…”

    @R. de Haan:

    Oh, I have no expectation that we’d ever do this, or leave the Middle East Police role. Just pointing out we COULD if we wanted to. There’s no need at all for a middle east dependency. That it’s convenient and profitable for the companies who get lower costs and higher profits will assure the USA ‘stays bought’.

    There were interesting divergent news stories today. CNN, I think it was, had folks saying the IMF would fix it… Fox Business had folks saying: No way the ECB can save it, and the IMF probably can’t either. Maybe 2 years delay.

    I think I’d vote with the Business folks. They see a slow grind to a financial Aw Shit for the banks.

    I think the IMF “message” depends on how much money they want from whom…


    While your ‘fix’ is the right one, it will not be done until the folks who benefit from the present system are also suffering, a lot. That doesn’t happen until a broad collapse happens (as they are in power and control the decisions) that hurts everyone even more.

    COULD we do differently? Yes. Just never happened before…

    Socialism is like pregnancy. There’s no such thing as ‘a little bit pregnant’. Once a society heads down the path of “more government dole / taxes / central planning” it’s only a question of rate, not of end point. “Typical” is about 50 years, but some, like Nazi Germany, did a boom and flop in a decade scale. Fascist Italy was more like 20 years. Soviet Russia more like 76 years (hard core communist socialism is more ‘stable’, and absent an external war lasts longer than the other forms. Even longer than most democracies that usually collapse in about 50 years.) Republics are very stable and can last for several hundred. To the extent we can have a ‘Socialist Republic’ it can last longer than the 50 of democracies.

    So after about 1940 we moved to ‘more democracy’ and less republic. After about the Nixon / Carter episodes, more central planning and control (brief attempt to pause with Reagan, but it didn’t stick) and then we’ve been accelerating ever since. Obama puts us squarely in the Lange Type Socialism with ever less “representation” and ever more “will of the people”. Romney can, at most, pause; but will more likely go for the ‘1/2 a loaf compromise’ (As evidence his prior job in Mass.) So we get continued drift.

    I place it as about 75 years post FDR. Call it 2016 for the first cracks. Could be up to 2035 if we run a little slow as the culture needs time to drift too (though it’s already drifted a very long ways…)

    That’s my best guess. EU will run much much faster as its a more fully formed Socialism and has people more comfortable with it. So from start of the EU to collapse more likely in the 20 year range. So 1993 +20 = 2017. Hmmm… odd synchronizing…

    The EU has held off the process by repeated expansion, but that’s at an end (who would want to join the mess it’s in now?).


    It’s possible to kibble the trash and density separate it. If you’re going for fuels rather than for recycle, you don’t need to read the numbers and sort by type…

  46. R. de Haan says:

    adolfogiurfa says:
    19 April 2012 at 11:20 pm
    Adolfo, firing the 40.000 EU apparatchiks and thinning national structures is the smallest of our problems. The biggest problem is the banks, too big to fail.
    After the financial crises of 2007/8 when Government bailouts took place and debt was mitigated on the shoulders of the taxpayers, those banks have grown 30% without solving the basic problems.

    Forget about too big to fail. They will come down and we don’t have to wait too long.
    The Eurozone is out of money and the (Spanish) banks just smoked their last joint.
    Today Spain’s latest bond auction failed.
    IMO it’s over as Spain is too big to fail too.
    Those waiting for the domino’s to fall won’t be disappointed.
    I would go long on beer and popcorn and short on anything else (LOL).

  47. R. de Haan says:

    E.M.Smith says:
    20 April 2012 at 12:50 am
    “I think the IMF “message” depends on how much money they want from whom…”

    Yes, the problem is they (banks, governments, businesses etc.) are all fishing in the same pond.

    That’s why refinancing has become so difficult.

    No, we have arrived at the end of the road.
    Spain today underlines this conclusion.

  48. DocMartyn says:

    The US has a methane to liquids plant at Great Plains. You would need about 100 of these.
    I think that a 100 smaller is a lot better than 10 big ones; firstly as a terrorist target and secondly because it is better to build the plants near the gas, rather than transfer the liquid gas. Liquification is expensive, its O.K. if going into cars/trains, but not if it is being reheated in a conversion plant.

  49. E.M.Smith says:

    The “get out free” card is that central banks can create currency in unlimited amounts. So the IMF can ‘wash’ ECB Euro’s and hand them back out to Spain, Italy, et. al. even if the ECB is not allowed to do so.

    The “Northern” countries realize this would cause very large inflation. So they have gotten very tired of the game. “Southern” countries have gotten tired of “austerity”.

    Everybody ran off to the IMF to see if they could get China, Japan, USA, et. al. to ‘pitch in’ to the “common pot” ( the IMF lady actually called it a ‘pot’…)

    On the first round, several folks said no. Guess they got some suckers to pitch in after all.

    Now the dance will go back to “austerity”. For a while.

    But until real wealth creation is addressed, all the shoveling paper around can only have paper effects. As long as folks are hungry, cold, with skyrocketing costs for ‘feed and fuel’, they will not be creating a lot of wealth. Actual wealth creation has been exported to China (who now does all the manufacturing) with honorable mention for extractive industries to support it (like Peruvian copper and Wyoming coal). That isn’t enough. That Germany is still making Mercedes and BMWs and some chemicals, and that France is still making some wine, cheese, and weapons, helps, but again, not enough to carry all of the Southern States.

    There’s a load of other economic activity in the Southern States, but there isn’t very much of it that is exported to pay for the imports of other stuff. So they have a ‘balance of trade’ problem in essence. Germany loaning the money for them to buy Chinese dishes, socks, etc. But China buys more BMWs than Ducattis, leaving the Italians a bit short. VW is now buying Ducatti, and over time, more of the productive assets are going to end up with German owners. Add in that folks don’t like to vacation in zones of Civil Unrest, and the tourism dries up too.

    Too many government paychecks to folks with benefits sucking up more Rest Of World goods than are being spent by the ROW on Italian wine, shoes, and motorcycles.

    Classically, they would just inflate the currency and ‘go cheap’. Imports of Chinese stuff would fall off and debt owned to Germany in Lira would inflate away. Now they can’t. Everything else is elaboration.

    That leaves us with a fight between the Northern nations not wanting inflation and the Southern nations needing it. The Northern nations not willing to allow debt repudiation, the Southern nations needing it. So everyone is hoping someone else will hand the Southern nations the cash to pay off their Northern nation loans. But who has cash?

    At this point, it’s China and the OPEC states. Latin America and the rest of the ‘3 rd world’ is largely in debt. America is in debt (and ballooning fast). Russia is doing OK, but still trying to find stability as it copes with great change. Japan is way in debt. South Asia isn’t doing so good either. The EU, net, isn’t doing well, and the UK isn’t horrible, but is in debt.

    So, like you said, everyone is fishing in the same ‘pot’… and it’s empty.

    Also breaking windows and paying people to fix them (with Chinese glass…) is not helping. (All those EU / UN projects).

    China is unwilling to let their currency appreciate (the mirror of Euro depreciation) and the OPEC countries are already heavily ‘invested’. Having them buy more French munitions or German chemical factories will not help the Spanish or Italians anyway.

    But ‘never say never’… there might yet be some way for them to extend the game a couple of more years…

    But a bond sales failure tends to be the fire on the fuse…

    How would I fix it?

    Were I Spain, I’d leave the Euro. Take all outstanding debt in Euro and declare it to be in Pesos at some designated exchange rate (yup, it will PO all the bond holders). Now they can inflate it away over time while becoming competitive in manufacturing. China can’t peg to three currencies ($US, Euro, Peso). I’d also take a load of public “departments” and privatize them. Sell whatever (banks, rail, …) and cut taxes. Pretty fast you’d have a lot of growing industrial base and higher tax revenues. Oh, and do the Regan Dodge of redefining the inflation adjustment so things like pensions and welfare slowly decrease in real terms over time.

    I know they won’t do that. But it’s what I’d do.

  50. E.M.Smith says:

    @Doc Martyn:

    Natural gas is usually shipped as gas, not liquid, via pipeline. Not much difference between shipping gas by pipe vs liquids by pipe. There may be some economic difference, but I think the ‘cost to build pipelines’ would dominate. In many palaces one could likely build it near existing gas and liquids pipes. Win win. For fields far from existing pipelines, the plant goes to the field. Then liquids go by ‘best means’. Likely via ship for the massive ‘stranded gas’ in Alaska. I’d expect there to be many combinations of pipelines, rail, ships depending on particular fields needs.

    Per number of plants: I was just using the existing one as an example. Actual scale depends on many things that are likely to cause a variety of sizes. A small stranded gas field getting a small plant. A plant at a major gas / oil Nexis being much larger. If you are right next to giant nat gas storage facility, it’s already a target and already defended. And if you have a few billion cu ft of excess gas headed to storage, takes a big plant to convert it to liquids.

    But generally, yes, I like many small ones too. Though for many chemical processes involving heat, efficiency goes up with scale as heat losses drop. There will be different sizes of best economy of scale for each of the different technologies ( IIRC the Rentech and Syntroleum methods work well at small scale.)

    I’d be happy to have a 1,000 of them from a hundred different makers in a bunch of sizes.

  51. Canadian Mike says:

    Another strategy I recall reading about around 10 years ago was the exact opposite: use up the Middle East oil reserves before dipping into your own. I wonder, does this make any sense? I’ve always heard their reserves are overestimated, while new technology has revealed that our own were underestimated.

  52. E.M.Smith says:

    It may have made sense 20 years ago, but not now. Now we’ve reached the point where we can pump natural gas and shale oil for many decades, perhaps a century plus. The damage from money outflows exceeds any strategic benefit from using ‘their’ oil first. Add in all the oil being found in places like Brazil, well… So by the time we’re 50 years more into it, we’ll be running various kinds of fusion reactors or doing nuclear power from Thorium with super flywheel cars. Basically, oil is a ‘wasting asset’…

  53. Randall says:

    E.M.: Syntroleum shut down their GTL demonstration plant in OK, but are converting chicken fat to diesel in a JV with Tyson in Louisiana. The JV is called Dynamic fuels. It basically hydrotreats/upgrades the fat to jet and diesel.

    Rentech is operating a demonstration plant in CO but apparently is not close to having a commercial fuels plant. I believe that environmental and permitting issues in California put the kibosh on the planned Rialto plant. As far as I can tell, Synthesis Energy Systems has gasification technology to make synthesis gas but that is all. The way I read it, they only claim that the syngas can be used for fuels production.

    So basically, there are promises being made, but only Sasol and Shell, really, are delivering commercial quantities of CTL products. I like the idea of skid mounted units but until at least one is producing 100+ BBL/day of product for a sustained period, I think these microreactor technologies, such as from Velocys, are more hype than fact.

  54. gallopingcamel says:

    Chiefio said:
    “FWIW, were I energy Czar, I’d have a ‘nuke a year’ plan. One new nuke facility of some sort every single year.”

    That comment is definitely on the right track but you have the scale wrong. Humanity needs to build a “Nuke-a- Day” while the USA needs to build a “Nuke-a-Week” if we want to maintain American leadership.

  55. Rob L says:

    The best option is just to ignore the problem and let the market sort it out. With wellhead USA natural gas costing something like $0.007/kWh at the moment (about 10% of $0.07/kWh Jet A) you will soon see every sector starting to convert to CNG and LNG of their own accord. Natural Gas is a very efficient fuel for most applications and once pressures on oil supplies are reduced by changing the transportation fuel of choice to natural gas there will probably be enough cheap oil being traded around the world that the GTL plants will end up as too expensive anyway.

    Aircraft and Ships would work very well with LNG, though retrofitting will be a bit tricky (requiring engine and tank modification). Heavy vehicles and trains can use also use LNG or CNG or a combination of both (LNG if refuelling every day, CNG if intermittent use) and ultimately all cars can use CNG too.

    ARPA-E is currently soliciting projects aimed at reducing costs for CNG in cars, including cheap home compressor/filling stations

  56. adolfogiurfa says:

    @E.M.: Treaties already signed, There are no signed treaties but gatherings just to talk and get fun. Free commerce only works among the quoted countries, the rest are tightly closed. As an example: The Mercosur treaty, which was supposed to free commerce between Brazil and Argentina, and others, it is not working at all.
    When taking a taxi from Rio de Janeiro airport to a hotel you have to pay more than US$100, and washing a shirt it costs you US$15 there is a problem, to say the least. They are living in a Land of Oz, not facing reality.
    In Buenos Aires, the Argentinian capital, I took a photo to a little plastic doll having a price of US$60, while in my country Peru, you get the same for less than US$ 1.-, it´s just crazy! and that´s because they just print money (which is the common populist policy of liberals all over the world).
    I have told many times the peruvian case, back in 1990, where the formula cited above, was applied. People not having a job and the absolute impossibility of getting one, just solved their problem the only way possible: Creating a job for themselves. Now, the majority of the then ultra-micro-businesses are big ones.
    Populist ideologues really offend humanity by turning people into parasites, totally dependent of Big Brother´s alms.
    Now, as an example, in Chile they have implemented many social policies, to “abolish poverty”, like giving the retired, even when they never contributed to a retirement fund, a monthly payment. What is the consequence of this?, well, their grandchildren in many cases, are living on grandparents checks, do not look for a decent living and they have formed a new army of young delinquents.

  57. Richard Ilfeld says:

    Dya ever get amazed at the observable, that, no matter how bad things look to us here in the States (those of us here, understanding, EM, that you have an international audience…) Dya ever get amazed that no matter how bad things have gotten “over there” there we’re still the safe haven of choice?

    The rest of the world is reallly, really good at buggering things up. Argentina’s Lady Macbeth screwed the pooh this week, China is beginning to crack, I think from the demographic bomb of years of “one child, mostly male”, Various countries in Europe continue to avoid known, if painful solutions (devaluation, kick the bondholder but fix the economy) & whistle past the gfraveyard.

    We mess up too, big time. We have a regime that seems determined that we share the world’s misery & give up our 300 odd years of relatie success. Our regime change mechanism has worked pretty well in the past, so maybe it will work again.

    A society wil prosper if individuals are given enough freedom, and a fully understood set of rules is enforced & changes slowly. It better with fewer rules, and a bias towards the individuals, but human creativity can find a way around almost any system given some space and time.

    The most anti-human part of all of the current US regime’s rules revolves around the ambiguity allowing capricious ad arbitrary enforcement. Where the rules are rigid and specific, such as thos designed to prevent govt waste & excess, they are easy for creative folks to get around. We can have a grudging admiration for the gsa even as we deplore the fact that they are stealing our money to party — American ingenuity is alive and well. The few folks there that planned the shindig will probably survive in the real world when we starve their agency to death.

    The remnant of our national DNA related to the fact that we are not a tribe, but a voluntary aggregation formed around the idea of individual freedom may still be enough to preserve us for a while longer. One can hope.

  58. pyromancer76 says:

    Richard Ilfeld, 4/20 2:40 pm: “Dya ever get amazed that no matter how bad things have gotten “over there” there we’re still the safe haven of choice?”

    Yes and no. Reputations can take a long time to unravel. Americans do have a DNA that is anti-authoritarian. However, this tendency only works if “the system” enables the continued overturning of newly developed powers. 1) E.g.,James Madison’s insight that “government” must be divided into “competing”, overseeing-each-other powers and in all its forms can not claim more than, say, 18% of GDP (some necessary new limit). 2) Our version of capitalism only worked as long one entrepreneurial interest did not win such that “it” could begin own everything necessary to “its” industry and also to buy the “support” of the government for everything else, including hiding its activities (transparency and accountability); 3) the society has abundant energy resources such that its engine(s) can always be imaginately fueled, with economic and technological creativity honored.

    E.M. Smith is addressing #3 in this post. If “there is no shortage of energy” and if Americans’ ingenuity can be let loose from the leftist fetters (those who abhor reasonable control of pollution), my guess is that the current “socialism” will rot on the vine. However, I do bow to E.M.’s knowledge of economic and social history. My hope is that socialism has never faced American can-do-ism. Let the whiff of prosperity be scented and the main chance become possible again, Americans will respond. (It will also take a WorksProgressAdministration type of effort to wean the socialist-dependent, I believe. )

    There is absolutely no substitute for abundance of energy and willingness to creatively and competitively develop it. America went “wrong” when we thought our energy supplies were dwindling and we had to own the world to have some. Those trillions and trillions of dollars sent overseas have come back to bite us big-time — the current administration is one result.

    E.M., this is one of the most timely and most important posts of an amazingly fruitful collection. I hope you and your readers forward it and further ideas developed from it to the proper political centers.

  59. E.M.Smith says:


    Sorry to hear that the small guys are folding tents, but not all the surprised, really. There are large economies of scale in chemical engineering…


    Per all I’ve seen on it, the forming documents are signed, and structures being built.


    Depends on how big each nuke is, doesn’t it? ;-)

    “Nuke a year” would be a good start. I think we don’t have the scale to build more than that right now. As skills and companies built up again, we could ramp the size and number ( or just buy them from France, Japan, and China..)

    @Rob L:

    “Ignore it and let the market work” works as long as there IS a free market. Since energy is now effectively under Central Control via a massive regulatory structure, that breaks much of the free market. How is the ‘free market’ pipeline to be built with Obama’s foot on the throat of pipelines? How are the CNG trains to be made with a Federal Rule forbidding the tankage? How do LNG airplanes get made with an FAA choke hold on approval? There as dozens more agencies and thousands more regulations.

    So the most effective way to ‘speed it up’ is to turn those regulatory environments from impediments into encouragers (or at minimum, neutrals). While I’d rather dissemble most of the ‘regulatory burden’ and return to a freer market, that’s not going to happen in the next decade or two.

    @Richard Ilfeld:

    Yes. And that IS the hope. “But hope is not a strategy. -E.M.Smith”…

    At this point the Socialist Progressive Agenda is fully integrated into the higher education system to the point of near ubiquity. It’s pretty much got the entire UN and most NGOs. It’s taken most of the countries of the world (with notable exceptions) and we’ve got a demographic shift (orchestrated…) to a more “Latin” view that embraces it. Even the Republicans advocate Socialist Progressive ideas (usually of the Corporatist form first pushed by the Fascist Socialists).

    Against all of that stands some vague ‘social heritage’… And one can only hope. But hope is not …

    Still, we’ve ‘dodged the bullet’ many times. Maybe we have one more left in us, collectively…


    You got it!

    And thanks for the kind words. IMHO just seeing the “size” of the problem vs the “size” of the military and other crap stimulus is the biggest ‘value added’. Makes it clear that ‘dependence’ on OPEC oil is entirely a matter of choice. Don’t know how to get the electorate to understand that their ‘leaders’ (on BOTH sides) are making the wrong choice.

    Your point about the needed competition between parties is a key one. I’m mulling over a posting to be titled something like “Evil Bastards!” that explores the fact that we need them, but they must be constrained (via competition). Part of where we went wrong was in the ’70s or so we let “enterprise” buy the government. GE buys the laws it wants to ban cheap lightbulbs (where it makes no money) and mandate expensive ones (where it makes a lot). “Pink Slime” gets a law passed while lawmakers load up on their stock. It’s the “cooperative” form of government advocated by the Fascist Corporatists as their vision of Socialism. An ‘intelligent directed central plan’ that avoids ‘destructive competition’. The problem, of course, is that it rapidly corrupts into Crony Capitalism and then ends in Tyranny… Your comment indicates you already see that part, and that it’s the competition that keeps them all ‘honest’ (to some degree…)


    One can hope. Unfortunately, I can tell you from personal experience that the “Social Sciences” and especially Social Studies has become entirely an appendage of the Global Socialist Movement. It’s just a propaganda arm now, and the odds of any broad shift are fairly small. Any such shift will need to bypass the entirety of the Academic Systems and most of Government. That’s a hard path.

    But one can hope. But hope is not…

  60. E.M.Smith says:

    From the Syntroleum website, it looks like they are moving from their Demo scale plant to licensing.

    On January 25, 2007, we signed a non-binding memorandum of understanding (“MOU”) with the China Petrochemical Technology Company (“Sinopec”) to establish a joint technology development effort to advance Fischer-Tropsch technology in China based on Syntroleum’s nitrogen diluted synthesis gas conversion technology, and to determine the most advantageous alternatives to jointly market Fischer-Tropsch technology in China.

    Ivanhoe Energy

    Ivanhoe Energy Inc. (“Ivanhoe”) and Egyptian Natural Gas Holding Company (“EGAS”), the state organization charged with the management of Egypt’s natural gas resources, signed a memorandum of understanding to enable Ivanhoe to conduct and prepare a feasibility study to construct and operate a GTL plant in Egypt. Ivanhoe holds a master unlimited-volume license with us. Ivanhoe has announced that, if the results of the feasibility study are positive, EGAS has agreed to commit up to 4.2 TCF of natural gas for the anticipated 20-year operating life of the proposed project.

    Only “MOU” at this point, but it does show who’s looking and how big. One can only wonder the the USA is not in that list… That China MOU is old enough ( 5 years) that something ought to be happening on it.

    Has a good, if dated, overview of the ‘players’. Looks like Exxon has a process they were shopping around too.

    Claims that Syntroleum was going to build something in Australia.

    Looks like as of 2011 they had a demo scale plant in China:

    Aug 08, 2011
    Syntroleum Announces Record July Production and Second Quarter Results
    Geismar Plant produced 5.4 million Gallons of Biofuels in July or 87% of design capacity
    Dynamic Fuels supplied fuel to KLM Royal Dutch Airlines for first ever commercial flight using sustainable, renewable jet fuel on June 30th
    Announced grand opening of Sinopec/Syntroleum Coal to Liquids Demonstration Facility

    TULSA, Okla., Aug. 8, 2011 (GLOBE NEWSWIRE) — Syntroleum Corporation (Nasdaq:SYNM) a renewable and synthetic fuels technology company, today announced record renewable fuels production and financial results for the six months ended June 30, 2011.

    Ah, they didn’t mothball the US demonstration plant, they packed it up and sent it to China…

    Mon Aug 1, 2011 8:03am EDT

    TULSA, Okla., Aug. 1, 2011 (GLOBE NEWSWIRE) — China Petroleum & Chemical
    Corporation (Sinopec) (NYSE:SNP) and Syntroleum Corporation (Nasdaq:SYNM)
    announced today the grand opening of the Sinopec/Syntroleum Demonstration
    Facility (SDF) located in Zhenhai, China. SDF is an 80 barrel per day facility
    utilizing the Syntroleum-Sinopec Fischer Tropsch technology for the conversion
    of coal, asphalt and petroleum coke into high value synthetic petrochemical

    Sinopec and Syntroleum entered into a technology transfer agreement in 2009. As
    part of the agreement, Sinopec relocated Syntroleum’s natural gas fed Catoosa
    Demonstration Facility to the Zhenhai Refining and Petrochemical Complex in
    Ningbo City, Zhejiang Province in China
    for joint technology demonstration and
    development. Upon successful completion of the Zhenhai program, Sinopec intends
    to build commercial scale coal and petroleum coke based Fischer Tropsch
    facilities using the Syntroleum-Sinopec technology.

    Well, I guess if you are providing the money you get to call the tune…

    Looks like they are playing with Eastman Chemical too:

    In November 2005, we announced that we had entered into an agreement with another company to conduct laboratory-scale demonstration of our Fischer-Tropsch (FT) catalyst with coal-derived synthesis gas produced at an established gasification facility. Syntroleum intends that this testing program with Eastman Chemical Company will demonstrate the effectiveness of the Syntroleum FT catalysts with proven coal-derived synthesis gas clean-up and treatment processes for use in a CTL application. The testing program, funded 100% by Syntroleum began in December 2006 and will continue through mid-2007 to gather catalyst performance data for use in development of reactor designs for future commercial coal-to-liquids plants using Syntroleum technology. Initial production of FT waxes and light products was achieved in mid-December and the overall testing program is currently meeting Syntroleum expectations.

    Still not ramping up big, but clearly they have a process that works. Even if it is working in China…

    Looks like SYMX Synthesis Energy Systems is doing the China thing too:

    April 5, 2012
    Synthesis Energy Systems Announces Cooperation Framework Agreement for Coal to Ammonia for Fertilizer Market in China
    Total Addressable Market of 3,500 Older-Generation Gasifiers

    HOUSTON, April 5, 2012 /PRNewswire/ — Synthesis Energy Systems, Inc. (Nasdaq: SYMX)(“SES”) today announced that it has entered into a Cooperation Framework Agreement for Coal to Ammonia for the Fertilizer Market in China (“Agreement”) with Beijing Zhonghuan Engineering & Project Management Co., Ltd. (“ZEP”).

    Under terms of the agreement, SES and ZEP will jointly explore undertaking a nitrogenous fertilizer retrofit project using SES’ U-GAS® gasification technology, with the goal of developing it into a demonstration project. If the results of this undertaking are successful, SES and ZEP intend to establish an exclusive cooperation based upon retrofitting many of the existing ammonia projects in the nitrogenous fertilizer industry in China with SES gasification technology, combined with ZEP engineering and project management. Today, China’s ammonia production for fertilizers relies heavily upon a large number of projects utilizing outdated coal-conversion technologies that require expensive coals such as anthracite, and a process that results in significant environmental damage. The parties are developing a turnkey solution that includes integrated design, equipment, technology, and installation packages for refueling these projects to low cost, lower quality coals through utilizing SES’ gasification technology, which is much more environmentally benign, and are simultaneously identifying and developing the initial customer opportunities for the cooperation.

    Focused on fertilizers and such high value products from coal, moving the China industry from hard coal to cheaper soft coal.

    Hey! Even Nigeria has more brains than we do!

    Reuters) – Nigeria’s state oil firm and the local arm of Exxon Mobil (XOM.N) began work on Wednesday on plans for a natural gas to liquid petroleum plant, a project the country hopes will reduce its dependence on imported fuel.

    They sell a lot of crude, but don’t do so well on refining. Have a lot of gas that’s hard to ship, so…

    Chevron too:

    Chevron Nigeria’s Natural Gas-to-Liquids Plant to Start Producing in 2013
    By Elisha Bala-Gbogbo – Aug 3, 2011 2:52 AM GMT-0700

    Chevron Corp. (CVX), the world’s fourth- largest energy company, said its Nigerian Escravos gas-to- liquids plant is more than 70 percent complete and on course to start production in 2013.

    The facility, which will refine natural gas to produce 33,000 barrels a day of fuels including diesel, is set “to be completed at the end of 2012,” Andrew Fawthrop, chief executive officer of the company’s Nigerian unit, said in an interview yesterday in Abuja, the capital.

    Well, looks like GTL is alive and well in other parts of the world, just not here in the USA where natural gas is approaching painfully low prices… Such a disconnect can not come from economic forces, only from political / governmental stupidities. Oh Well…

    Claims Chevron was looking at Australia, too, and that Syntroleum was active. Wonder if it’s still work in progress… or if they got scared off by the Greens…

    The Sasol Chevron gas to liquids (GTL) joint venture is considering Australia as the site of a $1bn first-stage synthetic fuels plant aimed at diesel markets. Output not given to fuel would be converted to naphtha or LPG.

    The GTL plant depends on being able to exploit Australia’s large natural gas reserves. The joint venture of South African fuel producer Sasol and Chevron, formed in 1999, is considering GTL project investments globally that could total more than $5bn in five to ten years.

    Up until recent times diesel from GTL was not competitive at oil prices below $35/bbl. Currently it is claimed that it can compete with $20 oil/bbl and with oil now hitting $86/bbl it is a good prospect, particularly for coal- and gas-rich countries.

    Gas to liquids (GTL) project make-up

    Sasol and Chevron’s management said large uncommitted natural gas reserves made Australia an attractive possibility for a GTL plant. Australia has a lot of competition, however, and the project will need a government willing to define an appropriate industry policy and fiscal regime
    Australia, like South Africa, has vast reserves of coal and these could also be used to produce liquid fuels if required in the future.
    Sasol itself has expertise in coal to liquid technology.

    Sasol Chevron proposal

    In February 2007 it was announced that the Chevron Corp and Sasol Ltd 50/50 joint venture was exploring the possibility of building a facility to convert gas from the Wheatstone field in Western Australia. Chevron will be leading the upstream field development while Sasol Chevron will be responsible for the downstream element (Fischer-Tropsch process and resulting refining).
    The initial plant would produce about 30,000–45,000bpd, of which about 22,700bpd would be GTL diesel replacement fuel. The remainder will be GTL naphtha and LPG. Plant capacity could be boosted over the following ten years to more than 200,000bpd, aimed mainly at export diesel markets.

    Alternative sources of gas

    Over 20 years the project will need about 21tcf of gas. Australian resources could easily supply this amount. The Carnarvon and Browse Basins offshore Western Australia contain almost 100tcf of gas, with at least a further 21tcf in the nearby Bonaparte Basin and the Timor Sea.

    Other resources include the Gippsland Basin (off Victoria’s south-east coast); Bass Strait, the Otway Basin and the Cooper/Eromanga Basins (on the borders of South Australia and Queensland). Australia also has coal seam methane resources in Queensland and New South Wales.

    Australia GTL fuel industry

    Australia has a growing problem. Supplies of domestic crude are being depleted and by the middle of this decade the country will no longer be self-sufficient in transport fuels. Unless something is done soon, Australia will become increasingly dependent on OPEC imports. Not only will the nation have a growing trade imbalance, it will be in a strategically vulnerable position.

    Australia has available a natural solution. It can turn to its huge uncommitted gas supplies for the answer. Investment in a Gas to Liquids Fuel industry now will guarantee security of supply of vital transport fuels for decades to come.

    A GTL fuel industry will deliver self sufficiency in transport fuels; provide a new export industry; guarantee Australia a role as a major world fuel supplier; together with the LNG industry, help Australia become a natural gas-based economy.

    The LNG industry alone will not monetise the 130 trillion cubic feet of uncommitted gas stranded off the north of Australia. But LNG – along with a GTL Fuel industry – could do so, and at the same time underpin the development of new gas fields and domestic gas infrastructure for Australia’s future.


    The GTL production process produces diesel-like fuel which has an energy density comparable to conventional diesel. The fuel has a higher cetane number, giving better performance, low aromatic content and low sulphur content.

    Conventional diesel fuel can have high sulphur content although 2005 legislation has stipulated strict levels of sulphur in fuels. Synthetic diesel is produced with low sulphur and aromatic content and so it could be argued is better for the environment than conventional diesel fuel.
    Australia GTL projects

    Several GTL projects aimed at products other than transport fuels are also planning to start output in Australia. US group Syntroleum is due this year to begin work on its A$600m Sweetwater GTL plant which will produce 10,000 bpd of synthetic lubricants, paraffin and other products. Methanex is considering a $1.5bn methanol plant in Darwin, using Timor Sea gas that is scheduled to come on-stream in 2004.

    So looks like Australia has a choice between OPEC dependence or being a significant net exporter of fuels at a tidy profit. (If it was a good deal at $80 /bbl oil it’s a great deal at over $100 / bbl oil).

    Maybe the USA can just buy all our gasoline and Diesel from Australia… Oh, wait, their Dollar is worth more than ours now. I wonder why … /sarcoff>;

    I find it very frustrating that we have all these TRILLIONS of cu ft of natural gas, stranded all over the world, with a known proven working technology to turn them into gasoline, kerosene, and Diesel at about $40 / bbl oil equivalent, and we’re mostly just screwing around due to political garbage. Sigh. OPEC ought to be weeping and squealing as Oil plunges to $40 / bbl from competition. I’m tempted to think they have ‘bought influence’ to prevent that…

  61. kakatoa says:

    Afternoon adolfogiurfa:

    I have been trying to catch up with a few honey do items- someone has to keep the irrigation systems functioning and I haven’t convinced my wife to keep the grasses, and weeds down- sorry for the delay in responding to you comment. I wish I had natural gas piped to our place, but no such luck. Rather then building up some infrastructure to take advantage of the rather large supply of natural gas available our leadership here in CA is putting in charging stations for our goal of a million + all EV (or plug in’s).

    I keep forgetting to mark the “Notify me of follow-up comments via email”. I’ll get the hang of the new log in process sooner or later. I haven’t read it yet but Popular Mechanics has a new article on energy-
    Debunking 10 Energy Myths: Fuel from Algae Is Cheap
    The road to clean energy is full of enticing opportunities—and perilous pitfalls. Picking the best path requires avoiding both starry-eyed hype and cynical fatalism. In this special report, PM debunks 10 of the most pernicious myths that could derail our progress.

  62. adolfogiurfa says:

    Such UNASUR was the making of Hugo Chavez, hoping all would agree on his 21st.century socialism, nobody did but it is like I said a good opportunity for chatting and enjoying some known favors for altruistic ladies.

  63. Beano says:

    Many many older Mercedes in Australia are powered with L.P.G.
    The government actually subsidizes the conversion from Petrol/Diesel to Gas.

  64. E.M.Smith says:


    Well, we’ll see. Things that are ‘just symbolic’ have a way of growing… At least one side of it thinks it’s a real integration project.

  65. gallopingcamel says:


    Just to keep things simple when I talk about a “Nuke-a-Day” it is a 200 MWe Nuke. If we build 100 MWe Nukes then it needs to be two Nukes-a-day.

    The mathematics is not too hard. Currently the USA consumes electricity at an average rate of 450 GW. As most of our power comes from sources with high availability such as Nuclear, Coal and Natural Gas, the nameplate capacity is around ~500 GW.

    Thanks to George Bush and Barack Obama, electricity consumption is in temporary decline so I am going to assume a return to a robust economy that will require an annual growth of electricity consumption of 2% p.a. or 10 GW per year of new power plants. Fifty two new 200 MW Nukes per year meets the growth rate needed to maintain our comfortable lifestyle.

    Why am I talking about 200 MW Nukes when 800-1,200 MW behemoths rule? Large size = large problems when things go wrong. My vision is a nuclear future based on small intrinsically safe MSRs (e.g. LFTRs) that can be shipped to site on a single 40′ truck.

    Another advantage of small Nukes is reduced dependence on long distance high voltage transmission lines.

    A nation that produced three liberty ships per day (~10,000 tonnes each) should have no trouble producing a Nuke-a-Day for domestic consumption and several times that for export.

  66. Ralph B says:

    Liberty ships and nukes are a touch different. Brittle fracture a liberty ship is not as catastrophic as a rx vessel. I am for using proven technology. Having worked on bothe BWR and PWR’s I know they are already safe and proven designs. Look at Fukashima…how much worse can it get? The total release? Negligable. If that doesn’t demonstrate a robust design what will? A few minor changes and they would not have experienced what they did. Build a few more Palo Verde stations and electically we are golden. Throw in a few Paradise KY steam plants (large mine mouth coal stations) for peaking. Lets use the NG for GTL. If I recall the octane rating from GTL is only 87 which is sufficient for most cars. I think we should loosen diesel standards. Everywhere else in the world diesel is king…right there alone we would reduce our oil demand by up to 6 million BPD (diesel being 30% more efficient and having a higher energy content)

  67. omanuel says:


    I agree. Energy (E) is stored as mass (m) in the very, very tiny cores of atoms – the nucleus.

    World leaders failed to learn anything from Einstein: E = mc^2 !

    The “Nuke-a-Day” program would indicate a return of sanity in the frightened naked apes that

    a.) Ignored reality: “The Oklo phenomenon” [Naturwissenschaften 70, 536-539 (1983)].

    b.) Allowed fear and the instinct of survival determine their response to the “nuclear fires” that consumed Hiroshima on 6 Aug 1945:

    A successful “Nuke-a-Day” program will include these provisions:

    1. The radioactive waste must be encapsulated, not stored for future disposal, and used as the concentrated energy source it is.

    2. The head of the nuclear energy company must live in the house closest to the reactors.

    3. Any politician who accepts funds, etc. from owners/operators of nuclear power plants will be executed immediately. No excuses.

  68. Pascvaks says:

    Great Discussion!

    Suggestion: To Solve the World’s Problems – Demobilize!! The 100 Years War is Over. Shrink Governments and Social Welfare Programs to 1912 Levels.
    OK, WWIII is right around the corner. When things get tough, confusing, chaotic, complicated, demanding, out-of-balance, flakey, and stupid, then you can pretty much bet that the polywogs-in-charge are going to jump to that time-tested, sure-fire solution: WAR.
    I think it was originally documented by a Celt Caveman named Murphy.
    War is never the smart answer, but it sure a hell is the most often arranged and given by every scum-sucking politician the world has ever known.
    It must be genetic too. Civil War is the result of whole populations being polarized about ‘The Answer’. They ain’t pretty, not the way they’re played today. How can you tell you’re close to Civil War? There are two VERY BIG OPPOSING SIDES.

  69. gallopingcamel says:

    Ralph B, 21 April 2012 at 7:34 am,

    As you point out, even 30 year old BWRs are amazingly safe. We need to build at least six per year, starting now.

    Nevertheless, for the long term one needs new reactor designs that can consume nuclear waste from Gen I & II reactors. It will take a while to develop them but the existing technologies will be adequate for decades if necessary.

  70. gallopingcamel says:

    omanuel, 21 April 2012 at 10:55 am:

    “3. Any politician who accepts funds, etc. from owners/operators of nuclear power plants will be executed immediately. No excuses.”

    There is at least one country that has special laws to keep legislators honest. The Republic of China (Taiwan) has a government on the US model (Executive, Legislature & Judiciary) but it has added a fourth branch, namely the “Ministry of Audit” with power to investigate the other branches. The penalties for stealing public money can be quite severe, including death by firing squad:

  71. Ralph B says:

    GC (gallopingcamel),

    I agree waste processing needs to be considered and new technologies developed. Nuclear fission is a known and can really deliver a huge impact now. I have never understood why it is so scary to many people or why the MSM is so anti-nuclear. I want to push for microwave power transmission….that is something that could evolutionize the transportation industry. GTL is a stop gap, microwaves are eventually going to rule the highways.

  72. adolfogiurfa says:

    LENR is feasible too. Let´s see what happens with Andrea Rossi´s E-CAT fusion between Nickel and Hydrogen, apparatus.
    “Blacklight power!” uses a similar reaction between Hydrogen and Aluminum in Raney´s Nickel to generate heat.

  73. adolfogiurfa says:

    Or rather sodium and aluminum, to produce heat, which gives sodium aluminate, which afterwards is reduced to Alº, with NaH (sodium “hydrine”) intermediate.

  74. gallopingcamel says:

    adolfogiurfa, 21 April 2012 at 8:04 pm

    “LENR is feasible too. Let´s see what happens with Andrea Rossi´s E-CAT fusion between Nickel and Hydrogen, apparatus.”

    It would be wonderful if a “table top” way to harness nuclear reactions could be found. Color me highly skeptical. There was an interesting discussion of this, including a video by a Nobel prize winning physicist:

  75. R. de Haan says:

    Beano says:
    21 April 2012 at 12:01 am
    “Many many older Mercedes in Australia are powered with L.P.G.
    The government actually subsidizes the conversion from Petrol/Diesel to Gas.”

    Unfortunately in Australia LPG cars can be recognized easily by the number plate so the emergency and fire squads know they are dealing with an LPG vehicle in case of an emergency.

    Joy riding LPG cars, turning them over and set fire to them is a great sport in Australia (and Iran).
    When the car is turned upside down the safety valve in the LPG tank does not work anymore
    often resulting in a BLEVE (Boiling Liquid Expanded Vapor Explosion) or…. a big bang.

  76. Laurence M. Sheehan, PE says:

    In case no one noticed, all of these futuristic technologies were tried during the late 1970s, and all were failures back then. Electric cars were available from the very introduction of automobiles, and although gasoline cars had to be cranked to start, the mass of cars sold were gasoline powered, due to range limitations and that it took far too long a time to recharge batteries.

    In the late 1970s, CNG was also tried . . . but the mass of the storage tank was so great that these dual fuel cars had little in the way of performance.

    This nation has the greatest amount of equivalent bbls of oil, in coal, natural gas and petroleum reserves . . . 1.3 trillion, and lots to be yet discovered.

    The concept of “clean” coal is absurd . . . Carbon dioxide is the “gas of life”, and is completely required for green plants to even sprout and then grow. The more the better, for green life, and also to replenish the oxygen in the air we breath. Four times the amount would be exceeding good, and to lower the amount would mean worldwide famine.

    Perhaps it is time to get educated in the various sciences, and to learn a lot more about detailed history.

  77. R. de Haan says:

    Laurence M. Sheehan, PE says:
    24 April 2012 at 9:35 pm
    “In case no one noticed, all of these futuristic technologies were tried during the late 1970s, and all were failures back then. Electric cars were available from the very introduction of automobiles, and although gasoline cars had to be cranked to start, the mass of cars sold were gasoline powered, due to range limitations and that it took far too long a time to recharge batteries.”

    Of course we know and you’re right. There is no peak oil, no energy crises just a fabricated crises which centers CO2 and climate change as the tools to enforce a new doctrine.
    The free West is quickly becoming the new USSR, with thicker walls and a (thanks to modern technology) suppressive regime never seen before in human history.

    If we let them, the will cause more casualties than Stalin, Hitler, Mao and Pol-Pot’s killing fields put together

  78. Pascvaks says:

    Out of Stupidity, Greed, and/or an occassional lapse into Total Chaos comes that most simple of human endeavours. The ultimate solution to everything and every problem under the Sun. Denial? Greed! Well, yes in a way. And what is that bestest and funnest and wickedest and most frightening form of denial (or greed) which most satisfies the most simpleminded, for a day and a night, and the most averous among us, if they are one of the lucky ones? The one where the simple have no chance and the averous see nothing but? It starts with ‘W’, ends with ‘R’, has one vowel, and sounds like ‘WHORE’. It wipes the slate clean, it gives some a fresh start, it changes everything for everyone, it’s a shot in the dark, it’s a spin of the wheel, it’s a toss of the dice. When you have no solution to life’s little problems there’s always the solution of last resort. If ya ain’t tried it, give it a go once, it ya live, ya might think ya was one of the lucky ones. OK folks! Dealer’s Choice, is ya ready? Here they come… duce, fiver, three, Jack, and dealer get’s an Ace, dealer bets yer life..

    Watch the Dealer, he’s slick!

  79. adolfogiurfa says:

    @Pascvaks: Are you proposing, like Eichmann did, a “Final Solution”?

  80. Pascvaks says:

    @Adolfo –

    Not me Bro! But, you know, I have this funny feeling on my nose AND ears, and lower backside, that tells me somebody thinks me and you, and a few billion other “Carbon Units”, are Jewish. Wonder how they got that idea? People are funny aren’t they? Ha.. Ha… ha? Does this stuff we’re up to our neck in, this Modern World stuff, look and smell like quicksand? Why are we sinking deeper.. and deeper… AND DEEPER?

    Old Saying – “There is nothing new under the Sun.”
    Oh! And another, “Listen to the beat of the drums.”

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