In the early days of carbon pricing liquid fuels aren't that badly affected. For example if CO2 costs $20 a tonne that adds about 5c per litre to petrol. Thus straight CTL would have carbon charges about 10c/L or 5c with CCS. What would happen with say an 80% carbon reduction target in year 2050 is hard to predict. If CTL costs haven't increased badly the carbon component would be relatively much higher. Maybe $2 carbon charges on top of $5/L fuel, inflation adjusted. On the other hand a wholesale switch to EVs, long distance train travel and low carbon electricity could mean only a small amount of CTL is needed for jet fuel. If so the tough carbon cap may not be too onerous because the problem has partly self corrected.

However I think we have to stick with a shrinking global carbon allowance so that CTL is seen as a less preferred option. I'm unimpressed with politicians who say because of this month's financial crisis we should back off cap and trade after years of planning. Doing things the old way clearly isn't the answer.

Treehugger
"the trend in the cost of extraction of oil sand have soared in the past 5 years from 45$ to 80$"
Do you have a source for that? I'm interested. Thanks.

mds

It was reported on this site acatually, a few weeks ago in "in brief culumn" but don't see it anymore.
You caan do a search on "soaring cost of tars sand extraction" i am sure you will find article about that

"The future course of each unit-cost driver is uncertain,..."

"For oil sands, new extraction technologies are being brought forward whose future costs are uncertain. For coal liquefaction, there is not yet experience with
modern plant designs implemented on a larger scale."

"All of these parameters are uncertain and difficult or impossible to accurately predict early in the planning process."

"However, if CTL turns out to be more costly than anticipated or oil prices in the longer term are lower than this reference price, CTL may not be cost-competitive even without a CO2-emission cost."

There are so many caveats in this report that the conclusion should have been "there is no clear answer". But then they would likely have fewer customers in the future, so might as well tweak the answer to favor the people who paid for the report.

Note the Year '2025'. By that time, conventional petroleum will cost $300/barrel and hence synthetic crude will be competitive.

But there is another factor. For every 1 unit of energy input, synthetic crude will give 5 units of energy output. So where is the input energy going to come.

Naturally Coal which will increase the coal consumption.
No other go, but we have to look for all these sources as the conventional crude supplies are dwindling.

Parallely, nuclear and wind are gaining rapidly and I hope they gain bigger share in our energy mix.

What's the average energy input for building a wind turbine?

Rand is offering a study to its petroleum clients just to offer something. It's doubtful the client will pay much attention or take any action.

Very large amounts of money were sent to oil producers these last two years of speculative oil price increases. This money was obviously a great increase in their profits. It must be noted that the oil producers did not set the price of oil high with straight forward demands that people who wanted their oil must pay a certain price, but knowing that the US government and others would allow the collective witholding of oil from the market, the oil producers allowed the speculators to drive up the price so that they could reap the profits. There is no benefit to oil companies producing oil in the US to have foreign oil companies produce lots of oil. Even though oil from off shore drilling and oil from shale and fuel from coal is not now available, merely stating the intention to support such activities would reduce speculation within minutes and reduce the flood of money out of the US. No one can claim that it costs $100 to get oil out of the ground. In fact, there is probably no place where, even including discovery, drilling and other costs does it cost more than $30 dollars a barrel and it is likely that the average costs are less than $10.

Oil companies have the money and oil companies have the technology and oil companies have the distribution systems and finally oil companies have the full knowledge that getting oil out of the ground is very cheap, so there is no way that oil companies will have any incentive to invest large sums towards alternative production of fuels except to preempt others from doing so. A recent effort to get oil from oilshale used expensive electricity to produce the heating and then abandoned the efforts on the pretext that it was too energy and CO2 intensive to produce oil from oilshale. This false test, with all its in efficiencies, will be quoted for the next century to show that even a rich oil company could not make oilshale work.

Every penny that they spent on expensive electricity and many more will be made up with the high prices they have recieved whilst deceiving the Colorado and US politicians into believing that oilshale is not profitable. There is no possibility that there was not an engineer that could be hired to make a burner to produce the required heat from natural gas or even butane-propane even in a deep hole.

This very moment, oilshale is being mined, ground up and burnt as a substitute for expensive oil and natural gas. Coal is too cheap in the US to have anyone need to burn oilshale directly.

All of the money sent abroad to oil producers could have built a massive, coal to liquids and oilshale to fuel, infrastructure, but no oil company would allow a government to support such a thing. It would be worse than an electric car. Why the US government's antitrust division allows an oil company to own the most reliable high energy battery technology for hybrid cars is entirely understandable.

Nuclear reactor heat can be used directly to produce both oilshale fuel and tar-sand fuel. Such reactors can be very small and made in a factory and delivered on site. Such reactors are used in ships and submarines.

If only half of the U235 in natural uranium is fissioned, 300 pounds of natural uranium will produce the same heat as 3,000,000 pounds of coal which, itself might leave 300,000 pounds of ash and produce over 8,000,000 pounds of CO2. At least %99 of the possible fission energy of the fuel is left in the "used" rods.

Already tested reactors and processes can get the remaining energy out if the price of natural uranium gets too high. Eventually all of the natural uranium can be fissioned. There is probably enough "used" uranium in stockpiles and "spent" fuel rods to supply all of the the electricity needs of the US for a century without mining an additional pound. Uranium can be got from the ocean itself now at a price less than price of energy from crude oil. This is not necessary now because uranium is and can be gotten out of the coal ash piles of power plants.

Thorium is also a fuel that is about three times as abundant as uranium. By adding two percent surplus uranium or plutonium from warheads or used fuel rods to thorium, CANDU reactors could start an efficient thorium burning cycle tomorrow. No additional plutonium or uranium is needed after starting the cycle.

If the high pressure steam is eliminated from reactors, most of the cost and most of the safety issues are eliminated. If no water had been in the Chernobyl reactor it could not have exploded and would have gotten very hot for a few seconds and just partially melted leaving the building intact and little or no fire. Automatic pressure relief valves might have even prevented the explosion.

There is a belief that efficient steam turbines are necessesary for nuclear power reactors, and this belief requires that the very efficient very large steam turbines be used. This belief is probably economically false, but is based upon coal and direct gas fired boiler steam power technolgy. Even this technology is probably obsolete especially if natural gas is being burnt.

Combined cycle units with lower power gas turbines and much lower power steam turbines is the most energy efficient widely used method of producing electricity at central power stations from natural gas. But any of the relatively low electric efficiency micro-turbines from Capstone and others are much more energy efficient and CO2 efficient as a part of combined heat and power and cooling units of buildings. There is almost no reason to build a single additional natural gas powered combined cycle power plant, and all of the capital should be devoted to building local generation. The natural gas used for such machines should be charged at low rates related closer to the rates that are charged to utilities.

Never again should a coal boiler be built for a power plant. The coal could be gassified and purefied first in a large central location out of town where byproducts can be economically extracted due to the large scale. Much expensive plant fertiliser is now being burned up with the coal in ordinary boilers and must be replaced with ammonia made from natural gas. No such unit should ignore the possibility of producing methanol and storing it. Methanol can be burned directly in some engines, converted to DME to burn in diesel engines or easily converted to gasoline directly.

High efficiency, on site diesel engines could be used for power peaking by burning either natural gas or synthetic gas with DME as the ignition fuel. Large ship diesel engines have a simple efficiency greater than %50; a combined rankine cycle could be added for even higher efficiency.

These coal to gas units can use much of the waste heat from the processes to generate some electricity or to refine ethanol from fermentation. Some organisms can use hydrogen gas and CO2 as part of the food for making ethanol.

The pure gas made from such coal gas plants can be shipped in pipes to small combined cycle power plants throughout any city where the waste heat can be used for building heating. Building owners near such pipelines can have the option of using that kind of gas in their microturbine, combined heat and power units.

Nuclear heat is very cheap heat, so expensive efforts to gain efficiency may not be worth the effort. Less than two pounds of natural uranium a year, used in a CANDU reactor, could supply the average house with electricity. Doubling of uranium prices should be unnoticable on a customers bill; Natural Uranium now costs about fifty dollars a pound which is high enough to make recycling profitable. One pound of natural uranium used in a CANDU reactor gives the same energy as 5000 pounds of coal. In a CANDU reactor a pound of natural uranium produces as much heat as about 20 barrels of crude oil. This much oil has cost as much as $2800. The coal energy at its highest price($100/ton) would have cost $250. Even doubling coal prices should only result in an increase of less than %20 percent on a customers bill because capital, management and operating costs are about %80 of every bill.

The smallest CANDU reactor that could be built on a site that might have as many as a hundred such units with even to or three turbines per reactor, could be built and be in production to produce revenue for the subsequent small units. The large numbers would make the design costs unimportant and the maufacturing costs much lower. The loss of revenue during repairs is eliminated with temporary higher power operation of the remaining reactors. These small reactors can also be built at tar sand production sites easily and quickly.

The successful pebble bed reactors can also be used for this purpose and produce hydrogen by themochemical means for upgrading heavy crude oil. ..HG..

Here is my take on this. From a mass balance stand point, going from coal (CH0.8) to liquid fuels (CH2) requires more hydrogen (or the elimination of more carbon as CO2) compared to using oil sands or heavy crudes (CH1.5)

mds:

For your information...

The lattest cost of extracting oil from tar sands is about $32/barrel split almost evenly between mining and upgrading the product. (most long term clean-up cost are not included in the above production cost) Inflation, increasing royalties, and NG price may bring production cost up in the future. However, In Situ technology may bring in down. A solution will have to be found when NG runs out. Will it be cheaper dirty coal or cleaner but more expensive Nuclear?

EROI varies between 1.5 to 5.2 depending on what is included in inputs and the technology used. Have your pick. When the potentially huge clean cost are included, an EROI of 1.5 to 2.0 may be closer to the truth for open mining operations. Of course, full In Situ operations could raise EROI closer 5.0.

Average CO2 created per oil barrel produced is about 135 Kg.

Fresh water used per barrel produced varies between 2.5 to 4.5 barrels. The highest figure may be the right one.