What is GTL?
Gas-to-Liquid (GTL) fuels are fuels that can be produced from natural gas, coal and biomass using a Fischer-Tropsch chemical reaction process. The liquids produced include naphtha, diesel, and chemical feedstocks. The resulting GTL diesel can be used neat or blended with today's diesel fuel and used in existing diesel engines and infrastructure. These fuels provide an opportunity to reduce dependence on petroleum-based fuels and reduce tailpipe emissions.
Will GTL be produced in California?
The GTL process needs large volumes of low-cost natural gas, less than $1.00 per million British Thermal Units (BTUs) (10 cents/therm), to compete with diesel fuel. Natural gas at this price, and in these volumes, does not currently exist in or near California. GTL produced from pipeline-supplied natural gas would not be competitive, due to the higher alternative value of pipeline natural gas (today's value is 70-90 cents/therm). In the long term, technology is expected to develop fuels that can be produced from nearby coal reserves, biomass or waste.
Why produce GTL?
Natural gas is four times more expensive to transport than oil. Converting remote natural gas into a liquid before transport is more cost-effective. Declining GTL production costs, growing worldwide diesel demand, stringent diesel exhaust emission standards, and fuel specifications are driving the petroleum industry to revisit the GTL process for producing higher quality diesel fuels. Since the late 1990s, major oil companies including ARCO, BP, Conoco Phillips, ExxonMobil, Statoil, Sasol, Sasol Chevron, Shell, and Texaco have announced plans to build GTL plants to produce the fuel.
Some remote natural gas can now be economically converted through the Fischer-Tropsch process into a clean diesel fuel. This fuel can be used as a blendstock to upgrade conventional petroleum diesel fuels and extend diesel fuel capacity and supplies. GTL fuel offers a new opportunity to use non-petroleum-based fuels in diesel engines without compromising fuel efficiency, increasing capital outlay, or impacting infrastructure cost. GTL fuel has virtually no sulfur, aromatics, or toxics. It can be blended with non-complying diesel fuel to make the fuel cleaner so it will comply with new diesel fuel standards.
Has GTL been used in California?
California's nearest GTL supplier is the Shell GTL plant at Bintulu, Malaysia. The plant, which began operation in 1993, was shut down December 25, 1997, and restarted on May 20, 2000. This plant can produce up to 82,000 gallons/day of GTL fuel for worldwide sales. This is equivalent to 2 percent of California's diesel demand. In 2002, GTL fuel was used in Caltrans heavy-duty vehicles for one month. This trial confirmed that there was no fuel-related performance or maintenance problems. Furthermore, Yosemite water trucks used GLT fuel in a 12-month trial beginning in 2004. The results of this trial showed a significant reduction in vehicle emissions.
Availability of GTL fuel will continue to be limited, as fuel from the planned world scale Qatar plant will be spread across world markets. In the near-term, GTL fuel can be blended with conventional diesel to reduce existing diesel vehicle exhaust and toxic emissions. Furthermore, it could improve the prospects of new engines meeting the national 2007 and 2010 heavy-duty diesel engine emission standards.
Is there a fuel economy loss with GTL?
Due to the low density of neat GTL fuel, there may be a slight loss of fuel economy of up to 3.3 percent. However, diesel engines are 20-40 percent more efficient than gasoline engines.
Does GTL reduce emissions?
Unmodified diesel engines, fueled with neat GTL, show the following average emission reductions compared to typical California diesel.
What are the economics of GTL?
While the cost of producing GTL fuel has been declining as a result of better catalysts, scale up and plant design, the transport and distribution costs to market are slightly higher than for locally produced refinery fuels. Research and development is focused on reducing costs further, as well as economies of scale from the new generation of world scale plants in Qatar. With limited GTL fuel available for some years, GTL fuel will be attractive to those markets prepared to pay these additional costs.