OVERVIEW

For the foreseeable future the world will rely on oil and gas to meet much of its energy requirements, especially for transportation. Many countries will need to import much, and in some cases, all of the oil they consume. This dependence on oil and on oil imports prompts an interest in exploring technologies that can produce gas and liquid fuels from more plentiful and accessible raw materials.

Conventional liquid petroleum products such as gasoline, diesel fuel, and kerosene are easily obtained by upgrading crude oil in petroleum refineries. Synthetic fuels (often also referred to as synfuels) are oil and gas substitutes that are produced from more plentiful hydrocarbon resources by complex chemical processing. The raw materials for synthetic fuels are tar sands, shale, and coal. The cost of producing synthetic fuels from these resources defines a shadow price for oil and gas products obtained from conventional oil and gas resources. If the price of fuel from conventional sources were to rise above the cost of producing synthetic fuels, the market would be expected to switch to producing synthetic fuels in quantity. The price increase might occur either because of cartel action by oil exporting countries, or because of the progressive depletion of oil and gas resources.

This chapter introduces the technical aspects of some of the principal synthetic fuel production processes. The cost of producing synthetic fuels is also discussed. A principal subject of the chapter is to describe the history of the synthetic fuels initiative launched by the...