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INTERVIEW: Dr. Johann Wingard On Synthetic Fuels and Energy Crisis

For more than twenty years Dr. Wingard was deeply involved in the development of the South African synfuels and energy industry as an engineering executive. Member of the American Society for Mechanical Engineers, he holds a PhD in Industrial Economics. His biological profile appears in “The Marquis Who’s Who in the World” (1996). Dr. Wingard is holder of several patents in the energy field, such as plasma-arc gasification of coal, improvements relating to dry cooling towers, improvements relating to boundary layer effect gas turbines and others.

Dr. Wingard authored the handbook, Technology Transfer, an Industry Perspective (1985), and has just published his best seller, "Towards a Synfuels Economy", which deals with technology transfer in support of synfuels technologies. The book also deals extensively with a survey of technologies and some case studies pertaining to the synfuels industry. David Storobin has interviewed him for the Global Politician.


1. With the recent rise in oil prices, some have discussed alternative fuels. What are the most promising developments?

Considering that the economies of the industrialized countries are energy driven, any disruptive changes to the energy industry will have serious knock-on effects on those economies. We know that cheap oil underpins our current lifestyle, providing low cost transport, food, goods, manufacturing and energy. National and international trade actually runs on cheap oil.

A significant increase in the cost of oil, for example, will automatically stimulate the demand for competing sources of energy. The Mossel Bay synthetic fuels from natural gas project in South Africa, for in stance, was considered to be viable in 1986 at an oil price of $23 a barrel. Today we have an oil price of $75 per barrel, which presents a huge incentive to explore available alternatives. To avoid confusion on the issue, let me first differentiate between synthetic crude oil(Syncrude), synthetic fuels (Synfuels and bio-fuels) and renewable energy sources.

Syncrude is natural oil, which is extracted from minerals such as oil shale. The derived oil is then fed to a hydrocarbon refinery for further processing. Synfuels would usually be hydrocarbon fuels, which are synthesized from coal or natural gas derived carbon monoxide and hydrogen. The most advanced and proven process for this is Sasol’s catalytic reactors known as the Fischer Tropsch process. Synfuels, which are derived from biomass, may be called bio-fuels, e.g. bio-diesel and ethanol. Other forms of renewable energy such as solar, wave or wind energy are usually harnessed as electrical energy. Synfuels could be competitive in many countries at an oil price above $75 a barrel. So, one could expect many exciting developments and announcements during the next few years as oil prices escalate. One could also expect a lot of hype, usually in the renewable energy sector, to accompany the investment scene during the next few years.


2. Which countries have led the way in the synthetic fuels?

Several countries have been involved with synfuels production. During WW2, Rurkohle of Germany used the high pressure Bergius process to produce synthetic fuels. After 1948 the South African firm SASOL led the world in synfuels production from coal. SASOL opened its first plant at Sasolburg, followed by regular expansions, until the huge new SASOL II and SASOL III plants were commissioned at Secunda around 1978/80. During the end of the eighties South Africa pioneered the production of synfuels from natural gas with the commissioning of the Mossgas plant at Mossel Bay, using SASOL’s Fischer Tropsch technology. We all know that Brazil is the world leader in ethanol production from sugar cane. Ethanol can be made from many organic substances and used as a blend in gasoline or even on its own for motor cars. Germany is the world leader in the commercialization of bio-diesel and many large scale bio-diesel plants are sprouting up all over Germany.


Israel has large reserves of low grade oil shale. There has been some speculation about a potential oil from shale project using a new technology. The Israelis claim to be able to produce synthetic oil from shale at an oil price of $17 a barrel. Personally, I believe that to be somewhat optimistic. One has to remember that the oil bearing shale has to be dug out of the ground and transported, conveyed, stacked, reclaimed and heated and the sulfur has to be removed. The large amount of waste must then be carted away and spread in an environmentally accepted manner over a large area. It would therefore be easy to underestimate the cost of those logistics. It would also be interesting to see the energy balance of mining, hauling, heating, stacking and dispersing the shale, which has a calorific value of less than 5 mega-joules per kilogram, as the Israeli shale is reported to be, considering that a liter of synthetic diesel has a calorific value of about 46 mega joules per kilogram. At an extraction efficiency rate of 80%, one would need about eleven tons of shale for each ton of syncrude. There are about seven barrels of oil to the ton, and at $17, we have only $119 to deal with 300 tons of mined materials – a tall order, I would say. But the processes are technically feasible, even with the old fashioned retorting techniques, where the shale is heated to separate the oil from the shale. One merely argues about the profit margin. At $75 a barrel it would be a different story.

I know there was a lot of hype about the new A.F.S.K. Hom Tov oil shale technology a while ago, but what current progress is, I do not know at first hand.

Regarding synthetic lubricating oil, I am particularly impressed by the work done by Prof. Reshef Tenne at the Weizman Institute of Technology on the search for a perfect lubricant. According to reports, the product called NanoLub , which consists of "spherical inorganic nanoparticles," are said to be able to roll over one another - like miniature ball bearings - staying cooler and maintaining their function longer, eliminating the need for frequent oil changes. Now, that is really something if long term trials would confirm the claims.

3. Israel recently announced development of synthetic fuel for diesel engines which within a few years totally replace oil-based diesel fuel. What do you think of the chances that this will happen?

I know only of a small Israeli firm called Ormat, who claim to have developed their own bio-diesel recipe. My impression is that it is still on a single plant scale, certainly nothing like the scale at which bio-diesel is being produced in Germany and South America. One should bear in mind that bio-diesel is derived from agricultural products, so the perennial conflict of food production versus energy production arises. Then there is the question of the cost of irrigation for countries with a predictable rainfall of less than 400 mm per annum. The Germans import huge amounts of oil bearing agricultural products to supplement their own inadequate production. Diesel from natural gas has a much better chance of replacing Israel’s oil-based diesel, unless Israel succeeds in securing adequate and reliable foreign sources of palm oil, canola oil or soybean oil. The secret is to extract the oil at the production source and to send the crude to the processing plant back home. Due to the current world demand for such products, the prices of plant oils have gone through the roof, making bio-diesel only economically viable at government supported fuel prices.


4. What are the odds of synthetic fuels replacing oil in all vehicles in the coming decades?

That would be a matter of national security and economics. While oil based fuels are available, and while such fuels are cheaper, synthetic fuels produced from bio-mass would need heavy subsidies. As sources of crude oil become scarcer, national security becomes threatened and alternative sources may need to be introduced, even at the cost of subsidies. For the foreseeable future, i.e. for the next two decades, I foresee bio-fuels being blended with oil based fuels in ratios of 5% to 30% for economic reasons. Synfuels made from natural gas, like the South African Mossgas project or the Secunda plants, (which are switching from coal to natural gas from Mozambique) or Sasol’s Oryx plant in Qatar; would be an entirely different story. It would at best be an intermediate stage, as the world’s natural gas reserves will probably peak about a decade or two after the oil peak.


5. When, if ever, can we expect oil to be obsolete?

Scientists estimate world oil production to be about 75-80 million barrels a day. World reserves are estimated at between 1 and three billion barrels. Conventional oil production has already peaked and is declining. Analysts say that for every 10 barrels of conventional oil that is consumed, only four new barrels are discovered. Without the unconventional oil from tar sands, liquefied natural gas, coal and other deposits, world production would have peaked several years ago. They also say that more than half of the world’s oil reserves have already been depleted. As energy demand grows at about 3-5% per annum, it is easy to calculate that we have about 30 to fifty years supply left. Clearly the growth needs to be satisfied from alternative energy sources. One thing is very clear, namely that an oil price of $100 per barrel will be with us quite soon, which certainly would degrade most economies and living standards.

This widens the scope for new technologies, especially for transportation, which accounts for two-thirds of U.S. oil consumption. Possible options are synthetic fuels from coal, hydrogen fuel from nuclear and renewable power sources, and electrified transport. Synthetic fuels are expensive and present environmental challenges, although they are well developed. Conventional gasification of coal, i.e. mining, carbon dioxide and nitrous oxide still present environmental problems. SASOL has just introduced a new technology to capture nitrous oxide from gas streams. Underground coal gasification is on the horizon and may yet prove to be the most economic source of producing synfuels as the coal is gasified in situ, without the associated costs of a gasification plant, mining, handling and ash disposal systems.

I believe that the combination of electrified transport, bio-fuels and synfuels from coal and oil bearing minerals can eventually replace oil based fuels, which would last mankind for the next couple of centuries. I am a hydrogen skeptic, but research and development on fuel cells which use hydrogen bearing liquid fuels may provide the breakthrough, as phenomenal efficiencies are possible with fuel cells used in conjunction with unfired micro-turbines. I agree with physicist David Goodstein who said that fusion and shale oil are the energy sources of the future – “…and will always be.” Geophysicist Amos Nur of Stanford University believes that oil production will have to triple by 2060 just to cater for the world’s expanding population. Clearly that is not likely to happen, meaning that a huge conflict could be emerging during the next few decades.


6. Why is synthetic fuel a better option than fuel cell technology, which is currently being used in hybrid vehicles, and some claim may soon totally replace the need for gasoline in cars?

Hydrogen fuel cell technology for transportation applications conjures up all sorts of infrastructural problems to deal with the gaseous fuel. Obviously there are many different types of fuel cells; some that use hydrocarbons as fuel. It would be particularly attractive to use fuel cell technology for distributed power generation applications as hundreds of utility power plants are nearing the end of their economic life cycles, exacerbating the global energy problem. I am particularly excited about Solid Oxide Fuel Cells also called SOFCs. Without going into the technical details at this juncture, suffice to say that SOFCs derive its hydrogen from hydrocarbon fuels that could be bio-mass based. SOFCs work at very high temperatures (some work at 1000ºC), and the hot off-gas can be used to drive secondary gas turbines to generate additional power. The variable geometry of SOFCs enables tubular SOFCs to be used through which the compressed air can be passed from the turbine’s compressor before expanding into the turbo generator. Combined efficiencies of as much as 70% can theoretically be attained in these fuel cell turbine (FCT) hybrid systems.

For transportation applications, I believe that hybrid vehicles offer a smooth changeover to future fuel cells, while retaining much of the conventional sub-technologies in today’s motorcars. So, its not either fuel cells or synthetic fuel, but fuel cells plus synthetic fuels. Together they seem to provide the logical answer.


7. What is the environmental impact of synthetic fuel?

Synthetic fuels that are coal and natural gas derived have very similar carbon and NOX emissions as oil based fuels, but inherently presents lower emissions of sulphur. Renewable synthetic fuels on the other hand have the advantage that they recycle the carbon from and to the atmosphere. During the coal mining and gasification processes, there are significant negative environmental impacts, such as subsidence of land surface, pollution of underground water, and contamination by undesirable metals that emanate from ash disposal areas. Underground gasification of coal holds the promise that all these negative impacts would be eliminated, especially if the gas cleaning process would include techniques for removing carbon dioxide for subsequent sequestering underground.


8. What are the major problems with synthetic fuel? Does it need to be improved to work in vehicles? Or is it simply a matter of price and making it cheaper?

Let us first talk of bio-fuels: The major problem is that feedstock production is climate dependent and seasonal and in many cases compete with food production, occupying large tracts of prime agricultural land. Emerging technologies using fermentation of cellulose materials could solve that conflict. Due to its social costs, one would expect a natural price escalation each year. The fuel itself is often better than oil based fuel, as is the case with bio-diesel conforming to DIN standard specifications, like in Germany. Price will certainly determine what market share synthetic fuels will capture in future.


9. How difficult and expensive will it be for gas stations to switch from gas fuel to synthetic fuel?

The costs would be minimal, although methanol would require special approvals to avoid underground leakage problems. As I said earlier, the easiest and cheapest route would be to blend the synthetic fuels with oil derived gasoline and diesel at depots before distribution to filling stations, in which case there should be very little if any costs involved.


10. Will replacement of gasoline with synthetic fuel change performance and safety of cars and trucks?

It is claimed that synthetic diesel from bio-mass has better lubricating properties, causing engines to last longer. Some older cars needed special piping materials and carburettor material for the alcohol in the gasoline. Most of today’s cars are able to use either fuel types. Ethanol has a calorific value of about 65% of that of gasoline; consequently a car running on ethanol will consume about 50% more fuel over the same distance. The cost of ethanol should therefore have to be about 65% of that of gasoline to compare apples with apples.


11. Besides cars and trucks, what are some of the other applications?

The most promising application for synthetic fuel, could be for distributed power generation plants using hybrid fuel cell and turbine technology. Conceivably, it could ultimately be feasible to replace a national grid with power generation nodes that are located at existing or new sub-stations, much like the thousands of mobile phone towers scattered across the countryside. Fuel levels in underground storage tanks could then be monitored using cell phone technology by fuel suppliers. At present, the cost of synfuels is still too high to compete with coal or gas fired power stations, but environmental pressures, legislation and availability would soon change that scenario.


12. Should major world governments, such as the United States and the European Union, invest in synthetic fuel or should it be left to the free market?

I am a protagonist of the free market system and my judgment would therefore be clouded by that fact. But since the free market tends to take a shorter term view of things and often have to resort to crisis management as a result, it would be prudent for governments to take an interest in the determining role that synthetic fuels will play in the future economies of their countries to avoid security, social and political problems. Direct investment may not be as effective as progressive policy and tax frameworks that could be set up by governments of industrialized countries. A particular case in point would be Germany where bio-diesel does not attract the same taxes as oil derived diesel, creating an attractive margin for entrepreneurs to invest, resulting in a booming synthetic fuels industry.

South Africa set an example for other emerging economies with its investments in power generation plants and synfuels plants such as Sasols 1,2 and 3, as well as Mossgas. The synfuels plants have subsequently been privatized. The point is that the magnitude of large energy projects is often beyond the appetite of the investment public due to potential overexposure to a particular economy or market sector.


13. How much money will have to be invested before synthetic fuels can be seen as a "normal" fuel, not an exotic project?

The answer probably lies in rising oil prices and dwindling crude oil supplies. Investors will probably allow existing oil refineries to limp along for yet another decade or two and not be replaced, while investments in synthetic fuel plants will become the “in” projects of the energy sector as legislation and state policy make these attractive. I would recommend analysts, investors, industry leaders and energy policy makers to visit my website at www.synfuels.co.za for more information on the exciting synfuels scene.