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Page added on August 21, 2014
Turn natural gas into gasoline for $1 per gallon
The clear liquid flowing from a collection of pipes and wires in a Hayward industrial park smells just like gasoline, and for all practical purposes, it is.
But it wasn’t made from crude oil. Instead, it came from natural gas, the fuel whose sudden abundance in America is reshaping the country’s energy landscape.
Siluria Technologies says it can produce large quantities of gasoline, diesel, jet fuel and chemicals at a lower cost than traditional refineries and chemical plants. At today’s natural gas prices, Siluria’s technology could make gasoline at roughly $1 per gallon, according to the company.
The oil industry has taken notice. Siluria reported Wednesday that its latest, $30 million fundraising round was led by Saudi Aramco, the world’s largest oil company.
For Aramco, the move may seem counterintuitive, since Siluria’s technology could turn natural gas into a competitor for crude oil. But Siluria, headquartered in San Francisco, sees it as a natural fit.
“Their business isn’t just oil,” said Ed Dineen, Siluria’s chief executive officer. “It’s oil and gas and petrochemicals and power. And when they look across that spectrum, they have a strong interest in increasing the value of their gas. This will allow them to do that.”
Aramco will join Siluria’s board of directors and has put together a team studying ways to deploy the technology in Saudi Arabia. Founded in 2008, Siluria has now raised $96 million from such investors as Bright Capital, Kleiner Perkins Caufield & Byers and Lux Capital.
The company has also built a short but impressive roster of partners, including the Linde Group, a global company specializing in industrial gases and engineering. Braskem, a petrochemicals giant based in Brazil, is installing Siluria’s system at one of its plants in La Porte, Texas, with operations expected to begin later this year.
Those alliances will help Siluria make the leap from tiny pilot plants, such as the one crafting small-batch gasoline in Hayward, to full production. And they reflect the company’s approach. Siluria wants to partner with oil and chemical companies, not supplant them.
“What we’ve done with these partnerships, with Aramco and Braskem, is we’ve essentially brought the customers into the company,” said Rahul Iyer, vice president of corporate development.
The ability to make liquid fuels from natural gas isn’t new, dating back to the 1920s. But the most common way of doing it, a process known as Fischer-Tropsch, is neither cheap nor easy, requiring high heat and pressure to work. Royal Dutch Shell last year shelved plans for a $20 billion “gas-to-liquids” plant in Louisiana, in part due to the cost.
Siluria’s process doesn’t require intense pressure and heat. It uses a chemical catalyst to take methane molecules from natural gas and combine them into ethylene, a hydrocarbon widely used in the chemical industry. The ethylene can be sold as its own product, or it can be processed with other catalysts to produce liquid fuels. The catalysts stitch together carbon atoms from the ethylene to create gasoline or diesel or jet fuel.
“With a refinery, you’re essentially boiling oil and separating it out,” Iyer said. “We’re building new molecules that weren’t there before.”
The controversial practice of hydraulic fracturing, or fracking, has flooded the United States with inexpensive natural gas, pried from shale formations beneath Pennsylvania, Ohio and West Virginia. Siluria’s technology represents one way to take advantage of that surge.
But it can have other uses. Oil companies often burn off, or “flare,” the natural gas that comes out of oil wells if they don’t have a pipeline to carry the gas to market. Siluria’s technology, deployed at oil fields, could create a valuable liquid commodity that would be easy to transport.
“If you’ve got stranded gas on the North Slope of Alaska or Kazakhstan, if you’ve got gas flaring in North Dakota or coming off of landfills, those are all opportunities for our technology,” Dineen said.
Siluria’s method for making fuel produces fewer greenhouse gas emissions than traditional refining, according to the company. There are no emissions of sulfur dioxide or mercury, either. And the carbon dioxide given off by Siluria’s methane-to-ethylene process is pure enough to be sold as its own product.
But Siluria’s version of gasoline still comes from fossil fuel. That limits its appeal as an alternative to oil, at least in the eyes of researchers concerned about global warming.
“My view is, it’ll make some people some money, but it’s not much of a solution, because you’re still burning fuel and creating emissions,” said Daniel Kammen, director of the Renewable and Appropriate Energy Laboratory at UC Berkeley. “It’s a good business deal.”
35 Comments on "Turn natural gas into gasoline for $1 per gallon"
TIKIMAN on Thu, 21st Aug 2014 7:21 am
“But it can have other uses. Oil companies often burn off, or “flare,” the natural gas that comes out of oil wells if they don’t have a pipeline to carry the gas to market.”
Maybe we should pipe that shit right up Obamas ass.
Pops on Thu, 21st Aug 2014 7:26 am
So if fracing shale means unlimited methane and this process claims to turn methane into whatever fuel you like for a buck, I can’t for the life of me figure out why they can only come up with $96 mil.
Facebook is “worth” $18 billion …
pctech on Thu, 21st Aug 2014 8:38 am
What about thermal dynamics? NG has less energy density than gasoline. What about the “up front” energy cost of this process? Sounds similar to the Bio Fuel scheme.
Makati1 on Thu, 21st Aug 2014 9:14 am
Natural laws…
Lawfish on Thu, 21st Aug 2014 9:29 am
From an article posted elsewhere: “Siluria chief executive Edward Dineen estimates that at commercial scale the company’s technology can produce gasoline for about $15 a barrel, not counting the cost of natural gas.” I wonder how much natural gas it takes to make a barrel of that stuff. Can’t seem to find an answer on that question anywhere. Big surprise. Not.
Plantagenet on Thu, 21st Aug 2014 9:39 am
HoooRAY! Cheap gasoline is coming back!
Perk Earl on Thu, 21st Aug 2014 10:29 am
If what they say is true, then why not have mobile conversion units locate at NG flaring locations, convert to fuel, pump into trucks and start driving the stuff to all parts of the country for distribution to consumers?
A dollar a gallon? If so, that would make it about 2.50 at the pumps.
Qatar could become the next Saudia Arabia.
Wouldn’t this push any concerns of collapse back several decades?
rockman on Thu, 21st Aug 2014 10:42 am
FYI Mobil Oil was doing this in New Zealand 40 years ago. The problem then was that even with almost free NG it still wasn’t economical. Also you have to be careful how you interpret what “I can make X for $Y per gallon”. It might cost me $5/bbl to produce oil out of my well. But it cost me $5 million to drill the well. So at $1/gallon is that the cost of the process to make the gasoline NOT including what you have to pay for the NG and NOT amortizing in the cost to build the plant?
And given they apparently have built a full scale pilot plant left I would take the estimated ops cost with a grain of salt.
rockman on Thu, 21st Aug 2014 10:42 am
Meant “haven’t built”.
Blair on Thu, 21st Aug 2014 11:08 am
$1 a Gallon sign me up!
Nony on Thu, 21st Aug 2014 12:00 pm
Rock is right. Basic idea has been around for a long, long, long time. Economics haven’t worked in the past. People have looked at the idea of using it for stranded (i.e. free) gas. This is not to say that at a high enough oil price, it doesn’t work. Or that technology will never be competitive.
But it’s a bit like solar power. Been around since the 70s and earlier. Getting better. But still too expensive to be competitive.
Jim McGinn on Thu, 21st Aug 2014 3:46 pm
Sounds too good to be true. If it is true (and I hope it is) they would build it at small scale and then use the tremendous profits to scale up. Why would they even tell anybody else about it? Doesn’t make sense.
Mike on Thu, 21st Aug 2014 4:50 pm
I don’t believe it. There’s more to the story than this.
Mike on Thu, 21st Aug 2014 4:50 pm
“Your comment is awaiting moderation.”
Why???
alokin on Thu, 21st Aug 2014 6:06 pm
I find it quite telling that SA is urgently searching technology to replace oil.
nemteck on Thu, 21st Aug 2014 6:11 pm
“…. fracking, has flooded the United States with inexpensive natural gas,….”.
Should read: “…flooding with expensive NG but sold mostly under production cost.
“If you’ve got stranded gas on the North Slope of Alaska or Kazakhstan, … those are all opportunities for our technology,” Yes, do you use helicopters to transport the NG?
Bob Owens on Thu, 21st Aug 2014 6:12 pm
It’s better to do this than to let our gas be flared. There will certainly be niches where this will be useful. I hope it works out. The downside, of course, is that we could end up exporting all our gas as gasoline. We might end up freezing in the dark.
Mark Ziegler on Thu, 21st Aug 2014 7:01 pm
They forgot to tell you it takes 255,000 cf natural gas (Canadian) for 1 gallon petroleum.
Jimmy on Thu, 21st Aug 2014 7:09 pm
Sounds like one of Tom Whipple’s magic porridge pot headlines.
jjhman on Thu, 21st Aug 2014 7:16 pm
Trying to remember back over 40 years to my last thermodynamics class it looks like the CH4 to C2H4 conversion is (theoretically) slightly net energy positive so if you have good catalysts it might be a relatively cheap, and practical, business model unlike trying to make alcohol from foodstuffs.
Roddy McClain on Thu, 21st Aug 2014 8:31 pm
This kind of sounds like a process called thermal depolymerization. That process took heat and pressure to hyper-saturate a slurry that was later processed.
Rob on Thu, 21st Aug 2014 8:37 pm
When exactly do i see this $1 a gallon gasoline at the local Kwik Trip? Next year? 10 years? never ever?
Norm on Thu, 21st Aug 2014 8:45 pm
I got gasoline in Salt Lake, year of 1999, for 79 cents a gallon. Filled up my big Chevy truck. Will Siluria also plz make me a time machine. I would prefer to go back to that time, and stay there. Ok ic the time machine looks kinda like the photo. Lotta pipes and wires.
Sykotic Elf on Thu, 21st Aug 2014 9:03 pm
If you believe this, I have some e-toys stock for ya. cheap too!!
Makati1 on Thu, 21st Aug 2014 9:18 pm
Nony, solar electric and panels have been around for a long time.
“1839 – Alexandre Edmond Becquerel observes the photovoltaic effect via an electrode in a conductive solution exposed to light.”
“1950s – Bell Labs produce solar cells for space activities.”
http://en.wikipedia.org/wiki/Timeline_of_solar_cells
MKohnen on Fri, 22nd Aug 2014 2:31 am
This sure sounds like all the other “cheap” fixes to our FF problems: hydrogen fuel cells, ethanol, cold fusion, etc. And the way the information being released is just like the others, too. Long on hype, super short on detail. At this point it would appear to me to be just another investment scam.
Kevin Cobley on Fri, 22nd Aug 2014 3:33 am
This discovery is up there with cold Fusion, Hot Fusion,Thorium Reactors.
I’m still trying to sell my Trilithium.
toolpush on Fri, 22nd Aug 2014 6:04 am
Here is a similar GTL plant with numbers.
http://www.velocys.com/arcv/press/ppt/CERAWeek%20v9%20March%202013.pdf
Key financial asumptions
Facilty producing 85%
diesel & 15% naphtha
Gas price = $4/MMBTU
9,500 scf per barel
Capital cost = $10k per
bpd for 2,500 bpd plant
Operating cost = $15/bl
20 year plant life
So 1 barrel oil normally = 6000scf gas. So 3500scf is used up in the process for producing 1 barrel of oil. operating cost is only $15 but you also have to add in Capex which the above article may have left off.
Davy on Fri, 22nd Aug 2014 6:31 am
Let’s just say for a moment this new revolutionary process becomes a reality after the big step from small batch to large scale production. How much will that change our situation? There is more to life than liquid fuels though some think that is life’s magical elixir. But for simplicity let’s focus on only one of our many predicaments that being the liquid fuel predicament. We know that the quantities will not be enough to offset decline of the heavy producing giant fields. From what I read there is nothing that can make up for that declining production, not in cost of production nor in time enough to stop PO. The area it would be most attractive is the shut in reserves that are often large but too expensive to get to market. I am thinking North Slope Alaska as one example. My out of my butt unqualified unanalyzed thoughts are this could extended what we see with the Ponzi Shale revolution today. This will not bring liquid fuel costs down much when we consider its contribution to the total. The thermodynamics of gas to liquids conversion even an efficient one says we would be using a huge amount of resource if we wanted to make a difference in liquid fuel supply. This of course requires a huge investment in infrastructure and requires time. . I am not sure we have either to make the difference we need. What about the diversion of gas from its other vital traditional uses. I see it as benefiting the shale production in the US where we have the situation of having some of that product that is not suitable for liquid fuels. It appears this process can make that suitable. The only revolution I see to our liquid fuel predicament is if we told all Iraqis and their fanatic offspring in Iraq except the Kurds to move out of Iraq oil basin. We could then with a concerted huge global investment allow the Kurds to ramp up production to 12MIL then we would buy some time. OH, I forgot we have to tell the other growing economies to significantly cut growth and in the process calm the financial markets that there will be no contagion. Any way I look at it solutions to our energy predicament are fantasy.
Nony on Fri, 22nd Aug 2014 7:09 am
It’s not revolutionary. Fischer Tropsch has been around for a long time. It’s like someone having a flashy story about biofuels. It’s not a new idea. The whole thing is evolutionary, not revolutionary. And they have to fix the costs. Not saying they never will. But they won’t do it by flashy stories that act as if it were a new idea.
John Waycuilis on Fri, 22nd Aug 2014 9:43 am
Based on inference from limited publically available information, this process appears likely to be a variant of OCM (oxidative conversion of methane). OCM chemistry and processes have been studied extensively by many researchers for more than thirty years, however none of the various approaches have yet reached commerciality because of either low conversion per pass (typically less than 10-20%) and/or low selectivity (to the desired product; typically much lower than 50%). This is a classic trade-off. However for almost all commercially successful chemical processes the product of Conversion% x Selectivity% must be greater than 30% or the capital and operating costs will likely be too high to make a profit. So this is one of the key hurdles that must be overcome.
In OCM you add a limited amount of an oxidant (usually oxygen separated from air) to produce ethylene or other reactive intermediates. Extracting hydrogens from methane to make ethylene is an energetically “uphill” reaction; this energy is usually supplied by burning some of the carbon and hydrogen in the methane feed to H2O and CO2. In addition to reducing energy efficiency, this challenges selectivity since these reactions to make CO2 and H2O are very fast and favorable and compete with the slower favorable reactions. There are also unfavorable side reactions such as the formation of soot, and other undesirable products. The management of solid carbon formation which can clog the process and foul catalysts can be a challenge. Lastly, since OCM reactions take place at fairly high temperatures, long-term durability of catalysts will be another important challenge that must be overcome to achieve commercial success.
dbturton on Fri, 22nd Aug 2014 10:40 am
No one mentioned the catalysts and their costs. Are they part of the $1 per gallon price? Where do they come from? Are they scarce resources also?
Kenz300 on Fri, 22nd Aug 2014 10:58 am
Flaring gas is a waste of energy…………….
LT Brown on Fri, 22nd Aug 2014 10:29 pm
Why waste time converting the we;; waste gas to a liquid to transport with some of that new diesel fuel to a transfer station and then to a filling station. What is needed is a full life cycle cost analysis. I have a very efficient system to convert the gas from the well head and convert it directly and efficiently of 89% on site to electricity ans sell directly back to the utilities. Don’t need all of those short supply truck drivers, tankers and tractors, expensive roads in swamp or frozen ground for transport, and The total emissions is substantially less than what it takes to produce the change of NG to liquid form of gasoline which is burnt in a 17-19% efficiency ICE. My solution will work far more efficient in a full life cost analysis than this one.
Louis on Sun, 1st Feb 2015 4:01 pm
Back in the late 1950’s Italians were placing and hooking up natural gas tanks in the trunks of their Fiat 500s. Using natural gas reduced the cost of running the car. My question has been why can’t some parts of our transportation systems use natural gas to fuel various sorts of vehicles?