Cost of Synthetic Fuel

In table above various cost estimates for liquid and gaseous fuels produced from coal and shale are presented. The consensus of the industrial companies most involved in these processes is that shale oil is the least costly of any the alternative fossil fuels. It is believed to be roughly cost-competitive with the international price of crude. Taking refinery-grade crude from shale oil as reference and recognizing that fuel derived from multi product processes is independent upon the value assigned each product produces the costs (given in table bellow) of synthetic fuels relative to those shale oil.

Cost of Synthetic Fuel relative to shale

Low-Btu Gas 0.8 to shale

Medium-Btu Gas 0.9 to 1.1

High-Btu Gas (SNC) 1.2 to 1.3

Methanol 1.3 to 1.5

Direct Coal Liquids 1.2 to 1.6

Indirect Coal Liquids 1.4 to 1.6

Gasoline, Middle Distillate 1.5 to 2.0

In term of these capital investment for synthetics fuel plants, the decade of the 70’s has seen an order-or-magnitude escalation in the estimated capital costs. Currently a 250.000 MMBtu/Day (40,000 bbl/day) Plant is estimated to cost 2 to 3 billion dollars, i.e.,$50,000 – 75,000 per daily barrel equivalent. This compares to the $10,000 - $20,000 per daily barrel of conventional petroleum in the most difficult environment in the north sea or Alaska and to cost of under $1,000/daily barrel in area which are easily accessible is shallow wells or large high-production fields. These large cost differentials of synthetic fuel plus the immature state of the technology are strong indications that a cost competitive synfuel technology is not yet truly here. Also the cost of developing the very heavy oil or large tar deposits such as those in Canada or the Orinoco belt in Venezuela are very real competitors to synfuels price in the worlds market.