The United States has the worldÕs largest coal reserves and Montana the highest potential for mega-mine development. Consequently, a large-scale effort to convert coal to liquids (CTL) has been proposed to create a major source of domestic transportation fuels from coal, and some prominent Montanans want to be at the center of that effort. We calculate that the energy efficiency of the best existing Fischer-Tropsch (FT) process applied to average coal in Montana is less than 1/2 of the corresponding efficiency of an average crude oil refining process. The resulting CO 2 emissions are 20 times (2000%) higher for CTL than for conventional petroleum products. One barrel of the FT fuel requires roughly 800 kg of coal and 800 kg of water. The minimum energy cost of subsurface CO 2 sequestration would be at least 40% of the FT fuel energy, essentially halving energy efficiency of the process. We argue therefore that CTL conversion is not the most valuable use for the coal, nor will it ever be, as long as it is economical to use natural gas for electric power generation. This finding results from the low efficiency inherent in FT synthesis, and is independent of the monumental FT plant construction costs, mine construction costs, acute lack of water, and the associated environmental impacts for Montana.
Once an oil exporter, California now depends on imports for more than 60% of its oil supply. This paper examines the oil production outlook for each of California's major oil sources, including California itself. Oil production trends, published geological and engineering reports, and proposed developments in California's supply area are reviewed to define supply trends, especially for the medium-to-heavy, sour crudes that are processed in California's refineries. Refinery upgrading capacity is already highly developed in California, thus it is assumed that a competitive advantage in heavy, sour crudes will continue, although refining heavy oil releases more carbon dioxide. About a quarter of California's imports are from Alaska, the rest from foreign sources including Saudi Arabia, Ecuador and Iraq. Before foreign sources became so important, California's refining industry processed California's own crudes and Alaska's North Slope crude. Like those crudes, oil from northern Saudi Arabia, southeast Iraq, and Ecuador is also sour and medium to heavy, ranging from 16 to 35° API and from 2 to more than 3% sulfur by weight. By far the most important sour crude development in California's supply area is Saudi Arabia's 900,000 BOPD Manifa project, originally slated for completion in 2011 but now facing delays. Manifa contains oil that ranges from 26 to 31° API and from 2.8 to 3.7% sulfur. Over the longer term, Alaska will continue to play an important supply role if the Chuckchi and Beaufort Seas live up to expectations. Middle East production is not increasing, yet oil cargoes from the Middle East have to pass growing Asian markets to reach California. Alaska and Mexico also supply oil to the Pacific Basin, but are facing production declines. The effect of rising Asian demand on Pacific Basin oil markets is already visible, with significant amounts of oil coming to California from Atlantic Basin sources such as Angola, Brazil, and Argentina. The US West Coast pipeline system is separate from the integrated East Coast, Gulf Coast and Midwest system, so energy security issues for the West Coast may differ from those of the country as a whole. There are policy options that could affect California's oil supply security, including increased oil development in Alaska or offshore California, development of additional oil pipeline outlets on Canada's Pacific Coast or substituting natural gas for oil if possible. All of these policy options are currently the subject of political debate.
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