Should we be looking to methane for vehicles, or ethane?\u00a0Should we be looking to carbon storage or carbon use?<\/p>\n
It\u2019s summer now in the northern hemisphere \u2014 the high season for sports. As any fan of any game will tell you, perhaps the only thing more unhappy for the fans than a bad game or a rough season is a bad trade.<\/p>\n
In 1988, the New York Yankees traded Jay Buhner for Ken Phelps, and Yankee fans still bristle when you mention it. Phelps would go on to play just 131 games for the Bronx Bombers, hitting just 17 home runs and batting .239. Buhner would go on to play 13 seasons and rack up 310 homers for the Mariners.<\/p>\n
In the energy business, you meet a lot of traders \u2014 some are among my closest friends and relatives, and they hate bad trades even more than some people hate Mondays, or the rain, or the Macarena. They dwell on them.<\/p>\n
But bad trades are always with us \u2014 because they are bad ideas that look like good ideas at the time, or seen from a narrow perspective, or seen from the wrong set of expectations.<\/p>\n
Two bad trade ideas going around these days in the energy business are:<\/p>\n
1) The idea that sequestering CO2 emissions from power-gen is a better deal than using the CO2 to make useful products.<\/p>\n
2) The idea that\u00a0using methane for energy\u00a0and ethane to make ethylene, is a better deal than using methane to make ethylene and ethane as a fuel.<\/p>\n
Those are both popular orthodoxies. Challenging them, you might find yourself on the outs with powerful interests. (Psst! Just like telling George Steinbrenner not to trade Jay Buhner might have been a career-shortening move).<\/em><\/p>\n How orthodox are these orthodoxies? In its draft rule-making on CO2 emissions, the EPA has embraced carbon storage as the preferred method; while you only have to google \u201cethane cracker\u201d or \u201cCNG\u201d to see all the proposed activity around shale gas. But let\u2019s see if there are reasons to re-think those trades.<\/p>\n Lindsay Leveen, who was best known as the technologist behind the Itz a Gaz<\/strong> duel-fuel system, which proposed some years ago to supplement gasoline or diesel with a methanol fuel supply as path towards radically improved economy and performance has lately been blogging as The Green Machine. He proposes that ethane, rather than methane, is the right fuel<\/a> to focus on in this era of shale gas surpluses.<\/p>\n The reasoning is simple. He writes:<\/p>\n \u201cEthane is the step sister of the other natural gas liquids<\/a> propane and butane.\u00a0 It is also the step sister of methane in pipelined natural gas\u2026The USA is actually swimming in ethane.\u201d<\/p>\n Decrying ethane-to-ethylene crackers, he adds: \u201cMore plastics are not what the world needs<\/a>!\u00a0\u00a0 Other companies are lining up to cryogenically liquefy and transport ethane to far off lands in Europe and Asia in specialty LNG type cryogenically refrigerated ships.\u00a0 This is also a waste of our ethane resource and an expensive and non-green option to deal with the glut of ethane.\u201d<\/p>\n Ethane liquifies at a fairly low presure, he notes \u2014 citing the example of wleding tanks, which contain 90% liquid ethane. \u201cMany more BTUS of fuel can be stored in the same volume of cylinder compared with CNG.\u00a0 Compared with LNG there is much less logistical and infrastructure hassle.\u201d<\/p>\n As a fuel?<\/strong> Liquid ethane has 70% more BTUs per cubic foot than methane, and is low in sulphur. It releases less CO2 than gasoline, and you get twice the range with liquified ethane then methane.<\/p>\n Cost?<\/strong> On a per gallon basis, you half the fuel energy content of diesel, but it trades for roughly 30 cents a gallon. So, think 60 cents per gallon for diesel-equivalent miles.<\/p>\n What about alternative uses?<\/strong> Leveen writes: \u201cCompanies are considering projects to covert ethane gas to liquids by reforming the gas and then synthesizing methanol, DME, gasoline, or diesel from the synthesis gas produced in the reforming.\u00a0This is massively capital intensive and wastes over half of the energy content of the gas with large amounts of CO2 being emitted due to the low efficiency of the gas to liquids synthesis process.\u201d<\/p>\n Starting where?<\/strong> Leveen proposes railroads. \u201cRailroads have investigated and considered<\/a> LNG but the logistics and costs of a cryogenic fuel are simply too high.\u00a0 It is very simple and easy for a train to have several tube trailers of ethane on flat bed carriages behind the locomotive that supply the ethane fuel to the locomotive for the long haul propulsion of trains.\u00a0 For shunting and rail-yard work the locomotive could easily be fueled from a single tube trailer on a carriage behind the locomotive.\u201d<\/p>\n Potential?<\/strong> Leveen says that there are up to 250,000 barrels per day of ethane now being reinjected or flared \u2014 roughly 2% of the US fuel supply on a volume basis.<\/p>\n In California, a company called Siluria is showing us what to do with the methane<\/a>. Rather than compress it into CNG, why not make ethylene, far more cost effectively than a naphtha or ethane cracker can do it?<\/p>\nEthane vs methane<\/h4>\n
What about methane?<\/h4>\n