5/23/2008

SYNTHETIC FUEL

USING THE KARRICK PROCESS TO TURN COAL INTO FUEL AND ELECTRICITY | Ben Ross Northern
Region Young Nats

Ben Ross

Synthetic Fuels

Contents
I. II. III. IV. V. Brief Outline The Karrick Process Outlined Article in Craccum Article for Craccum (shortened) Draft Lobby Pamphlet

Ben Ross

Synthetic Fuels

Brief Outline
The price of petrol and energy is running away now at OVER $2 a litre for petrol and diesel at $1.739/l, causing major pain to Kiwis wallets and standard of living. However a solution to use New Zealands own resources to ease the pain is waiting to be exploited. It is called synthetic fuel and is made from coal. Using what is called the Karrick Process, our own coal, free from world markets and instability is converted into multiple products for the New Zealand economy. Products such as petrol, diesel, fuel oil (industry), kerosene (jet fuel) and electricity (by product of the process). The process is clean and the converted fuel burnt lets off less particle emissions than standard fuel. What is the most important is that NZ made synthetic fuel frees us from the international oil market, stabilising and even giving relief on our energy prices and our wallets. The cost is $3b to set up the require plants and infrastructure but the benefits (being): This is what 1000 tones of New Zealand Coal converted gives you (per plant): 100,000 kilowatt hours of electricity (enough to power a large chunk of South Auckland) 25% converts to petrol (at 100 Octane grade with no additives added) 10% to kerosene (Basic component for jet fuel) 20% to fuel oil (heating and possibly diesel) Burns clean, and provides savings and does not mean we have to use the environmentally unfriendly biofuel

Investment return would be made approximately five years after completion on the plants with savings flowing through within 18 months after the first plant becomes operational. To fund the debt for the plants and infrastructure required a 50/50 Private Public Partnership would be required, however with returns to be made with five years after completion and very little chance of oil falling below $US80 a barrel again, taking on board such debt should be tolerable to taxpayers and investors. The location of the plants (two are required for future proofing) would be one in Taranaki and the other at Huntly, both are close to major rail or shipping lines for the coal, close to major powerlines and pipelines with Huntly even sitting on coal mines itself. Ironically the buy back of the trains could play a key part as the key link in getting coal from the mines to the plants. Also I would recommend an investigation into our own refining capacity at Marsden Point, there is a chance the refinery could bottle neck fuel from the Synthetic Plants without either further expansion or even a new refinery at a location to be determined.
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Ben Ross

Synthetic Fuels

Number crunching done provides the following:

$3b needed to fund the infrastructure and capital for the two Synthetic Plants Construction Time: Five years at full speed with NO hold ups from the RMA Investment Return Time: Five years after completion of both plants so ten years after project start The Higher the price of crude oil, the faster the rate of return, although oil MUST be US$80 a barrel plus for the plants to be viable Savings to consumers and producers change every time oil moves however conservative figures show Price of 91 petrol at the pump going down to $1.50/l conservative; $1.15/l at optimum diesel about 10% cheaper again. Further Number Crunching on savings to consumers An Individual on $50k a year Tax total (Current) $11,370 per year Gross Income: $961.53 per week $218 tax average per week Net Income $ 743 per week

Price on Fuel (91 grade): Savings Between $31-$48 on fuel alone Total Savings (after Nationals north of $50 tax cut and $35 saving on food estimate) between $110-$130 a week back to the consumer 50l tank @ 2.129/l = $106.45 50l tank @ $1.509/l = $75.45 (on conservative estimate) 50l tank $ $1.159/l = $57.95 (optimum estimate)

Resource Expectancy: Recoverable Coal in NZ: 200-800 years according to GNS and School of Geography, Geology and Environmental Science at University of Auckland Synthetic Fuel Plants Capacity Two will serve upwards of 5.5m people and has a shelf life of 75 years per plant It is expected that if our refining capabilities are extended to serve the maximum potential of the plants, we could be exporting energy ONCE our own needs are met.

Ben Ross

Synthetic Fuels

More information on the Karrick Process can be found here: http://en.wikipedia.org/wiki/Karrick_process I acknowledge the Synthetic Fuel Plants are a long term (10 year) plan for a medium (75-100 year) solution and that more short term gains are needed as well. While the plants are being established, the best short term methods apart from tax excise cuts would be to order Marsden Point to max out her diesel production to slow down price rises. I would advocate away from biofuel as Dr Nick Smith would attest and know that Synthetic Fuels are a medium term solution until electric and fuel cell vehicles are main stream in around 30+ years time. (Article continues on with technical aspects of the Karrick Process found here http://en.wikipedia.org/wiki/Karrick_process as well as a promotional material and an article published in Craccum)