GTL Fuels From Natural Gas Earn Alternative Fuels Designation

Natural gas-based liquid fuel seen as cleaner replacement to diesel which in California generates estimated 70% of all vehicle emissions.

Published: 21-Dec-2000

DENVER, Dec. 20 /PRNewswire/ -- The 106th U.S. Congress has designated domestically produced Gas-to-Liquids (GTL) fuels made from natural gas as an Alternative Fuel (AF) as defined under the Energy Policy Act of 1992 (EPACT). The measure is part of the Omnibus spending bill recently signed by the President. The measure was sponsored by Alaska Senator Stevens and Congressman Don Young with Senator Murkowski. The effort was supported by representatives of Alaska Natural Gas to Liquids (ANGTL), Forest Oil Corporation (NYSE: FST) and Rentech, Inc. (Amex: RTK).

GTL fuels are sulfur- and aromatic-free. It can be used to replace conventional diesel fuel to achieve lower emissions and cleaner air. GTL fuels are also biodegradable.

GTL is a well established technology; South Africa has produced GTL fuels on a commercial scale since the 1950's.

Interest in GTL fuels has increased has discussed within the last two years as states have struggled to reduce emissions form motor vehicle. In California alone it is estimated that 70% of all vehicle emissions are generated from diesel-driven vehicles. The Environmental Protection Agency (EPA) has proposed tough standards for the reduction of sulfur in diesel fuel and gasoline. These standards, planned for implementation by mid-2006, have spurred interest in GTL by major energy providers and technology providers. British Petroleum, Chevron, Conoco, ExxonMobil, Rentech, Sasol, Shell, and Texaco have all spent considerable amounts of capital developing GTL technologies or venturing with GTL technology providers in a race to fully exploit this process.

The designation of GTL fuels as alternative fuels could lead to the reduction or elimination of federal fuels excise, and road taxes on the purchase of GTL fuels. The designation would act as an incentive to diesel fuel users to switch to cleaner burning GTL fuels. It may also help to alleviate the expensive capital requirements governmental agencies must undertake to modify their vehicle fleets to meet the emission goals of EPACT using other forms of energy.

Extensive testing has shown that GTL fuels reduce overall emissions by a minimum of 25% including reductions of: 50% for carbon monoxide; six times less hydrocarbons; up to a 66% reduction in Particulate Matter without traps; and, an approximately 50% reduction in nitrogen oxides without traps. (No GTL tests to date have been conducted with the use of traps.) The sulfur-free nature of the fuel will allow for the use of catalytic converters that may result in greater emissions reductions. The quality of GTL fuel will also greatly extend the useful and effective life of the proposed particulate traps required to meet the increasingly restrictive emissions standards.

GTL fuel can be used directly in diesel-burning vehicles without any engine modifications. As GTL fuel contains no sulfur, it may also be used as a blend-stock and mixed with fuel containing 30- to 60-PPM sulfur to meet the 2006 standard. The United States' existing road fuels delivery infrastructure can transport GTL fuels obviating the need to develop a new infrastructure (a major drawback with alternative fuels such as compressed natural gas (CNG) and liquefied natural gas (LNG)). An additional advantage is that existing diesel engines can use GTL fuels without modification (which is again a drawback for alternative fuels like CNG and LNG). GTL fuels, due to their clean qualities, are also an excellent feedstock for fuel cells as they contain about twice the amount of hydrogen as methanol, another oft-mentioned potential feedstock fuel for fuel cells.

The alternative fuels designation could provide for the development of U.S. natural gas especially in Alaska where much of the state's natural gas resource has no local market. GTL could provide an effective means to develop this "stranded" resource and aid the United States in reducing its dependency on foreign oil while providing clean burning fuels to the country.

Dennis L. Yakobson, president, chairman, and CEO of Rentech, Inc. stated, "We are very pleased with this development and believe it will expedite the introduction of the optimum diesel fuel potentially available with minimum cost to existing diesel engines and existing delivery infrastructure. We appreciate the efforts of all the parties involved in helping to bring alternative fuels designation to GTL fuels produced from natural gas."

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