With crude oil price projected to top $140 per barrel by 2035, alternative fuel technologies, which can produce gasoline at the equivalent of $75 per barrel, will rise, according to a Lux Research report.
Bringing the Heat: Gas- and Waste-derived Synfuels, says the price disparity between crude oil and other resources — coupled with the emergence of cheap and abundant shale gas, especially in the US — is transforming the alternative fuels landscape, opening up opportunities to produce cheaper gasoline.
Natural gas and waste biomass will become increasingly viable choices for making liquid fuels, says Daniel Choi, a research associate at Lux Research and the lead author of the report.
Lux Research analysts studied the cost of 21 biomass-to-liquids (BTL) and gas-to-liquids (GTL) processes. Among their findings:
- Methanol-to-gasoline is the cheapest option. At small scale (about 1,000 barrels per day), methanol-to-gasoline (MTG) is the most competitive route for liquid fuels from either natural gas ($82 per barrel) or waste ($75 per barrel).
- GTL can make ethanol more cheaply, but offers limited product value. Among GTL approaches, ethanol synthesis has the lowest cost of $80 per barrel, while Fischer-Tropsch costs $86 per barrel and MTG costs $82 per barrel. However, ethanol has less product value, due to blending limits and lower energy density.
- Waste biomass is a ubiquitous alternative. The Energy Department says waste biomass could produce 50 billion gallons of ethanol, roughly 3.5 times the current production. Processing the waste is challenging, adding $3.60/bbl to the fuel price — but that’s often more than offset by feedstock cost savings.
In other alternative fuels news, Alaska Airlines earlier this week said it will begin using biofuel to power its Hawaii flights as soon as 2018 and Gevo has begun supplying the US Coast Guard research and development center with initial quantities of finished 16.1 percent renewable isobutanol-blended gasoline for engine testing.
Alternative fuel developers face a make-or-break year as leading companies, such as Amyris, Poet, Solazyme, Gevo, Novozymes and Mendel, race to show substantial revenue, according to a report by Lux Research published earlier this year.