Speaking at the GTL and CTL (coal to liquids) conference in Perth yesterday, Penm said technological advancements over the past decade had already slashed the capital costs involved in GTL production by about two-thirds.
“Technological improvements have driven down the costs to produce GTL, however, more research is needed so the sector can compete with the main petroleum industry,” he said.
Japan Oil, Gas and Metals National Corporation researcher Yoshifumi Suehiro, who also spoke at the conference, said his research team had developed two new technologies that would significantly reduced the cost of building and operating a GTL plant.
Unlike other GTL processing technologies, JOGMEC’s process can use the carbon dioxide present in raw natural gas, which eliminates the need for a CO2 extraction unit. Meanwhile, a second process consumes less oxygen than traditional methods and so an O2 generator is not required.
These two processes, which underwent a four-year trial by JOGMEC at a specially-built GTL pilot plant, can reduce the cost to run a large-scale production plant by about 20%, Suehiro said.
Meanwhile, Penm argued that GTL investment would depend on long-term projected oil price movements.
He said ABARE believed oil prices would remain high, at least in the short-term, generating interest and investment in alternative energy sectors, he said.
“During the time of high oil prices in the late 70s to early 80s, research was poured into developing alternative fuels,” he said. “However, these prices soon plummeted and the research stopped, because it became too unprofitable.”
“Now that we’ve entered a sustained era of high oil prices again, researching the alternatives has started again.”
But Penm says ABARE is not forecasting a sudden drop in oil prices this time around. However, he did predict oil prices could ease to about $US40 per barrel by about 2010, as world economic growth returns to more sustainable levels.
“There hasn’t been significant investment in new capacities – so it will take some time for production to expand and supply to catch up,” he said.
“However, concerns over whether we’ve reached ‘peak oil’ could keep prices high in both the short term and long term.”
