Synthetic petrol cost 'less than refining’

Press, 15 June 1979, Page 4

Synthetic petrol cost 'less than refining’

Synthetic petrol could be made in New Zealand at less cost than it takes to refine imported oil, according to an oil company. Mobil Oil (N.Z.), Ltd, has for many months been advocating the use of Maui natural gas as a feedstock for synthetic petrol, but it has now received new encouragement from the Minister of Energy (Mr Birch). Mobil has developed two processes for making synthetic petrol, and Mr Birch saw one of these on his recent visit to the United States.

He has asked the Liquid Fuels Trust Board, the body responsible for advising the Government on the possible uses of the Maui resources, to include consideration of this process in its report, due to be released by August 31. The timing of the report will coincide with a report being prepared by technical advisers to the Marsden Point oil refinery, on future development of the refinery. Mobil’s director of planning and supply in Wellington (Mr R. W. L. Makeig) said that the process Mr Birch saw in the United States had been proved economic about eight years ago.

However, no pilot plant has been built, although the company is believed to be planning one for West Germany. The establishment of a commercial plant would take another three or four

years after the pilot plant had been built, Mr Makeig said.

An experimental plant in the United States has produced four barrels of petrol a day (a barrel is the equivalent of 40 U.S. gallons), and the pilot plant in West Germany would be built to produce 100 barrels a day. The' cost of establishing a commercial plant in New Zealand would depend on its size, but the likely cost would be SIOOM for a synthetic petrol plant, Mr Makeig said. A methanol plant would also be needed, and the cost of building this would be extra. Mr Makeig said that synthetic petrol could be produced for 16c or 17c a litre. The cost of producing petrol, refined from imported oil, was 17c to 19c a litre. Mr Makeig emphasised that these were costs, and not prices. Argument about the synthetic petrol process had ignored the “fixed base process” that had been developed in the United States by Mobil about 1971, he said. Instead, debate had ranged round the "fluid base process” that was still being developed, and which had not yet been proved commercially.

Central to the issue is the estimated lifespan of the Maui gasfield. Opponents of the synthetic petrol process have asserted that it would

use up the Maui resource

: sooner than other possible ; uses such as methanol production.

Whichever plan receives final Government approval a methanol plant would have to be built, and the Liquid Fuels Trust Board has been letting out planning contracts on a methanol plant since late last year. Methanol could be used as a blend in imported petrol to “spin out” the use of imported oil. Its introduction would require minor adjustments to most car engines, some fuel lines, and paints, Mobil’s attitude to methanol blends is that thev would not make great inroads into New Zealand’s huge bill for oil imports. Production of synthetic petrol, however, would have an immediate effect on the oil bill, they say. The company has done its homework to meet the objections of its opponents. Once Maui gas was depleted, they say, the plant could still produce petrol from methanol derived from biomass or gasified coal, or even from ethanol derived from trees and other plants. “The arguments against synthetic petrol are becoming academic," Mr Makeig said. The Government’s attitude was that construction of a

synthetic petrol plant was a “question of economics,” depending on the cost of other fuels. "I believe we have now

passed that point,” he said.