I disagree. You can produce 42 gallons of jet fuel with $10 in coal. It's extremely cost effective. Furthermore, while normal fuel has a shelf life of 3-4 months this fuel has a shelf life of 8 years.

 

$10 of coal yes. But how much $$$ in equipment, manpower, and most significantly ENERGY to drive the conversion process? That's where the real cost comes in. And what fuel do you burn to generate the energy? More coal most likely, and it's not a super-clean fuel especially when you're using an older power plant. Power plants cost billions and take decades to break even, so we're not going to tear down all the older plants and build new high-tech green ones tomorrow.

Actually DARPA and the USAF are conducting test flights with a synthetic fuel, but I actually saw the contract info for the next phase of the project....it's pretty expensive right now. Currently the researchers estimate that their process (using natural gas now but hoping to move on to coal) could be cost-effective if oil stays above $50/bbl. Let's hedge their natural optimism and assume that $75/bbl is the break even point. The DoD will probably procede because they want to eliminate their dependence on foriegn oil in ten years...even if it costs a little more. For commercial applications, somebody who was going to invest billions in conversion plants would want to be pretty certain that oil prices will stay high...and that is not certain right now. Remember if OPEC sees something like that about to become large-scale reality they are likely to flood the market in an attempt to scare away investors. This tactic would almost certainly work in the short and mid-term.

But like I said before, the technology is close enough that it should be ready when we really need it, as determined by oil prices...so when demand actually exceeds all realistic supplies, the price will go up for sure.

 

The reason jet fuel prices shot up so much post-Katrina was that many refineries switched to producing gasoline, which is easier to produce and more marketable, to recover from their losses, but since then it's gone back down a little bit. The main problem we have now is not the fuel prices, but the fare prices...if only people would realize that. In order to pay for increased fuel prices, got to raise fares...problem is, nobody can without losing a LOT of customers to the competition these days. So, mgmt usually says let's cut the labor costs (And we know what that means). I don't know if fuel hedging will work anymore, since no one knows if the price will increase or decrease for the next few years. Should be interesting to watch.

 

Magic 8 ball says "unsure shake again"

 

$40-$45/bbl inclusive.

http://www.futurepundit.com/archives/003453.html

I doubt we'll see that price point ever again, so seems like a win-win. Liquefied coal-to-fuel actually burns cleaner than other fuels because they take the sulfur out from my understanding. I think you're referring to the University of Pennsylvania study, correct?

Good points about the private sector not wanting to invest in CTF plants. Although I disagree with OPEC flooding the market. They are already pumping out as much as they possibly can for the most part.

 

Looks like you've got the right name for this thread, Helium3... Lets put a trillion dollar down payment on a helium three harvest on the moon. we'd be set for many lifetimes if we could only figure the logistics of such an endevor.

 

Yeah....I'm a geek. Thanks for taking notice of the handle.

That might be a great investment for 20 or 30 generations down the line.

The current use of H3 is in cold fusion technology in a research capacity only.
The amount of H3 required to actually create usable power on a large scale is phenomenal.
Until we can harvest it from the gas giants or create it on a grand scale we have little or no hope of actually utilizing it for the cold fusion process in a commercial application.

 

I still say we should have nuclear planes.