THE PROSPECTS FOR SYNTHETIC FUELS IN THE UK

This paper contains a brief review of world fossil fuel resources and the balance between the forecast demand and supply for oil and gas over the next 35 years, an assessment of the probable production costs of synthetic fuels and the system investment likely to be required, and a consideration of the major uncertainties and a summary of the main implications for the energy industries. A comparison is made of the properties and costs of synthetic fuels, which include the following two main groups: (1) conventional hydrocarbon fuels produced from fossil materials such as coal, oil shale and tar sands, i.e. methane, fuel oil and petrol; and (2) non-fossil fuels derived from water and possibly limestone using nuclear power or nuclear heat, e.g. methanol and hydrogen. The following conclusions are drawn: (1) Even if world demand for liquid and gaseous fuels continues to increase by as little as 2 percent per year past 2000, the production from fossil sources is unlikely to be sufficient to meet demand, so that it is probable that large scale production of non-fossil synthetic fuels such as hydrogen and methanol using nuclear energy will have to start during the period 2000-2030; (2) There is a possibility that hydrogen can be produced by thermochemical technically feasible the cost seems unlikely to be much lower than for electrolytic hydrogen; (3) In the long run it should be possible to produce synthetic oil and gas from fossil sources for roughly 3-4 times 1972/73 costs, but non-fossil fuels could increase costs by a further factor of up to 2 for hydrogen gas and 3-6 for liquid fuels; and (4) The capital investment in energy systems is likely to increase by a factor of 2-4 as synthetic fuels from coal are introduced, and by a factor of roughly 15 when the production of non-fossil fuels starts, and the accumulation of such vast capital resources could present serious problems when the time comes to produce non-fossil fuels.