Petroleum products derived from conventional crude oil constitute 55 percent of end-use energy deliveries in the United States and more than 95 percent of energy used in the U.S. transportation sector. Although less CO₂-intensive per British thermal unit (Btu) than coal, oil-derived liquids account for 44 percent of the nation’s carbon-dioxide (CO₂) emissions.¹ There also are concerns about the long-term cost of petroleum-based energy, the economic and other implications of large wealth transfers to oil exporters, and price instability in petroleum markets.²

These rising concerns about both energy security and greenhouse-gas (GHG) emissions from use of petroleum-based motor fuels have...

The Synthetic Fuels Corporation (SFC) was a U.S. government–sponsored program to develop a capacity to produce synthetic fuels in the early to mid-1980s. Critics of new efforts to promote unconventional fossil fuels often use the poor results of SFC as an argument for keeping the government out of the role of alternative energy–resource development. Our brief review of the SFC experience in this chapter is intended to highlight cautionary lessons and to indicate how current circumstances differ from those of SFC.

Dramatic oil-price increases due to world oil-market upheavals in the 1970s gave special impetus to the creation...

This chapter presents an overview of technology and costs for CCS as it relates to extracting bitumen from oil sands and producing liquid fuels from coal. Thecapture of CO₂refers to methods of isolating a concentrated stream of CO₂ and pressurizing it in preparation for transportation by pipeline to permanent storage.Storage of CO₂refers to permanent, belowground storage of CO₂. Significant research, development, and demonstration are under way in the United States and throughout the world to identify sites that would support large-scale, permanent, geologic storage of the CO₂. Several large-scale tests are under way.

The systems and...

This chapter considers the use of oil sands to produce liquid fuels via the extraction of bitumen and conversion to SCO. The analysis includes a discussion of the North American oil-sand resource base, the technologies involved in extracting and upgrading bitumen to SCO, the CO₂ emissions associated with oil-sand operations, and options for capturing and storing plant-site emissions of CO₂. It also addresses limiting factors with respect to the expansion of oil-sand development in Canada.

Oil sands are deposits of bitumen in sand or porous rock. Bitumen, a mixture of hydrocarbons that, at normal temperatures and pressures, is a solid...

This chapter considers the production of CTL fuels via indirect liquefaction, which is the method for producing liquid fuels from coal that is currently receiving the most attention in the United States.¹ The analysis includes a discussion of the U.S. coal resource base, the fundamental technologies involved in CTL, the potential CO₂ emissions—based on very preliminary plant designs—and options for capturing and storing plant-site emissions of CO₂, and possible scenarios and limiting factors with respect to the development of a CTL industry in the United States.

The United States possesses vast coal resources. Estimates of proven coal reserves...

In this chapter, we describe how the unit costs of both SCO and CTL would compare to the prices of products derived from conventional crude under different assumptions about the production costs of these unconventional fossil-based fuels and the cost of CO₂ emissions. Since products derived from oil sands and CTL are being compared to conventional crude-oil products, we must also account for the uncertainty that surrounds future world oil prices and apply assumed costs of CO₂ emissions to conventional fuels.

In this analysis, we look at a range of potential future oil prices in 2025 taken from the 2007...

In this final chapter, we first provide a synthesis of our analysis of the key influences on the cost-competitiveness of SCO and CTL relative to conventional petroleum. We then turn to broader conclusions and implications of the analysis.

Tables 7.1 and 7.2 show some of the key information from Figures 6.1 through 6.3 in Chapter Six. Table 7.1 identifies the highest cost of CO₂ emissions at which either SCO or CTLwithout CCSis cost-competitive with conventional petroleum, given different assumptions about oil prices (EIA’s reference and high-price cases) and technology costs (base and high-price cases as presented in Chapters...