One more cost to consider is that new facilities would have to be built at both ends to load and unload the pellets. I guess enough hoppers would be available initially with declining coal shipments.
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Euclid MidlandMike Every article said that the pellet process would have to be at least comparable to present costs. No article said or indicated that any oil company would pay a premium for supposed safety dividend. No amount of "clarification" is going change those facts. In the article that you linked above, it says this: “Gates’ team can make these pellets in different sizes using about the same amount of energy required to render the bitumen liquid for pipeline shipping.” Using the same amount of energy for pelletizing as is used to render bitumen liquid does not necessarily mean that the cost of the two processes is the same. There is far more to the cost comparison than just the cost of energy used in the processes. I certainly do not think it is obvious that the cost of pelletizing cannot exceed the cost of using diluent in order to for pelletizing to be viable, as you say a couple posts above. I expect pelletizing could be considered viable even if the cost is higher than using diluent. If pelletizing increases safety, that too translates into a cost reduction in the form of lower liability.
MidlandMike Every article said that the pellet process would have to be at least comparable to present costs. No article said or indicated that any oil company would pay a premium for supposed safety dividend. No amount of "clarification" is going change those facts.
Every article said that the pellet process would have to be at least comparable to present costs. No article said or indicated that any oil company would pay a premium for supposed safety dividend. No amount of "clarification" is going change those facts.
In the article that you linked above, it says this:
“Gates’ team can make these pellets in different sizes using about the same amount of energy required to render the bitumen liquid for pipeline shipping.”
Using the same amount of energy for pelletizing as is used to render bitumen liquid does not necessarily mean that the cost of the two processes is the same. There is far more to the cost comparison than just the cost of energy used in the processes.
I certainly do not think it is obvious that the cost of pelletizing cannot exceed the cost of using diluent in order to for pelletizing to be viable, as you say a couple posts above.
I expect pelletizing could be considered viable even if the cost is higher than using diluent. If pelletizing increases safety, that too translates into a cost reduction in the form of lower liability.
In the Futurism article that you quoted above, I guess that I assumed that "same amount of energy" was about the closest that this pop science magazine got to talking about economics. But you are right that this does not necessarily mean that the costs are the same. I must point to the other two links quoted.
In the OilPrice.com article it says:
The method, which involves applying heat and pressure to the bitumen, is cheap – as cheap, the team says, as adding diluent to the bitumen to make it liquid enough to be transportable via pipelines.
And in the Globe and Mail article it says:
Success of the invention will depend on whether oil-sands producers and refiners are willing to adopt the technology at a cost that is roughly equivalent to shipping bitumen with diluent now, CN says.
MidlandMike Euclid MidlandMike All the linked articles state the obvious, that the process would have to be equal or less costly than adding dilutant to be economically viable. That is one way of defining "economically viable," however, all the articles emphasize the objective of increasing oil transportation safety. If this increase in safety is desired by the industry or the regulators, then the process could be economically viable even if it imposes extra costs after saving the cost of eliminating the use of diluent. In that case, the viability would also depend on whether the extra safety was deemed to be worth the extra cost of pelletizing. So, withouth clarification on this point, there really is no indication given that shows how the economic viability of the process is defined. It is not a foregone conclusion that this added safety is a free ride after saving the cost of diluent. Every article said that the pellet process would have to be at least comparable to present costs. No article said or indicated that any oil company would pay a premium for supposed safety dividend. No amount of "clarification" is going change those facts.
Euclid MidlandMike All the linked articles state the obvious, that the process would have to be equal or less costly than adding dilutant to be economically viable. That is one way of defining "economically viable," however, all the articles emphasize the objective of increasing oil transportation safety. If this increase in safety is desired by the industry or the regulators, then the process could be economically viable even if it imposes extra costs after saving the cost of eliminating the use of diluent. In that case, the viability would also depend on whether the extra safety was deemed to be worth the extra cost of pelletizing. So, withouth clarification on this point, there really is no indication given that shows how the economic viability of the process is defined. It is not a foregone conclusion that this added safety is a free ride after saving the cost of diluent.
MidlandMike All the linked articles state the obvious, that the process would have to be equal or less costly than adding dilutant to be economically viable.
All the linked articles state the obvious, that the process would have to be equal or less costly than adding dilutant to be economically viable.
The professor who stumbled on this process was actually trying to upgrade bitumen by making it less viscous and more like liquid crude, i.e., less safe. He instead made it more viscous, and pelletizable. All the linked articles state the obvious, that the process would have to be equal or less costly than adding dilutant to be economically viable.
I'll add that with pellets versus blocks, pellets will flow, blocks will not.
This was one of the greatest benefits of iron ore pelletization.
Another item which could be employed potentially, and I say this from a 100% novice perspective, is that they could add things to the pellets in advance of the refining process. Not sure what that couold be, as I understand refining is primarly based on the different boiling points of hydrocarbons, but they've had great sucess with iron ore adding in what's needed at the furnace so all they have to do is dump in the pellets.
All of the articles I find on the pelletizing invention emphasize the objective being safety, and most of the emphasis is on the safety of protecting the environment rather than reducing fires and explosions.
There is a second pelletizing proposal offered by Canadian National Railway that uses a different process for creating the pellet skin. In one article about the CN process, it says it can be done for the cost of adding and recovering diluent, which the pelletizing will render unnecessary. This is the only mention of an economic objective that I find in the coverage of the pelletizing story.
Here is the CN pelletizing story:
https://beta.theglobeandmail.com/news/national/cn-develops-technology-that-could-make-bitumen-transportation-safer/article34082304/?ref=http://www.theglobeandmail.com&
As I understand this issue overall, shipping bitumen in pipelines or tank cars requires that diluent be added to the bitumen to make it flowable for passing though pipelines or pumping out of tank cars. Then after the bitumen is delivered to the refinery, the diluent must be recovered and shipped back to the bitumen origin for reuse in thinning bitumen for shipping.
For pipelines, the bitumen must be thinned enough to flow through the entire pipe distance. For tank cars, bitumen it must only be thinned enough to flow when being unloaded by pumping. As I understand it, even with added diluent, the bitumen must be heated before it is pumped out of tank cars, and this is accomplished by running steam through pipe coils that are built into the tank car. So this adds the capital cost of steam coils in the tank cars plus the cost of operating and maintaining them.
Once the tank car is unloaded, the bitumen is pumped into a refinery plant that is fully capable of heating the bitumen from whatever temperature upon arrival before the steam coil heating. So the steam coil heating is only to unload the tank car and get the bitumen into the plant.
So, overall, what I am suggesting is to eliminate the cost of adding, removing, and returning the diluent to the bitumen origin; and to eliminate the cost of steam coil heating and its time of operation for unloading the bitumen at its refinery destination. I am not including any safety advantage for either protection from fires or protection of the environment. This objective does not involve any processing of the bitumen to modify its characteristics. While this approach saves some costs of production, it also adds the cost of new, specialized railcars and unloading equipment.
They won't know the true costs until the process is scaled up and in practical use. They are competing with dilutant, syncrude processing, and even conventional oil.
MidlandMike As I recall from the article, the purpose of the pelletizing was to save the trouble and cost of transporting the added dilutant. Safety seemed to be a lucky byproduct, and an extra selling point.
As I recall from the article, the purpose of the pelletizing was to save the trouble and cost of transporting the added dilutant. Safety seemed to be a lucky byproduct, and an extra selling point.
Back in 2014, I proposed my idea for a bread pan car that would carry bitumen blocks and dump them at the refinery by rotation of the car. I considered this to be an alternative to transporting the bitumen in tank cars that used steam coils to heat the bitumen for pumping out at the refinery.
As I recall, there was a fair amount of feeling that the steam coil tank cars were sufficient for the task. That may be so, but in any case, my goal for the proposal was to lower the cost of production by eliminating the steam heating process at the refinery along with the extra cost and maintenance of steam coil tank cars.
During that 2014 discussion, there was reference to the physical nature of bitumen which would require heating to make flowable for pumping out of tank cars. I do not recall there being a final resolution to that question, so let me ask this: What are the physical characteristics of bitumen product being shipped to the refinery at a temperature of zero degrees Fahrenheit? What is it at 80 degrees Fahrenheit?
I am asking this based on bitumen that has not been thinned sufficiently to unload from tank cars without heating the loaded car with steam coils.
Upon reading about this new idea of pelletizing the bitumen so it can be handled dry in open top cars, I was thinking that the point was what I was suggesting for the bread pan cars. That is, to reduce costs by eliminating the need for steam heating the tank cars for unloading. But while the pellet proposal would accomplish that objective, it does not seem to feature it as the objective. The pellet proposal’s stated objective is to make oil transport by rail safer, apparently because the pellets are less flammable than liquid crude, and also because the oil is encapsulated so it cannot disperse in water bodies if it is spilled in train wrecks.
But, generally, adding safety adds cost; as in stronger tank cars, slower trains, ECP brakes, etc. So it would be very helpful to know whether the proposal for pelletizing process adds cost that the inventor feels is justified by the enhanced safety since that safety enhancement is the stated goal.
For that matter, this proposal raises the question of why it is just being applied to the heavy bitumen that comes from oil sands. Could Bakken crude be pelletized to make it essentially non-flammable during a train wreck? Or is it only bitumen that lends itself to the pelletizing process? Isn’t bitumen already a lot less flammable than the lighter crude oil from wells?
CSSHEGEWISCH Has anybody considered the next step: the pellets would have to be liquefied at the destination for refining into various petroleum products.
Has anybody considered the next step: the pellets would have to be liquefied at the destination for refining into various petroleum products.
According to a link from an article in today's NewsWire, the pellets can be reconstituted back to liquid with light oil. The newswire story also the pellets could be carried in coal hoppers, however, that could get messy in the pellets get crushed under the weight of a carload of pellets. Gondolas would be safer. If there are air quality issues, they may need a top. Link to original story:
https://futurism.com/an-engineer-has-accidentally-discovered-a-way-to-make-transporting-oil-safer/
I expect that if the process looks viable, and superficially it seems promising, it won't take long for clever minds to develop a way to ramp up the volume to commercial levels. Every mass production technique started out small, in a lab or somebody's basement.
MidlandMikeThe article says: "The pellet-production technology is fully automated, and within the next couple of months it will be able to produce several barrels of bitumen pellets daily. Within a year, Gates says, the production capacity could reach several hundred barrels per day." Here is the problem... It will take a year to scale up the process to several hundred barrels per day. A rail tank car can hold about 700 barrels of crude. If they are able to scale up to that rate, this would work at field projects with a hundred or more wells to fill a unit train. They don't indicate if this would work at tar sand projects that mine the bitumen.
"The pellet-production technology is fully automated, and within the next couple of months it will be able to produce several barrels of bitumen pellets daily. Within a year, Gates says, the production capacity could reach several hundred barrels per day."
Here is the problem... It will take a year to scale up the process to several hundred barrels per day. A rail tank car can hold about 700 barrels of crude. If they are able to scale up to that rate, this would work at field projects with a hundred or more wells to fill a unit train. They don't indicate if this would work at tar sand projects that mine the bitumen.
Unless the process can be ramped up to the volume of Oil unit train per week it won't be of much use for rail transportation.
Never too old to have a happy childhood!
Here is a similar idea I proposed in 2014. We had quite a lively discussion in that thread which is here: http://cs.trains.com/trn/f/111/t/227379.aspx?page=1
Posted by Euclid on Tuesday, February 11, 2014 4:26 PM
I speculate that bitumen could be shipped by rail in a totally undiluted form in open top cars rather than in tank cars. The cars could be smooth inside with rounded corners and a fair amount of draft taper. Then for unloading, the car could be rotary dumped.
The open top car I mention could have a hinged cover to keep contaminants out. The car would not take an excess amount of time to dump. Once inverted, the contents would release and drop within seconds.
The key to dumping would be to use a release liner made of something like 20 mil HDPE. The liner would be seamless and made to fit the car cavity. It would be installed with an inserter machine prior to loading. Then when the car is inverted for dumping, the film would promote a 100% free release of the bitumen. The film liner would be discharged with the bitumen and be burned up in the processing. Very little, if any, interior cleaning of the car would ever be needed.
It seems like a real hardship to put bitumen in tank cars and then have to steam heat it to get it to flow out through a pipe. And even then, the process still requires thinning with the use of, and handling of diluent, although it does require less diluent than the pipeline option.
What I am suggesting eliminates the use of diluent. So it offers four advantages over the tank car handling method:
1) Eliminates the need to thin the bitumen with diluent.
2) Eliminates the thermal energy needed to heat the bitumen for unloading.
3) Dramatically speeds up the unloading process by eliminating the time for heating.
4) Eliminates the need to clean the car interior.
Therefore, if the process I am suggesting were perfected, it would offer rail shipment of bitumen an enormous advantage over the tank car method; and quite likely a large advantage over the pipeline method.
Here is a link to article, I got to work:
http://oilprice.com/Latest-Energy-News/World-News/Can-Bitumen-Pellets-Make-Oil-by-Rail-Safer.html
"Can Bitumen Pellets Make Oil-By-Rail Safer?"
By Irina Slav - Sep 07, 2017, 10:12 AM CDT
The article says:
According to this article a process to pelletize Alberta heavy crude has been identified making it possible to transport by open top hopper. No need to add a dilutent for pipeline or tank car. Doing so makes RR transport attractive.
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