IFT's 'alt-fuel' petition for gas condensate rejected

Diesel Fuel News, Dec 9, 2002 by Jack Peckham

U.S. Department of Energy (DOE) has rejected a petition by International Fuel Technology (IFT) to designate natural-gas condensate blends as an Energy Policy Act (EPAct) "alternative fuel" for fleets.

Under the federal EPAct law, certain government and fuel-provider fleets are supposed to buy a portion of new vehicles that are capable of running on "alternative fuels," meaning anything except crude-based gasoline or diesel fuel. In most cases, fleets buy "flexible-fuel" vehicles capable of running on ethanol but actually running on gasoline.

Under the EPAct law, DOE must review "alternative fuel" petitions to verify whether the candidate fuel is "substantially non-petroleum" and offers "substantial energy security benefits" and "substantial environmental benefits" compared to crude-based fuels.

The proposed condensate fuel strikes out on all three counts, according to DOE's letter to IFT.

"While the term 'natural gas condensate' suggests materials that are by-products of natural gas processing, our understanding is that the term 'condensate' is most often used within industry to designate material produced within refineries that is petroleum in origin, as opposed to natural gas liquids from field processing of natural gas," the DOE letter says. That means that "condensate" doesn't necessary mean "substantially non-petroleum," DOE says.

"Moreover, while approximately half of what the [U.S.] Energy Information Administration (EIA) classifies as natural gas liquids (NGLs) are arguably non-petroleum in origin, these are generally blended with other feed-stocks in refineries and end up in gasoline and diesel fuel, used as refinery fuel, or used as petrochemical feedstocks.

"EIA classifies all NGLs as petroleum products for these reasons and because their origins are typically not distinguished in commerce. Diversion of a portion of natural gas liquids to diesel fuel would represent no net reduction in the amount of petroleum fuel demanded. Therefore, blending in diesel fuel of even those NGLs that are non-petroleum in origin would appear to fail to meet the second criterion in sec. 301(2) [of EPAct] of yielding 'substantial energy security benefits."

Nor did IFT provide detailed emissions data that would "represent in-use fuel/vehicle combinations and meaningful comparisons with baseline fuels," DOE said. This comparison, DOE said, should include crude-based 15-ppm sulfur ULSD (the main diesel fuel expected in 2006) and include tests on engines with exhaust catalysts expected in 2007 for particulate matter (PM) and nitrogen oxides (NOx) control. DOE also pointed out that IFT didn't include a required analysis of life-cycle greenhouse gas impacts from producing and using this condensate fuel.

On a related front, DOE is separately considering "EPAct" petitions for FischerTropsch diesel (FTD), as proposed by Syntroleum, Rentech and PetroSA (see Diesel Fuel News 10/28/02, p12). All of these aim to include FTD made from foreign gas fields in "EPAct" qualifying fuel list.