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Permalink Reply by Doug Stracener on January 19, 2011 at 3:52pm

There are many many more uses for synthetic oil than just autos. Factories of all types use synthetic derivatives (oil, hydraulic fluid, etc).

 

I do agree that industry should be the investors, not government BUT for much of the past 20 years or so government has a proven track record of standing in the way of industry. My guess is they want to know that the state has some 'skin in the game' and will not pull the rug out from under them and their investment. 

Nao Ueda said:

I was also present at the meeting.

 

Since lignite does not transport well, and Arkansas does not have a lignite power plant, proponents want to turn it into synthetic fuel. Rep. Garry Smith (D-Camden), who appears to be the spokesperson for lignite proponents and was present at the meeting, claims that Lion Oil is ready to buy synthetic fuel derived from lignite. He wants the Arkansas legislature to allocate $3 million to further test lignite for commercial uses.

 

There are many problems to his argument for lignite:

 

1) When most automakers are turning to natural gas and electricity to power their next generation vehicles, how much of market demand will there be for synthetic fuel derived from lignite, which is the dirtiest and lowest grade of coal?

 

2) EPA is becoming more strict on emissions from mobile sources, e.g., cars. How much of market demand will there be for synthetic fuel derived from lignite?

 

3) According to the presenters, Arkansas lignite has the potential of generating $640 billion. If that's the case, why are they asking the legislatuer to allocate mere $3 million? Why aren't investors financing the cost of study? Why are they asking the government to subsidize the study?

 

4) If Lion Oil is interested in buying synthetic fuel derived from lignite, why aren't they interested in mining lignite themselves instead of buying from a third-party? Why aren't they allocating $3 million to study commercial potential for lignite? As Rep. Smith said, Lion Oil just finished constructing $250 million+ refining facility. $3 million is nothing for them.

 

There are many unanswered questions, and I advise caution. So far, this sounds to me like ethanol bubble that ended up busting.

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Permalink Reply by Nao Ueda on January 19, 2011 at 5:01pm

Proponents specifically said at the meeting that the fuel produced will be for auto and jet fuel.

Doug Stracener said:

There are many many more uses for synthetic oil than just autos. Factories of all types use synthetic derivatives (oil, hydraulic fluid, etc).

 

I do agree that industry should be the investors, not government BUT for much of the past 20 years or so government has a proven track record of standing in the way of industry. My guess is they want to know that the state has some 'skin in the game' and will not pull the rug out from under them and their investment. 

Nao Ueda said:

I was also present at the meeting.

 

Since lignite does not transport well, and Arkansas does not have a lignite power plant, proponents want to turn it into synthetic fuel. Rep. Garry Smith (D-Camden), who appears to be the spokesperson for lignite proponents and was present at the meeting, claims that Lion Oil is ready to buy synthetic fuel derived from lignite. He wants the Arkansas legislature to allocate $3 million to further test lignite for commercial uses.

 

There are many problems to his argument for lignite:

 

1) When most automakers are turning to natural gas and electricity to power their next generation vehicles, how much of market demand will there be for synthetic fuel derived from lignite, which is the dirtiest and lowest grade of coal?

 

2) EPA is becoming more strict on emissions from mobile sources, e.g., cars. How much of market demand will there be for synthetic fuel derived from lignite?

 

3) According to the presenters, Arkansas lignite has the potential of generating $640 billion. If that's the case, why are they asking the legislatuer to allocate mere $3 million? Why aren't investors financing the cost of study? Why are they asking the government to subsidize the study?

 

4) If Lion Oil is interested in buying synthetic fuel derived from lignite, why aren't they interested in mining lignite themselves instead of buying from a third-party? Why aren't they allocating $3 million to study commercial potential for lignite? As Rep. Smith said, Lion Oil just finished constructing $250 million+ refining facility. $3 million is nothing for them.

 

There are many unanswered questions, and I advise caution. So far, this sounds to me like ethanol bubble that ended up busting.

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Permalink Reply by Shirley Reynolds on January 19, 2011 at 9:17pm

Well I guess Saline County can forget about lignite for jobs.  It would not pass the smell test.  Too bad! We did need the jobs.

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Permalink Reply by Shirley Reynolds on January 24, 2011 at 11:36pm

What ever happen to EPA?  They want in everything else.

I believe they were wanting to provide jobs and of course it takes dollars to make dollars.

The Appalachian people have got a lot of issues and its not just strip mining.  We can send dollars to every blamed

country in the universe but can't take care of our own people. We have got to supply jobs for people to make a living

or we are going to wind up like some other countries in tents.

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