When Is the Future for Synthetic Fuel?

Zheng Cui
November 10, 2014

Submitted as coursework for PH240, Stanford University, Fall 2014

The Necessity of Hydrocarbons

Fig. 1: Projected world oil reserves. The author predicts that the crude oil will be depleted in approximately 70 years based on the assumptions mentioned in "The depletion of crude oil" section. [7]

Hydrocarbons are chemical compounds consisting entirely of hydrogen and carbon atoms. [1] The majority of hydrocarbons are refined from crude oil and make up a primary source of energy in today's society. [2] Due to fundamental constraints of chemical bonding, hydrocarbons have extremely high energy densities that are unmatched by any other common types of fuel. [1] For comparison, all the modern batteries have no more than approximately 1 percent of the energy density of hydrocarbons'. [3] This is the primary reason that cars and airplanes use almost exclusively crude oil products as fuel sources and will probably continue to do so in the future. Crude oil products are also very safe because the reaction (burning) is easily controllable by eliminating oxygen. [1] For such reasons, many contemporary technologies (such as aviation and the majority of motor vehicles) still rely on crude oil products despite rising prices in recent years. This article will make an reasonable assumption that no radical changes will be made in transportation technology (just like none was made in the last century) such that crude oil products become obsolete. As the crude oil reserve gets depleted but the demand remains undiminished, artificial crude-oil-product replacements, namely synthetic fuels, will become important.

Synthetic Fuels

Synthetic fuels are crude-oil or crude-oil-processed-fuel equivalents that are produced from other sources such as coal, natural gas and biomass. [4] The concept and technology behind synthetic hydrocarbon fuels are not new. The predominant process for synfuel production is called the Fischer-Tropsch process, which was invented during the Second World War. [4] Currently, the crude oil supply is still plentiful and thus the price of synfuels, which is high due to the cost of initial implementation of infrastructure, is not competitive in the market. [5] But as the crude oil price continues to rise, or as the world oil reserve gets depleted, natural gas, coal and other feedstocks will be used to produce reasonably priced synfuels for consumption.

The Depletion of Crude Oil

Crude oil is a nonrenewable resource that was formed over millions of years. [2] The estimated proven world oil reserve is below 1700 billion barrels and the estimated undiscovered conventional oil is below 600 billion barrels. [2]

In Fig. 1, the lines start with the proven world oil reserves in 2013. The slopes are the production and consumption rates of crude oil in 2013. That is, Figure 1 assumes that no new oil will be discovered and the production and consumption rates remain constant. Under these assumptions, I predict that the world oil will run out in 50 years. Potential undiscovered oil will add no more than 20 years of conventional oil consumption. [2] Unconventional oil, such as heavy oil, oil sands and shale oil cannot be efficiently extracted yet. [2] Therefore, the limited amount of oil is not sufficient for current consumption for more than 70 years according to my projections. Due to the irreplaceable role of hydrocarbon fuels mentioned in the last section, synthetic hydrocarbon fuels will become a major source of energy within this time frame regardless of the socio-economical situation.

Fig. 2: Crude oil price history and projections to 2040. [6]

The Economics

As crude oil is still plentiful at the moment, synthetic fuels are not competitive in terms of the production cost. One may think that when the cost of oil becomes too high, society will simply adopt new technologies and make crude oil products obsolete. This line of reasoning, however, neglects the limitations of technology posed by fundamental natural laws. In reality, aviation and long distance car traveling will probably still rely on liquid hydrocarbon fuels in the foreseeable future. As discussed in the previous section, the depletion of crude oil necessitates that synthetic fuels become relevant within the next century. But can this come faster due to an increase in the crude oil price or improvements in synfuel technology? Princeton researchers estimate that installing enough infrastructure to replace 50% of the U.S. national petroleum-based fuel supply with synfuel would put the synfuel cost at $75.83 per barrel. [5] The synfuel price rises to $95.11 per barrel if enough facilities were built to replace 100% of the petroleum fuels. [5] Oil price trends from recent years and both high-price and low-price projections from the EIA all indicate that the oil prices would be between $68.4 and $202.24 per barrel in the next 30 years, shown in Fig. 2. [6] Assuming that the synfuel feedstock, such as natural gas and coal, do not become significantly more expensive, large scale synfuel production can be economically advantageous. Currently, several countries such as South Africa and Qatar already have significant synfuel production capabilities. [6] With the inevitable collapse of the oil industry within the next century, more countries and companies will invest in synfuel production facilities in the next few decades.


Crude oil will be depleted. With reasonable assumptions, I predict the depletion date to be within the next century. On the other hand, crude-oil dependent technologies such as airplanes will likely remain in the current state. This requires the production of synthetic fuels as crude oil product replacements. Even though synthetic fuels are not yet economically viable, as the price of crude oil continues to rise, synthetic fuels will become more relevant in the near future. When the world oil reserve becomes critically low, synfuel may even become a major energy product, the price of which becomes increasingly more competitive as the infrastructure gets implemented over time.

© Zheng Cui. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] M. Silberberg, Chemistry: The Molecular Nature Of Matter and Change, 5th Ed. (McGraw-Hill, 2008).

[2] D. Malyshev, "Origin of Oil," PH240, Stanford University, Fall 2013.

[3] T. Reddy, ed., Linden's Handbook of Batteries, 4th Ed. (McGraw-Hill, 2010).

[4] J. G. Speight, Synthetic Fuels Handbook: Properties, Process, and Performance, 1st Ed. (McGraw-Hill, 2008).

[5] J. A. Elia, R. C. Baliban, C. A. Floudas, "Nationwide Energy Supply Chain Analysis for Hybrid Feedstock Processes with Significant CO2 Emissions Reduction," AIChE J. 58, 2142 (2012).

[6] "Annual Energy Outlook," U.S. Energy Information Administration, EOA/EIA-0383(2014), April 2014.

[7] "BP Statistical Review of World Energy," British Petroleum, June 2014.