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Financial Times: Oil groups and carmakers link to push GTL

By Thomas Catan andJames Mackintosh in London
Published: March 8 2006 02:00 | Last updated: March 8 2006 02:00
International oil companies and carmakers have joined forces to promote a new generation of synthetic fuels derived from natural gas or coal at a time when many are seeking alternatives to oil.
DaimlerChrysler, Renault and Volkswagen have teamed up with Royal Dutch Shell and SasolChevron in a new body, the Alliance of Synthetic Fuels in Europe.
The two oil companies are pioneering a novel technology that can be used to produce high-quality diesel fuel from natural gas or biomass instead of oil.
Diesel engines burning the synthetic fuels are cleaner-running, making them appealing both to carmakers facing strict exhaust gas controls and to governments trying to deal with vehicle pollution in cities.
But only fuel made from biomass – a process still at the experimental stage – provides improved greenhouse gas emissions, with coal-based fuel producing almost twice as much carbon dioxide as ordinary diesel. GTL produces about the same level as ordinary diesel.
Thomas Weber, board member for research and technology at DaimlerChrysler, said this new generation of fuels would help Europe meet its energy policy objectives. “Synthetic fuels can make a real contribution in many of Europe's policy areas, combating climate change, reducing energy consumption, diversifying energy supplies, ensuring security of energy supply and improving air quality.”
Oil companies are investing billions of dollars in new “gas to liquids” plants that use a method developed in Nazi Germany and apartheid-era South Africa to turn gas, coal or biomass into products traditionally refined from oil. Of the three processes, GTL is the most commercially advanced.
Shell operates a small “gas-to-liquids” plant in Malaysia, which produces some synthetic diesel that is used in its high-performance V-Power fuel. The first large-scale commercial GTL plant is due to open in the coming weeks in Qatar, a joint venture between Sasol and Qatar Petroleum.

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