During a time when renewable energy is picking up speed, petroleum energy companies are working hard to show that oil and gas are not only needed, but they can produce cleaner fuels.
In April, energy developer Nacero Inc. announced plans to build the world’s first natural gas-to-gasoline plant that will operate entirely on renewable energy. It will rely on natural gas, captured bio-methane and mitigated flare gas for its product: a sulfur-free gasoline that will have half the lifecycle carbon footprint of traditional gasoline.
The approximately $7 billion plant, which will be located just outside of Odessa, Texas, will use the abundant natural gas resources in the Permian Basin and ultimately produce 115,000 barrels of gasoline a day for markets in Texas and the Southwest. It will be the nation’s first natural gas-to-gasoline manufacturing facility, according to Nacero, with two others planned by the company in Arizona and Pennsylvania.
A Greener Gasoline
“Taking natural gas to manufacture gasoline and making low sulfur gasoline would be a big step forward in how to do things compared to the gasoline you get out of a refinery,” said past AAPG President Mike Party, president of the Midland, Texas-based Beryl Oil and Gas.
“From a geographic and logistics standpoint you can’t beat it,” said Nacero President and CEO Jay McKenna about the location of the Penwell, Texas facility. “We will be a major new market and beneficial home for the natural gas that is currently flared in the Permian Basin. Our zero-sulfur gasoline will reduce ground-level ozone, a pollutant that is causing illness and limiting economic growth in cities across Texas and the Southwest.”
The project is reported to be one of the nation’s largest energy transition infrastructure facilities and is expected to employ 3,500 skilled workers at the peak of construction and 350 full-time operators and maintenance personnel upon completion. Furthermore, Nacero estimates that $263 million in equipment and services will be locally sourced.
“It’s an environmentally responsible way to take a resource in the ground that currently has no market and make it into a usable product,” said Wesley Burnett, director of economic development for the Odessa Chamber of Commerce and Development Corporation. The Odessa Development Corporation offered Nacero a $20 million grant incentive to build the facility.
Construction, which will be performed by Bechtel, will occur in two phases. The first is anticipated to begin late this year and take four years to complete, Burnett said. First gas is expected in 2025, with the second phase of the project to take an additional two years.
Bechtel said it would use sustainable practices for design, supply chain and construction of the 2,600-acre facility.
“This project is truly a game-changer. It will give every day American drivers a chance to participate in the energy transition and will be a model for the kind of environmental improvement America is looking to bring about,” said Paul Marsden, Bechtel president.
A Model of Clean Energy
According to Nacero, the gasoline will be useable in today’s cars and trucks without modification, sold locally and distributed widely, and cost-competitive with traditional gasoline.
The plant’s electricity will come from renewable sources, much of which will be produced on-site from solar panels co-located with the manufacturing facilities. Nacero will purchase additional renewable energy if needed, Burnett said.
In addition to the facility itself, Nacero will build the needed pipelines to transport the feedstock from the Permian Basin to the plant, but much of the infrastructure is already in place, Burnett said.
The plant’s technology will be the same as that of the natural gas-to-gasoline facility built in Turkmenistan in 2019 to leverage its vast gas supply. That plant was built by Kawasaki Heavy Industries and Turkish company Ronesans, using technology from Danish catalysis company Haldor Topsoe.
In the eyes of Party, using mitigated flared gas is an example others should follow to avoid discarding valuable resources while also considering the environment.
“There is really not any reason we should be flaring gas in the Permian Basin. It’s hard to believe that these companies can’t get that gas into a pipeline. The infrastructure is there. They can’t be more than a half-mile from a pipeline in most cases,” he said. “In the evening and at night, you can see 10 to 20 flares when you are flying into Midland.”
For the country to achieve its domestic energy and climate change mitigation goals, “we need big vision,” McKenna added.
Nacero estimates that 30 million tons of CO2 emissions will be avoided each year by 4 million “everyday” drivers using the sulfur-free gasoline from the Penwell facility.
The company is planning to build similar facilities in the Marcellus Basin in Pennsylvania and in Kingman, Ariz. An estimated 25 million tons of CO2 emissions are expected to be avoided with approximately 4,000 drivers using cleaner gasoline from the Marcellus plant, and an estimated 17 million tons of CO2 emissions are expected to be avoided from approximately 3,000 drivers using fuel from the Kingman, Ariz. plant.