Porsche will build the largest synthetic fuel plant in Texas and only there will it costa about $30 per gallon, now it costs above $200 per gallon

May. 3rd, 2023, 11:58 AM GMT
Porsche is betting heavily on synthetic fuels, this is clear from the speed with which the German company moved to announce in December a first pilot plant in Chile, plans for the rapid scaling of production with investments of 1 billion euros and the introduction of an exception for synthetic fuels in the future ban of internal combustion engines in the EU from 2035. The factory in Chile, however, was only a pilot project, to demonstrate that the technology is possible, but it has a production capacity of a few tanks of fuel per year, or only about 35,000 gallons (130.000 liters). Now, however, Porsche and HIF, the company that was founded to operate Porsche's factory in Chile, have obtained permission in Texas to build the world's largest plant of its kind. And with the construction permits, more curious details about the figures associated with the production of synthetic fuels and Porsche's plans came to light or were analyzed.
Thus, some time ago, Porsche had invited several youtubers to Chile, to its first synthetic fuel plant, called Haru Oni, where they were presented with the technology, where they were able to drive the cars powered by the fuel produced there and were also told and how much does this fuel cost, about 40 dollars per gallons (or about 9-10 dollars per liter). Many were horrified by such a price, but now we find out that Porsche was not honest after all. In fact, only at the new plant in Texas, which plans to produce 200 millions gallons (750 million liters) of fuels per year, the price will drop to around 8 dollars per gallon in direct production costs, to which profit, transport costs have also been added and the inevitable taxes and excises from all the countries of the world that usually bring the price up to 4 times more than the production price. Only then will it reach a cost of up to 30 dollars per gallon (8-9 dollars per liter) at the pump, with a lower price possible only if syntethic fuels is to be exempt from taxes. The paradox is that currently, at the Porsche factory in Chile, the production cost of a single liter of synthetic fuel was 55 dollars, which equates do 200 dollars per gallon! And this does not include transport or profit, as Porsche has for now used all the production for its motorsport competitions and tests, without selling it to anyone.
However, even if we consider that 2 euros per liter in production cost is already acceptable, the new factory in Texas reveals some worrying figures from the process of manufacturing synthetic fuels. As we said in our previous articles — synthetic fuels, usually methanol or synthetically produced gasoline — closely repeat the formula of a fuel extracted from the earth. Since both gasoline and methanol are hydrocarbons, to produce them in industrial conditions we need hydrogen and carbon, possibly from CO2. The magic of synthetic fuels is the fact that during their production, CO2 is captured from the atmosphere, and during combustion, the same CO2 previously captured is emitted, without emitting extra quantities.
In manufacturing processes, however, the reactions are energy-consuming, so energy is needed to make them happen, and this means that it is vital where you source that energy — from a source with zero CO2 emissions or one with combustion and emissions. Only if the source is one with zero emissions can the whole equation make sense, otherwise everything becomes absurd. That is precisely why the factory in Chile, for example, uses a 3.4 MW wind turbine and the electricity from it provides the necessary energy. And thus synthetic gasoline or methanol ends up effectively being a kind of liquid battery, without the need for lithium and without the associated weight.
Well, on the scale of the new Texas plant, one wind turbine won't be enough, of course. In fact, to ensure the necessary scale of production, the factory will need to produce 300,000 tons of hydrogen from renewable energy, which it will have to combine with 2 million tons of CO2 captured from the air, powering compressors with green energy to capture it. This process will produce 1.4 million tons of methanol, and 200 million gallons of synthetic gasoline can be distilled from it. That would only mean a need for electrolysis capacities for hydrogen of 1.8 GW power, which would have to be fed from huge wind or photovoltaic farms. A few days ago a photovoltaic park of 1 GW power was connected online in China, located in the desert, on about 40 square kilometers (15 square miles). And here we need 1.8 GW of power. The designers of the new plant do not say where they will get the necessary electricity, but at such a scale, critical voices have not let themselves be expected and say that wherever such renewable electricity power comes from, they should find a better use for it than the production of synthetic gasoline, for internal combustion engines.
And the arguments bring unexpected figures. If for 100 kWh of renewable energy produced at a power plant or a wind farm, with all transport and efficiency losses, an electric car ends up transposing 77 kWh on the road, and one with hydrogen and fuel cells only 30 kWh, then the transformation of energy in synthetic gasoline makes that engine transpose to the asphalt only 13 kWh of the 100 kWh generated at the turbine, and 87 kWh are lost unnecessarily. Thus, the production of synthetic fuels is accused of a huge energy inefficiency, and if we were to produce such fuels, they would have to be used for types of transport where it is not feasible to switch to electricity at the moment - such as airplanes or long-distance ships.
So, many arguments on both sides, which give food for thought. HIF, however, have already announced that they will build another factory in Australia, smaller than the one in Texas, where they will produce another 100 million liters (26.5 million gallons) annually. They say that, probably if enough was produced on a large scale, the production cost could reach 1 dollar per liter (3.8 dollars per gallon) and then, if that fuel was not overtaxed, it could end up costing comparable to regular gasoline. For now, it has an exorbitant price, which even Porsche owners would rarely agree to pay.
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