Drilling the Sky -- is it real and what is Exxon's interest

First, I want to thank the folks who have briefed me in detail about some aspects of these discussions.
More and more it gets hard for me to know when people would prefer to be given credit, or their names kept
confidential... etc.. So let me just talk about the technical/economic reality for now...

Second -- Exxon is a business and they depend on economic calculations a lot more than
the entertainment business, for example. (This is a COMPARISON -- please don't read in more
than I have said.) The "business case" for "drilling the sky" has to
be a lot more solid than the usual fluffy NASDAQ IPO stuff to get very far with the folks
who decide on real investments (unless they think they can justify some small change from the PR budget).

Third: Any decision by Exxon or Chevron on something this big would have to fit into their overall corporate strategy.
But right now, their overall strategy is in flux. They haven't yet really figured out how to adapt to some very jarring changes
and trends all over the world. Of course the same thing is true of the auto makers and the US government -- but those
two are very far along in a new dialogue. We haven't really had the same kind of dialogue about the interests and options
of the oil companies in a massively changing world.

Fourth: I don't think that drilling the sky by making fuel in offshore platforms makes any sense with the menu
of technologies any of us have available right now. The reason is that we are talking about CARBON-BASED fuels for now --
which requires a source of carbon. It is very expensive to pull carbon dioxide out of the atmosphere. It is a lot
cheaper to start with a more concentrated source of carbon dioxide -- like the emissions of the many huge coal plants
in Four Corners in Utah.  Those plants are close enough to desert land that would be a relatively easy place
to get a rectenna sited .. and there is no shortage of power lines in the area.

Fifth -- once we have such a source of CO2, and water, and electricity ... I don't think we know enough chemistry yet to know what
the optimum process is for getting car fuel out of those inputs. In fact, I asked that question about a year ago to a guy named Siirola
at Tennessee Eastmann, who was formerly president of AIChE -- the American Institute for Chemical Engineer(ing). My impression
is that this is a research project -- a good research project, but a research project. At the moment, there is a miniboom in trying
to use algae to convert these emission streams plus water and sunlight to fuel. We do have to show we can do better.
 Because the efficiency of photosynthesis is down around 3% or so, we probably can do better... but it's not trivial.
One question: to reach, say, 80% of theoretically possible efficiency in making car fuels, would we need new catalysts?
Would we need "RF chemistry," the use of optimally crafted pulses of laser light or microwaves, etc.?
Nobody sane would invest billions without knowing the story about this aspect.

Sixth -- it is highly unlikely that straight-chain hydrocarbons are the car fuel that would give maximum efficiency here.

But here is where we start butting into strategic plans. When oil companies build refineries, they have no problem
with the idea that they want the plants to be as efficient as possible. When it's their money, why waste it?

But have the big US oil companies accepted the idea that they are in the business of fuel processing and distribution
in general? They now accept that unconventional sources of oil like tar sands and shale are THEIR business
opportunity, however constrained. But what about liquids from coal? What about biofuels? What about
the stuff we are talking about?

On the car side, it is relatively easy and cheap to redesign cars (AT THE FACTORY) so that the driver can choose, from
day to day, whether  to fill up his/her car with gasoline OR "ethanol" (E85) OR methanol (M85). People argue whether
it is $100 or $200 per car, but that's the range, and it may even be less. The car companies would be happy to do it,
given modest incentives... but what will the oil companies do? This is crucial to us and to them.

I heard last Wednesday that there are major incentives for GEM fuel flexibility in the works, which may make it to
the final conference bill on energy this year **IF** they don't get derailed. But many oil company LOBBYISTS
in DC feel morally obligated to oppose anything that might reduce Saudi Arabia's revenue from crude oil.
This is a serious problem. It is also possible that they don't have a clear understanding of where Exxon's present and
future profits may come from, in part due to strange accounting related to SEC and IRS stuff.

IF we are entering a new era of competition in supplying car fuel (as US national survival badly needs), it behooves
Exxon to think about ECONOMIC competition with electricity and perhaps even biofuels, rather than counting on
corrupt politicians to outlaw the competition.

To compete with electricity -- the challenge is how to get cheaper liquid fuels, to input to their big distribution systems.

To do that, they should affirmatively SUPPORT the push for GEM fuel flexibility, which gives them the option of making
cheaper liquid fuels for the long haul, without having to send so much money to OPEC.

And then, when they do that...

it probably ISN'T the straight chain hydrocarbon that would make the most sense in a few years.

In fact, straight chain hydrocarbon requires MORE CAPITAL than a messier liquid fuel.

Since we don't know the chemistry here yet... let me use an analogy.
When the input stream is CO and H2 ("syngas")... it is well-known
that we CAN make straight, pure hydrocarbons, but only after expensive
synfuels processing, very capital intensive.  Exxon could save a lot
of money by getting rid of all this purity nonsense. More precisely:
capital cost and total cost per Btu of liquid fuel generated can be a lot less,
if one gets rid of the purity constraint. If CARS are GEM fuel flexible
(with intelligent engine control, which is certainly known to GM, Ford, Toyota,
Caterpillar and Bosch at least), they can basically handle any mix of
liquid fuel which is not more corrosive than M85. That's a big space.
If one tries to get the maximum BTU per dollar... one would be able
to spend a lot less money on processing, by producing a fuel mix
a lot closer to what the syngas "wants" to produce. 
I would call this "optimal corrosive Fischer-Tropsch liquids."

Using this kind of strategy -- the fuel produced using space-based electricity would be cheaper.
(Of course, the same thing goes for fuel produced from coal or remote natural gas.
If it's just them and not us who take up this opportunity, then it will be harder for us to compete.)

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At the of the day, however, Exxon will certainly notice that the electricity from space will
be ridiculously expensive if we don't move past bullshit and get a real technically viable
solution to the access-to-space problem. With $1000 per pound access, there is no
way we can compete with even 17 cents per kwh solar troughs in the deserts
near four corners. Even if you add the costs of 24-hour storage and transmission nationwide,
we still couldn't compete with earth-based solar farms. False claims and PR and
enthusiasm for heavy lifters won't change this reality; they would only make
Exxon legitimately suspicious of anything we say in this community.

In my view -- the best hope of overcoming this serious show-stopper is if Exxon
itself could take a profitable position, not in the glitzy >$1000-per pound options, or even
in the tile-and-blanket  vehicle now under development in Seattle, but
in the solid hot structures RLV technology I have talked about many times before.
 We NEED $200/pound even to get to 17 cents per kwh, in any of the serious life-cycle cost
analyses out there, and that is our only serious hope of that. And... it open up
a $50 billion/year near-term market long before SSP itself. (If we believe certain figures
from the Financial Times.)

Yes, that may be hard... but sometimes the hard way is the only way that can really work.
Engineering reality doesn't always allow "cheap shots."

Best of luck to us all,

     Paul