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Figure 2

Resource Pyramid: Oil

Conventional

"Depletable"

Crude

Oil

Orimulsion

Synthetic Oil

Nonconventional

Agricultural Oils

Infinite

icant extension of the petroleum age at best.6

The most promising unconventional fos-

sil fuel today is orimulsion, a tarlike sub-

The significance of orimulsion for the

stance that can be burned to make electricity

electricity-generation market may be

or refined into petroleum. Orimulsion

matched by technological breakthroughs

became the "fourth fossil fuel" in the mid-

commercializing the conversion of natural

1980s when technological improvements

gas to synthetic oil products. For remote

made Venezuela's reserves commercially

gas fields, gas-to-liquids processing can

exploitable. Venezuela's reserve equivalent of

replace the more expensive alternative of

1.2 trillion barrels of oil exceeds the world's

liquefaction. In mature markets with air

known reserves of crude oil, and other coun-

quality concerns, such as in California, nat-

tries' more modest supplies of the natural

ural gas could become a key feedstock from

bitumen add to the total.

which to distill the cleanest reformulated

gasoline and reformulated diesel fuel yet.7 A

With economic and environmental (post-

scrubbing) characteristics superior to those

half dozen competing technologies have

of fuel oil and coal when used for electricity

been developed, several by oil majors who

generation, orimulsion is an attractive con-

are committing substantial investments rel-

version opportunity for facilities located near

ative to government support. The wide-

waterways with convenient access to

spread adaptation of gas-to-oil technolo-

Venezuelan shipping. While political opposi-

gies could commercialize up to 40 percent

tion (in Florida, in particular) has slowed the

of the world's natural gas fields that hither-

introduction of orimulsion in the United

to have been uneconomic.8

States, orimulsion has already penetrated

In addition to orimulsion and synthesized

markets in Denmark and Lithuania and, to a

natural gas, tar sand, shale oil, and various

lesser extent, Germany and Italy. India could

replenishable crops also have great promise,

soon join that list. Marketing issues aside,

however uneconomic they now are, given

this here-and-now fuel source represents an

today's technology and best practices (Figure

abundant backstop fuel at worst and a signif-

2).9 Michael Lynch of the Massachusetts

4