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Natural Gas into Jet Fuel

Posted December 11, 2014 at 10:20AM

The B-52 stealth bomber is arguably the most advanced plane in the world.

Soaring 10 miles above the earth, it can strike any target without warning.

It only has one problem: The flying wing consumes gas at an astronomical rate.

Each plane guzzles a whopping 47,000 gallons of jet fuel per mission. That's a $162,000 fill-up.

It's no wonder that the U.S. military is the world's largest buyer of fuel, consuming 8 billion gallons a year.

The Air Force alone spends roughly $10 billion a year on jet fuel.

Fifteen-Year Plan for Freedom

In an effort to reduce these costs, the Air Force is seeking out a revolutionary new kind of jet fuel with the plan to wean itself off expensive foreign oil producers who supply half of the military's fuel supply.

The Air Force hopes this new fuel will make up its entire supply by 2030.

And it's already been tested in the B-52 bomber planes... with excellent results.

"We're seeing very little difference in the plane's performance," says the Air Force's lead engineer, Chris Stroh.

And just like Tang and the Internet, this fuel has the ability to move over into civilian life, replacing traditional gasoline.

Cheaper, Better, Faster

In fact, this new fuel obtained through GTL technology can be made for 53% less than what it costs to make traditional gasoline.

It's profitable at $1.57 a gallon.

And it's set to power over 10 million American automobiles.

These aren't special vehicles, either. They don't need to be retrofitted or modified.

As Forbes says, "No new cars, engines or filling stations are required."

This is where we can tell OPEC to “go pound sand” for good.

According to the Brookings Institute, the technology behind this fuel could account for "24% of all the liquid gas supply in the United States by 2017."

Already in Use

Two international airline fleets are using GTL right now to help power their jetliners.

It's being produced at facilities around the world. There's a mammoth plant in Qatar that's producing 140,000 barrels of this fuel per day.

And now, the development of new facilities is underway here in the United States...

For instance, a large-scale $14 billion plant is being developed right now in Louisiana by a South African company called Sasol (NYSE: SSL), and it's set to produce 96,000 barrels of this new liquid fuel per day... enough to fuel over 10 million automobiles.

And it's all being made possible by a technology that has its roots in World War II but wasn't perfected until recently...

Lost Secret to Nazi Oil

GTL was developed in Nazi Germany to turn natural gas into fuel for the war effort.

The method is called the Fischer-Tropsch process — a series of chemical reactions that converts a mixture of carbon monoxide and hydrogen into liquid hydrocarbons.

It was first developed by Franz Fischer and Hans Tropsch in Germany in 1925.

During WWII, the Nazis were desperate for fuel, so they made GTL work for their planes and tanks.

Now Better Than Ever

This same technology has been further refined by large oil companies like the $37 billion Sasol and the $202 billion Royal Dutch Shell (NYSE: RDS), among others.

The problem with these huge multinational companies is that GTL only makes up a small portion of their income and will not be a difference-maker. What you need as an investor is a small, focused company — or what I like to call a pure play.

At Crisis and Opportunity we like to double our money on every play. And I've just found one small company that could easily make 1,500% gains if things work out.

New Fracking Rules

The key to making gas-to-liquid technology work is getting the gas a very low price. The good news is that in many places, they are practically giving it away for free.

Oil companies are actually burning gas off into the atmosphere rather than bothering to collect and transport it.

They burn the natural gas at the wellhead because it costs too much to get it to market. There isn't enough infrastructure, and besides, why waste time dealing with $4 natty gas when you can sell the $70 crude oil?

This is changing for a couple of reasons, not the least of which is the environment.

North Dakota is cracking down with the some new rules...

No Flare

According to Reuters:

North Dakota is cracking down on flaring, the wasteful burning of natural gas, with strict rules that may stymie development in areas far from pipelines in a state that is one of the fastest-growing U.S. oil fields.

The new rules also will effectively reinforce the competitive advantage enjoyed by producers that have already taken steps to curb flaring.

The state's Industrial Commission, a three-member regulator chaired by Governor Jack Dalrymple, changed its policy to require energy companies to submit a plan to capture any natural gas that could be released by a new well when filing for permits.

Without a plan, applications for new wells will not be approved, state officials said. The goal is to reduce the amount of gas flared, an economic and environmental consequence of the shale boom, to 10 percent by 2020 from about 30 percent currently.

New rules means there will now be new markets for GTL — but this doesn't just apply to North America. There are stranded gas fields all over the world, from Kazakhstan to Timbuktu.

What is needed is a small-scale GTL plant that can be built locally.

One little-known company I've found does just that. It doesn't just wait at the end of the pipeline for gas to come to it — it can go out to new, underserved fields like the Bakken and turn liquid into gas so it can be more easily transported in trucks or trains.

Small-scale GTL plants are at a tipping point. The cost of these refineries will be around $50 to $100 million, compared to $15 to $20 billion for what Sasol will do.

I'll tell you more about it in my free report due out after Christmas.

Good hunting,

Christian DeHaemer Signature

Christian DeHaemer

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Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor's page.


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