The price of gasoline at the local level can also be affected by the immediate, short-term availability of oil and gasoline.

For example, the Phoenix area is served by Western refineries via pipeline. Several years ago, an issue forced the pipeline to close for several weeks, constricting the supply of gasoline to the area.

California gasoline cannot be sold in Arizona because of different local–or “boutique”–fuel specifications.
Boutique fuels are specially formulated to meet the various requirements of local and state air quality laws. There are currently more than 200 boutique fuels in the U.S. In this case, gasoline that met Arizona requirements had to be trucked in from other parts of the U.S. at great expense, which drove up the price of gasoline in Phoenix.

Additionally, local, state and federal taxes, which account for almost one-third of the price of gasoline, have one of the biggest impacts on regional price variations. State sales taxes typically are a percentage of the pre-tax gasoline price instead of a flat per-gallon fee, which means that as gasoline prices rise, taxes also rise.

But, they are higher in other parts of the world: in Canada, for example, taxes comprise, on average, one-third of the price of gasoline at the pump. In the UK, that figure rises to about 75%.

View a larger version of the map (gif, size 29 kB) – opens in new window <http://www-static.shell.com/static/usa/downloads/responsible_energy/price_at_the_pump/gas_taxes_chart.gif>.

Download the full report here (pdf)

People wonder how oil and gasoline prices get so high and why energy companies seem to make so much money. High fuel prices impact the entire nation, affecting everything from our driving habits to the price of food.

But as you browse our site, you’ll learn about the many outside factors affecting prices at the pump–and you’ll also learn about the hardworking men and women at Shell who make it their mission to ensure Americans everywhere continue to get affordable energy when they want it.

Program Performance Goal: By 2010, complete research and development for advanced power systems capable of achieving between 45 and 50 percent electrical efficiency at a capital cost of $1,600 per kilowatt (in constant 2007 dollars) or less for a coal-based plant.

Coal gasification offers one of the most versatile and clean ways to convert coal into electricity, hydrogen, and other valuable energy products.

Coal gasification electric power plants are now operating commercially in the United States and in other nations, and many experts predict that coal gasification will be at the heart of future generations of clean coal technology plants.

Rather than burning coal directly, gasification (a thermo-chemical process) breaks down coal – or virtually any carbon-based feedstock – into its basic chemical constituents. In a modern gasifier, coal is typically exposed to steam and carefully controlled amounts of air or oxygen under high temperatures and pressures. Under these conditions, molecules in coal break apart, initiating chemical reactions that typically produce a mixture of carbon monoxide, hydrogen and other gaseous compounds.

Gasification, in fact, may be one of the most flexible technologies to produce clean-burning hydrogen for tomorrow’s automobiles and power-generating fuel cells. Hydrogen and other coal gases can also be used to fuel power-generating turbines, or as the chemical “building blocks” for a wide range of commercial products. [> Read more about hydrogen production.]

The Energy Department’s Office of Fossil Energy is working on coal gasifier advances that enhance efficiency, environmental performance, and reliability as well as expand the gasifier’s flexibility to process a variety of coals and other feedstocks (including biomass and municipal/industrial wastes).

Environmental Benefits

The environmental benefits of gasification stem from the capability to achieve extremely low SOx, NOx and particulate emissions from burning coal-derived gases. Sulfur in coal, for example, is converted to hydrogen sulfide and can be captured by processes presently used in the chemical industry. In some methods, the sulfur can be extracted in either a liquid or solid form that can be sold commercially.  In an Integrated Gasification Combined-Cycle (IGCC) plant, the syngas produced is virtually free of fuel-bound nitrogen.  NOx from the gas turbine is limited to thermal NOx. Diluting the syngas allows for NOx emissions as low as 15 parts per million. Selective Catalytic Reduction (SCR) can be used to reach levels comparable to firing with natural gas if required to meet more stringent emission levels. Other advanced emission control processes are being developed that could reduce NOx from hydrogen fired turbines to as low as 2 parts per million.

The Office of Fossil Energy is also exploring advanced syngas cleaning and conditioning processes that are even more effective in eliminating emissions from coal gasifiers. Multi-contaminant control processes are being developed that reduce pollutants to parts-per-billion levels and will be effective in cleaning mercury and other trace metals in addition to other impurities.

Coal gasification may offer a further environmental advantage in addressing concerns over the atmospheric buildup of greenhouse gases, such as carbon dioxide. If oxygen is used in a coal gasifier instead of air, carbon dioxide is emitted as a concentrated gas stream in syngas at high pressure. In this form, it can be captured and sequestered more easily and at lower costs. By contrast, when coal burns or is reacted in air, 79 percent of which is nitrogen, the resulting carbon dioxide is diluted and more costly to separate.

Efficiency Benefits

Efficiency gains are another benefit of coal gasification. In a typical coal combustion-based power plant, heat from burning coal is used to boil water, making steam that drives a steam turbine-generator. In some coal combustion-based power plants, only a third of the energy value of coal is actually converted into electricity.

A coal gasification power plant, however, typically gets dual duty from the gases it produces. First, the coal gases, cleaned of impurities, are fired in a gas turbine – much like natural gas – to generate one source of electricity. The hot exhaust of the gas turbine, and some of the heat generated in the gasification process, are then used to generate steam for use in a steam turbine-generator. This dual source of electric power, called a “combined cycle,” is much more efficient in converting coal’s energy into usable electricity. The fuel efficiency of a coal gasification power plant in this type of combined cycle can potentially be boosted to 50 percent or more.

Future concepts that incorporate a fuel cell or a fuel cell-gas turbine hybrid could achieve  efficiencies nearly twice today’s typical coal combustion plants. If any of the remaining heat can be channeled into process steam or heat, perhaps for nearby factories or district heating plants, the overall fuel use efficiency of future gasification plants could reach 70 to 80 percent.

Higher efficiencies translate into more economical electric power and potential savings for ratepayers. A more efficient plant also uses less fuel to generate power, meaning that less carbon dioxide is produced. In fact, coal gasification power processes under development by the Energy Department could cut the formation of carbon dioxide by 40 percent or more, per unit of output, compared to today’s conventional coal-burning plant.

The capability to produce electricity, hydrogen, chemicals, or various combinations while  eliminating nearly all air pollutants and potentially greenhouse gas emissions makes coal gasification one of the most promising technologies for energy plants of the future.

If you hear the term “froth treatment”, you would be forgiven for thinking it was a device for making the perfect cappuccino. What you might not expect to hear is that it is one of several technologies that help Shell extract oil from sand in Canada.

Oil from sand

Canada’s oil sands are one of the unconventional sources that we are now developing thanks to advances in technology. Shell’s Athabasca Oil Sands Project already provides more than 10% of Canada’s oil needs and there are plans to increase production to more than 500,000 barrels a day.

Oil sands are a blend of clay, sand, water and bitumen – a very thick oil. Unlike conventional oil recovery techniques that require drilling underground, in oil sands mining, the ore is excavated using shovels and trucks. The material is then mixed with warm water to separate the oil from the sand. The bitumen rises to the surface and the resulting mixture, called froth, is treated to remove the remaining sand and fine clay, producing clean, dry bitumen that is diluted and transported for further processing.

Shell recently developed a new froth treatment technology called Shell Enhance, the first commercial application of an innovative technology that will reduce costs and improve energy efficiency in oil sands production. By using higher temperatures, Shell Enhance froth treatment technology can more efficiently remove impurities from the oil sands froth because it uses less energy, less water, and fewer vessels for cooling and reheating. By saving energy, about 40,000 tonnes per year of greenhouse gas emissions are prevented.

Upgrading the oil
The diluted bitumen still requires further upgrading before going to a refinery and is transported via pipeline from Shell’s oil sands mine to Shell’s Scotford upgrader.  Unlike other oil sands operators in Alberta who utilize coking technology to extract the carbon from the very heavy oil material, Shell at Scotford uses “hydrogen addition” technology to break the large carbon molecules into smaller ones by increasing the hydrogen to carbon ratio. Through this chemical reaction, Scotford actually produces more than 100 barrels of synthetic crude from every 100 barrels of bitumen processed and enables refiners to produce clean, high-quality refined products, such as gasoline and diesel fuel, with low levels of aromatics, particulates and sulphur.