The Graduate Institute of Geneva

Executive Master

International Oil & Gas Leadership

Thesis

By Nihat Dincmen

2014/2015

Direct Methanol Fuel Cell, DMFC a Promising Novel Power Source should replace

Diesel Generators used

In the Oil & Gas Industry

Chief Advisor Professor Alexander Van de Putte

Abstract:

Efficient and economic direct methanol fuel cells (DMFC) should replace diesel generators

currently used in the oil and gas industry. As a progressing novel proton exchange membrane

technology, it has a revolutionary potential to be used as a clean fuel source, using a liquid

fuel, methanol instead of hydrogen. It may become a game changer in supplying prime and

backup power on field at oil and gas exploration and production sites as well as both the

midstream operations, the oil and gas pipelines and in downstream, refineries.

The need for sustainable and clean sources of energy is ever increasing across the globe.

Consequently, electrochemical devices such as fuel cells are becoming the most promising

solutions in this respect.

Different types of fuel cells started to be used in a wide range of application and are being

promoted by governments as a better technology option than conventional internal

combustion engine generators or batteries. It is a better option thanks to its economic

advantages, technical and environmental advantages, making it also suitable to be used as

power source in the oil and gas industry.

The current state of DMFC technology cannot allow larger scale applications yet, but the

ongoing developments in the field of proton exchange membranes to be used with DMFCs

will allow it to be produced on larger scales and used in large-scale applications with a

potential to substitute diesel generator used a prime and backup sources in oil and gas

industry.

1

Content:

1. Introduction.......................................................................................................................2

a. About DMFC and Fuel Cells.....................................................................................2

b. Current Uses of DMFC and Fuel Cells.....................................................................3

c. Power Supply Needs in Oil & Gas Industry.............................................................5

2. Arguments..........................................................................................................................5

a. DMFC as a More Efficient & Economic Alternative Source of Power.................5

i. Methanol Economy vs Fossil Fuels...........................................................................6

ii. Current Potential of DMFC Technology..................................................................6

iii. Advantages of DMFC against Hydrogen Fuelled PEMFC.....................................9

iv. Future of DMFC.......................................................................................................11

b. Methanol – a Sustainable and Renewable Energy Source....................................14

3. Counterarguments...........................................................................................................15

a. Technical Constraints...............................................................................................15

b. Economical Constraints...........................................................................................16

4. Discussion and Conclusions............................................................................................17

5. References.........................................................................................................................19

1. Introduction

a. About DMFC and Fuel Cells

Fuel cell technology represents a relatively newly adopted way of producing electrical power.

Just as batteries – fuel cells convert chemical energy into electrical energy. Indeed, a fuel cell

differs from a battery in that it has not be discarded or recharged to once depleted, as it

happens to batteries. A fuel cell uses different types of fuels as its name implies, as external

source of hydrogen used in the chemical reaction. However no combustion is involved in this

process with the source of hydrogen even if designated as fuel, which is only

electrochemically converted into electricity by oxidation.

Different types of fuel cells generally classified depending on the nature of electrolyte used

are available. Methanol is one of aforementioned sources of hydrogen, used directly instead of

pure hydrogen in direct methanol type of fuel cells. Direct methanol type fuel cells are a

subcategory of proton exchange membrane, also known as polymer electrolyte membrane

2

(PEM) fuel cells, with hydrogen and methanol fuelled variances – PEMFC and DMFC

respectively.1 2

b. Current Uses of DMFC and Fuel Cells

Fuel cells are becoming well established in a number of markets where they are now

recognized as a better technology option than conventional internal combustion engine

generators or batteries. The fuel cell ‘industry’ indeed has yet completely formed as an

industry – with a very wide range of applications, technologies, market ambitions and supply

chains.3 Fuel cell technology is applied in a drastically varying scale from charging smart

phones with a couple of watts, to stationary power grid applications in gigawatt scale.4 5

The three main fields of fuel cell applications are: 1) portable, 2) stationary and 3) transport

applications.6 In terms of market size and megawatt, stationary applications lead where among

different types of fuel cell types foremost PEMFC and MCFC are preferred, with the largest

potential seen in residential combined heat and power (CHP) applications.7 In the transport

segment, the focus is primarily on fuel cell electric vehicles (FCEVs)8, where materials

handling devices like forklifts find also a considerable field of application. A total annual

market size within ranges of $14-$31 billion for stationary, of $18-97 billion for transport and

of $11 billion for portable fuel cell applications are projected in coming 10-20 years.9

Currently markets for fuel cells have been dominated by policy and regulatory drivers. As a

renewable and environment friendly source of power – fuel cell applications are being

supported by governments across the globe.10 Fuel cell technology projects receive cash

incentives in USA.11 12 Japan supports renewable energy sources in order to minimize

1 Lee, J. S. et al. (2006). Polymer electrolyte membranes for Fuel Cells, Journal of Industrial and Engineering Chemistry 12, p 175-183.2 Dohle, H.; Mergel, J. & Stolten, D. (2002) Heat and Power Management, Journal of Power Sources, 111, p 268-282.3 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 9.4 Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 4. 5 Mackinnon L., & Jerram, L. (2014). Fuel Cells Annual Report 2014. Navigant Research, p 2. 6 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 7.7 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 24.8 Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 16.9 An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies (2011). The Department of Energy Hydrogen and Fuel Cells Program Plan, p 28.10 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 27.11 U.S. Department of Energy (2011). An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies. The Department of Energy Hydrogen and Fuel Cells Program Plan.12 Dumaine B. (2014). Fuel Cells Power Way Up, Way Up. The Fortune , May 19, 2014, p 26.

3

dependence on nuclear.13 EU adopted in 2014 a fuel cells and hydrogen joint undertaking with

a goal to reduce emissions and to increase efficiency and energy security.14

Figure 1: Comparison and Applications of Fuel Cell Technology. Fuel cells provide a cleaner and more efficient energy

conversion when compare with other fuels and sources of energy. 15

The future is bright for the DMFC and PEMFC technologies particularly in backup power for

forklifts and telecom applications,16 the short term and in large scale stationary projects in the

long term, whereas in US more and more businesses such as hotels and hospitals are seeking

13 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 17.14 ibid., p 15.15 U.S. Department of Energy (2011). An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies. The Department of Energy Hydrogen and Fuel Cells Program Plan, p 2.16 Mackinnon L., & Jerram, L. (2014). Fuel Cells Annual Report 2014. Navigant Research, p 1-3.

4

reliable during grid blackouts. The fuel cell market of $ 150 million size in 2013 is expected

to reach to a total sales revenue of $ billion as of the year 2030.17

c. Power Supply Needs in Oil & Gas Industry

Oil and gas industry operations are carried out in challenging conditions, often at locations in

remote conditions – equipment ruggedness, longevity and reliability are paramount. Power

generation is essential to the petroleum industry since any downtime to occur would lead to

higher costs. Modern oil and gas exploration and production requires reliable, fuel-efficient

generators on-site for activities such as camp loads, draw-works, drilling and mud pumping.

Generators to be sued for drilling and digging operation have to provide uninterrupted power

in the remote locations and harsh environment of a typical drilling operation, such as cold

weather, high humidity and low oxygen.

For aforesaid purposes – diesel generators in a rather wide range of prime power ratings from

100 kVA up to 10 thousand kVA are being used currently to provide key power sources for

the oil and gas industry – both as prime power, as well as backup power in cases of

emergency or disaster. Diesel fuels used in such generators are priced slightly higher than

gasoline, but at a higher density, allowing more energy to be extracted for the same volume of

gasoline. In today’s power industry, the increasing demand and diminishing supply of fuel in

our economy makes a cost effective fuel solution an essential part of your primary or back-up

power system. Diesel generators can be outfitted with bifuel systems to burn natural gas, as

well.

2. Arguments

a. DMFC as a More Efficient & Economic Alternative Source of Power

DMFC is a promising power source in comparison to both fossil fuels and its ‘close relative’

hydrogen fuelled PEMFCs. Using methanol as a fuel in DMFCs as a power source, instead of

using fossil fuels with internal combustion engines offers several benefits.

i. Methanol Economy vs Fossil Fuels

Methanol that can be used as an alternative source of hydrogen in fuel cell applications offers

several advantages in comparison to other fuels. These can be summarized under three main

categories: 1) economic advantages, 2) technical advantages; 3) environmental advantages.17 Dumaine B. (2014). Fuel Cells Power Way Up, Way Up. The Fortune , May 19, 2014, p 25.

5

Methanol as the raw material in the DMFC process is available in larger amounts; it can be

manufactured at larger scales thanks to the availability of diverse ways of production. It has a

relatively low LCOE, leveraged cost of electricity enabling reducing costs to build and

operate a power-generating asset over its lifetime per unit power output. On the other hand, as

the result of easier and cleaner handling, during a quiet operation, labor costs and

maintenance costs can also be reduced.

Due to its high octane rating using existing internal combustion engines is possible in

transport applications. Thanks to its higher volumetric energy density, it can be stored,

transported and dispensed more conveniently. As a non-explosive material in liquid form, it is

safer than fossil fuels and hydrogen, and it is less subject to pilferage.

It causes less harm on the environment with respect to its both manufacturing process and its

consumption. As a renewable source of energy, it can be produced by different recycling

methods without causing any harmful emissions. During its use in fuel cells, hydrogen is

converted into water and heat, without creating noise and noxious emissions like greenhouse

gases, sulfur and nitrogen oxides.

ii. Current Potential of DMFC Technology

Supported by Governments: As in many other countries – in USA, the Department of

Energy (DOE) supports cost-effective technologies like fuel cells, homegrown biofuels,

vehicles run on electricity.18 In the year 2011, DOE has declared its “Hydrogen and Fuel Cells

Program Plan” to address the technical and non-technical challenges hydrogen and fuel cell

are facing19. The mission of this program is to enable the widespread commercialization of a

portfolio of hydrogen and fuel cell technologies through basic and applied research,

technology development and demonstration, and diverse efforts to overcome institutional and

market challenges.

Why Fuel Cells: Use of fuel cell technologies is encouraged as by authorities as mentioned

above and several commercialization attempts are being made, as broad range of benefits is

offered by these technologies. These benefits include reducing greenhouse emissions,

reducing oil consumption, advancing renewable power, using hydrogen for energy storage

18 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 26.19 U.S. Department of Energy (2011). An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies. The Department of Energy Hydrogen and Fuel Cells Program Plan, p. 6.

6

and transmission, highly efficient energy conversion, fuel flexibility and use of diverse

domestic fuels, reducing air pollution, high reliability and grid support capabilities, suitability

for diverse applications, quiet operation, low maintenance needs, and opportunities for

economic growth and leadership in an emerging high-tech sector.

Figure 2: Power vs. Efficiency

for Stationary Power

Technologies. Fuel cells provide

very high efficiency for

stationary power generation, for

a broad range of power output.

The highest efficiencies are

achieved by high-temperature

fuel cell– turbine hybrid systems 20

A good example for the DMFC preferred against another source of power was the

performance of DMFC systems used in material handing applications replacing lead-acid

batteries, in a project of the US company Oorja supported by the National Renewable Energy

Laboratory (NREL) and the U.S. Department of Energy (DOE). In the year 2011, under the

frame of this project, 75 OorjaPac DMFC systems and their associated methanol fueling

infrastructure were operated and maintained at customer warehouse sites for real-world use

and testing, where it was found out that PEM fuel-cell-powered MHE can have a lower total

cost of ownership compared to battery-powered forklifts21 22.

Fuel type Fuel material (feedstocks)

Energy content (Heating range)

Physical State

Maintenance issues Energy security impacts

Gasoline/E10 Crude oil 112-124k Btu/gal (g)

Liquid Manufactured using oil, of which nearly 1/2 is imported

20 An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies (2011). The Department of Energy Hydrogen and Fuel Cells Program Plan, p 12.21 National Renewable Energy Laboratory, “Hydrogen and Fuel Cells Research: Early Fuel Cell Market Demonstrations.” http://www.nrel.gov/hydrogen/proj_fc_market_demo.html.22 National Renewable Energy Laboratory, Hydrogen Technologies and Systems Center’s Technology Validation Program, “Total Cost of Ownership for Class I, II, & III Forklifts,” March 2012. http://www.nrel.gov/hydrogen/cfm/images/cdp_mhe_58_totalcostofownership.jpg.

7

Low Sulfur Diesel

Crude oil 128-138kBtu/gal (g)

Liquid Manufactured using oil, of which nearly 1/2 is imported

Biodiesel Fats and oils from sources such as soy beans, waste cooking oil, animal fats, and rapeseed

120-128kBtu/gal (g)

Liquid Hoses and seals may be affected by higher percent blend. Lubricity is improved over that of conventional diesel fuel.

Biodiesel is domestically produced, renewable, and reduces petroleum use 95% throughout its lifecycle

Propane (LPG) A by-product of petroleum refining or natural gas processing

84-91Btu/gal (g)

Pressurized liquid

Approximately half of the LPG in the U.S. is derived from oil, but no oil is imported specifically for LPG production

Compressed Natural Gas

Underground reserves and renewable biogas

20-22kBtu/lb (g)

Compressed gas

High-pressure tanks require periodic inspection and certification.

CNG is domestically produced from natural gas and renewable biogas. The United States has vast natural gas reserves.

Liquefied Natural Gas (LNG)

Underground reserves and renewable biogas

21-24kBtu/lb (g)

Cryogenic liquid

LNG is stored in cryogenic tanks with a specific hold time before the pressure build is relieved, the vehicle should be operated on a schedule to maintain a lower pressure in the tank.

LNG is domestically produced from natural gas and renewable biogas.

Ethanol/E100 Corn, grains, or agricultural waste (cellulose)

76-85kBtu/lb (g)

Liquid Special lubricants may be required. Practices are very similar, if not identical, to those for conventionally fueled operations.

Ethanol is produced domestically. E85 reduces lifecycle petroleum use by 70% and E10 reduces petroleum use by 6.3%

Methanol Natural gas, coal, or, woody biomass

57-65kBtu/gal (g)

Liquid Special lubricants must be used as directed by the supplier and M-85- compatible replacement parts must be used.

Methanol is domestically produced, sometimes from renewable resources.

Hydrogen Natural gas, methanol, and electrolysis of water

52-61kBtu/lb (g)

Compressed gas or liquid

When hydrogen is used in fuel cell applications, maintenance should be very minimal. High-pressure tanks require periodic inspection and certification

Hydrogen is produced domestically and can be produced from renewable sources.

Electricity Coal, nuclear, natural gas, hydroelectric, and small percentages of wind and solar

3,414 Btu/kWh Electricity It is likely that the battery will need replacement before the vehicle is retired.

Electricity is generated mainly through coal fired power plants. Coal is the United States’ most plentiful and price-‐stable fossil energy resource.

Table 1: Comparison of alternative sources of energy.23

Large Scale Stationary Fuel Cell Applications: Even though large-scale generating

capacity is still dominated by conventional fossil powered solutions – fuel cell technology has

already started to be used in large scale stationary applications in a similar scale to the diesel

gen-sets used in oil and gas industry. Several companies are employing different types of fuel

cell technologies in prime power applications – such as FuelCell Energy (MCFC, molten

carbonate fuel cells of 300 kW capacity), Bloom Energy (SOFC, solid oxide fuel cells of 200

kW capacity), ClearEdge Power (PAFC, phosphoric acid fuel cells of 400 kW capacity) and

Ballard (ClearGen® hydrogen fuelled PEMFC of 1 MW capacity) in USA and Korea, as the

major markets.24

23 DOE, Alternative Fuels Data Center. Website http://www.afdc.energy.gov/fuels/fuel_comparison_chart.pdf24 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 22.

8

Figure 3: Fuel Cell

Shipments for Stationary,

Transport and Portable

Applications 25

iii. Advantages of DMFC against Hydrogen Fuelled PEMFC

PEMFC systems already preferred in stationary applications use compressed hydrogen as

fuel.26 Indeed, use of methanol in liquid form instead would offer further advantages. First of

all, methanol has a considerably higher volumetric energy density than hydrogen even in

liquid form. Besides, building a liquid hydrogen infrastructure is prohibitively expensive.

Methanol on the other hand would only require limited modifications on existing fossil fuel

infrastructures. Furthermore, methanol can be more efficiently stored compared to

compressed hydrogen and needs less volume. Methanol is less volatile, hence more user-

friendly and prone to less leakage losses than hydrogen, which is dependent on high pressure

or cryogenic systems. On the other hand, the by-products of the fuel cell process using

DMFC, heat, carbon-dioxide and water are natural elements of environment, distinguishing

itself as a zero pollution technology. This provides a further advantage, since heat and water

generated beneath electrical power can be used as additional heat and water sources, which

particularly becomes important at remote location in cases of distributed generation as well as

in the proposed use in oil and gas industries.

Ultimately, methanol to be used in DMFC systems may be viewed as a compact and safe way

of storing hydrogen and offers a more cost-efficient fuel alternative to the hydrogen used in

PEMFC applications – in cases of large scale stationary prime and backup power systems.

Current Uses of DMFC: Such advantages have been started to be employed in backup

power applications in by companies like Oorja, SFC launching DMFC power supply 25 ibid., p 41.26 Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 33.

2009 2010 2011 2012 2013 2014

35.4 35 81.4 124.9 186.9147.3

50 56 2841

2828

1.5 0.4 0.4 0.50.3

0.5

Fuel Cell Shipments by Application (MW)

Stationary Transport Portable

9

products.27 Until recently, DMFC28 is being used in telecom off-grid backup systems, for

powering materials handling devices and refrigerated trucks, and also in lightweight city cars

by ECOmove in Denmark.29 Moreover, fuel processors are used to reform methanol into

hydrogen onsite for use with a conventional PEMFC system, as DMFC technology is not

suited to larger-scale applications for now. This style of deployment has soared in popularity

recently, most notably for telecoms backup power systems, as Ballard does, where methanol-

fuelled systems started to be preferred more than the hydrogen version, as reported in August

2014.30

Advantages of DMFC in Distributed Generation Market: More than 1.3 billion people are

lacking access to reliable electricity worldwide and 84% of them are located in rural areas.

DMFC based micro-grid and nano-grid systems can be readily used at remote locations,

thanks to the availability and easy transportation of the fuel used, methanol. 31 As an example

of DMFC distributed generation application, the US company Oorja has undertaken in the

year 2014 by a grant of United States Trade and Development Agency (USTDA) for

powering telecommunication towers in South Africa.32 33

An advantage brought in DMFC by technology in distributed generation market, especially at

remote locations such as oil and gas exploration sites is that the by-products of the full cell

process can be used as additional sources of water and heat, where no other alternatives are

available at remote locations.

Figure 4: Total Cost of

Ownership over Time: DMFC’s

costs are compared to hydrogen

fuelled PEMFC and to diesel

generator sets.34

27 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 21, 26, 38.28 ibid., p 31.29 Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 21.30 ibid., p 15.31 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 11-12.32 Alternative Energy Magazine (2014). “Oorja enters the African Telecoms market with pilot project funding from USTDA”. Website: http://www.altenergymag.com/news/2014/06/03/-oorja-enters-the-african-telecoms-market-with-pilot-project-funding-from-ustda-/3358633 Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 32.34 Orjaa company master files.

10

iv. Future of DMFC

Until recently, DMFC had a relatively low efficiency, making this technology more suitable

for applications with modest power requirements, such as mobile electronic devices or

chargers and portable power packs, where energy and power density are more important than

efficiency.

On the other hand, other fuel cell types, primarily molten carbonate fuel cells, are already

used as stationary prime power sources, and high temperature PEMFCs do also find a field of

application in in micro CHP, combined heat and power applications.35 Further potential fields

of use in larger scale are the oil and gas industry, remote communities, desalination plants,

off-grid mining, military, public service buildings (hospitals, schools, banks, government

offices), data centers, business parks, distribution centers.

Against all, the rules of this game are about to change, due to novel technological

developments achieved in the DMFC technology. DMFC will be a game changer in

applications of larger scale.

New Developments in DMFC: A US based manufacturer of DMFCs, Oorja has made a

technological progress in the development of DMFCs, namely a better efficiency with

enhanced water and carbon dioxide management modules has been achieved36 37. Currently,

Orjaa has managed to manufacture DMFCs of relatively higher capacity of 1.5 kW. In this

manner, a better design of MEA (membrane electrode assembly), bipolar stack type, more

efficient thermal unit have been achieved. The novel process enables cost reduction by 20-

30% and targets to prolong fuel cell lifetime from current 6k hours to 10k hours.

35 Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 24.36 Malhotra, S. (2008). Water Management in a Direct Methanol Fuel Cell System. United States Patent, Patent No. US 7,452,625 B2, p 3.37 Malhotra, S. (2006). Carbon Dioxide Management in a Direct Methanol System. United States Patent, Patent No. US 7,907,930 B2, p 2.

11

As the result further studies several improvements have been achieved in comparison to

conventional carbon supported catalyst. Instead of the wet chemical synthesis – a novel

process has been adopted. Ruthenium leaching due to its chemical synthesis due to low degree

of alloy was improved by a highly controlled alloying process using novel process. Effective

electrochemical surface area reduction with hydrophobic surface treatment was eliminates in

order to reach to a better performance. In contrast to multiple steps required to prepare

electrodes in the conventional catalyst, conventional printing step for catalyst ink could be left

out. The issue of varied particle size and potential non-alloy metal could be resolved by virtue

of the process provides very narrow bell distribution for the particle size of catalyst. All of

these developments have been supported further by several patent applications. 38 39 40 41 42 43

Furthermore, the power output of DMFC could be improved by more than 50 percent by MIT

scientists offering a potential of further commercialization of this technology. 44 The new

material, among other advantages, is considerably less expensive than its conventional

industrial counterparts. The goal of these studies was to replace traditional fuel-cell

membranes with more cost effective and highly tunable materials of higher performance. A

new technique, known as layer-by-layer assembly, was created as an alternative to the

material currently used for the electrolyte sandwiched between the electrodes, namely Nafion,

which is expensive as well as in-efficient allowing methanol to seep across the center of the

fuel cell. 45 46 Layer-by-layer processing enables nanometer scale blending of polymeric and

other organic/inorganic materials, which are otherwise impossible to form – using an

assembly as a versatile thin-film production method of repeated sequential immersion of

substrates into different solutions. By this new technique, the high methanol permeability and

38 Stark, J., & Knauer, P., & Malhotra, S., & (2009). Apparatus, System, and Method For Supplying Fuel To And Removing Waste From Fuel Cells. United States Patent, Patent No. US 2009/0226772 A139 Knauer, P., & Kwok, D., & Sanchez-Chopit, S. (2012). Apparatus and method for stacking fuel cells. United States Patent, Patent No US 2012/0005885 A1. 40 Sompalli, B., & Knauer, P., & Kwok, D. (2012). Compression of direct methanol fuel cell stacks with catalyst coated membranes and membrane electrode assembly. United States Patent, Patent No US 2012/0009493 A1.41 Cha, S., & Ridley, D., & Stark, J., & Kwok, D. (2012). Concentration sensor using an electrolytic cell for aqueous hydrocarbon fuel. United States Patent, Patent No US 2012/0009495 A1. 42 Cha, S., & Lau, W. (2012). Flow field design for high current fuel cell applications. United States Patent, Patent No US 2012/0015280 A1.43 Cha, S. (2012). Composite gasket for fuel cell stack. United States Patent, Patent No US 2012/0015283 A1.44 Thomson, E. (2008). MIT creates new material for fuel cells. MIT Tech Talk, Vol. 52, No. 27, p 5.45 Ashcraft, J.N., & Argun, A.A., & Hammond, P.T. (2010). Structure-property studies of highly conductive layer-by-layer assembled membranes for fuel cell PEM applications. Journal of Materials Chemistry, Vol. 20, p 6250–6257. 46 Argun, A.A., & Ashcraft, J.N., & Hammond, P.T. (2008). Highly conductive methanol resistant polyelectrolyte multilayers. Advanced Materials, Vol. 20, p 1539–1543.

12

high processing costs of Nafion prohibiting a wide spread commercial use of DMFCs. 47 In

addition, layer-by-layer films composed of polymer material have been studied for ionic

strength of assembly solutions in order to identify the nature of the remarkably high ionic

conductivity. 48

Ongoing R&D studies for future enhancements in DMFC technology are being carried out at

DOE Frontier Research Center together with Lawrence Berkeley National Laboratory

(LNBL), General Electric, Stanford and Yale Universities. These studies for the next

generation liquid fuel cell development have the following goals. A sufficient energy density

at accessible potentials will be achieved by the selection of the correct carrier liquids. Higher

rates at the right voltages are targeted by virtue of electro-catalysts being evaluated for

oxygen reduction and evolution. Proton conduction without fuel crossover is intended by the

use of Membranes to provide incredible selectivity and high proton transport. Higher

operation hours at lower costs will be achieved by higher durability of components.

b. Methanol – a Sustainable and Renewable Energy Source

Methanol is a very common industrial raw material and commodity worldwide. It is the 3rd

most widely produced, distributed und used chemical source material with an annual

consumption of 37 million tons.49

Methanol can be efficiently generated by different ways of production. The major production

method uses a wide variety of natural sources including still-abundant types of fossil fuels

such as natural gas, coal, oil, shale tar sands, methane hydrates and similar. Landfill gas is

another source of input in this production method. Furthermore, municipality and industrial

wastes can also be used for methanol production. Black liquor from pulp industry, lumber

mills, glycerol, demolition waste and animal waste are the sources used in this method.

A revolutionary way of methanol production is the recycling of carbon-dioxide to produce

methanol. Carbon Recycling International (CRI)50 has demonstrated with its first commercial

scale plant in Island. Rich flue gases of fossil-fuel-burning power plants or exhaust from

cement and other factories are used as sourced of carbon dioxide. Its process adopts the direct 47 ibid., p 1539.48 Ashcraft, J.N., & Argun, A.A., & Hammond, P.T. (2010). Structure-property studies of highly conductive layer-by-layer assembled membranes for fuel cell PEM applications. Journal of Materials Chemistry, Vol. 20, p 6250–6257. 49 Methanex website: https://www.methanex.com/50 Carbon Recycling International Website: http://www.carbonrecycling.is/

13

synthesis of carbon dioxide to methanol; the application development of large scale water

electrolyzers and purification of industrial flue gases.

In the longer term, another future potential exists for methanol production by renewable

chemical recycling of atmospheric carbon-dioxide even at low concentrations using new

efficient absorbents, solar power and catalysts. Stanford, MIT & US Naval Research Las and

others are reducing the costs of converting CO2 to methanol using solar power and catalyst.

Chemical recycling of CO2 to new fuels and materials could thus become feasible, making

them renewable on the human timescale.

14

Figure 5: Methanol prices: As to

Methanex Non-Discounted

Reference Price ($/gal) methanol

prices demonstrate a rather volatile

picture over more than 10 years. 51

Methanol prices demonstrate fluctuations, primarily depending on demand. While methanol is

not a derivative of crude oil, its price has become increasingly linked to price trends in the

energy complex. While traditional derivatives such as acetic acid and formaldehyde account

for about two-thirds of total methanol demand, energy is what is driving global growth,

according to the largest producer and supplier of methanol in the world, Methanex.

In the long term, however methanol production capacities are across the world, as new

investments to be launched in Iran are being reported. Another potential center for future

methanol production would be Antwerp52, offering a high level of integration and diversity

across the value chain of petrochemicals, with synergies in energy, process integration and

logistics leading to cost effectiveness.

3. Counterarguments

a. Technical Constraints

New technologies – especially in energy – take decades to become relevant. But the pace of

change in energy today is higher than ever, as is the uncertainty. Under current conditions,

DMFC can only be efficiently used in modest power applications, such as backup power of

51 Methanex website: https://www.methanex.com/our-business/pricing52 EPC (2007) Think Tank Sessions.

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Methanex Non-Discounted Reference Price

$/gal

15

telecom systems and forklifts, but in large scale applications, due to high costs of the

electrolyte material between electrodes in DMFC causing methanol to be wasted as fuel.

On the other hand, currently only PEMFC consuming hydrogen as fuel can be used on larger

scale applications for the same reason. This may however change in future and methanol can

be used instead of hydrogen, if and when DMFC technology can be sufficiently improved

allowing methanol to be used as fuel in larger scale applications.

b. Economical Constraints

As the result of recent developments in the US tight oil and gas revolution and increasing

global oil supply, Consequently, oil prices have experienced a large drop over the last 12

months, 2014 and 2015, more than halving crude oil prices from about $110 to $40 and now

just recently stabilized around $60-70 levels, in the long term the price volatility is an

expected uncertainty, as the tight oil producers will be able to balance supply demand

equilibrium and due the new flexible oil production technologies. This would make fossil

fuels still a more economic source of energy.

Figure 6: WTI Oil Prices, 1973 to

Present: Prices for the U.S.

benchmark have fluctuated between

$16 and $142 a barrel over the last

40 years.

Fuel cell business is still a non-profitable despite hefty clean-energy subsidies, as seen in the

example of Ballard Power Systems Inc. engaged in the development and commercialization of

PEMFCs worldwide since 1979 and has made extensive R&D investments in the amount of

$1 billion and is still in loss.

16

4. Discussion and Conclusions

Energy and its sources on earth are limited regarding the geometrically increasing global

population. The sustainability of energy sources and the environmental issues in connection

are becoming more and more important across the globe – leading to it that new types of

energy sources and technologies of energy use are being sought for decades. One of such

novel technologies is the fuel cells finding increasingly more use, providing benefits and

address critical challenges in all energy sectors – industrial, commercial, residential, and

transportation – through their use in diverse applications.

Fuel cell is promising technology thanks to the advantages in a reasonably wide range it

offers. It is a more economic, efficient and environment-friendly source of energy. This

makes it an attractive candidate in replacing the accommodation of fossil fuels causing several

concerns such as greenhouse gas emissions and limited natural reserves.

One of these fields of application in industry would be being the main focus in this present

study: The power source needs in oil and gas industry, which are currently met by diesel

generators. When compared with diesel generators sets DMFCs offer several competitive

advantages in terms of durability, performance and cost reduction – as well as benefits with

respect to producing, storing and delivering the raw material used, namely methanol.

Methanol is as a lighter and safer material, making it a more efficient, more economic raw

material which is easier and safer to transport and to store. Another vital factor for raw

materials is their availability thanks to different alternatives of production sources and

methods available. It can be manufactured easily and by natural ways of production.

Nevertheless, fuel cell and DMFC technologies have not yet reached to a sufficient level to be

used widely in practice. The major issue under the scope of this study – in the use of DMFCs

instead of diesel generators is the concerns of scalability of DMFC technology.

DMFCs are currently not suitable large scale due to certain electrolyte issues, which would

also affect its alternative use above 100 kW level in oil and gas industries as diesel generator

sets. Indeed, technological developments and governmental incentives across all developed

countries supporting the development of alternative fuel sources and fuel cells in particular

are quite promising. DMFCs have already started to be used in the distributed generation

market on larger scale applications around 10 kW capacity at remote locations. Several

17

private sector corporations, academicians and official institutes are engaged with the

enhancement of DMFC which would most probably in near future. Another major threat

overall which might affect all types full cells and alternative sources of energy is the

possibility of low levels of oil prices in future, which might be achieved particularly by the

new easily adoptable tight oil and gas productions and the over supply of hydrocarbons in the

global markets.

In conclusion, fuel cells in general and specifically direct methanol fuel cells are promising

new technologies of clean energy sources worth to invest in, thanks to novel scientific

developments and substantial government supports – having a large potential to be used in the

oil and gas industry to supply prime and backup power to operation sites as well as midstream

and downstream operations.

18

5. References

U.S. Department of Energy (2011). An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies. The Department of Energy Hydrogen and Fuel Cells Program Plan.

Malhotra, S. (2006). Carbon Dioxide Management in a Direct Methanol System. United States Patent, Patent No. US 7,907,930 B2, p 1-2.

Malhotra, S. (2008). Water Management in a Direct Methanol Fuel Cell System. United States Patent, Patent No. US 7,452,625 B2, p 1-3.

Stark, J., & Knauer, P., & Malhotra, S., & (2009). Apparatus, System, and Method For Supplying Fuel To And Removing Waste From Fuel Cells. United States Patent, Patent No. US 2009/0226772 A1

Knauer, P., & Kwok, D., & Sanchez-Chopit, S. (2012). Apparatus and method for stacking fuel cells. United States Patent, Patent No US 2012/0005885 A1.

Sompalli, B., & Knauer, P., & Kwok, D. (2012). Compression of direct methanol fuel cell stacks with catalyst coated membranes and membrane electrode assembly. United States Patent, Patent No US 2012/0009493 A1.

Cha, S., & Ridley, D., & Stark, J., & Kwok, D. (2012). Concentration sensor using an electrolytic cell for aqueous hydrocarbon fuel. United States Patent, Patent No US 2012/0009495 A1.

Cha, S., & Lau, W. (2012). Flow field design for high current fuel cell applications. United States Patent, Patent No US 2012/0015280 A1.

Cha, S. (2012). Composite gasket for fuel cell stack. United States Patent, Patent No US 2012/0015283 A1.

Argun, A.A., & Ashcraft, J.N., & Hammond, P.T. (2008). Highly conductive methanol resistant polyelectrolyte multilayers. Advanced Materials, Vol. 20, p 1539–1543.

Ashcraft, J.N., & Argun, A.A., & Hammond, P.T. (2010). Structure-property studies of highly conductive layer-by-layer assembled membranes for fuel cell PEM applications. Journal of Materials Chemistry, Vol. 20, p 6250–6257.

Thomson, E. (2008). MIT creates new material for fuel cells. MIT Tech Talk, Vol. 52, No. 27, p 5.

Hart, D., Lehner F., Rose, R., & Lewis, J. (2013). The Fuel Cell Industry Review 2013. E4tech, p 2-45.

Carter, D., & Wing, J. (2014). The Fuel Cell Industry Review 2014. FuelCellToday, p 2-45.

19

Mackinnon L., & Jerram, L. (2014). Fuel Cells Annual Report 2014. Navigant Research, p 1-3.

Dumaine B. (2014). Fuel Cells Power Way Up, Way Up. The Fortune , May 19, 2014, p 25-26.

National Renewable Energy Laboratory (2012). Hydrogen and Fuel Cells Research: Early Fuel Cell Market Demonstrations. Website: http://www.nrel.gov/hydrogen/proj_fc_market_demo.html.

National Renewable Energy Laboratory (2012). Hydrogen Technologies and Systems Center’s Technology Validation Program, “Total Cost of Ownership for Class I, II, & III Forklifts” . Website: http://www.nrel.gov/hydrogen/cfm/images/cdp_mhe_58_totalcostofownership.jpg.

Alternative Energy Magazine (2014). “Oorja enters the African Telecoms market with pilot project funding from USTDA”. Website: http://www.altenergymag.com/news/2014/06/03/-oorja-enters-the-african-telecoms-market-with-pilot-project-funding-from-ustda-/33586

Lee, J. S. et al. (2006). Polymer electrolyte membranes for Fuel Cells, Journal of Industrial and Engineering Chemistry 12, p 175-183.

Dohle, H.; Mergel, J. & Stolten, D. (2002) Heat and Power Management, Journal of Power Sources, 111, p 268-282.

EPC (2007) Think Tank Sessions.

Interviews with corporate executives of the companies: Caterpillar (Geneva, Silicon Valley), Enel (Italy), MV Holding (Turkey), Romulus Cap (Cambridge, MA, USA), Telecom Italia, INWIT (Italy), Aksa Enerji (Turkey), Terremark (USA), Medina CAP (USA), 2014-2015, IHS Geneva

20