An industrial plant that would be the first large-scale facility in the U.S. that converts natural gas into diesel  and other liquid fuels – a so-called “gas to liquids” plant – recently received a key permit approval. Regulators are now seeking public comments on a proposed air pollution control permit.

On Sept. 27, the North Dakota Public Service Commission approved a siting permit for a Canadian company called Cerilon to build a gas-to-liquids plant in Trenton, about 10 minutes from the Montana border in a shale formation with some of the most productive oil and gas fields in the country.  

Cerilon is marketing the facility as environmentally friendly, but according to the facility’s proposed Clean Air Act permit, the plant would emit over 5,700 tons of dangerous air pollutants and nearly 4.3 million tons of greenhouse gases annually. That’s more than the carbon emissions from 860,000 cars and trucks driven for one year.  

Not everyone has heard of “gas to liquids” or GTL fuel.  Because the name incorporates the words “gas” and “liquid,” it sounds like liquefied natural gas (LNG), but it is very different. LNG is methane that is supercooled and condensed into a liquid form so it can be more easily shipped, often overseas on tankers, and then burned to generate electricity or to power industry.

GTL technology chemically separates the components of natural gas into liquid fuels such as gasoline, diesel, and jet fuel that are usually made from petroleum. The idea has been around for nearly a century – but large-scale applications in the U.S. have faced significant delays or cancellations, in part because of economics.

GTL makes sense, from a business perspective, when natural gas prices are extremely low, relative to crude oil. So renewed interest rose about a decade ago when the fracking boom caused natural gas prices to plummet. A Cerilon representative told Oil & Gas Watch News that “a surplus of natural gas in North Dakota” is one of the key factors in planning the project there.  

There are currently no operating GTL plants in the U.S., although they have been built in Malaysia, Qatar, and South Africa.

The project proposed by Cerilon Inc. in North Dakota would convert natural gas into 48,000 barrels per day of liquid hydrocarbon products – including diesel, naphtha, and lubricant base oils – while capturing and sequestering carbon dioxide.    

A public information meeting and public hearing will be held on Nov. 14 at 5:30 p.m. in the Williams County Administration Building in Williston, North Dakota, and public comments on the draft air construction permit will be accepted until Nov. 25, 2024.  

Cerilon isn’t the first company to attempt a large-scale GTL project in the United States. Several plants have been proposed over the years, but all have been canceled or are significantly delayed. One of them is planned for Redfield, south of Little Rock, Arkansas, where Energy Security Partners is proposing to build a 33,000 barrel per day GTL plant. The project – which has the potential to emit over 8 million tons of greenhouse gases per year – has failed to move forward after four years of delay. Energy Security Partners reapplied for a new construction permit in July 2024.

Cerilon boasts that the Trenton plant will be the first gas-to-liquids plant in the world to include carbon capture and sequestration. The company plans to capture approximately 450,000 metric tons of CO2 per year from each phase of the project, or around 30 percent of the facility’s projected annual CO2 emissions—significantly lower than the 2 million ton per year capture rate announced when the project was first proposed in 2021.

The captured carbon will be transported by pipeline to nearby sequestration sites. A Cerilon spokesperson said the company is considering “a number of sequestration sites with suitable geology” in the area but has not selected a final location.  

“We are conducting the necessary technical work on this component of our project and the permitting process has not started,” the company spokesperson said in an email. “Our facility will include carbon capture technology and we are working with partners who have CCS experience in North Dakota and elsewhere to permit, design and build the CO2 pipeline and sequestration component.”

But carbon capture technology is largely untested and has not been proven to be economically viable on a large scale. “Is carbon capture actually going to work for permanent sequestration? We don’t know yet. A lot of the science is theoretical,” said Scott Skokos, executive director of Dakota Resource Council, a watchdog group.

Cerilon will need to obtain underground injection control permits from the North Dakota Department of Mineral Resources before it can begin sequestering carbon dioxide. Although the company plans to sequester carbon underground, it has not ruled out using the captured CO2 for enhanced oil recovery. While injecting carbon dioxide underground is considered carbon sequestration, using it to extract more oil and gas offsets many of its supposed benefits.

Cerilon asserts that its products are cleaner alternatives to conventional diesel and gasoline. The company claims that its GTL diesel is “non-toxic, nearly odorless and is readily biodegradable,” and that its GTL naphtha is low in sulfur and “essentially aromatics free.”  

Naphtha is a mixture of hydrocarbons that can be sold for further refining or diluted with oil from the Canadian oil sands for pipeline transport. Cerilon is based in Alberta, home to around 70 percent of the world’s oil sands—one of the most destructive and carbon-intensive fossil fuels.

Because Trenton is in the heart of the Bakken formation, one of the project’s stated objectives is to bolster the state’s oil industry by capitalizing on associated natural gas production, or gas that’s produced alongside crude oil. Once fully built, the Trenton plant will be able to process 480 million standard cubic feet of natural gas per day—roughly the same amount of energy needed to power 1,900 homes for one year. For context, the town of Trenton is home to just under 500 people, according to the 2020 U.S. Census.  

Associated natural gas is often flared or vented into the atmosphere, although the latter is illegal in North Dakota. The oil and gas industry has argued for years that the best way to lower natural gas flaring at aging oil wells is to build pipelines, gas processing plants, and other infrastructure that can capture excess gas and convert it into valuable products.  

“If [the Cerilon GTL plant] does reduce flaring, it’s not a bad thing. But the devil is in the details,” Skokos added.  

The Cerilon GTL Plant took a huge step forward last month after securing a key permit from the North Dakota Public Services Commission—just months after the agency denied a similar approval for the Summit Carbon Pipeline Project. The company has also garnered millions of dollars in tax breaks and incentives from local and state governments, including $3 million in initial development capital from the North Dakota Development Fund, a $7 million grant and a $40 million loan from the state’s Industrial Commission, and $16 million in loans from the Williams County Board of Commissioners.  

Lead photo: A drilling site in North Dakota, where Canadian company Cerilon is proposing a gas-to-liquids plant that would convert natural gas into liquid fuels such as gasoline and diesel. Photo by Trudy E. Bell, FracTracker Alliance, 2013.