Review of Cost Improvement Literature with Emphasis on Synthetic Fuel Facilities and the Petroleum and Chemical Process Industries

by Ron Hess


Download eBook for Free

FormatFile SizeNotes
PDF file 4.7 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 FormatList Price Price
Add to Cart Paperback165 pages $40.00 $32.00 20% Web Discount

In order to provide a firmer basis for making realistic assessments of potential synthetic fuel process cost reductions, this Note documents a review of the publicly available literature on cost improvement, defined as the reduction in a technology's unit product cost that typically occurs as experience with the technology is gained. The review encompasses both theoretical and applied works and emphasizes the practical observations and empirical data from the few synthetic fuel facilities actually in existence as well as the analogous petroleum refining and chemical process industries. Among its conclusions, the study found that (1) with respect to overall unit product cost/price, the effective range of improvement rates appears to be between 5 percent and 40 percent with a norm between 20 percent and 30 percent; and (2) it typically takes four or five years to iron out basic performance problems in innovative process plants.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.