Wednesday, September 21, 2005

Let's talk about oil shale

This report has everyone a-twitter over the fantastic volume of 1.5 to 1.8 trillion barrels of oil reserves in our western oil shale deposits. Now, before we start celebrating and immediately withdraw from the Middle East so that they may get on about the business of killing each other as they have for 1300 years, a few words of caution.

First, "oil shale" is a misnomer. There is no oil in it, at least as we think of petroleum and it's not shale. The organic material is chiefly kerogen and the "shale" is usually a relatively hard rock, called marl. Kerogen is a solid, waxy, organic substance that forms when pressure and heat from the Earth act on the remains of plants and animals. Kerogen converts to various liquid and gaseous hydrocarbons at a depth of 7 or more kilometers and a temperature between 50º and 100ºC - or - yields oil when the shales undergo destructive distillation. And therein lie the problems, insoluble up to the present time.

The kerogen must be superheated to about 450ºC (842ºF) in order to convert it to something approaching petroleum. If the shale is mined and crushed, this is done above ground but produces a horrifying amount of waste material as well as permanently scarring the land. It can also be done "in situ" by sinking heaters encased in pipe into the shale to great depths. The shale is heated and the resulting gases and liquids can be pumped out, more or less like a conventional oil or gas well.

Both processes use a tremendous amount of water which would then presumably also be contaminated and have to be treated, an expensive process in its own right. The material generated by either of these processes produces a liquid which must undergo additional processing and the result is an oil which is said to be better than the lowest grade of oil produced from conventional oil deposits, but of lower quality than the upper grades of conventional oil. In other words, it's not Texas Sweet. It would really be most fair and accurate to call the processing results synthetic crude oil and gas.

Oil companies have spent billions of dollars, and heretofore lost all of it, in attempting to overcome these significant obstacles. At $66.00 a barrel, however, the expense might now be worth it. The environmental concerns and challenges are gargantuan and are only now beginning to be addressed.

The proven oil shale deposits in the US total 33,400,000,000,000 tonnes (multiply by 1.2 for US tons). That's 33 trillion 400 billion tonnes. And estimated undiscovered reserves are about the same number, so the total is about 67 trillion 800 billion tonnes. The estimated yield of synthetic oil per shale tonne is 57kg, or about 125 pounds of oil per tonne of shale. A conventional barrel of oil weighs about 250 lbs., so about two tonnes of shale is required per barrel of synthetic lower grade oil. Therefore, US known deposits of oil shale should yield about 1.675 trillion barrels of oil with the possibility of doubling that number.

(shale tonnes x 57kg x 2.2) / 250 = conventional barrels

Try to imagine the hole a 33,400,000,000,000 tonne excavation would make. Hello, China. Try to imagine the mountain of waste rock (carcinogenic) because the rock expands, kind of like popcorn, when it is heated to remove the kerogen, so more has to go back than is removed. Hello, Icarus. Try to imagine the poisons produced by the processing of all that shale if it is done above ground, or all the dead fish if it is done in situ. Hello, King of the Wasteland - the Ayatollah of rock-'n-rolla.

It is an unfortunate fact that none of the oil companies, despite their massive investments in research, have been able to successfully demonstrate the capacity to process this stuff in large quantities without rendering an uninhabitable moonscape, a real Death Valley. But, at $66.00 per barrel and 1.7 to 3.4 trillion barrels awaiting, the impetus exists to keep pouring money into it.

However, all is not doom and gloom. Shell Oil believes that its in situ process can be profitable at oil prices above $30 per barrel and its process, theoretically, is fairly clean. It is also fairly efficient, using about 1 unit of energy for every 3.5 units produced. This is far, far more efficient than any other technology that anyone is talking about. Shell has tested and, at least to their satisfaction, has proven the process on a very small scale. The process is, in a word, amazin'. Here is how Shell does it.

1. Drill shafts into the oil-bearing rock. Drop heaters down the shafts. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. The resultant product will be about one-third natural gas, two-thirds light synthetic crude oil. One advantage discovered with oil shale is that a production site, when it gives out, gives out fairly quickly. This is as opposed to conventional wells which taper off over many years, yielding less and less petroleum as each year goes by. Shell claims that this process yields 10 times as much oil as more conventional strip mining and above-ground processing.

2. While the rock is cooking, ground water contamination becomes a real problem. What is the simplest compound you can think of that is impermeable to water? Right, ice. Shell drills holes all around the production site, every 8 to 10 feet, installs pipe and pumps refrigerant through the pipe. The ground water is frozen all around the superheated rock effectively protecting itself as well as the groundwater outside the site. A protective "shell", as it were, 20 to 30 feet thick. Now Shell pumps out the water inside the ice "shell" and production commences.

3. When the production site gives out, Shell pumps water back into the shafts. Since the rock is superheated, much of the initial water flashes off as steam which picks up any kerogen still laying around. Shell collects the steam and removes this last vestige of useful organic compound which also avoids contamination of the surrounding groundwater, and then moves on to the next production site. Shell uses a checkerboard (chessboard, for you geeks) approach, which means that they will maintain and use 1 or 2 of the ice walls from site A for site B, and so on.

Pretty nifty, eh? But also unproven on a production scale and it will be horrendously and frightfully expensive to develop that first production site. Also, the real fear of the oil companies like Shell is that if they invest billions more in the development of this process, what happens to the price of oil? Imagine the price of oil in 10 years if the United States tapered off oil imports to, oh, zero. Will China's oil requirements keep pace and keep the price of a barrel of oil high enough that Shell et al can make money? And China is actively engaged in oil shale exploration and process development, also. It's a little scary. Possibly the federal government will have to step up to the plate here and offer some type of protection to oil companies willing to sink 5, 10, 20 billion dollars or more in this project. And remember that the oil companies have already lost a bundle in their early and unsuccessful attempts to develop oil shale production. All in all, though, it seems pretty exiting to me.

More info here:
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