Shale Oil Obstacles
By EV World
The world's largest deposits of shale oil are found in America. Estimates range into the equivalent of a trillion of barrels of oil. But that doesn't mean our energy problems are solved; not by a long shot, as the attendees to the 2005 ASPO USA conference in Denver, Colorado learned.
As the head of Shell's Unconventional Resources unit, Steve Mutt, explained that as far back as the native Americans, people have been trying to exploit this resource, which is essentially immature petroleum. The Indians called it fire rock and inexperienced homesteaders tried to use it for their fireplaces with disastrous consequences.
Historically, it has been mined as illustrated by the 1947 photo of a Bureau of Mines experiment in Rifle, Colorado. To extract any useable hydrocarbons from the shale, the rock must be crushed and then heated. What is left behind is a charcoal-like waste that, itself, presents its own set of environmental problems. Efforts to utilize this resource over the last 50 years have not proven economically viable in the face of cheaper, better quality oil and gas.
"Unlike oil and gas, finding the prize isn't the issue. Unlocking the resource and migrating it to reserve position is the real challenge," Mutt stated, adding that there are an estimated 2-to-4 trillion barrels (equivalent) oil shale located around the world, principally in about 20 countries, but over half of it is located in the United States.
Yet, despite these vast quantities of carbon-rich energy resources, Mutt indicated that very little of it may actually end up being utilized in the 21st century due to limits in technology -- not to mention growing concerns about pollution, excessive water consumption and greenhouse gas emissions.
Because of the inherit problems associated with mine extraction and surface retort of shale, Shell decided to investigate a second, less environmentally-damaging methodology: in-situ conversion. It's been working on the process for the last 23 years.
Starting in 1996, the company has successfully carried out five, small-scale ICP tests, the most recent being late in 2005 in which some 1,500 barrels of light hydrocarbon liquid and some associated gas was recovered from an area of a only a few hundred square feet. Mutt noted that while small, the results confirmed its computer model and will lead to a larger scale test that will help determine the economic viability of going to full-scale production.
The IC process or ICP involves drilling bore holes into the shale deposit and heating the surrounding kerogen-rich rock with electric resistance heaters at between 600-700 degrees F for a period of three to four years. To control groundwater encroachment, additional bore holes are drilled along the perimeter of the in-situ site and the groundwater is frozen.
About sixty-percent of the hydrocarbon present in the rock gradually migrates as a gas to a conventional extraction well. The remaining hydrogen-poor carbon resembles charcoal and is of little commercial value.
"We call this process ‘smart carbon sequestration' because the easiest carbon to sequester isn't brought to the surface in the first place."
"ICP is clearly energy intensive as its principle driving force is the injection of heat into the subsurface," Mutt commented. The EROEI or Energy Returned on Energy Invested is about 3.5 units produced for every one unit of energy invested.
According to Wikipedia, "this compares to a figure of typically 20 to 100 for conventional oil extraction."
Mutt noted that the EROEI for ICP "compares favorably" with other methods used to extract useable fuel from heavy petroleum deposits. What results are a pre-gasoline, naphtha, a jet fuel-like liquid and a heating oil-like liquid in a roughly percentages.
"All these fractions can be easily transformed into finished products with significantly reduced processing when compared with traditional crude oils", Mutt stated.
Back underground, the IC process not only leaves behind the "charcoal" waste, but also other contaminates which could pollute subsurface water sources. According to Mutt this material can be brought to the surface for treatment and abatement that he says meets very stringent licensing requirements.
He also pointed out that like coal and other heavy hydrocarbons, shale oil is deficient in hydrogen and results in a proportionately higher release of greenhouse gases when compared to conventional petroleum and natural gas.
"ICP is also very energy intensive in the production phase," he acknowledged. It requires a lot of electricity that also increases its CO2 profile. "These negatives are offset by the fact that ICP includes a carbon rejection step in the subsurface, produces only light products with little need for above ground conversion, and not requirement for residual upgrading.
"As such, on a lifecycle basis, ICP and oil shale have a carbon dioxide impact similar to that of the average crude (oil) process in the United States, and far superior one to the incremental to the heavy barrel, which represents the marginal barrel imported into the country today."
Mutt explained that because of the in-situ process, no mine tailings are created and far less water is used than in the older retort method. In addition, he estimated that it can recover 1 million barrels of oil per acre in the richest basins, which is about 10 times what can be produced using conventional mining and retort methods. Shell also believes that the IC process might also be applicable to older oil fields and possibly tar sands.
Mutt cautioned that with respect to ICP, Shell is very much still in research mode and the promise of unconventional energy resources like shale oil remain a promise, not a fact.
"Even with success, ICP will only be viable on a small fraction of the oil shale resources worldwide". He added that Shell hopes to make the process commercial by the end of the decade.
Following his formal presentation, Mutt participated in a 13-minute Q&A that revealed more about the current state of shale oil development, including the fact that projections of the industry being able to produce 10 million barrels of fuel a day by 2025 would appear unrealistic for environmental and economic reasons. This synopsis only covers the major points of Mr. Mutt's presentation, so we encourage you to use the MP3 player above or download the MP3 files of both his presentation and the follow-up questions.
EV World expresses its thanks to ASPO USA, Steve Andrews and Randy Udall for granting us permission to attend and record this historic event. The next conference will be held in Boston, Massachusetts in 2006.