Oil shale

Oil shale is a general term applied to a group of rocks rich enough in organic material (called kerogen) to yield petroleum upon distillation. The kerogen in oil shale can be converted to oil through the chemical process of pyrolysis. During pyrolysis the oil shale is heated to 445-500 °C in the absence of air and the kerogen is converted to oil and separated out, a process called "retorting". Oil shale has also been burnt directly as a low-grade fuel. The United States Energy Information Administration estimates the world supply of oil shale at 2.6 trillion barrels of recoverable oil, 1.0-1.2 trillion barrels of which are in the United States Energy Information Administration, Annual Energy Outlook 2006.

Estonia, Russia, Brazil, and China currently mine oil shale, however production is declining due to economic and environmental factors.

Geology

Oil shale is considered to be formed by the deposition of organic matter in lakes, lagoons and restricted estuarine areas such as oxbow lakes and muskegs. Generally, oil shales are considered to be formed by accumulation of algal debris.

When plants die in these peat swamp environments, their biomass is deposited in anaerobic aquatic environments where low oxygen levels prevent their complete decay by bacteria. For masses of undecayed organic matter to be preserved and to form oil shale the environment must remain steady for prolonged periods of time to build up sufficiently thick sequences of algal matter. Unlike coal, oil shale does not necessarily require low mineral and ash content, as it is not used for burning, and mineral waste in oil liquefaction plants is easier to deal with.

Eventually, and usually due to the initial onset of orogeny or other tectonic events, the algal swamp-forming environment is disrupted and oil shale accumulation ceases.

Burial by sedimentary loading on top of the algal swamp converts the organic matter to kerogen by the following processes;

Compaction, due to loading of the sediments on the coal which flattens the organic matter
Removal of the water held within the peat in between the plant fragments
With ongoing compaction, removal of water from the inter-cellular structure of fossilized plants
With heat and compaction, removal of molecular water
Methanogenesis; similar to treating wood in a pressure cooker, methane is produced, which removes hydrogen and some carbon, and some further oxygen (as water)
Dehydration, which removes hydroxyl groups from the cellulose and other plant molecules, resulting in the production of hydrogen-reduced coals

However the heat and pressure were not as great as in the similar process that forms petroleum. Oil shale is known as 'rock that burns'.

Extraction

There are two main methods of extracting oil from shale - surface mining and in-situ.

Mining

With mining, the oil shale is/can be mined either by traditional underground mining or surface mining from the ground and then transported to a processing facility. At the facility, the shale is heated to 450–500 °C and enriched with hydrogen (via introduction of superheated steam). The resulting oil is then separated from the waste material. More recent but less exhaustively tested technology may enable the shale to be processed at somewhat lower temperatures with the addition of catalyzing bitumen.

In-situ

With in-situ processing, the shale is fractured and heated underground to release gases and oils. Most of these methods are still experimental.

The Shell Oil Company has been developing a new method under the name the Mahogany Research Project that uses electrical heating in Colorado, some 200 miles (320 km) west of Denver. A heating element is lowered into the well and allowed to heat the kerogen over a period of approximately four years, slowly converting it into oils and gases, which are then pumped to the surface. This greatly reduces the footprint of extraction operations—to no more than a conventional oil well. It could also potentially extract more oil from a given area of land, as the wells can reach much deeper than surface strip-mines can.

Methods for In-situ Retorting		In-Situ Conversion Program	bgcolor=#FFFFFF	Super Heated Air	bgcolor=#FFFFFF	Supercritical Fluid Extraction	bgcolor=#FFFFFF

History

Oil shale has been used since ancient times and can be used directly as a fuel just like coal. The modern use of oil shale to produce oil dates to Scotland in the 1850s. In 1847 Dr James Young prepared lighting oil, lubricating oil and wax from coal. Then he moved his operations to Edinburgh where oil shale deposits were found. In 1850 he patented the process of "cracking" oil into its constituent parts. Oil from oil shale was produced in that region from 1857 until 1962 when production was cancelled due to the much lower cost of petroleum.

Estonia first used oil shale as a low-grade fuel in 1838 after attempts to distill oil from the material failed. However it was not exploited until fuel shortages during World War I. Mining began in 1918 and has continued since, with the size of operation increasing with demand. Two large power stations burning oil shales were opened, a 1,400 MW plant in 1965 and a 1,600 MW plant in 1973. Oil shale production peaked in 1980 at 31.35 million tonnes. However, in 1981 a nuclear power station opened in the nearby Leningrad region of Russia, reducing demand for Estonian shale. Production gradually decreased until 1995, since when production has increased again albeit only slightly. In 1999 the country used 11 million tonnes of shale in energy production, and plans to cut oil shale's share of primary energy production from 62% to 47–50% in 2010.

Australia mined 4 million tonnes of oil shale between 1862 and 1952, when government support of mining ceased. More recently, from the 1970s on, oil companies have been exploring possible reserves. Since 1995 Southern Pacific Petroleum N.L. and Central Pacific Minerals N.L. (SPP/CPM) (at one time joined by the Canadian company Suncor) has been studying the Stuart Deposit near Gladstone, which has a potential to produce 2.6 billion barrels of oil. From June 2001 through to March 2003, 703,000 barrels of oil, 62,860 barrels of light fuel oil, and 88,040 barrels of ultra-low sulphur naphtha were produced from the Gladstone area. Once heavily processed, the oil produced will be suitable for production of low-emission petrol.

Brazil has produced oil from oil shales since 1935. Small demonstration oil-production plants were built in the 1970s and 1980s, with small-scale production continuing today. China has been mining oil shale to a limited degree since the 1920s near Fushun, but the low price of crude oil has kept production levels down. Russia has been mining its reserves on a small-scale basis since the 1930s.

The United States has seen some attempts at large-scale exploitation. Oil distilled from shale was first burnt for horticultural purposes in the 19th Century, but it was not until the 1900s that larger investigations were made and the Office of Naval Petroleum and Oil Shale Reserves was established in 1912. The reserves were seen as a possible emergency source of fuel for the military, particularly the Navy.

After World War II, the US Bureau of Mines opened a demonstration mine at Anvils Point, just west of Rifle, Colorado, which operated at a small-scale. In the early sixties TOSCO (The Oil Shale Corporation) opened an underground mine and built an experimental plant near Parachute, Colorado. It closed in the late sixties because the price of production exceeded the cost of imported crude oil. It was not until the oil crisis of the 1970s and the US becoming a net importer of oil that efforts at utilization were increased. Military uses were deemed less important and commercial exploitation came to the fore, with several oil companies investing. Unocal returned to the same area where TOSCO had worked. Several billion dollars were spent until declining oil prices rendered production uneconomical once more and Unocal withdrew in 1991. In late 2005, President Bush authorized discrete mining of federally owned reserves under Colorado's surface. The federal government currently owns 72% of all known oil shale in the US.

Reserves

Estimates vary as to how many barrels of oil are contained in oil shale reserves. The US Office of Naval Petroleum and Oil Shale Reserves estimates there are some 1.6 trillion barrels of oil contained in oil shales around the world, with 60–70% of reserves (1.0–1.2 trillion barrels) in the United States. Most US oil shale is concentrated in the Green River Formation in Wyoming, Utah and Colorado. These oil shale resources underlie a total area of 16,000 square miles (40,000 km²).

Estonia has some five billion tonnes of oil shale reserves.

The Australian Geological Survey Organization estimates that the country has 32–37 billion tonnes of oil shale, equivalent to 220–260 billion barrels of oil.

Germany has reserves equivalent to three billion tonnes of oil shale.

Israel has more than 15 billion tonnes of lean oil shale, equivalent to about 5 billion barrels of oil. The cost of extracting distillates from oil shale was estimated in 1999 to be about 27 US dollars per barrel.

Jordan has estimated its oil shale reserves at 40 billion barrels.

Economics

Below forty dollars a barrel, oil-shale oil is not competitive with conventional crude oil. If the price of oil were to stay permanently over forty dollars a barrel (with no chance of declining, which could be the case if oil shale were to be exploited on a large enough scale), then companies would exploit oil shale. Generally, the oil shale has to be mined, transported, retorted, and then disposed of, so at least 40% of the energy value is consumed in production. Water is also needed to add hydrogen to the oil-shale oil before it can be shipped to a conventional oil refinery. The largest deposit of oil shale in the United States is in western Colorado (the Green River Shale deposits), a dry region with no surplus water. The oil shale can be ground into a slurry and transported via pipeline to a more suitable pre-refining location.

During the oil crisis of the 1970s, people thought that oil supplies were peaking, expected oil prices to be around seventy dollars a barrel for some time to come, and invested huge amounts of money in refining oil shale — money that they lost. Because of the astronomical sums that were lost last time around there is considerable reluctance to invest in oil shale this time around. Investors are waiting to see if oil prices really will remain this high (in April 2006: dollar|US$75" target="_blank" >^*). Prices are rising because of increased demand in rapidly developing countries, particularly China. Will high prices result in the discovery of more oil, as happened in the seventies, or will alternatives to drilling for oil have to be developed? Investors, burnt badly in the 1980s for their enthusiasm of the seventies, are in no hurry to develop oil shale. Those who lost money then are inclined to believe that more oil will be found in the near future, although the increasing resource nationalism in producer countries such as Venezuela and Bolivia mean resources in those countries will be off-limits to Western oil and gas companies.

In 2005, Royal Dutch Shell announced that its in-situ extraction technology could be competitive at prices over $30/bbl Shell's Ingenious Approach to Oil Shale is Pretty Slick, Rocky Mountain News, September 3, 2005. There are other companies that have other patented methods for in-situ retorting, but the Shell method has proven to produce in commercial quantities after a pilot project shown successful.

US Companies in Oil Shale
Companies	Method	bgcolor=#CCCCCC	Shell	In-situ Conversion Program	bgcolor=#CCCCCC	Exxon Mobil		bgcolor=#CCCCCC	EGL Resources		bgcolor=#CCCCCC	Oil Tech		bgcolor=#CCCCCC	Oil Shale Exploration	Unknown

A critical measure of the viability of oil shale is the ratio of energy used to produce the oil, compared to the energy returned (Energy Returned on Energy Invested - EROEI). Oil shale typically has a very low EROEI: Royal Dutch Shell reported a figure of about 3:1. That is, energy equivalent to one barrel of oil was used for every three gained, on its recent in-situ development (which uses electric heating of the shale up to 500 degrees fahrenheit while it is still in the ground, and also creating a frost shield around the mining site), Mahogany Research Project. This compares to a figure of typically 20 to 100 for conventional oil extraction.

EROEI may be less important if alternate energy sources are used to fund the process. Coal was the primary power source used by the Shell pilot project.

China is challenged severely by high oil prices. The Chinese government has sponsored a project to extract oil from shale.

Environmental considerations

Surface-mining of oil shale deposits has all the normal environmental effects from open-pit mining. In addition, the pre-refining process to obtain crude oil generates ash, and the waste rock (a known carcinogen) must be disposed of. Oil shale rock expands by around 30% after processing due to a popcorn effect from the heating; this waste then needs disposal. Oil shale processing also requires water, which may be in short supply.

The energy demands of blasting, transporting, crushing, heating the material, and then adding hydrogen, together with the safe disposal of huge quantities of waste material, are large. These inefficiencies, plus the cost of environmental restoration, mean that oil shale exploitation will only be economical when oil prices are high (and projected to remain so).

Currently, the in-situ process is the most attractive proposition due to the reduction in standard surface environmental problems. However, in-situ processes do involve possible significant environmental costs to aquifers, especially since current in-situ methods may require ice-capping or some other form of barrier to restrict the flow of the newly gained oil into the groundwater aquifers.

References

Oils | Petroleum | Sedimentary rocks

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