What is oil shale? - Oil & Gas, Fossil Fuel Reference

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". Recent developments in Jordan may allow for processing at lower temperatures (see "Mining" below). 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. [1] However, attempts to develop these reserves have been going on for over 100 years with limited success. [2]

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

Contents

1 Geology

2 History

3 Reserves

3.1 Africa

3.2 Asia

3.3 Australia

3.4 Europe

3.5 Middle East

3.6 North America

3.7 South America

4 Industry

4.1 Mining

4.2 Power generation

4.3 Oil extraction

4.3.1 Off-situ

4.3.1.1 Internal combustion technologies

4.3.1.2 Hot recycled solids technologies

4.3.1.3 Conduction through a wall technologies

4.3.1.4 Externally generated hot gas technologies

4.3.1.5 Reactive fluids technologies

4.3.2 In-situ

5 Economics

5.1 Notes on oil shale economics

6 Environmental considerations

7 See also

8 References

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. Another important control on oil shale preservation and distribution in lacustrine oil shale is lake level and lake salinity.

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'.

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 the fourth reactor of the Sosnovy Bor nuclear power station opened in the nearby in Leningrad Oblast 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, Queensland, 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. Southern Pacific Petroleum was placed in receivership by its majority shareholder — US energy investor Jeff Sandefer — in 2003, [3] and by July 2004, Queensland Energy Resources announced an end to the Stuart Shale Oil Project in Australia.

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

Estimating shale oil reserves is complicated by several factors. First, the amount of kerogen contained in oil shale deposits varies considerably. Second, some nations report as reserves the total amount of kerogen in place, and do not account for what fraction might be recoverable. Third, by definition, "reserves" refers only to the amount of resource which is economically recoverable by current technology. Fourth, shale oil recovery technologies are still developing, so the amount of recoverable kerogen can only be estimated.

In order to avoid this confusion, this section reports shale oil reserves in three parts. All figures are presented in metric tons ("tonnes", equal to 2204 pounds).

Shale Reserves is an estimate of identified and assayed oil shale rock which is technically exploitable and economically feasible under current economic conditions.

Kerogen Reserves is an estimate of kerogen which may be extracted from identified and assayed oil shale rock using available technology and under current economic conditions.

Kerogen in Place is an estimate of kerogen which is present in known and anticipated oil shale resources, regardless of technical or economic constraints. This figure is therefore speculative.

Estimated Shale Oil Reserves (Millions of Tonnes) Region Shale Reserves Kerogen Reserves Kerogen in Place

Africa 12,373 500 5,900

Asia 20,570 1,100 –

Australia 32,400 1,725 36,985

Europe 54,180 600 12,500

Middle East 35,360 4,600 24,600

North America 3,340,000 80,000 140,000

South America – 400 9,600

Source: World Energy Council, WEC Survey of Energy Resources

(To convert tonnes to barrels, multiply by 7. This is a reasonable approximation.) Therefore, worldwide there are approximately 620 billion barrels of known recoverable kerogen. This compares with known worldwide petroleum reserves of 1200 billion barrels (Source: BP Statistical Review of World Energy, 2006).

Africa

Major oil shale deposits are located in Morocco (12.3 billion tonnes) and South Africa (73 million tonnes).

Asia

Major oil shale deposits are located in China (260 million tonnes), Thailand (18.7 billion tonnes) and Turkey (1.6 billion tonnes). China is currently producing about 60,000 tonnes of shale oil per year.

Australia

Australia is one of the few locations currently producing kerogen from oil shale. The Stuart demonstration project is designed to produce 4,500 barrels per day of shale oil products.

Europe

Major oil shale deposits are located in Albania (6 million tonnes), Estonia (1.5 billion tonnes), Sweden (50 billion tonnes) and Ukraine (2.7 billion tonnes). Estonia is currently producing shale oil.

Middle East

Major oil shale deposits are located in Israel (15.4 billion tonnes) and Jordan (40 billion tonnes). Jordanian oil shales are high quality - comparable to Western US oil shale - with the exception of high sulfur content.

North America

At 3.3 trillion tonnes, the oil shale deposits in the United States are easily the largest in the world. There are two major deposits: the Eastern US deposits, located in Devonian-Mississippian shales, cover 250,000 square miles (650,000 square kilometers). The Western US deposits, the Green River formation in Colorado, Wyoming and Utah, are among the richest oil shale deposits in the world.

South America

Brazil is also producing small amounts of shale oil. Production in 1999 was about 200,000 tonnes.

Industry

Mining

The oil shale is/can be mined either by traditional underground mining or surface mining

Power generation

Oil shale could be used as a fuel for thermal power plants, where the shale is burned like coal to drive steam turbines. Currently there are oil shale-fired power plants in Estonia and Israel, while some other countries (e.g. Jordan) looking for construction of oil shale-fired power plants.[4][5] The most modern technology of a combustion of oil shale is a circulating fluidized bed (CFB) process, which is used in Narva Power Plants in Estonia.[6]

Oil extraction

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

Off-situ

In case of the off-situ method, 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 (750-950°F) 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. Carbon rich waste material from the process may be burned in electric power plants. The lighter and more hydrogen rich fractions of the original shale kerogen are available for further refining in fairly standard oil refineries after the catalytic process is complete.

The off-situ technologies could be classified as internal combustion technologies, hot recycled solids technologies, conduction through a wall technologies, externally generated hot gas technologies, and reactive fluids technologies.[7]

Internal combustion technologies

Internal combustion technologies are Kiviter, Union A, Paraho Direct, Superior Direct, and Petrosix processes.[7] The Kiviter processing takes place in gravitational shaft retorts and it's possible only using large-particle feed. The process gas combustion products are used as the heat carrier. In the case of kukersite the yield of crude oil accounts 14-17% of shale and the oil consists only small amount of low-boiling fractions. Main problems of Kiviter process are related with environmental concerns like extensive use and pollution of water in the process, as also solid residue continues to leach toxic substances.[8] The Kiviter process is used by Estonian company VKG Oil, a subsidiary of Viru Keemia Grupp.[9]

The world’s largest surface oil shale pyrolysis reactor is the Petrosix 11-m Gas Combustion Retort (GCR) used in Brazil. The Petrosix process, is similar to the Paraho technology and it is considered a highly reliable technology for use with U.S. oil shale.[9]

Hot recycled solids technologies

Hot recycled solids technologies are Galoter, Lurgi, Chevron STB,LLNL HRS, and Shell Spher processes.[7] The Galoter processing takes place in a rotary kiln-type retort and it's possible to use also shale fines. The solid shale ash is used as the heat carrier. In the case of kukersite the nly there are oil-shale fired power eld of crude oil accounts roughly 12% of shale and the oil consists 15-20% of low-boiling fractions. The Galoter process is more environmental-friendly than the Kiviter process, as the water use and polution is smaller. However, the burning residue causes some environmental problems because of organic carbon and calcium sulphide consistent.[8] The Galoter process is used for oil production by Eesti Energia, Estonian energy company.[9]

Conduction through a wall technologies

Conduction through a wall technologies are Alberta Taciuk (ATP), Pumpherston, Fischer assay, and Oil-Tech processes.[7] Like in the Galoter process, the Alberta Taciuk processing takes place in a rotary kiln-type retort and it's possible to use shale fines. The Alberta Taciuk process uses combined retort-heating system of internal heating with shale ash and external heating with combustion gases. The produced oil consists up to 30% of low-boiling fractions. The water pollution in the process is quite moderate.[8] Southern Pacific Petroleum NL, an Australian oil company, is presently operating an industrial-scale pilot plant using the Alberta Taciuk Processor. Estonian VKG Oil is planning to construct a new retort using the Alberta Taciuk Processor.[9]

Oil-Tech staged electrically heated retort process is developed by Millennium Synfuels, LLC (former Oil Tech Inc.). In this process, the feedstock material is heated to greater degrees as it goes further down the retort. This method allows the retort to also double as a refinery: thermal distillation allows the oil components to separate in different areas of the retort. In the first five feet of the retort, ethane and methane would be the only hydrocarbons to be distilled, allowing them to be captured. When the material is heated further down the line, different hydrocarbons are progressively released for ample refinery capabilities. The shale residue is used as a source for heating new shale entering the retort. The retort-style prototype was reported to have passed a test.[10]

Externally generated hot gas technologies

Externally generated hot gas technologies are Union B, Paraho Indirect, and Superior Indirect processes.[7]

Reactive fluids technologies

Reactive fluids technologies are IGT Hytort (high-pressure H2), and Donor solvent processes.[7]

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 in Colorado, some 200 miles (320 km) west of Denver. First a freeze wall is constructed to seal off groundwater. (Drilling 2000' wells eight feet apart, around the perimeter of a 10 acre working zone then circulating with a super-chilled liquid to freeze the ground to -60oF.) The working zone is then dewatered. Recovery wells are drilled on 40' spacing within the working zone. An electrical heating element is lowered into each well and allowed to heat the kerogen to 650 to 700oF over a period of approximately four years, slowly converting it into oils and gases, which are then pumped to the surface. An operation producing 100,000 barrels a day would require a dedicated electrical generating capacity of 1.2 gigawatts. To maximize the functionality of the freeze walls, working zones will be developed, in succession, adjacent to each other. This in-situ method requires 100% surface disturbance, greatly increasing the footprint of extraction operations in comparison to conventional oil and gas drilling. In-situ operations could potentially extract more oil from a given area of land than conventional oil shale mining and retorting, as the wells can reach much deeper than surface strip-mines can.

Methods for In-situ Retorting

In-Situ Conversion Program

Super Heated Air

Supercritical Fluid Extraction

Economics

If the price of a barrel of oil is under forty US dollars, oil-shale oil is not competitive with conventional crude oil. If the price of oil were to remain 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 August 2006: US$75 a barrel). Prices are rising because of increased demand in rapidly developing countries, particularly China. Will high prices stimulate 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 [11]. 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 with Oil Shale operations or pilot projects Companies Method

Shell In-situ Conversion Program

Exxon Mobil

Chevron In-situ Conversion Program

EGL Resources

Oil Tech Staged electrically heated retort process

Oil Shale Exploration Unknown

Notes on oil shale economics

During the sixties A&P heir Huntington Hartford was Chairman of Oil Shale Corporation.

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 (260 °C) while it is still in the ground, while also creating a frost shield around the mining site), Mahogany Research Project. This compares to a figure of typically 5:1 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.

Estonia is the only country that is currently using oil shale to generate electricity. [1]

Environmental considerations

Surface-mining of oil shale deposits has all the detrimental 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.