Oil shale economics: Difference between revisions
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Economics
According to the survey conducted by the RAND, a surface retorting complex (mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation) is unlikely to be profitable unless real crude oil prices are at least US$70 to US$95 per barrel.[1] Once commercial plants are in operation and experience-based learning takes place, costs are expected to decline to US$35–US$48 per barrel after 12 years. After production of 1000 million barrels, costs are estimated to decline further to $30 – $40 per barrel.[2] In 2005, Royal Dutch Shell announced that its in situ extraction technology deployed in Colorado could be competitive at prices over US$30 per barrel.[3] However, it is possible that the real competitive price level will be higher as the costs for building an underground wall of frozen water to contain melted shale have significantly escalated.[4]
At the full scale production, the production costs for one barrel of light crude oil of the Australia's Stuart plant were projected to be in the range of US$11.3 to $12.4 per barrel, including capital costs and operation costs at a 30 years projected lifetime. However, the project is suspended due environmental concerns.[2][5] Israel's AFSK Hom Tov process, which produces oil from a mixture of oil refinery residue (in the form of bitumen) and oil shale, claims to be profitable at US$16-US$17 per barrel. This technology still being tested.
The project of a new ATP retort planned by VKG Oil, is estimated to achieve break-even financial feasibility operating at 30% capacity, assuming a crude oil price of US$21 per barrel or higher. At 50% utilization, the project is economic at a price of US$18 per barrel, while at full capacity, it could be economic at price of US$13 per barrel.[6]
Due to the low price of oil and other competitive fuels, oil shale production has ceased in Canada, Scotland, Sweden, France, Australia, Romania and South Africa, and has not taken off in the USA, Belarus, Jordan and Morocco.[7] 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 huge losses last time around, there is considerable reluctance to invest in shale oil production. Investors are waiting to see if oil prices really will remain in high level and no hurry to develop oil shale. However, USA, Canada and Jordan are planning or already started with test projects, and Australia considers restarting oil shale production.[7][8]
| Company | Location | Method | Status |
|---|---|---|---|
| Petrobras | Sao Mateus do Sul, Brazil | Externally generated hot gas (Petrosix process) | Operational |
| Shell Frontier Oil and Gas | Colorado, USA | True in-situ process (ICP) | Pilot project |
| Chevron Shale Oil Company | Colorado, USA | Modified in-situ process | Pilot project |
| EGL Resources | Colorado, USA | True in-situ process | Pilot project |
| Millennium Synfuels | Utah, USA | Staged electrically heated retort process | Pilot project |
| Oil Shale Exploration | Utah, USA | ATP | Pilot project |
| Shale Technologies LLC | Rifle, Colorado, USA | Internal combustion (Paraho Direct process) | Pilot project |
| Queensland Energy Resources | Stuart Deposit, Queensland, Australia | Hot recycled solids (ATP) | Pilot project |
| Fushun Mining Group | Fushun, China | Internal combustion (Fushun process) | Operational |
| VKG Oil | Kohtla-Järve, Estonia | Internal combustion (Kiviter process) | Operational |
| Eesti Energia | Narva, Estonia | Hot recycled solids (Galoter process) | Operational |
| Kiviõli Keemiatööstus | Kiviõli, Estonia | Internal combustion (Kiviter process) | Operational |
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). 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. EROEI of the different oil shale deposits varies between 0.7-13.3.[9] Royal Dutch Shell has reported a figure of EROEI about 3:1 on its recent in-situ development, Mahogany Research Project, which uses electric heating of the shale up to 500 degrees Fahrenheit (260 °C. 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.
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.
Several co-pyrolysis processes to increase efficiency of oil shale retorting have been proposed or tested. In Estonia, the co-pyrolysis of kukersite with renewable fuel (wood waste), as also with plastic and rubber wastes (tyres) has been tested.[10] Co-pyrolysis of oil shale with high-density polyethylene (HDPE) has been tested also in Morocco and Turkey.[11][12] Israel's AFSK Hom Tov co-pyrolysis oil shale with oil refinery residue (bitumen). Some tests involve co-pyrolysis of oil shale with lignite and cellulose wastes. Depending on reaction conditions the co-pyrolysis may lead to higher conversion ratio and thus lower production costs, and in some cases solves the problem of utilization of certain wastes.[10]
References
- ^ Cite error: The named reference
randwas invoked but never defined (see the help page). - ^ a b "A study on the EU oil shale industry viewed in the light of the Estonian experience (IP/A/ITRE/FWC/2005-60/SC4)" (PDF). European Parliament. October 2006. Retrieved 2007-06-02.
- ^ Linda Seebach (2 September 2005). "Shell's ingenious approach to oil shale is pretty slick". Rocky Mountain News. Retrieved 2007-06-02.
- ^ Nancy Lofholm (16 June 2007). "Shell shelves oil-shale application to refine its research". The Denver Post. Retrieved 2007-06-24.
- ^ Schmidt, S. J. (2003), "New directions for shale oil:path to a secure new oil supply well into this century: on the example of Australia" (PDF), Oil Shale. A Scientific-Technical Journal, 20 (3), Estonian Academy Publishers: 333–346, ISSN 0208-189X, retrieved 2007-06-02
- ^ Cite error: The named reference
fossilenergywas invoked but never defined (see the help page). - ^ a b Cite error: The named reference
symposiumwas invoked but never defined (see the help page). - ^ Cite error: The named reference
aimrwas invoked but never defined (see the help page). - ^ Cleveland, Cutler J.; Costanza, Robert; Hall, Charles A. S.; Kaufmann, Robert (1984-08-31), "Energy and the U.S. Economy: A Biophysical Perspective" (PDF), Science, 225 (4665), American Association for the Advancement of Science: 890–897, ISSN: 00368075
{{citation}}: CS1 maint: date and year (link) - ^ a b Veski, R.; Palu, V.; Kruusement, K. (2006), "Co-liquefaction of kukersite oil shale and pine wood in supercritical water" (PDF), Oil Shale. A Scientific-Technical Journal, 23 (3), Estonian Academy Publishers: 236–248, ISSN 0208-189X, retrieved 2007-06-16
- ^ Aboulkas, A.; El Harfi, K.; El Bouadili, A.; Benchanaa, M.; Mokhlisse, A.; Outzourit, A. (2007), "Kinetics of co-pyrolysis of Tarfaya (Morocco) oil shale with high-density polyethylene" (PDF), Oil Shale. A Scientific-Technical Journal, 24 (1), Estonian Academy Publishers: 15–33, ISSN 0208-189X, retrieved 2007-06-16
- ^ Ozdemir, M.; Akar, A.; Aydoğan, A.; Kalafatoglu, E.; Ekinci, E. (7–9 November 2006), Copyrolysis of Goynuk oil shale andthermoplastics (PDF), Amman, Jordan, retrieved 2007-06-29
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