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| Shell Oil has method to extract oil from shale @ US$30/bbl |
| 2005-09-04 |
| Hattip Instapundit Since 1981, Shell researchers at the company's division of "unconventional resources" have been spending their own money trying to figure out how to get usable energy out of oil shale. Judging by the presentation the Rocky Mountain News heard this week, they think they've got it. Shell's method, which it calls "in situ conversion," is simplicity itself in concept but exquisitely ingenious in execution. Terry O'Connor, a vice president for external and regulatory affairs at Shell Exploration and Production, explained how it's done (and they have done it, in several test projects): Drill shafts into the oil-bearing rock. Drop heaters down the shaft. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. Collect them. Please note, you don't have to go looking for oil fields when you're brewing your own. On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. "Product" - about one-third natural gas, two-thirds light crude - began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil. More on the technique, and Shell Oil's next steps (Shell has applied for an R&D lease on 160 acres of Bureau of Land Management land, which could be approved by February. That project would be on a large enough scale so design of a commercial facility could begin.) Engineer, techie and finance types should go read the whole thing. |
| Posted by:trailing wife |
| #20 NO PEBBLES FOR OIL! |
| Posted by: Korora 2005-09-04 14:07 |
| #19 I was able to find some more articles on the same process thanks to the ever present google (just search up in "situ conversion" or "shell and shale oil"). It seems that this is a heavily industrialized process still and is only a bit better than the strip mining process that would normally be used to get at the shale. Also the process would extract about 10-15 times more oil from the same amount of shale versus the normal way of bringing it up to the surface and extracting it by crushing and heating/pressure. |
| Posted by: Valentine 2005-09-04 13:26 |
| #18 Okay, my take on this article is that addresses innovative methods for oil extract, heavy on the innovative. Given we are an innovative, capitalistic society, my bet is that there is going to be quantum leaps in innovative now that the incentive bar has been raised. Higher petro prices create both the obvious short-term costs to consumers AND the wherewithall to find a more sustainable solution to higher prices long term. |
| Posted by: Captain America 2005-09-04 12:23 |
| #17 LR: I have no idea how this technology scales up - I just wanted to make the point that dismissing this because it "only yielded 2.something barrels per day" was probably an inappropriate comment. We're talking about a small fraction of a football field - less than (even) a basketball court. That is precisely the point. Many things are not scalable. What kind of fixed investment was necessary to produce those 3 barrels a day? The numbers given indicate 1000 barrels a year or revenues of $60,000. Is $30 a barrel the variable cost? What was the fixed cost, including the cost of exploration and equipment? |
| Posted by: Zhang Fei 2005-09-04 12:22 |
| #16 SPOD: I can see pumping units from my front door and most of the people around me actually work in the field of extracting and delivering petroleum products and delivering energy. They don't seem to be as pessimistic as you seem to be. They seem to be finding new resources and cheaper better ways to get at them or deliver them all the time. Energy people are optimistic because supplies are scarce and prices are likely to not only remain high but continue climbing at a steady rate for the next several decades. They are optimistic in the same way that farmers are optimistic when the global harvest is poor, and their harvest is good. Anyone that is producing natural gas or oil right this minute is making a mint. |
| Posted by: Zhang Fei 2005-09-04 12:16 |
| #15 Okay guys, someone tell me what temperature you have to heat the rock to extract the oil/gas, and how long it takes to reach that temp? I'm kinda assuming that it took a while to get to temp. and that the time that should be used to extrapolate is from the day it first started producing. That may (or maynot) increase the per/day rate going forward, no? |
| Posted by: AlanC 2005-09-04 11:13 |
| #14 I have no idea how this technology scales up - I just wanted to make the point that dismissing this because it "only yielded 2.something barrels per day" was probably an inappropriate comment. We're talking about a small fraction of a football field - less than (even) a basketball court. So - maybe thsi means something. I dunno - I'll leave it to those who knos more. |
| Posted by: Lone Ranger 2005-09-04 10:09 |
| #13 What's important is not whether this particular method works but that a new price plateau is reached that makes development profitable for which ever alternative proves to be best economically and helps to gain energy independence from the Arabs. The worst thing that could happen now is for the price of oil to fall to under $30 in 9 months. The Saudis and Iranians aren't stupid. Well, not that stupid. Look for it to happen. That's why we need to impose an oil import tarriff if it does. |
| Posted by: Mrs. Davis 2005-09-04 10:04 |
| #12 Phil B My recollection is that the US imports more like 12-15 million bar/day; I wish it were just 5. Maybe you meant 5 million bar/day from the mideast. |
| Posted by: mhw 2005-09-04 09:01 |
| #11 SPoD, i deal in facts. The USA imports 5 millions barrels of oil A DAY. Its a huge geopolitical problem. I dearly wish it wasn't true because a self sufficient USA is my ultimate gaurantee of the world I live in (although Australia under Howard is IMVHO stepping up to the plate). Having said that there is so much greenie snakeoil out there that lots of people believe fuel cells for example will solve the problem. They won't. *ONLY* increased energy supplies will do that. |
| Posted by: phil_b 2005-09-04 08:15 |
| #10 Your comments are almost always seem negative about energy. I just wondered if you had actual experience or a degree in the field that could justify such a view. I live in an area that produces oil natural gas and electricity. I can see pumping units from my front door and most of the people around me actually work in the field of extracting and delivering petroleum products and delivering energy. They don't seem to be as pessimistic as you seem to be. They seem to be finding new resources and cheaper better ways to get at them or deliver them all the time. |
| Posted by: Sock Puppet O´ Doom 2005-09-04 06:47 |
| #9 SPoD, coincidentally my wife works for the company in question. However thats moreorless irrelevant. I spent my entire working life analysing businesses about which I knew nothing more than an educated layman. its not that hard, despite the mystic that people weave around what they do. I've been around an oil refinery, but then Ive been around a battle tank factory and a goldmine. So, what's your issue? |
| Posted by: phil_b 2005-09-04 06:04 |
| #8 phil_b do you actually work in the energy business? Have you actually ever seen a pumping unit in you life? Dealt with petroleum to any greater extent than putting oil and gas in your car? Do you have any experience in the energy field besides theoretical or having read about it? |
| Posted by: Sock Puppet O´ Doom 2005-09-04 05:49 |
| #7 Good summary of the world's energy reserves. |
| Posted by: phil_b 2005-09-04 05:36 |
| #6 Lone Ranger, if the math scaled linearly then you'd need only about 100 square miles of land to supply more 5 million barrels per day. However I doubt it does. Also this technique requires oil shale still in the ground which luckily the central plains and midwest have in huge abundance (contains more oil than all the oil in saudi arabia and a good chunk of the rest of the world to boot). |
| Posted by: Valentine 2005-09-04 03:12 |
| #5 Interesting! There have been a lot of false starts with oil shale and the only producing oil shale facility in Australia was recently shutdown - not economic and too many environmental problems from the leftover shale. Not only does this not produce waste rock, but it will scale incrementally, which means it will be faster to ramp up and incremental improvements can be introduced along the way. Its also a candidate for solar energy cos the underground heating can be supply driven (unlike most energy uses which are demand driven which makes solar prolematic since the sun shines for less than half the time). |
| Posted by: phil_b 2005-09-04 02:29 |
| #4 On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. "Product" - about one-third natural gas, two-thirds light crude - began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil. Lease ground and comply State/ US regulations, Heat rock and Freeze rock ground for a year and then add the drill rig, Heating system, Freezer system/ pipe/equiptment, oil pumping/eqipt, transportation of oil to refinery and labor costs. $30 + a few pesos + a few biscuits.... |
| Posted by: Red Dog 2005-09-04 01:06 |
| #3 At current and near current prices, look for considerable investment in new R&D for petro alternatives. Ironically, the problem in the past has been too low of petro prices. This (high energy prices) is likely to prove to be the greatest opportunity for energy independence. |
| Posted by: Captain America 2005-09-04 00:27 |
| #2 Hey ZF - If my math is correct, there are 39,826 such plots in one square mile. I'm not sure how this scales up in relation to surface area, but if the relationship is linear, then that means one square mile would yield 54,556 barrells per day. That might be considered significant. |
| Posted by: Lone Ranger 2005-09-04 00:26 |
| #1 Article: On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. "Product" - about one-third natural gas, two-thirds light crude - began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil. In 1-1/2 years, they extracted 1,500 barrels of oil. That's under 3 barrels a day. I wouldn't break out the bubbly yet. |
| Posted by: Zhang Fei 2005-09-04 00:20 |