Energy Forum 031809


Published on

Oil Shale developments and future directions

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Energy Forum 031809

    1. 1. Recent Developments and Future Paths for Production of Shale Oil Jeremy Boak, Director Center for Oil Shale Technology & Research Colorado School of Mines
    2. 2. Introduction <ul><li>COSTAR and the Oil Shale Symposium </li></ul><ul><li>Oil shale and global resources </li></ul><ul><li>Developments in the U. S. </li></ul><ul><li>World-wide developments </li></ul><ul><li>Future paths </li></ul>
    3. 3. COSTAR <ul><li>Center for Oil Shale Technology and Research </li></ul><ul><li>Membership - Total, Shell, ExxonMobil </li></ul><ul><li>Research Team </li></ul><ul><ul><li>Colorado School of Mines </li></ul></ul><ul><ul><li>University of Wisconsin </li></ul></ul><ul><ul><li>Binghamton University (SUNY) </li></ul></ul><ul><ul><li>National Center for Atmospheric Research </li></ul></ul><ul><li>Initial tasks: </li></ul><ul><ul><li>rock mechanics, </li></ul></ul><ul><ul><li>geology and stratigraphy, </li></ul></ul><ul><ul><li>geochemistry </li></ul></ul><ul><ul><li>GIS database development </li></ul></ul>
    4. 4. Oil Shale Symposium <ul><li>Colorado School of Mines, Golden CO, </li></ul><ul><ul><li>October 19-23, 2008 </li></ul></ul><ul><li>>300 attendees each year from >20 countries </li></ul><ul><li>Strong representation by countries already producing shale oil at the surface </li></ul><ul><li>Full spectrum of viewpoints, lively discussion </li></ul>
    5. 5. Global Oil Shale Resources
    6. 6. Changing Resource Estimates
    7. 7. Where is the Green River Formation? <ul><li>The world’s largest known oil shale resources occur in: </li></ul><ul><ul><li>Eocene lake sediments of Green River Formation </li></ul></ul><ul><ul><li>Western Colorado and adjacent Utah and Wyoming </li></ul></ul><ul><li>Piceance Basin largest fraction of reserves </li></ul><ul><li>Major basins connected at times during history </li></ul><ul><li>Each basin has a unique history </li></ul><ul><li>Even different evaporite mineralogy </li></ul>
    8. 8. Oil Shale - Tremendous Potential <ul><li>The U.S. Geological Survey estimates: </li></ul><ul><ul><li>Total U.S. oil shale resource is 2.1 trillion barrels </li></ul></ul><ul><ul><li>1.5 trillion barrels in the Green River Formation of Colorado, Utah, and Wyoming </li></ul></ul><ul><li>800 billion barrels of oil </li></ul><ul><ul><li>Strategic Unconventional Fuels Task Force estimate of recoverable resource from Green River Formation </li></ul></ul><ul><ul><li>Enough to replace the oil we import for more than 180 years </li></ul></ul><ul><ul><li>Almost three times the proven reserves of Saudi Arabia </li></ul></ul>
    9. 9. Recent activity - RD&D leases <ul><li>Shell </li></ul><ul><ul><li>permit submitted & withdrawn; tests continue on private land </li></ul></ul><ul><li>Chevron </li></ul><ul><ul><li>1 core hole, 15 monitoring wells drilled and logged </li></ul></ul><ul><ul><li>Research partnerships - Los Alamos National Laboratory, University of Utah, and others </li></ul></ul><ul><ul><li>Key issues - kerogen chemistry; rock fracturing; environmental protection </li></ul></ul><ul><li>AMSO </li></ul><ul><ul><li>hydrologic test well drilled </li></ul></ul><ul><li>OSEC </li></ul><ul><ul><li>lease for surface processing in Utah </li></ul></ul><ul><ul><li>Plan in preparation </li></ul></ul>
    10. 10. Recent activity - other <ul><li>Other western U. S. activity </li></ul><ul><ul><li>ExxonMobil Colony site </li></ul></ul><ul><ul><li>OSEC partnership with Petrobras & Mitsui </li></ul></ul><ul><ul><li>Total partnership with IEP </li></ul></ul><ul><ul><li>Ecoshale retort pilot field test complete; next step commercial scale </li></ul></ul><ul><ul><li>ConocoPhillips holds private land </li></ul></ul><ul><li>Regulatory activity </li></ul><ul><ul><li>Leasing regulations </li></ul></ul><ul><ul><li>New RD&D leases </li></ul></ul><ul><ul><li>Shell water request </li></ul></ul>
    11. 11. Ecoshale pilot scale test results <ul><li>10 barrels product per BOE energy input </li></ul><ul><li>5 barrels product per barrel water input </li></ul><ul><li>API gravity 34 with no fines; </li></ul><ul><li>70% diesel + jet fuel fraction </li></ul><ul><li>CO 2 2/3 of traditional retort </li></ul><ul><li>No hazardous emissions </li></ul><ul><li>1 year construction to reclamation </li></ul><ul><li><$25/barrel cost </li></ul><ul><li>Mined </li></ul><ul><li>Rubblized </li></ul><ul><li>Impounded </li></ul><ul><li>Handled Only Once at Mine Face </li></ul><ul><li>Stationary Extraction </li></ul><ul><li>Source: Laura Nelson, Ecoshale </li></ul>
    12. 12. Oil Shale Regulations Proposed Leasing Process <ul><li>Call for expression of interest </li></ul><ul><li>Comments from Governors, local governments, and Native American tribes </li></ul><ul><li>Set geographic area </li></ul><ul><li>Call for lease applications </li></ul><ul><li>NEPA for lease area </li></ul><ul><li>Hold competitive lease sale (high bidder wins) </li></ul><ul><li>Plan of Development </li></ul><ul><li>Site-specific NEPA </li></ul><ul><li>Obtain Permits </li></ul><ul><li>Construction </li></ul><ul><li>Production begins </li></ul>
    13. 13. Oil Shale Regulations Diligence Milestones <ul><li>Submit proposed Plan of Development (POD) within 2 years of lease issuance </li></ul><ul><li>Submit final POD within 3 years of lease issuance </li></ul><ul><li>Apply for all permits within 2 years of POD approval </li></ul><ul><li>Begin installation of needed infrastructure before end 7 th lease year </li></ul><ul><li>Begin production by end 10 th lease year </li></ul>
    14. 14. Oil Shale Regulations Proposed Royalty Options <ul><li>Flat 5 % </li></ul><ul><li>5 % royalty on initial production, 12.5 % thereafter </li></ul><ul><li>Sliding Scale Royalty </li></ul><ul><ul><li>(Based on market price of oil) </li></ul></ul>
    15. 15. Comments <ul><li>Over 75,000 comments received </li></ul><ul><li>~74,800 from letter writing campaigns </li></ul><ul><li>Some comments on royalty rate: </li></ul><ul><ul><li>Shale oil costs more than oil and gas to produce and a lower rate will promote oil shale production. </li></ul></ul><ul><ul><li>The 5% flat rate is too high ; a 1% to 3% royalty would offset start-up cost and promote oil shale production. </li></ul></ul><ul><ul><li>The government should impose a royalty rate higher than 5%. </li></ul></ul>
    16. 16. Competitive Leasing Route <ul><li>If regulations finalized, what is ACTUAL impact? </li></ul><ul><li>Is this a “ rush to develop? ” </li></ul><ul><ul><li>No environmental or socioeconomic risks – merely set “rules of the road” </li></ul></ul><ul><ul><li>No on-the-ground activities are authorized </li></ul></ul><ul><ul><li>Projects must still clear 47 Federal, State and County permitting agencies </li></ul></ul><ul><ul><li>Water rights’ issues reside with the States, not BLM </li></ul></ul>
    17. 17. Global Developments <ul><li>Total partnering with Petrobras in Morocco and Jordan </li></ul><ul><li>China contracting with UMATAC for ATP Retort; expanding production in several areas; completed survey of oil shale resources </li></ul><ul><li>Jordan working with multiple partners </li></ul><ul><li>Estonia continues to increase production </li></ul>
    18. 18. Current shale oil production
    19. 19. Future shale oil production (?)
    20. 20. Potential influences on oil shale production <ul><li>Local environmental issues </li></ul><ul><li>Socioeconomic issues </li></ul><ul><li>Global environmental issues – carbon </li></ul><ul><li>Peaking of global oil production </li></ul>
    21. 21. Environmental issues for oil shale Development <ul><li>Issues </li></ul><ul><ul><li>Water quantity and quality </li></ul></ul><ul><ul><li>Air quality </li></ul></ul><ul><ul><li>Surface and ecosystem impact </li></ul></ul><ul><li>Environmental process needs </li></ul><ul><ul><li>Process, baseline, management, dissemination </li></ul></ul><ul><ul><li>Model development </li></ul></ul><ul><ul><li>Impact assessment & policy </li></ul></ul><ul><ul><li>Mitigation technology development </li></ul></ul><ul><li>Social and economic impacts </li></ul><ul><ul><li>Multiple developments (tight gas) </li></ul></ul><ul><ul><li>Revenue sharing – time and share </li></ul></ul><ul><ul><li>Concerns about boom-bust cycle </li></ul></ul><ul><ul><li>Public outreach </li></ul></ul><ul><ul><li>Workforce development </li></ul></ul>
    22. 22. Greenhouse gases <ul><li>How to keep this </li></ul><ul><li>From accelerating this </li></ul>
    23. 23. World Oil Production – Peaking?
    24. 24. Oil Shale Conclusions <ul><li>Oil shale resources are widely distributed </li></ul><ul><li>A great deal of excitement in the revived oil shale industry </li></ul><ul><li>Countries & companies that have sustained effort will benefit by their leadership </li></ul><ul><li>Both surface and subsurface processes are being employed </li></ul><ul><li>New advances offer promise for the future </li></ul><ul><li>Environmental challenges are significant </li></ul>
    25. 25. Backup Information
    26. 26. Oil Shale and Tar Sands PEIS Proposed Land Use Plan Amendment <ul><ul><li>Colorado – </li></ul></ul><ul><ul><li>359,798 acres </li></ul></ul>Utah – 630,971 acres Wyoming – 1,000,453 acres
    27. 29. What is oil shale? <ul><li>Organic rich sedimentary rock formed in lake or marine environments </li></ul><ul><ul><li>Commonly carbonate rich; most not true shale </li></ul></ul><ul><ul><li>Kerogen-rich, primarily algal and bacterial </li></ul></ul><ul><ul><li>Immature precursor to oil & gas </li></ul></ul><ul><li>Produces oil upon heating </li></ul>