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Potential for Oil Shale Development in the United States
Khosrow BiglarbigiHitesh Mohan
Marshall Carolus
INTEK
July 15, 2009Calgary, Canada
2
America’s Oil Shale
• Resource• Technology• Economics• Environmental• Path Forward
3
What is Oil Shale?
RockKerogen
Pyrolysis
Upgrade
700 - 800 °F
Syn- Crude Naphtha
Jet Fuel
Diesel
Nat. Gas
Hydrogen
4
10 Trillion Barrels of Shale Oil Worldwide
United States
Zaire
Russia
Brazil
Italy
Morocco
Estonia
China
Canada
France
Egypt
Australia
IsraelJordan
Countries With Oil Shale Deposits
5
Most Concentrated Hydrocarbon Deposit
2 Trillion Barrels
6 Trillion Barrels
Source: US DOE, 2004
6
The Mahogany Zone
• The Most Prolific
• Up to 1000 Ft Thick
• Up to 75 Gal/Ton
Source: Redleaf Resources, 2008
7
Oil Shale Production Oil Shale Production ApproachesApproaches
Mining Retort UpgradingResource Refinery
Surface ProcessSurface Process
Drilling Heating UpgradingResource Refinery
In Situ ProcessIn Situ Process
Source: US DOE, 2004
Choke Point
8
Shell In-Situ Conversion Process
Source: US DOE, 2008
High Value ProductsPilot Test (Colorado)Pilot Test (Colorado)
Light Surface Processing
HEATER
PRODUCER
OVERBURDEN
9
Other Examples of In-SituPilot Tests (Colorado)Pilot Tests (Colorado)
IDT–EGL Resources ProcessChevron Process
FracturesFractures
Injector
Producer
Source: US DOE, 2004
10
Ecoshale In-Capsule Technology
Source: Redleaf Resources, 2008
HOT GAS
COOL GAS
Pilot Test (Utah)
11
Alberta Taciuk Processor (ATP)
Pilot Test (Utah)Pilot Test (Utah)
PreheattubesVapour
tube
Combustionzone Retort
Preheattubes
Coolingzone
Oil shalefeed
750°C
500°C 250°C
Source: US DOE, 2006
12
Gas Combustion Retort (GCR)
• Australia (Project Scale Up)
• Brazil (In Production)
• China (In Production)
• Estonia (In Production)
• USA (In Pilot)
Source: US DOE, 2007
Raw Shale
Spent Shale
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATING
Oil MistExtractors
Raw Shale
Spent Shale
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATING
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATINGMIST FORMATION
13
First Generation Project Costs
Item Unit Range
Capital Cost $/BPD
O&M Cost $/Bbl 12-20
40K-55K*
* Barrel of Daily Capacity
Source: INTEK, Inc., 2006
14
Economic Price for Oil Shale Technology
True In-Situ
Surface Mining
Underground Mining
2007
Do
llar
s P
er B
bl
In-Capsule
$38
$47
$57Rate of Return – 15%
$0
$10
$20
$30
$40
$50
$60
$70
$35
Source: INTEK, Inc., 2008
15
Breakdown of Economic Price for Generic Surface Mining
$47/Bbl
Operating Costs38%
Risk Premium9%
Taxes 19%
Cost of Capital19%
Transfer Payments14%
Source: INTEK, Inc., 2008
16
Oil Shale Environmental Impacts
Air Quality
Oil Shale Processing
HCGas CO2 SOx NOx
• CO2 Enhanced Oil Recovery• Sequestration• Other Industrial Uses
Capture and Clean Existing Technology
Process Plant Use
Source: SPE #110590, 2007
17
Land Use
• 1 MMBbl/D Production for 40 Years– Surface: 31 Square Miles
– In-Situ: 14 Square Miles
• A Small Footprint for a 2.5 MMBbl/D Industry:
Source: SPE #110590, 2007
2.5 MMBbl/d
52 Square Miles
Green River
17,000 Square Miles
2.5 MMBbl/d
52 Square Miles
Green River
17,000 Square Miles
18
Water Requirements
• 1-3 Barrels of Water per Barrel of Shale Oil
• Challenges:–Water rights–Ground water protection–Water runoff
Source: US DOE, 2007
19
Development Hurdles
• Access to Land
– 70% on Federal Land
• RD & D
• Environmental Permitting
• Fiscal Regime
Total Resource6 Trillion Barrels
High Quality Resource2 Trillion Barrels
Technical Recovery
1 Trillion Barrels
Reserves600 – 750Billion Bbls
The Prize
$50 - $65 / Bbl
@
Source: INTEK, Inc., 2008
21
0
500
1,000
1,500
2,000
2,500
2005 2010 2015 2020 2025 2030 2035
Year
Th
ou
san
d B
bl/
DProduction Potential
(Shale Oil in the U.S.)
Base
Tax Incentives
RD&DAccelerated Scenario
Measured Scenario
Business as Usual
Source: US DOE, 2007
22
Summary
• Over 6 trillion barrels of in place resource
• The most concentrated hydrocarbon deposits on Earth
• Conversion technologies are advancing rapidly
• Sustained production potential of up to 2.5 MMBbl/Day
• Substantial economic benefits
• Requires concerted effort by the private sector, governments, and local communities