Here's a story about oil shale development from the San Francisco Chronicle. They write, "...as the federal government makes another push to develop oil shale, Shell and other companies say they have developed techniques that may extract this treasure with much less environmental impact. Shell's project is stunningly complex. Instead of strip-mining the rock and then processing it, Shell plans to superheat huge underground areas for several years, gradually percolating oil out of the stone and pumping it to the surface. Years of testing still lie ahead. Shell's heating process risks polluting local water supplies, and the enormous amounts of electricity needed would require construction of the West's largest power plants...
"Oil shale deposits in Colorado and neighboring areas of Utah and Wyoming are estimated to contain 800 billion recoverable barrels, three times larger than Saudi Arabia's proven reserves of conventional crude, and the equivalent of 40 years of U.S. oil consumption. To stimulate the sector's development, in June the House passed a bill written by Rep. Richard Pombo, R-Tracy, calling for much lower royalties on oil shale than the 12.5 percent for conventional oil and gas. The bill suggests companies pay royalties of about 1 percent until they recoup their investments. The bill, which also would open offshore waters to conventional oil and gas drilling, is pending in the Senate.
"In early August, the Bureau of Land Management gave a boost to oil-shale plans, granting preliminary approval to research and development projects by Shell and Chevron. On Aug. 25, the bureau took its first steps toward creating a national oil-shale leasing program, inviting public comment on proposed rules. Unlike conventional deposits of petroleum, found in a liquid form that can be pumped to the surface, oil shale doesn't even contain oil. Instead, the rock is impregnated with kerogen, a chemically immature hydrocarbon -- essentially, oil's geological ancestor...
"To coax the oil out of the rock, it must be heated to high temperatures. In the 1970s and early 1980s, companies including Exxon, Atlantic Richfield, Unocal, Shell and Chevron spent billions on strip-mining large volumes of oil shale and then cooking it in huge retorts, or kilns. The process disfigured the landscape, spewed out vast heaps of slag and sucked up tens of millions of dollars in federal synthetic fuels subsidies -- but produced only a poor-quality crude that required costly refining. When Ronald Reagan became president in 1981, he eliminated the subsidy. And when global oil prices collapsed in 1982, the bottom fell out...
"Shell is pioneering a much different technology that company officials say is more efficient, profitable and environmentally friendly. Instead of mining the shale, since 1996 Shell has experimented with in situ, or in-place, extraction of oil from the ground. Twenty-five miles southwest of Meeker, a ranching town in northwest Colorado, drilling rigs, compressors, ducts and tanks are scattered across a pinon- and juniper-covered plateau, connected to scores of electric heaters sunk hundreds of feet underground. At each production site, the powerful heaters extend down hundreds of feet, stretching vertically through a cylindrical area of shale about 100 feet in diameter. They then heat the area to about 700 degrees Fahrenheit -- for two to three years. During this period, the heat ages the kerogen by the geological equivalent of millions of years, chemically transforming it into a high-grade oil that is easily pumped to the surface. In an experiment that ended in May, 1,500 barrels of light, sweet crude were produced from one site. O'Connor, the Shell executive, says these techniques have been highly successful but need several more years of testing. One danger is that the oil might pollute the surrounding water table. To prevent that, Shell plans to surround each heated area with a frozen barrier about 10 feet thick, chilled by pipes of pressurized aqueous ammonia. Machinery is being installed now to create a circular freeze-wall about 1,700 feet deep. When it is finished, engineers will simulate an environmental emergency by pumping water at high pressure outside the wall to try to force a rupture. Then they will rush to plug the break and re-create the barrier...
"O'Connor said the company expects commercial production to be profitable as long as international oil prices are at least in the low $30s per barrel, far below the current $70 average. Other nations with oil-shale deposits also would benefit if the technologies prove successful. One is Israel, where the Negev Desert holds deposits estimated at 18 billion barrels, or about 190 years of the country's annual oil consumption. Israel imports nearly all of its oil, and becoming self-sufficient has long been a national security goal...
"The report also noted that all forms of oil-shale production could cause a big shift toward burning the region's abundant supplies of coal. Under in situ methods, the report said, each 100,000 barrels produced daily would require about 1.2 gigawatts of electric-generating capacity -- the size of Colorado's largest power plant, a coal-fired facility in nearby Craig. The Energy Department has forecast oil-shale production of 2 million barrels a day by 2020 and eventually 10 million barrels a day. As a result, the report said, the industry could become a major producer of the greenhouse gases that are linked to global warming...
"O'Connor said Shell estimates that the energy value of the oil produced would be about 3.5 times greater than the energy in the electricity used to produce it, though he declined to provide details. Udall said such a result would be achievable only with the most expensive, rarely used natural-gas generating technology. Conventional coal-fired power plants would reduce the net power return to about 2 to 1, he said."
Category: 2008 Presidential Election
7:34:01 AM 
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