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Old 06-05-2008, 02:00 AM   #1
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Oil Shale in the US - 5 times bigger than Saudi Arabia's oil reserves

http://money.cnn.com/2007/10/30/maga...tune/index.htm

Oil shale may finally have its moment
In a dusty corner of northwestern Colorado, an energy of the future is beginning to look like the real thing. Can oil shale work? Fortune's Jon Birger reports.
By Jon Birger, Fortune senior writer
November 1 2007: 11:12 AM EDT


(Fortune Magazine) -- Touring a drilling site on a dusty mountain plateau above Rifle, Colo., Harold Vinegar stops, grins and then announces out of the blue, "I love that smell!"

No, the Royal Dutch Shell chief scientist is not referring to the crisp fragrance of the high desert air or the conifer scent wafting from the nearby stand of evergreens. Rather, it's the faint, asphalt-like aroma of oil shale - a sedimentary rock rich in kerogen, a fossil fuel that is now the focus of Shell's single biggest R&D investment.

Vinegar is the energy industry's leading expert on the complex petroscience of transforming solid oil shale into synthetic crude - a liquid fuel that can be refined into diesel and gasoline. The breakthroughs this 58-year-old physicist has achieved could turn out to be the biggest game changer the American oil industry has seen since crude was discovered near Alaska's Prudhoe Bay in 1968.

If that sounds like hyperbole, then consider this: Several hundred feet below where Vinegar is strolling lies the Green River Formation, arguably the largest unconventional oil reserve on the planet. ("Unconventional oil" encompasses oil shale, Canadian tar sands, and the extra-heavy oils of Venezuela - essentially, anything that is not just pumped to the surface.)

Spanning some 17,000 square miles across parts of Colorado, Utah and Wyoming, this underground lakebed holds at least 800 billion barrels of recoverable oil. That's triple the reserves of Saudi Arabia.

The reason you probably haven't heard about the Green River Formation is that most of the methods tried for turning oil shale into oil have been deeply flawed - economically, environmentally or usually both. Because there have been so many false starts, oil shale tends to get lumped with cold fusion, zero-point energy, and other "miracle" fuels perpetually just over the horizon.

"A lot of other companies have bent their spears trying to do what we're now doing," Vinegar says of his 28-year quest to turn oil shale into a commercial energy source. "We're talking about the Holy Grail."

Unlike the Grail, though, Shell is convinced that oil shale is no myth and that after years of secret research, it is close to achieving this oil-based alchemy. Shell is not alone in this assessment. "Harold has broken the code," says oil shale expert Anton Dammer, director of the U.S. Department of Energy's Office of Naval Petroleum and Oil Shale Reserves.

Vinegar has developed a cutting-edge technology that, according to Shell, will produce large quantities of high-quality oil without ravaging the local environment - and be profitable with prices around $30 a barrel. Now that oil is approaching $90, the odds on Shell's speculative bet are beginning to look awfully good.

Shell declines to get too specific about how much oil it thinks it can pump at peak production levels, but one DOE study contends that the region can sustain two million barrels a day by 2020 and three million by 2040. Other government estimates have posited an upper range of five million. At that level, Western oil shale would rival the largest oilfields in the world.

Of course, considering the U.S. uses almost 21 million barrels a day and imports about ten million (and rising), even the most optimistic projections do not get the country to the nirvana of "energy independence." What oil shale could do, though, is reduce the risk premium built into oil prices because energy traders could rest easy knowing that the flow of oil from Colorado or Utah won't ever be cut off by Venezuelan dictators, Nigerian gunmen or strife in the Middle East. In a broader sense, U.S. energy security lies in diversity of supply, so enhancing domestic sources is appealing.

Oil shale has one other big appeal: It's not vulnerable to the steep depletion rates that have afflicted other big oilfields. Alaskan oil production is now 775,000 barrels a day, down from its peak of two million in 1988. In contrast, there's enough oil shale to maintain high production levels for hundreds of years. "Companies just aren't discovering new Prudhoe Bays anymore," says Bear Stearns oil analyst Nicole Decker, who thinks Shell has hit on a breakthrough technology. "This could be very significant - certainly bigger, to our knowledge, than any new discoveries that might be available globally."

Vinegar has been visiting northwest Colorado since 1979. For most of those years, his friends and co-workers back in Houston, and even his children, had no idea what he was doing there. They would have been even more mystified had they known that this Brooklyn-raised, Harvard-educated Ph.D.- a man who looks about as outdoorsy as Alan Greenspan in hiking boots - spent many of the project's early days camped out in rough terrain miles from the nearest motel.

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But now the veil of secrecy has lifted. With some 200 Shell (Charts) oil shale patents already filed and approvals needed from Colorado and the U.S. Department of the Interior to proceed with commercial production, Shell knows it has to make the public case for developing the country's oil shale potential.

So after months of negotiations, Shell and Vinegar agreed to give FORTUNE an exclusive look at a new technology - inelegantly dubbed the In Situ Conversion Process, or ICP - that could vindicate Shell's 28-year, $200 million (at least) bet on oil shale research.

In a nutshell, ICP works like this: Shell drills 1,800-foot wells and into them inserts heating rods that raise the temperature of the oil shale to 650 degrees Fahrenheit. To keep the oil from escaping into the ground water, the heater wells are ringed by freeze walls created by coolant piped deep into the ground; this freezes the rock and water on the perimeter of the drill site. Eventually the heat begins to transform the kerogen (the fossil fuel embedded in the shale) into oil and natural gas. After the natural gas is separated, the oil is piped to a refinery to be converted into gasoline and other products

In essence, ICP simply accelerates Mother Nature's handiwork. Fifty million years ago, large swaths of what is now northwest Colorado, northeast Utah, and southwest Wyoming were covered by two great lakes. Algae, leaves and other prehistoric life forms sank to the bottom, leaving behind a thick layer of organic muck. Starved of oxygen, these sediments could not decay, and periodically they would be covered and compacted by sand and other rock deposits. Over millions of years, the pressure exerted by the weight of the rock layers transformed the organic layers into kerogen.

In its purest form, kerogen looks like ordinary black rock. In most parts of the Green River Formation, however, it exists as thin black or dark-gray stripes between lighter-colored layers of limestone or sandstone. Kerogen is an oil precursor. So given a few million more years, those layers would morph into an oozing crude. Of course nobody wants to wait that long, which is why there has been no shortage of attempts over the years to make use of Western oil shale. The Ute Indians called it "fire rock" and burned it for heating. Attempts to commercialize oil shale began in the early 20th century and accelerated during the 1970s Middle East oil crisis, when the Carter administration began pouring big money into synthetic fuels.

......For his part, Vinegar's attention is focused squarely on Colorado. "So many Americans have no idea that they're sitting on a resource several times the size of Saudi Arabia's," he says. "The fact is that it's entirely possible to produce this stuff. Our technology works. There's no doubt about it."
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Old 06-05-2008, 02:14 AM   #2
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Senate votes to continue moratorium on oil shale

http://www.rockymountainnews.com/new...le-moratorium/

Senate panel retains oil-shale moratorium
By M.E. Sprengelmeyer, Rocky Mountain News (Contact)
Originally published 03:20 p.m., May 15, 2008
Updated 03:21 p.m., May 15, 2008

The Senate Appropriations Committee today narrowly defeated Sen. Wayne Allard's attempt to end a moratorium related to oil shale development in Colorado.

It was a big day for Colorado energy issues on Capitol Hill as Gov. Bill Ritter testified before a senate committee asking lawmakers to move cautiously on oil-shale development until more is known about the environmental impact and other issues.

Meanwhile downstairs, the appropriations committee was considering a massive Emergency Supplemental Spending Bill. Allard, a member of the committee, attempted to insert an amendment that would reverse the moratorium that lawmakers approved late last year.

The moratorium prevents the Department of Interior from issuing regulations so that oil companies can move forward on oil-shale projects in Colorado and Utah. Allard said the moratorium has left uncertainties at a time when companies need to move forward and in the long term make the United States more energy independent.

"If we are really serious about reducing pain at the pump, this is a vote that would make a difference in people's lives," Allard argued.

But in a 14-15 vote, the committee spilt strictly on party lines and rejected the amendment.

One of the key votes was from Sen. Mary Landrieu, D-La., who said Sen. Ken Salazar had urged her to reject the amendment even though she personally thinks the moratorium on oil-shale development is unjust.

Landrieu vowed to try to lift the moratorium when the large appropriations bill reaches the floor of the U.S. Senate in coming weeks.
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Old 06-05-2008, 03:43 AM   #3
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What oil shale could do, though, is reduce the risk premium built into oil prices because energy traders could rest easy knowing that the flow of oil from Colorado or Utah won't ever be cut off by Venezuelan dictators, Nigerian gunmen or strife in the Middle East. In a broader sense, U.S. energy security lies in diversity of supply, so enhancing domestic sources is appealing
great article!

and it could help eliminate the influence of the speculators, create new jobs, and God forbid stimulate the US economy. this and other domestic drilling could allow less import of terror funded oil. there's plenty right here, besides others ARE drilling near our coasts!

i might have to go back to buying shell exclusively!

by some chance this and new drilling happens such that the price of fuel is decreased, i believe tougher penalties and better rebates should be given to guzzler and efficient vehicle owners respectively. business owners to be exempt of the penalties of course.

glenn beck actually aired a report about shale not too long ago. i know, i know...

beck, hannity, levin, bortz, north...

these individuals are for themselves, and couldn't possibly love their country or have any legit views in politics or anything else.
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Old 06-05-2008, 04:19 AM   #4
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great article!

and it could help eliminate the influence of the speculators, create new jobs, and God forbid stimulate the US economy. this and other domestic drilling could allow less import of terror funded oil. there's plenty right here, besides others ARE drilling near our coasts!

i might have to go back to buying shell exclusively!

by some chance this and new drilling happens such that the price of fuel is decreased, i believe tougher penalties and better rebates should be given to guzzler and efficient vehicle owners respectively. business owners to be exempt of the penalties of course.

glenn beck actually aired a report about shale not too long ago. i know, i know...

beck, hannity, levin, bortz, north...

these individuals are for themselves, and couldn't possibly love their country or have any legit views in politics or anything else.
at the very least it will create more jobs in the shale oil region. I agree that tougher penalties and better rebates for guzzlers and efficient vehicle owners, and we should consider including business owners at least on the rebate part - big trucks can be made efficient as well.

now if we could only convince our senators and congressperson....
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Old 06-05-2008, 06:51 AM   #5
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now if we could only convince our senators and congressperson....
i am "convinced" that this issue rivals greed, as one of society's greatest problems, certainly because greed is present within bureaucracy.
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Old 06-05-2008, 07:47 AM   #6
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so the plan is to drill a well then heat the ground hotter then your oven can get, freeze the ground around it and let the oil drip out...
slate is pretty close to being oil shale and anyone who has cut slate tiles with a wet saw can easily see the oil slick that develops in the water, but current oil wells are like sticking a straw in a glass of soda, this is more like trying to get that same soda out of a roll of paper towels.
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Old 06-05-2008, 05:12 PM   #7
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so the plan is to drill a well then heat the ground hotter then your oven can get, freeze the ground around it and let the oil drip out...
slate is pretty close to being oil shale and anyone who has cut slate tiles with a wet saw can easily see the oil slick that develops in the water, but current oil wells are like sticking a straw in a glass of soda, this is more like trying to get that same soda out of a roll of paper towels.
actually, once the shale is heated (for three to four years) the light oil just floats up, the hard part is maintaining the heat and the ice barrier around the wells.
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Old 06-12-2008, 07:10 PM   #8
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My father in law has worked in the oil industry for 30 odd years in Texas, he told me Shale is costly to get energy from and oil companies do not want to spent money to make money!
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Old 06-13-2008, 06:09 PM   #9
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My father in law has worked in the oil industry for 30 odd years in Texas, he told me Shale is costly to get energy from and oil companies do not want to spent money to make money!
Shell is already spending money on it. with oil at $137 a barrel, it's now economical to harvest oil shale. Per Shell, they can harvest the oil in the shale profitably even if the price of oil goes below $40 a barrel.

I think that there has been enough advancement in technology for oil companies to harvest the oil in oil shale. BUT in the end, congress is not allowing them to do so.
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Old 06-13-2008, 06:14 PM   #10
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Shell is already spending money on it.

They have to, there are no more new oil reserves, this is beginning of peak oil and an extra 2 million oil users with money.

Shell are drilling all over the North Sea in hopes of finding more oil, it cost them almost ?150k per drilling rig per day!

I wish we could all get off the Black Heron we use in our cars..
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