Econbrowser on Oil Shale

Econbrowser discusses Oil Shale, and is starting to sound like at any moment he might break down and join our Draft Roscoe for President campaign :-). (snippets under the fold...)
The fact that large quantities of heat are required to obtain a usable fuel from the rock means that this is a far less efficient source of energy than conventional oil. Shell claims it can produce 3.5 units of energy for every unit input, though one wonders whether the energy content of all the inputs is taken into account in such figures. The lower this ratio, the more the cost of producing oil from shale would rise as energy prices go up. Another implication of the high energy needs for processing is that significantly more greenhouse gases are released per barrel of usable fuel produced. Concerns about greenhouse emissions appear to have been the basis on which Greenpeace succeeded in closing down the Australian demonstration plant.
Despite these misgivings, I believe that the applications that BLM has received for oil shale demonstration projects should be approved and pursued aggressively. Given these lead times, we certainly need to be developing the ability to exploit this resource, if need be. Bad as this option is, I'm not certain that we have anything better. But unlike the enthusiastic supporters of oil shale, my hope is that we never have to rely on it.
Regarding Oil Shale i have to wonder about this obsession to produce crude oil from it. Wouldn't it be far cheaper and more efficient to mine the stuff and burn it for electrical power generation? The ecological consequences would not look pretty to say the least but the EROI should certainly look a lot better. If you are desperate for liquid fuels the freed up NG from the previously gas powered electric plants could be used for conversion.
It would be a lot like trying to burn road asphalt in a power plant.  As a matter of fact, road asphalt would probably work better.
Quite likely, but my point is more that burning this shit is probably far more viable than trying to convert it into gasoline.
Estonia burns shale directly to generate electricity (because they have no alternative). They use the bulk of their oil shale for electricity generation, burning it like you would coal, at an energy yield from the primary energy contained by the shale in the ground to electricity delivered to the customer of 11%. For the small share they use to produce oil, the energetic yield from ground to tank is 9%. That's pretty lousy, and you have huge amounts of waste to dispose of. The Shell process produces liquid fuel, with a small net energetic return, and no waste disposal - if it works. Murray
I think Roscoe could be the Ross Perot of the 2008 Republican Primary Race - injecting an issue that forces others to deal with - something other than the culture wars.

In terms of Oil shale, Tar Sands, etc. The real question is - how much are we willing to destroy the environment to get at something that is just delaying the peak a few years at most or softening the slope a bit. The investments we make there could probably be better invested in cleaner renewable energy. I cringe at the amount of water needed for this operation.

Renewable first! And RUN Roscoe, RUN

It seems that the hard part is getting out of the ground. Once it is out, it makes sense to get it into the transportation fuel stream. This would be complicated, but doable.

Does anyone know what is involved in refining the raw product? The product is similar to bitumen which is one of the lowest quality/value outputs of a refinery. The majority of bitumen produced by refineries is further processed using very expensive equipment to produce lighter products.

In this regard, the oil shale output is like a low value post distillation refinery by product. If this is the case, turning a lot of the stuff into useable product is going to require massive capital additions to the refining sector, but not necessarily additional capacity.

Also, since the raw product is similar to an existing product stream, it must be fairly straight-forward to calculate costs. I'd be grateful if anyone can point me to any documentation of refining costs and infrastructure requirements.

The basic problem with all these ultra-heavy oils is that they require a source of hydrogen to be upgraded.  The cheap way to produce hydrogen is through steam reforming of methane or coal.  The extrodinarily expensive way to produce hydrogen is through electrolysis or recyclable thermal processes like the Sulfur-Iodine process.  Methane reforming needs about 39 MJ/kg H2 wheras electrolysis is 190 MJ/kg of H2 using real-world efficiencies.  

The problem is, you need a lot of natural gas to upgrade this viscous stuff.  Syncrude, as of their last corporate report I've seen, were consuming 1.35 mcf/bbl for tar sand seperation and upgrading.  Of that, you could maybe replace 60 % of the energy input with steam from a high temperature nuclear plant.

In-situ techniques are generally worse -- they need about 1.2 mcf of natural gas just for seperation.  Since Royal Dutch Shell is exclusively looking at in-situ shale production, I ask the obvious question, where's the heat going to come from?  If we are seriously going to embark on heavy oil programs that consume prolifigate quantities of natural gas to produce liquids, we will run out of natural gas very quickly.  At current depletion rates, Alberta is due to run out of conventional natural gas is 2012.  If the switchover to coal-bed methane isn't smooth, or we don't get a LNG terminal built in Prince Rupert the wheels could fall off tar sand production.  

The following is an excerpt from an input I provided to Dan Kish (Rep. Pombo's senior adviser) after Shell's original press release quoting a 6:1 return. Randy Udall spoke to the Shell guy that testified before the Congressional committee (I forget his name) and was told that the 3.5:1 was from primary energy to light oil, but assumed a 60% efficient power plant and did not include the power for the freezing. Using a conventional coal plant at about 33% efficiency the 3.5:1 goes to about 2:1. Including the power to run the freezing plant will get near 1:1. The interesting potential is to power the system from a high temperature AFR nuke and use the waste heat to augment the electrical heating. >2:1 should then be possible, and that is a lot better than eg coal to liquids at about 0.6:1. There is still the issue that Shell has overstated the truly available resource by a very large amount, but even what is really available is very attractive, especially if we get to a really efficient car fleet. Murray
From World Energy Council 2001 (, using USGS numbers, we have USA proven  reserves of 3.34x10e12 tons of shale that could yield 242 Gt kerogen or 1936 Gb at an average of .58 b/ton. Of this 560 Gb of shale oil is considered "proven recoverable". Estimated unproven is another 500 Gb. Total is about equal to world conventional oil reserves. Sounds great.

However the top grade (0.5 to 1.2 b/ton) is about 30%, so at $40./b for light crude, maybe 200 Gb of the proven are economically useful to replace light crude and the rest is speculation. At our present consumption rate of >7 Gb/yr, the economically proven is 30 years. Not so great.

Note Suncor gave up on the Stuart development in Australia in 2001, and it was yielding 0.5b/ton, with light crude at about $25.00/b. We can suggest that technology will make things better, but from 1973 to 2002 several billion dollars were spent on shale oil, so I doubt that much technology has been overlooked.

Shell suggests an energetic recovery of 6:1, but all other references I can find say that 40% of the energy in the shale is used to generate the usable shale oil. I.e. for 10b of kerogen in the shale you must consume the equivalent of 4b to leave 6b useable. How do Shell get their 6:1? I will bet all the money in my pocket against all the money in yours that the 6:1 is the result of measurement in the lab of joules of heat in to a sample of
shale vs joules of primary energy contained in the kerogen produced. From that point you have to take the electricity to heat efficiency, which will be high in the lab, but not high in the rock being mined, and the efficiency from the primary energy in the fuel used to the generation of electricity. There will be a lot of heat dissipated in the rock mass that does not generate shale oil, but lets optimistically assume 70% efficiency. If we use coal to generate the electricity, we know the typical efficiency is about 35%, giving us a net of 25%, which reduces our 6:1 to 1.5:1, or about the same as conventional processing.

Worse, in situ, Shell admits that the heavy fractions do not get recovered, only the light fractions, while in the lab recovery might be close to 100%. From other sources I find that the light fractions seem to be about 65% of the total kerogen which would reduce our 200 Gb/30 yr to 130 Gb/20 yr. Then we have to upgrade the shale oil to light oil equivalent (FROM THE TESTIMONY IT BECOMES CLEAR THAT i WAS WRONG ON THIS POINT. THE IN SITU HEAT SOAK ALREADY DOES THE CONVERSION.)
In calculating the whole system energy returned on energy invested (EROEI) we also have to include the portion of the energy embedded in all of the plant and equipment that should be assigned to the final gasoline as well. If we do that for everything from the coal mine through the refinery we probably have energetic recovery less than 1, even for the Shell process.

. If we use the Shell in situ method for recovery, water may
not be a problem in the Green River Basin. If we use conventional mining and pyrolitic processing, water will be the limiting factor on production rates, because it is an area of very low water resource. We could consider using the Eastern Black shales first, where water is not so much of a problem, and have the additional benefit that these shales are relatively high in Uranium, which could spread the economic cost. However due to an unfavorable H/C ratio the light oil yield is low, or a large fraction of hydrogen has to be added. Also the recoverable resource is much less than the Green River.

Finally there is the issue of recovery rate. It doesn't matter how big the resource is, what matters is how fast it can be produced. Late 2004 production of light crude equivalent from Athabasca tar sands is just getting to 1 Mb/day and is projected to be no more than 3 Mb/day by 2020. It is unlikely to ever exceed 6 or 7 Mb/day, of which Canada will need 1/2 when their oil declines sufficiently. Availability for the USA is unlikely to ever exceed 3 Mb/day. Given the relative ease with which tar sand bitumen can be made to flow, how fast can we ever produce shale oil? Maybe 2 or 3
Mb/day some time in the distant future, at least 20 or 30 years from now?

Shell doesn't even intend to make a decision on going to production before 2012. Then if they do go ahead, they have to build a source of electricity, as well as the rest of the recovery plant and then ramp up. Let's assume they build a 1000 MW nuclear plant as their electricity source. That plant can produce 8 billion Kwh/yr of energy/yr, which is .033 quads. Even at the claimed 6:1 energy yield that would give 0.2 quads of kerogen or about .16 quads of light crude equivalent per year. We use 40 quads of oil per year, so that 1000 MW nuke plant would support production of 0.4% of our annual
oil consumption at the most optimistic energy assumption, equivalent to 80 thousand barrels/day. (AT 2:1 IT WOULD ONLY PRODUCE 0.14%) We would need 25 such nuke plants to support production of the 2 MB/day I have suggested above as a max output. snip

Since the Shell 6:1 ratio now proves to be between 2:1 and 3:1 (assuming the AFR nuke), we will need 50-75 nuke plants. How many can we build by 2020? 2030?

Let's assume petroleum production worldwide goes into decline in 2008 (which is highly probable), and declines at an average rate of 3%/yr during the first 20 years (starting at 1%/yr and growing to 5%/yr). UK North sea oil went into decline in 1999 and is already at 10%/yr. With demand rising in all other parts of the world the decline rate for USA availability is likely to be higher than the world average, but let's work with 3%/yr to be optimistic. BY 2020 our petroleum availability has dropped to 67% of the peak. If we assume a peak at 8 Gb/yr in 2008, (22 Mb/day), we will have lost
over 7 Mb/day by 2020, and tar sands plus shale oil will not have offset more than 3Mb/day of that. By 2030 petroleum will be down by 11 Mb/day, and the offset for tarsands plus shale oil might be up to 5 Mb/day. Our net supply is still down 30% from the peak, using very optimistic assumptions.

Shale oil might provide a partial offset for a portion of oil decline, but will never be a solution. However as I have noted above it can be a lot better than coal to liquids. It makes sense to develop to have for strategic military reasons, but it cannot be something to pin a responsible National Energy Policy on.

But how do you deliver high temperature steam from a nuclear plant to an in-situ production site?  You can't just pickup a helium or sodium cooled nuke plant and move it every time you exhaust a production site.  Pipelining would be extrodinarily expensive in order to prevent major parasitic losses.  

Keep in mind, there's zero point in using electricity or electrolysis-produced hydrogen both as a source of heat or a source of hydrogen for upgrading.  It's (believe or not) more efficient to produce the hydrogen by electrolysis as fuel and switch to the much ballyhooed hydrogen economy.  

The engineering difficulties of a portable sodium cooled nuclear plant are not that great - OTOH, licensing the thing would probably be next to impossible. It would be large and heavy, granted (picture the power plant from a nuclear submarine), but it can be done. Nuclear energy is far more scalable in the small direction that most people realize.
The Shell material suggest tapping only a few acres at a time. Heat can be transferred in insulated pipes as liquid salts for example for a long distance, so one nuke can probably be used in one location for decades. when the shale recovery is dependent on heating the rock it would be stupid to throw away high quality heat, so I am sure a way can be engineered.  Murray
so if runaway climate change/habitat destruction/general screwing up of the environment stems from getting a little more oil to string out the industrial experiment its ok? I would argue not. In many ways we've already kicked many positive feedback loops into action that will have ramificatiosn for many 100 or 1000 years in the future (See the Millenium Ecosystem Assessment with data from the IPCC).
Yes but if you are going to to all the trouble of setting up a nuke just to get oil at 2:1 EROI why not just set the plant up to produce electricity and charge electric cars.
Agreed, or we can attempt to move away from automobiles entirely and rely more on electric powered mass-transit and railways. And for heat, small nukes can be used for district steam heating, which is much better efficiency-wise than making electricity and then running electric heating systems.