Quick Facts
- Colorado’s oil shale deposits hold an estimated 1 trillion barrels of oil — nearly as much oil as the entire world’s proven oil reserves. However, oil production from those deposits remains speculative.
- Utah has enormous deposits of oil shale rock, known as marlstone, which can be converted into crude oil.
About Oil Shale
Oil shale is a group of rocks rich enough in organic material, known as kerogen, to yield petroleum upon distillation. The kerogen in oil shale can be converted to oil through a chemical process called pyrolysis.
Pyrolysis and gasification are similar processes of heating (around 900 degrees Fahrenheit) with limited oxygen. Conditions for producing pyrolysis oil are more likely not to include oxygen. Pyrolysis oil can be used directly as fuel, but in 2002, 69 percent of world oil shale production was used for generation of electricity and heat. About 6 percent of pyrolysis oil was used for cement production and other uses.
Exploration and processing
Two methods are used to extract oil shale. They are known as surface mining and in-situ processing.
Oil shale can be mined using traditional underground mining or surface mining from the ground. The material is then transported to the processing facility where the shale goes through the chemical process of pyrolysis. The resulting oil is then separated from the waste material.
The in-situ method fractures and heats the shale underground to release oil and gases, but this method remains in the experimental stage. In 1996, Shell Oil Company started a project called the Mahogany Research Project, which utilized the in-situ method.
Location
Measuring oil shale can be difficult because the amount of kerogen in oil shale differs from reserve to reserve. Some countries report reserves as a total amount of oil shale rather than reserves that are economically recoverable via current technologies. According to the U.S. Energy Information Administration (EIA), the global resource base is quite large, equaling 2.9 trillion barrels of recoverable oil. This amount exceeds conventional oil resources by more than 50 percent, which are estimated at 1.9 trillion barrels. The U.S. currently holds 750 billion barrels of oil shale with the biggest concentration of reserves located in Utah, Wyoming and Colorado. Deposits that yield more than 25 gallons of syncrude from 1 ton of oil shale are said to be economically viable. Using this calculation, fully-developed U.S. reserves could supply the U.S. for more than 100 years.
However, only a few countries utilize oil shale as an energy source. Estonia, Russia, Brazil and China currently mine oil shale, but production is declining for the following reasons:
- The waste rock must be disposed. The oil shale rock expands by approximately 30 percent after processing, due to a popcorn effect from the heating.
- Oil shale production requires large amounts of water, which can be in short supply.
- The surface-mining of shale has the potential to leave a significant environmental footprint, similar to that of open-pit mining.
- The amount of energy required to mine, transport, crush, heat and safely dispose of huge quantities of waste material is quite large. These inefficiencies coupled with the cost of environmental restoration mean that oil shale extraction is only economically feasible when oil prices are high.
- The greatest risks facing oil shale production are higher production costs and lower crude oil prices.
Consumer concerns
More research is needed to lower the costs of extraction and lessen the environmental footprint. Better technology will certainly lead to an increase in the economical, social and political benefits of oil shale development.
The U.S. National Energy Technology Laboratory (NETL) published a report called ‘Oil Shale Development in the United States’, where the benefits of developing the oil shale industry were outlined.
Benefits of development
- Economic Benefits: If low-cost oil shale production methods can be achieved to produce approximately 3 million barrels per day, the direct economic profits could reach about $20 billion per year. Through lease bonus payments, royalties on production and corporate income taxes, roughly half of these profits would likely go to federal, state and local governments and provide large benefits to the consuming public.
- Employment Benefits: An increase in oil shale production would cause an increase in employment within the regions where shale oil production occurs, or within regions that contain industries providing inputs to the production process. A few hundred thousand jobs would likely be associated, directly and indirectly, with oil shale production. The net effect on nationwide employment is uncertain, however, because increases in employment arising from oil shale production could be partially offset by reductions in employment in other parts of the country.
- Reduced World Oil Prices: Production of 3 million barrels of oil per day from oil shale would likely cause oil prices to decrease. According to NETL, if world oil prices were to fall by 3 to 5 percent, benefits to consumers and businesses in the U.S. would be roughly $15 to $20 billion per year.
- National Security Benefits: The principal value of oil shale production would be its contribution to a portfolio of measures intended to increase domestic oil supplies and reduce oil imports.
For more information, visit CEA Affiliate Environmentally Conscious Consumers for Oil Shale.
Source: U.S. Department of Energy