November 09, 2007

Oil from shale progress

Fortune magazine has a feature on the progress of Shell to get oil from shale. Hat tip to futurepundit.

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.

Oil shale has one other big appeal: It's not vulnerable to the steep depletion rates that have afflicted other big oilfields.

Oil shale would help make any transition from oil easier in the event of peak oil.

Harold 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.

In Situ Conversion Process, or ICP - that could vindicate Shell's 28-year, $200 million (at least) bet on oil shale research.

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.