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Front Page » June 25, 2009 » Business journal » Making oil from rock: Pioneering process breaks new ground
Published 2,301 days ago

Making oil from rock: Pioneering process breaks new ground

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The idea of making good, useable oil from oil shale, tar sands and other oil rich earthen products is nothing new. Processes for extracting oil based products from these sources has been around a very long time.

The Problem is, however, that there are major drawbacks in doing so with traditional processes. Some require more input of energy to remove the oil than the oil itself will supply. In other cases the environmental damage, both in terms of air and water pollution, along with desecration of the land that the earth is being removed from is unacceptable by many people.

And finally there is water. Most processes need water, lots of it. In fact in some processes the amount of water get the oil out of the petroleum laden rocks is as much or more than a one to one ratio.

That's why a new process, developed by Red Leaf Resources of Salt Lake City is so interesting. Many of these problems appear to disappear with their new process they have demonstrated in a pilot plant that is located in southern Uintah County along the Seep Ridge Road.

For those that attended the SEUPA banquet at the Carbon County Events Center last fall, there is some familiarity concerning this process. The speaker at the banquet was Laura Nelson, vice president of energy and environmental development for Ecoshale, a division of Red Leaf Resources and she spoke at the time about the upcoming operation of the pilot plant.

Now that plant has run and the results have been outstanding. A legislative tour spent time at the site in late May and the tour was an eye opener for every one involved.

The site is located on school and institutional trust lands, and the company has already obtained leases to do much more than just a pilot operation. The company holds leases on approximatley 17,000 acres of SITLA land. That land holds an estimated 1.1-1.5 billion barrels of in place oil equivalent shale resource. However, right now the pilot plant only takes up a few acres in the vast expanse of land that lies between Vernal and Thompson near I-70.

The pilot plant that ran this winter produced a test production of of approximately 15,000 barrels of oil. The oil extracted during that process has been rated with an average API of 34 which is close to that of intermediate Texas crude. This is a breakthrough for oil shale production product, which often is rated much lower and requires a lot of processing before it can be brought to market.

The pilot plant sits on a five acre plot, that includes the plant itself, storage capacity, a maintenance building and an office for site management operations.

The day the legislators visited the site, all was quiet, because now the company is just waiting to expand their operation and the plant was not running.

Before a tour of the plant Nelson pointed out some of the advantages of the plant over other methods of extraction.

"We use no external water to produce our product, which is important in this area of little water," said Nelson as the group gathered in the office buildings conference center. "The process does not disturb what ground water there is either. In addition the site can be rapidly reclaimed. In fact, initial reclamation begins as part of the process."

The test site consists of a small "cell" in which the process was operated. In many areas around the pilot plant the overburden above the shale is about 20-60 feet deep with some at surface. Oil shale seams are on average between 70-90 feet thick. The cell is excavated, the equipment for the extraction of the oil is put in and then the cell is backfilled with the shale and then covered with the overburden.

The plan is for the cells to be much larger, and after one cell is constructed and being processed the next one will be built right next to it and the equipment can be slid over to work on that cell when the previous cell has all its resources drained from it. At that point the previous cell has already been reclaimed with the exception of the pipes that are used within the cell, which remain in place.

"We have a completely innovative production process," said Nelson. "Rapid site reclamation, reduced carbon dioxide emissions, no process water use, and the protection of the ground and surface water make this process environmentally friendly."

Obviously with the kinds of oil shale processes that exist in most places today, people are skeptical of any kind of new process. But the company believes they answer most if not all environmental questions.

First they say they set aside overburden to preserve topsoil biodiversity. They claim this allows them to rapidly reclaim the site within a few weeks of completion of the production cycle as well as support new grasses and brush for wildlife within months.

"Reclamation is started before the removal of the oil from the cell," stated Nelson.

The cell is rapidly reclaimed. Instead of years to reclaim, the company returns native soils within weeks of the completion of the production cycle. New grasses and brush begin to appear within a short period of time.

Secondly the company says they build an environmental protection layer within a bentonite clay impoundment. Clay impoundments like this are used to protect the environment in the mining industry and provide long-term protection of ground water and underground aquifers.

The cell is then filled with freshly mined shale ore. The ore is sized, sorted and then roasted in the impoundment to extract the kerogen oil.

The company uses nonheat the cell. Pipes do not need to be removed after operations. Without using any water the process transfers dry, low emission heat from natural gas burners through the pipes. When the roasting is completed, they remove the heat by circulating air through the pipes into an adjacent cell. The company says no rock is burned at any time and they claim by burning natural gas, they avoid nearly two-thirds of typical CO2 emissions.

"The primary emissions we produce are from the gas burners that provide the heat," said Nelson. "And as you know natural gas is the cleanest of carbon based fuels."

Once the operators complete heating the shale and producing the kerogen oil, the oil can be upgraded to remove nitrogen and sulfur. Kerogen oil is a feedstock that is highly compatible with the production of premium low sulfur diesel fuel.

The process is a simple one and much of the equipment to do it looks like it came right off the shelf of a big box home improvement center.

"As you look at it you can see this is not very fancy equipment," said site manager, Les Thompson, as the tour of the facility began. "There were only a couple of things here that had to be invented. Mostly this was constructed with present technology, off the shelf stuff."

In the west and particularly in the Bookcliffs water has been a major factor in the failure of oil shale processing getting off the ground. Historically, traditional oil shale removal operations have used four or even five barrels of water for every barrel of oil produced, although this average has decreased to closer approximately 2 barrels today. In the case of the Ecoshale system, the company claims only one barrel of water is used for every five barrels of oil produced. That water is not used directly in the oil removal process, but for dust control, reclamation, and staffing use at the site. Even the average oil well uses two to three barrels of water to produce a barrel of oil.

As to the quality of the product, Nelson said the reaction from some has been surprising.

"Historically oil shale production has been a problem," she stated. "The heat used to remove oil in other processes often burns the oil and it is not as good of quality. We heat the shale at relatively low temperatures and so the product, once refined, comes out and can be used as diesel or jet fuel."

Cost of production has also been a factor for oil shale in the past. Often the cost of producing it has outstripped the price at the customer delivery point. But with the cost of a barrel of oil presently over $70 per barrel, the economics of the process look pretty good for Ecoshale.

"Based on pilot plant results we estimate the the operating cost to produce a barrel of oil at less than $25 dollars a barrel for an 8,000 barrel per day operation," explained Nelson. "We estimate that the cost would be lower for a 30,000 barrel per day operation.

One of the advantages to the process is the steady flow of oil that results. Nelson said that while most oil wells have an initial high point they drop off rapidly in production very quickly with most of their production coming in their first three months of operation.

"This process is consistent," she said. "The volume from the process remains steady throughout the operation."

The pilot plant ran for only 90 days, but the process worked well. Nelson said bigger cells would produce up to 8,000 barrels of oil a day and each cell which would have a relatively small foot print producing between 80-90 thousand barrels of oil per acre.

"At a production rate of 8,000 barrels a day, the company would generate roughly $10-15 million per year for SITLA," said Nelson. "With a 30,000 barrel a day operation SITLA would bring in about $150 million per year."

While the Bookcliffs hold a great deal of shale, there are also large reserves all over the world and people from many countries have visited the plant. Rather than the oil the technology could be the big money maker for the company. Oil shale reserves around the world are estimated to be eight to 10 trillion barrels with the total United States resources consisting of six trillion of those.

This technology could hold a lot of advantages for Carbon County since it can also be used to remove oil from tar sands, which is more prevalent in Carbon than oil shale is.

Obviously the Ecoshale in-capsule process could be a good portion of the answer to the energy crisis as well as to economic growth in the area and around the country.

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June 25, 2009
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