September 2008

Blood from a rock: Oil in shale is kerogen

Crude oil at $120/bbl has lots of automation engineers, experts, and entrepreneurs returning to the drawing board, revisiting former technologies. The extraction of oil from oil shale is the challenge.

There are about 800 billion barrels oil in the western U.S. locked into the coal-like rock. That would be three times as much oil as the reserves of Saudi Arabia and nearly 90 years worth of U.S. oil consumption.

The Wall Street Journal reported tapping that potential requires heating rocks buried deep beneath the earth to hundreds of degrees Fahrenheit. Oil companies are racing to find ways to do so economically, but their solutions are years away from commercial use.

That means oil shale is like many other potential solutions to the nation's energy woes-a resource of staggering potential but far from fruition. Oil beneath the Alaskan wilderness or the California coast could add billions of barrels to U.S. production but will take years to access.

Wind power is contributing to the power grid in a handful of areas, but technical and logistical hurdles exist. For now, it can play only a bit part in the broader energy picture. Next-generation nuclear plants, cellulosic ethanol, solar power, and other technologies all face similar challenges.

Oil shale is across a swath of Colorado, Utah, and Wyoming. In the past, companies have tried bringing the rock to the surface to heat it, but that has proved too costly. Now the industry is trying again.

Companies including Chevron Corp. and Royal Dutch Shell PLC said high prices have made the production of oil from shale feasible and are pouring cash into pilot projects. They are trying new technologies to cut the costs, including experimenting with heating the shale while it is still buried.

The "oil" in oil shale is kerogen, a precursor to oil. Left alone underground at sufficient temperature and pressure, kerogen will turn into oil in a million or so years. Geochemists can speed that process by heating the rock to several hundred degrees Fahrenheit until the kerogen turns into flowing crude oil.

Royal Dutch Shell has been working for more than 25 years on a novel technology that heats the shale in the ground. Such an "in situ" process would not involve an expensive and environmentally troublesome mining operation and would not create thousands of tons of waste in the form of spent shale, as the mining method does.

However, Shell's process is complicated. The company plans to insert electric heaters hundreds of feet into the ground to heat the oil shale to between 650 degrees and 700 degrees for more than two years.

In order to prevent groundwater from flowing into its production area, which would raise pollution concerns and dissipate the heat, Shell plans to create an underground wall around its site by freezing surrounding groundwater, down to 2,000 feet deep.

Shell has tested the steps individually, but never all together.

Oil-services company Schlumberger Ltd. earlier this year bought technology from Raytheon Co. In the 1970s, the defense contractor drilled into the ground in Utah and inserted radio transmitters that heated rock in the same way a microwave oven heats leftovers.

The tests proved the technology could heat shale to the necessary temperature. However, falling oil prices led Raytheon to shelve the program before it could produce any oil.

That was then. It is different now.