Oil Shale - an economic alternative?

[snake100]

Cost to produce is quite high per the channel 9 tv show tonight...anyone know estimated % per barrel?....vs offshore/onshore oil wells...

 

[Smurf1976]

Cost to produce is quite high per the channel 9 tv show tonight...anyone know estimated % per barrel?....vs offshore/onshore oil wells...

Well... The single largest cost of extracting oil from shale is energy itself. So the more oil costs, the more it costs to extract it from these sources.

It was going to be viable at 30, 40, 50, 60, 80, 100 and now probably $200 per barrel. And yep, you guessed it, when prices do hit $200 it will need probably $250 or $300 to be viable. Hence many saying that "oil shale is the fuel of the future and always will be". It's always been "close" to viability and still is "close" despite a 10 fold rise in oil prices.

 

[snake100]

Thanks. They did speak about the energy involved and amount of pollution it causes to extract oil from the rock...interesting article from Channel 9.

 

[Smurf1976]

Oil SANDS.
Wonder when people will see the damage from oil sands mining as too great a cost to bear.

It's the same with most alternative energy sources.

Oil and gas are easy and low impact (unless it gets spilled). Drill a few holes and out it comes. Burn it and there's your energy. Not even any ash to dispose of and, with modern technology, no smoke either. Easy.

Consider these 3 power stations, all of which are about the same size. Newport (Vic, gas-fired), Northern (SA, coal-fired) and Gordon (Tas, hydro).

The first one is an industrial building about 6km from central Melbourne. Look at it and you see a big chimney stack and perhaps a bit of vapour being emitted. That's it. Half the people living in Melbourne probably don't even know what it is.

Second one is near Port Augusta. Twice as much CO2 as the gas-fired plant. Plus ash dumps, particle emissions and so on. Plus a huge hole in the ground where the coal came from. You wouldn't want it in suburban Adelaide that's for sure. On the plus side, there's a lot more coal than gas so it's an alternative in that sense. It somewhat dominates the local area.

Third one is in a remote part of Tas. Totally renewable and sustainable. Nothing goes into the air or even the water. It'll still be there long after oil and gas cease to be economic. But just one problem - 11 years and $185 million (in 60's and 70's $) to build makes for a rather large upfront investment. And of course this is the scheme which started the world's first Green political party. The scheme itself is clearly visible on any map of Tasmania, in satellite images and so on.

Oil and gas are easy. Everything else is a LOT harder economically, environmentally or politically - usually all 3.

Alternatives there are, but you have to accept some rather drastic "modification" to the natural environment if you want to use them. Coal mines, ash dumps, flooded valleys, wind turbines everywhere you look, the inherent hazard of nuclear materials and so on.

Personally I'm fine with the wind turbines and dams simply because I'm all to well aware that they're at least reasonably sustainable if not aesthetically pleasing. The damage can be largely undone (though it would take a few decades).

But even I start to worry at the prospect of reactors in every country and ripping up entire US states (literally) for shale. At that point we're doing massive damage in return for something that has no lasting value - burn it and it's gone. And we'll NEVER undo all that damage.

Worth noting that many of the biggest environmental battles have been about alternatives to oil and gas. Take out the debates about dams, wind farms, uranium, transmission lines and coal-fired power and that's most of the big environmental debates we've seen in Australia apart from forests (though even there I could point out that the amount burnt nationally each year for fuel is about the same as the amount chipped for pulp).

 

[So_Cynical]

Ive been reading (Googleing) a bit tonight and the "Stuart Oil Shale Project"
that fell over in 2004 was sposed to be profitable with oil at over $30 a barrel :dunno:

I found an ASX listed mob with a deposit in Tasmania...JORC indicated resource
of 59 million Barrels (equivalent)

59 million @ 130$ a Barrel = $7.670.000.000 did i add that up right?

 

[doogie_goes_off]

Smurf, that's a circular argument you have going although there's no guarantee it's not true whilst governments don't look to alternative sources of energy and consumers don't stop buying cars.

The devestation for mass extraction from oil shale would be considerable, but the question is "what's accepable?" or "sustainable?*"

This is where funding of science with a social angle should be done at a federal government level, not just think tanks or papers or just the CSIRO unless they get bigger and less wasteful...

Find out what's viable longer term and promote/subsidise/encourage it, now!

*Using an arbitary time scale of the continuation of human existance in "an oil age" state of living

 

[Smurf1976]

Smurf, that's a circular argument you have going although there's no guarantee it's not true whilst governments don't look to alternative sources of energy and consumers don't stop buying cars.

I don't follow which part of the argument is circular. Most of the non-oil/gas energy sources produce more non-CO2 impact than oil/gas for the same level of energy supply. Therefore if you want to use these alternatives whilst maintaining the same volume of supply then you have to accept some of those impacts.

If that makes the argument circular then so does saying that shares in XYZ have gone up therefore if you held them you should have made a profit.

 

[doogie_goes_off]

Maybe this is going to be a circular solution for you then - choose an alternative energy source, accept the impact, use it to extract oil from oil shale, sell the oil for consumption, make money. Simple isn't it. The circular argument would be: choose oil to provide the energy to produce oil and the margin is always going to be marginal.. Well it is a possibility that people will go with solution 1 but disagree if you like. I suppose solution 2 is not that different to refining oil to make other products. My other points were - at what point would we say enoughs enough, stop trying to make oil and is it worth bothering to decide if it's "economic" now, some people think yes it is worth it, that's why they are pegging oil shales as assets.

 

[Smurf1976]

Ive been reading (Googleing) a bit tonight and the "Stuart Oil Shale Project"
that fell over in 2004 was sposed to be profitable with oil at over $30 a barrel :dunno:

I found an ASX listed mob with a deposit in Tasmania...JORC indicated resource
of 59 million Barrels (equivalent)

59 million @ 130$ a Barrel = $7.670.000.000 did i add that up right?

It may have been profitable but there were so many ongoing technical problems that it just didn't stack up. The pilot plant caused rather a lot of environmental problems - a full scale plant running like that would have been an outright disaster.

As for oil shale in Tassie, there's lots of small deposits known all over the place. The most famous one would be on Bruny Island, a popular holiday spot not far from Hobart but there's lots of others places with a bit of shale. There was some mining of the shale historically (1920's - 30's).

Much the same with coal - lots of small deposits (120 or so) but nothing really big (they total about 150 million tonnes of recoverable black coal). Only one coal mine operates today. Production is about 0.5 million tonnes per annum although that is largely due to lack of a use for it (it's low grade coal mostly used in the cement works, paper mills and a bit for boiler fuel in breweries, vegetable processing etc).

 

[Smurf1976]

Maybe this is going to be a circular solution for you then - choose an alternative energy source, accept the impact, use it to extract oil from oil shale, sell the oil for consumption, make money. Simple isn't it. The circular argument would be: choose oil to provide the energy to produce oil and the margin is always going to be marginal..

In that case you're basically turning one energy source (eg coal, gas) into another (oil). Like changing AUD100 into an equivalent volume of some other currency.

My point is basically EROEI - Energy Return On Energy Invested. If it takes 100 barrels, megawatts or whatever to produce 90 barrels etc then in energy terms it's a loss no matter what the actual resource being used. It might still be finanically profitable, but it doesn't solve much in terms of energy problems.

But if it takes 100 barrels to produce 110 barrels then at least it's profitable in terms of energy. The net gain of 10 does imply an awful lot of resources extracted and consequent environmental impact though. If you have to dig up 2 cubic metres of rock to fill your car's tank and it produces 4 cubic metres of waste (oil shale expands when the oil is extracted) then that's a rather big impact environmentally.

I reckon we'll do it though. I seriously do think we'll mine, drill, react, dam, farm, collect and ferment everything we can to keep the game going as long as possible.

 

[grace]

I hold GRV which has a market cap of $10million with 11 billion barrels of oil in oil shale. Trial mining was to start this quarter, but haven't heard anything yet. I wait in hope. The register is tightly held.

 

[renim]

the 'solvent' for oil shale will basically be lpg heated to 60 degrees C.
its new tech, new idea, but recyclable and a lot cheaper than retorts

 

[ghotib]

What do these companies say about the effect of a carbon price on their prospects?

 

[So_Cynical]

I found some info on a big American company that found an electronic
way to separate the oil from the shale....all a bit hush hush.

Anyway i figured today that if u grind the shale down into a sand type
consistency...then u have approximately what the Canadians are
successfully mining...oil/bitumen sands.

 

[nioka]

I found some info on a big American company that found an electronic
way to separate the oil from the shale....all a bit hush hush.

Anyway i figured today that if u grind the shale down into a sand type
consistency...then u have approximately what the Canadians are
successfully mining...oil/bitumen sands.

I don't think that is correct. The Canadian product is a very heavy bitumous oil type. The Australian is a shale containing a very light crude. During the war I seem to remember a kerosene type product being produced from it.
The electronic method is a microwave process I think.

Can't guarantee that though, it's a long time ago and my memory plays tricks at times.

 

[grace]

I don't think that is correct. The Canadian product is a very heavy bitumous oil type. The Australian is a shale containing a very light crude. During the war I seem to remember a kerosene type product being produced from it.
The electronic method is a microwave process I think.

Can't guarantee that though, it's a long time ago and my memory plays tricks at times.

Nioka, your memory is pretty good! They call it kerogen (now that's from my memory, and I only read that last night). Might have to check how accurate I am!

 

[Smurf1976]

Nioka, your memory is pretty good! They call it kerogen (now that's from my memory, and I only read that last night). Might have to check how accurate I am!

It's kerogen in shale, as distinct from crude oil or bitumen.

In my opinion if we do end up using large amounts of shale then it will be by some means other than the conventional idea of mining, heating and recovering liquid fuel from it.

We could just burn it for boiler fuel in power stations. That's pretty simple technically and been done before.

Burn it in situ and recover CO gas from that. Then we put that through another process and turn it into something more useful.

Heat it in situ by some means, fracture it and do some drilling to recover oil. A questionable idea environmentally - depends on how much vapour ends up escaping.

Refine it using solvents rather than thermally.

Shale is pretty toxic stuff though so I'm somewhat wary environmetally. Simply mining it and dumping it as is causes enough environmental and human health problems at Leigh Creek (SA) without actually trying to extract oil from the stuff.

We might do something with solvents etc and recover liquids that way.

 

[nioka]

Nioka, your memory is pretty good! They call it kerogen (now that's from my memory, and I only read that last night). Might have to check how accurate I am!

My recollection goes back to the early war years when we did not have electricity and used kerosene lamps. I seem to recall some talk then about the shale oil kerosene that we used at home and a power kero that was used in tractors. Most of the tractors I remember from those days had steel wheels.
I've started writing a book and all these things that prompt memory help a lot.

 

[Smurf1976]

My recollection goes back to the early war years when we did not have electricity and used kerosene lamps. I seem to recall some talk then about the shale oil kerosene that we used at home and a power kero that was used in tractors. Most of the tractors I remember from those days had steel wheels.

"Lighting" kero for heaters and lamps, "power kerosene" for tractor engines.

There were quite a few sites of production from shale in that era. NSW & Tasmania were among them, not sure about elsewhere. In more recent times kero is simply another product of crude oil refining.

Last time I remember seeing a kero heater used inside a house as a normal means of heating would be roughly 1986.

I think there's still one service station in Hobart that sells kero (from a bowser) and I saw one in Brisbane 3 years ago with the kero bowser oddly placed right next to the petrol and LPG pumps - you could end up filling the car with kero if you weren't paying attention.

Heating oil these days is often simply a 50/50 mix of kero and diesel. And there's still a few around using it (it's getting rather expensive though).

 

[So_Cynical]

Jet-A fuel is also pretty much kerosene....so its not like kero is outdated and unwanted.

From my reading last nite, the blacker and thicker oil is, the more processing it needs to
get it to a usable state..so the lighter and browner oils sell for a higher price cos they
cost less to process....so Aussie shale is good Shale.

For me its hard to believe that with oil above $120 a barrel, that these 50+ million barrel
shale deposits will not get developed in some way shape or form.