Saturday, November 18, 2006

Oil from Oil Shale at $17 A Barrel?

Holy energy independence, Batman! It remains to be seen, but if this is true, it's huge, as InstaPundit says.

A couple of ironies here:
  • The extraction technique is discovered by an Israeli, from the only land in the Middle East without any oil reserves;
  • If it pans out, the discovery may weaken the economic power of the other Middle Eastern state who have sworn the destruction of Israel.
More power to the Israeli innovators.

Update:

A close associate who is a Professor of Chemical Engineering at a major western research university says:

Unfortunately, they don't give much of a hint as to the attributes of their methodology, other than it is a lower-temperature process than traditional techniques. The economic claim seems a bit optimistic to me, but it is hard to know without more details on their process. We have had one or two individuals . . . who have made similar claims (on the order of $15/bbl) for their processes, and it gets into the newspapers and excites the venture capitalists, but when approached on the topic I have advised caution. There are many things that can be missed in an economic analysis (even unintentionally); in particular, when individuals are "working out the numbers" and are not really experienced at doing such thing for large scale processes.

One major item that . . . may be less of an issue in Israel, is the opposition of environmentalist groups. All of these low-cost methods are based on extracting the shale and then processing them through some sort of furnace or retort. Although details were not given, the Israeli process appears to also require extraction of the material. In most cases, this would involve strip-mining, which is highly unpopular in the U.S. Even promisses of reclamation, with gorgeous photographs of reclaimed regions that are more picturesque than before, does not quell the fire.

I attended a recent . . . workshop . . . that included attendees from as far away as Tokyo . . . . Amid various presentations on the nature of the fuel resource, problems unique to processing this fuel, emerging technologies, economic issues, etc. was a presentation by an attorney representing [an envirnomentalist group] that could be summed up in one sentence: "It is really bad - don't do it." In addition to environmental concerns, he discussed the economics at length to demonstrate that in his view, it makes no sense to develop such an industry in [the West]. Although he conceded that there are between 12-20 billion barrels of oil locked up in oil sands . . . , his analysis indicated that only 1/5 of those reserves were recoverable and therefore it is not worth pursuing. From my perspective (as a Chemical Engineer), if true, this just means we have a technology shortage and thus an opportunity to develop new methods (as the Israelis appear to have done).

Another presentation . . . focused on a range of issues that would need to be addressed, such as the observation of a Mexican Spotted Owl in a canyon nearby one of the reserves, which therefore qualified the area as a habitat for an endangered species.

Anyway, these are the kinds of things we face in the U.S. that may or may not be as pronounced in Israel (I am guessing much of the populace is concerned about more immediate threats to their well-being).


4 Comments:

Anonymous Anonymous said...

Hedgehog,

According to wikipedia, there is a big difference between oil shale and oil sands. Canada has the largest oil sand reserves but the U.S. has the lions share of all known oil shale reserves. They are estimated at over 3 Trillion tons. If economically extractible, this would supply the U.S. at current levels for 400 years. It is larger than the reserves of Saudi Arabia. I hope Wiki and the Israeli's are right as this could lead to our true oil independance.

Cheers 

Posted by Jody Green

Saturday, November 18, 2006 4:01:00 PM  
Blogger Anarchus said...

Hmmmmm.

Back in 1980-81, I worked on the first major oil shale project in the US, the now-infamous Exxon/TOSCO Colony Shale Oil Project. Quite a disaster, it was.

The historical problem with processing is threefold: you need a lot of heat to release the oil from the rock, you need a large volume of rock to generate a meaningful volume of oil and worst of all, the large volume of rock pops like popcorn when heated, so you end up with a lot more detritus than you started out with . . . . . over the past decade, there have been some innovative projects using in situ  retorts, but as far as I know those are all pilot size or smaller.

Maybe, just maybe, there is something new on the horizon - there's been some recent work published on the possibilities of using ionic liquids and/or supercritical fluids as solvents to extract the oil from the rock. The entrepreneurs in Utah and Israel making the wild-eyed claims could be using some version of these "neoteric solvents" in their secret processes. Stay tuned, I suppose, but for now count me among the skeptics. 

Posted by Anarchus

Saturday, November 18, 2006 7:20:00 PM  
Blogger HK Vol said...

I suspect if it is true, the Chinese get it done first.
They won't have the environmental fight to strip mine the raw material.
Even so, if it is possible, look for oil prices to plunge. And the result in places like Iran? Couldn't happen to nicer bunch of guys..... 

Posted by HK_Vol

Saturday, November 18, 2006 10:22:00 PM  
Anonymous Anonymous said...

wow, as an israeli i feel like flipping the bird at saudi arabia, venezuala and iran right now. even if this oil-shale extraction claim turns out to be nothing, i hope that for one brief, beautiful moment, all the leaders of those countries collectively crapped their pants.  

Posted by shosh

Sunday, November 19, 2006 1:22:00 AM  

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