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Oil Shale
Jocelynn Snoozy
Fall 2004

followed with comments and additions
from Dusty McGuire
dusty_mcguire1@cox.net

 

The History of the Shale Oil Industry . . . If You Can Still Call It an Industry
 

            Oil shale, a type of rock containing oil, has been a known resource of energy since the 1800’s.  The United
States has a very abundant supply of this substance in the Green River Basins of Colorado, Utah, and Wyoming (Blair 330).  New sources are still being discovered as oil shale was found on Native American land in New Mexico in 2001 (Reeves, et al. para.8).
 

            The U.S. deposits of oil shale in Colorado, Utah, and Wyoming were created in two large, shallow freshwater lakes formed nearly 60 million years ago.  Surrounded by hills, these lakes accumulated large quantities of plant and animal life during frequent rains.  “Meanwhile, the deep earth forces which were thrusting up the Rocky Mountains raised the lakes” (Blair 331), cutting them off from outlets and sources, and leaving the lakes stagnant.  John Blair, author of The Control of Oil, continues:


The accumulating organic matter in the water acted like a natural pollutant . . . that stimulated the growth of immense quantities of algae, bacteria, fungi, protozoa, and other microorganisms . . . Over perhaps 10 million years of remarkable constant climatic conditions, this material sank to the bottom to form thick layers of ooze, along with sedimentary clay and sand with which it was chemically combined.  As the lakes continued to shrink, the ooze was covered with think layers of volcanic ash and other rock torn loose from the convulsive forming of the nearby mountains, which did not allow most of the organic material to progress beyond the kerogen stage (Blair 331).
 

            The first economical use for oil shale was discovered by Dr. Abraham Gesner in 1854.  He developed a method for removing oil from rock, calling the new oil “kerosene.”  Kerosene is the combination of two Greek words for “wax” and “oil.”  Gesner described this as a new hydrocarbon to be used for various purposes, including illuminating (Yergin 23).
 

            It was not until 1894 that technology allowed for a new industrialized way to extract oil from rock.  In Scotland, the first machine used to extract oil from shale, was created to commercially and efficiently process oil shale.  It was called the Pumpherston Retort (Blair 330).
 

            The process of making crude oil from shale is relatively less complex than the processing of other minerals, requiring no “special mineral preparation, high pressures, or difficult catalytic procedures (Blair 330).  Instead, it requires heating up one ton of rock to 900˚ F and allowing the oil to separate from the rock to produce one barrel of crude oil (Blair, 330).
 

            Other advantages include low sulfur content and therefore less air pollution from vehicles if shale oil were to be processed into gasoline and oil for engines.  Oil spills would no longer cause concern, as they have for as long as the United States has been importing oil from other countries and participating in offshore drilling.  If any ecological hazard were to occur in the processing of shale oil, it would be in the “desolate, unscenic,” and sparsely inhabited portions of three states, which have already been exposed to the destruction of nature (Blair 334).
 

            The disadvantages of processing shale oil include the disposal of the used shale, technology failures, and the price of manufacturing this resource.  Once shale oil has been processed, large amounts of invaluable slag is left behind.  Because heat has been applied, the rock expands and therefore cannot all be put back into the mine.  Of what can be put back, three types of native grass have been found to grow in the slag, meaning that the landscape would not be harshly effected (Blair 334).  Although the retort was a great advancement in the production of oil shale, it has also posed many problems to the take off of the industry.  One unexpected problem was the size of the shale particles left over.  Instead of gravel-sized grains, as were expected after burning, the shale became a powdery substance which would often clog the retort (Rose para. 20).  The other disadvantage, the price of manufacturing crude shale oil, has been a problem affecting the shale oil industry of the U.S. for the last 20 years. 
 

The U.S. first became interested in other sources of energy when the first oil shortage of World War I hit.  Nearly all of the large petroleum companies jumped on the alternative fuel bandwagon, most with very little success.  In a joint venture, Standard Oil, Phillips Petroleum, and Sun Oil eventually abandoned shale production because the process became “uneconomical,” saying that the technology to process oil shale into quality crude oil in a cost-effective way is not yet available (Schellhardt, et al. para. 1, 2, 12).  They were partners for 11 years and invested over $300 million in their project (Schellhardt, et al. para. 1).  Exxon, the biggest name in petroleum, even became wrapped up in the shale oil industry in 1980 and some 60 years earlier, but “nothing had come of it then” (Yergin 716).
 

            Unocal, another oil company, had stayed the longest in the shale oil industry.  In 1986, they encountered problems with their retort, ranging from “bursting filters to systems that become so gummed with shale waste that jackhammers were needed to clean them out” (Rose para. 5).  In an effort to alleviate this problem, Unocal installed a cooling device to mix water into the spent shale, but the projected success rate of the mechanism was only 10 percent.  Unocal ran into a few small problems with the cooling machine before they decided they needed a newer device called the fluidized bed combustor, which would burn the remains of the shale.  Unfortunately, this would have exceeded their budget so the combustor was not installed (Rose para. 21-24). 
 

In their excitement about the advancements they’d made in the oil shale industry, Unocal managed to skip some important steps in their development.  They had planned to build a facility larger than their first, but not to the scale of a commercial-sized facility.  Unfortunately, this was left out so that Unocal could get funding from the government for the building of their full-scale facility (Rose para. 19).  As the commercial-sized facility was being constructed, Unocal made its second mistake.  A pipeline that was meant to transport the crude oil to a refinery only 50 miles away failed to be constructed so the oil needed to be shipped by truck or train – a much more costly process (Rose para. 27).  Unocal did ship its first synthetic crude oil in December of 1986, but not at full production (“Unocal” para. 1, 5).  Because full production could not be achieved, Unocal shut down its facility in 1991 on account that it was losing money.  This was due in part to the pricing of oil in 1981.  Saudi Arabia was the biggest supplier of United States’ oil, and, fearing that Americans would find alternative sources of energy, they determined the price of manufacturing crude oil from shale and “stayed below it” (“Only Commercial” para. 14).
 

            New technologies have been invented to extract oil from shale, including a “microwave” technique created in 1991 by the Illinois Institute of Technology’s Research Institute (IITRI).  As opposed to Unocal’s method of mining out the shale and then baking it, IITRI’s process would leave the shale underground.  Various holes would be dug and then antennas dropped into the holes where they would heat the shale cavity like a microwave oven, “except evenly” (“Scientists” para. 11).  Then the oil would fall into wells where the antennas are located, a process that “needs half as large a workforce, uses a quarter of the water, emits a fifth as much carbon dioxide, and has no on-site combustion” (“Scientists” para. 3, 11, 13).  This new process has a projected output of four million barrels per day (“Scientists” para. 14), compared to the limited 6,000 barrels per day with Unocal’s retort process (“Only Commercial” para. 10).  But why hasn’t this process had its chance in a shale oil facility?
 

            “Timing,” says Jack Bridges, senior scientific adviser at IITRI.  That truly seems to be the answer to everything in economics.  The only time that shale oil gained any interest was during an oil crisis.  That is when shale oil shows a prospect of success because petroleum sources are scarce.  This is the wrong way for petroleum companies to approach this technology.  They should show interest in developing new technology for extracting oil from rock when their profits are at a high and they have the money to invest in such ventures.  Instead, they choose to wait until they are reaching a debt to explore new ways to become less dependent on foreign sources of energy.    I suggest that the government provide funding to the oil companies to find new sources of energy now, when the economy is stable.  But, as author John Blair (335, 338)said, “the principle obstacle to the development of oil shale has been the opposition of the oil companies . . . they are just about as anxious to have competition from shale oil as the Republicans are to have Democrats win the next election.”  The oil companies have already attempted to get crude oil from shale and failed, mainly due to funding.  That is why I suggest they get together to develop the technology to extract oil from shale while the oil industry is booming.  It will seem like much less of a loss to them to spend their money during a prosperous time than during a crisis when money is scarce.
 

            The government seems to play a role in the “development” of the oil shale industry as well.  They must know of all the energy that is sitting in the mountains of Colorado, Utah, and Wyoming.  We have known about these sources since at least 1919, when it was predicted that “within a year petroleum will probably be distilled from these shales in competition with that obtained from wells” and that “shale oil would provide the ‘supplies of gasoline which can meet any demand that even his children’s children for generations to come may make of them’” (Yergin 194).  It was even argued back then that United States shale oil could be produced at a lesser cost than importing oil from such places as Latin America (Yergin 235).  So what has been keeping the U.S. from embarking on a quest for more independence from foreign energy sources?  Again, a major problem has been opposition from the oil companies, so perhaps they work in conjunction with the government.

            I feel that the shale oil industry will never take off if our country continues to approach it in the same ways as they have in the past.  The advantages of this industry are wonderful:  low sulfur content, less pollution, less wasted landscape, and vast amounts of reserves.  The disadvantages of this industry are minimal in comparison to those of the petroleum industry, of which oil spills and ecologic damage are among the top few.  The technology is there, the economy, it seems, just chooses to ignore the real possibilities of manufacturing a much needed energy source in our homeland.  I believe the shale oil industry would help to further the economy and create less tension between neighboring countries.

Works Cited

            Blair, John M.  The Control of Oil.  New York:  Pantheon, 1976.

            “Only Commercial Shale Oil Company Closes.”  Morning Edition.  23 July 1991.  Research

Library.  ProQuest.  Cochise College Library, Sierra Vista, AZ.  November 15, 2004.  http://www.proquest.com
Reeves, Scott, et al.  “Mancos Shale Oil Potential Large on Jicarilla Lands In New Mexico.”  Oil

& Gas Journal.  2 Dec. 2002: 42-50.  Research Library.  ProQuest.  Cochise College Library, Sierra Vista, AZ.  November 15, 2004.  http://www.proquest.com
Rose, Frederick.  “Coming Up Dry:  Unocal Struggles On With Attempt to Get Crude Oil From

Shale – It Spends Nearly $900 Million Without Selling a Drop; Subsidies Spur a Dispute – Synfuel’s Going-Away Gifts.”  Wall Street Journal.  [New York:  N.Y.]  14 May 1986, Eastern edition: 1.  National Newspapers(5).  ProQuest.  Cochise College Library, Sierra Vista, AZ.  November 15, 2004.  http://www.proquest.com
Schellhardt, Laurie P. Cohen, and Frank Allen.  “Project to Get Oil From Shale Is Abandoned –

Sohio, Phillips Petroleum And Sun Oil Invested $300 Million in Venture.”  Wall Street Journal. [New York, N.Y.]  31 Dec. 1985, Eastern edition:  1. National Newspapers (5).  ProQuest. Cochise College Library, Sierra Vista, AZ.  November 15, 2004.  http://www.proquest.com
“Scientists Seek Money to Cook Oil From Rock.”  Christian Science Monitor (pre-1997

Fulltext).  [Boston, Mass.] 22 Apr. 1991, NOPGCIT.  National Newspapers (5).  ProQuest. Cochise College Library, Sierra Vista, AZ.  November 15, 2004.  http://www.proquest.com


Submitted by Dusty McGuire on 5/6/05:

I just read your November 2004 article, I believe it might have been penned by Jocelynn Snoozy, and I was wondering what you guys though of Shell method of, that and Oil Tech's method in Vernal, Utah?

I keep on coming across people and companies claiming that shale can be had into crude oil for a rate of between 9.XX per barrel up to 30 dollars per barrel, profitably. Let me get you some links...

http://www.oil-tech.net/newsrel/nsrlease_june.html

These guys seem to think long-wall mining can pull up the necessary amounts of stock, and using the gas created from the heating as a heating component for itself. It sounds like a fairly efficent system. Not to mention, they seem as if they want to market ALL the products from the shale.

http://www.gasandoil.com/goc/features/fex33435.htm - "But nowadays, the cost of $ 10 per barrel of oil extracted is apparently feasible, providing reasonable return to investment." More interesting stuff.

Shell says it is also operating outside the driving force of the crude oil market. It estimates that its process is economical at between $25 and $30 a barrel of crude oil but is not ready to take its technology to the commercial production stage. - http://www.glenwoodindependent.com/article/20050407/VALLEYNEWS/104070011

Shale Technologies Ltd also has the PARAHO technology, but i'm not sure WHAT it is, and how cheap it could deliver shale oil to the public.

Not to mention....this is assuming our refinery capacity can keep up..........
or big oil wants to lose profits by getting cheap oil.

Anyways, just wondering what you think about Oil Tech's methods and Shell's new way of doing it.

Dusty McGuire
Wichita State University