7 Jan 2014

‘Critical Last Step’ Taken to Open Commercial-Scale Facility in Utah

Margaret Kriz Hobson, E&E Reporter
Published: Tuesday, January 7, 2014

This spring, as the snow melts and ground thaws in eastern Utah, Red Leaf Resources Inc. plans to begin building the first commercial-scale oil shale production facility to operate in the United States in 30 years.

The Utah Division of Water Quality last month granted Red Leaf a long-awaited water discharge permit, clearing the deck for the company’s large oil shale demonstration project in the Uinta Basin. The project had been delayed by concerns that it might pollute local water supplies.

“It’s hard to overstate how significant it would be to commercialize oil shale in the United States,” said company spokesman Jeff Hartley. “This is the last critical step we need to move forward.”
The Salt Lake City-based company is proposing to use its EcoShale technology to develop Utah’s plentiful supply of oil shale. The procedure entails mining and crushing the kerogen-rich oil shale and dumping it into a massive clay-lined pit. A single rock capsule will be almost a half-mile long and 300 yards wide.

Once sealed, the encased rock will be heated to 700 degrees Fahrenheit over a period of weeks to convert the solid kerogen into oil, natural gas and condensate.
Red Leaf successfully tested the technology in a 2009 smaller-scale demonstration project. Now company officials hope to prove the process can be scaled up for commercial production (EnergyWire, Jan. 11, 2013).

They predict that the upcoming demonstration project will produce more than 300,000 barrels of oil, with an initial output estimated at 10,000 barrels a day. Red Leaf predicts that its Utah state trust land leases could contain up to 600 million barrels of recoverable oil.

The large-scale demonstration project is targeted for completion in July 2015. The company must acquire a second water permit before moving to the next stage of broad-scale oil shale development.

As Red Leaf begins the commercial-sized demonstration project, the company plans to monitor rain and well water at the site, as well as the heat distribution in the rock capsule, Hartley said.
“Because this is our first commercial demonstration project, we will be testing throughout the process,” he explained. “So this will be a slower construction time frame than when we get into full commercial production.”

The Utah project is being underwritten through a joint venture with the U.S. affiliate of French energy company Total SA.

“They brought $400 million to the table,” Hartley said. “We have the technology and the resource. It’s a straight-up JV that will split the profits 50-50 and prove the commerciality of oil shale.”
Red Leaf also is leasing oil shale-rich lands in Sweetwater Canyon, Wyo. That property is estimated to contain 750 million barrels and is being developed under a joint venture with the Canadian firm Questerre Energy.

The company is also licensing its EcoShale technology to other companies. Hartley said oil shale development projects are moving forward in Morocco and Jordan. In addition, Red Leaf has licensed its extraction process to another company with state leases in Utah.