What Is Oil Shale?
Oil shale is essentially an “immature” fuel source, and we are using technology to speed-up what would otherwise be a slow, geologic process of converting it to oil.
Oil shale is a sedimentary rock that contains an organic material called kerogen. Kerogen can be heated, separated from the rock, processed and turned into liquid oil. This oil can then be treated and refined into diesel and jet fuels, as well as into gasoline.
There are two known ways to make oil out of oil shale, and only one of these — using traditional mining and refining techniques — is proven. Enefit has decades of experience using conventional mining and processing techniques to produce oil in its home country of Estonia. Another method being researched by other companies, called “in-situ” production, is considered experimental and involves heating oil shale deep in the ground. It’s important to point out that neither of these processes are related to producing “shale oil” through hydraulic fracturing, also known as fracking.
Enefit’s Utah Project will entail conventional mining of oil shale and then processing of the rock at the mine site to produce oil. Once the kerogen is removed from the rock, the spent shale will be returned to the mine site and the land will be re-contoured and re-vegetated.
Why Do We Need Oil Shale?
Growth of developing economies around the world, the lack of viable alternatives for many transportation fuels, and the huge array of uses for oil and its byproducts, are projected to continue driving oil demand for decades to come. In fact, the International Energy Agency (IEA) has raised concerns that the unprecedented fall in industry investment in 2015 and 2016 may lead to production being unable to keep up with demand by the end of the decade, which may cause oil prices to spike.
In its recent “World Energy Outlook” report, the IEA expects global oil consumption to continue growing until at least 2040, even with tougher regulations to cut emissions and efforts to switch to other energy sources. The strongest oil demand worldwide will continue to come from the need for aviation and vehicle fuels (particularly for road freight), and for petrochemicals, all of which are uses with few viable alternatives. IEA’s projections expect worldwide oil demand to reach 103.5 million barrels per day by 2040, up from 92.5 million bpd in 2015 – about a 12 percent increase.
Oil prices are expected to increase, as well. IEA projections suggest that oil prices could rise from today’s approximately $50 per barrel to $82 per barrel by 2020, $127 per barrel by 2030, and $146 per barrel by 2040.
Unexpected Uses for Oil
While about 50 percent of the world’s oil production is used to make gasoline and another 20 percent goes into other transportation fuels, the remaining 30 percent is used as a feedstock for petrochemicals and a huge array of products most people wouldn’t expect to contain oil. OilPrice.com published a selection of surprising uses – ranging from lipstick and chewing gum to toothpaste and contact lenses – in its article “10 (Unexpected) Uses of Oil”.
Oil from Oil Shale is Part of the Solution
With global oil demand continuing to rise, investment in conventional oil production not keeping up, and a desire by many countries to reduce dependency on oil from the Middle East, trends point toward the need to find and develop alternative sources of oil. These factors and innovative technologies are making it feasible to pursue solutions such as oil shale in an environmentally responsible way.
With a century of experience pioneering the use oil shale to produce energy in Estonia, Enefit is well-placed to help countries with oil shale reserves ensure their energy independence. Even in countries like the U.S. that have benefited from advances in hydraulic fracturing, producing oil from oil shale will create new jobs, foster innovation, enhance economic growth and help eliminate trade and budget deficits.
Worldwide Oil Shale Reserves
There are estimated resources of 2.8-3.3 trillion recoverable barrels of oil in oil shale deposits around the world. These contain at least three times more than conventional crude oil reserves, which are estimated to be around 1.2 trillion barrels.
Oil shale is found in many places around the world, and there are over 600 known deposits in more than 30 countries on all continents. The largest oil shale resources are in the United States, Brazil, Jordan, Russia and Mexico; it is estimated that 72% of the world’s reserves are to be found in the USA. And most of America’s reserves are in the Green River Formation, centered on the place where the states of Utah, Colorado and Wyoming meet.
The location of Enefit’s property is in the “sweet spot” of the Green River Formation. Unlike deposits in Colorado and Wyoming, the oil shale on Enefit’s 27,000 acres in eastern Utah is both shallow (much of it at or just below the surface) and rich in kerogen.