May 02, 2006
Tuesday

Massive deposits of oil shale are locked up under America's Western prairies, but even with crude prices at historic highs, some experts doubt it will become economical to extract it anytime soon.

The Energy Department remains enthusiastic about the prospects of using the deposits, saying the United States needs to take a second look at this "strategically located, long-term source of reliable, affordable and secure oil."

The Bureau of Land Management says it is reviewing proposals from eight companies to conduct research into how to extract the oil from shale in Colorado, Wyoming and Utah. U.S. deposits of oil shale hold the potential of providing enough oil "to meet U.S. demand for oil at current levels for 110 years," the agency says.

With oil hitting record prices on the world market, projects once shelved as impossibly uneconomical when oil was $30 a barrel are now getting a second look.

But Walter Youngquist, a retired University of Oregon geology professor, says he's considered ways of exploiting America's untapped oil shale resources for 40 years and concludes that extracting commercial amounts is like a mirage: every time it is approached, it just keeps retreating into the distance.

Youngquist said it takes more energy to extract a barrel of oil than the amount of energy recovered.

It's not just the issue of committing energy to the project, but the amounts of oil that can be produced from oil shale aren't going to be an immediate solution to America's problems, Youngquist argues. Environmental consequences are also significant, he said.

"I'm not very enthusiastic about the prospect,'' said Youngquist. "When you look at alternative energy sources, there's no comprehensive substitute for oil."

Youngquist, an advocate of population control, said the only way to solve the energy crisis is to curb demand and growth.

The U.S. Geological Survey says deposits of oil and tar sands in North America are vast, estimated to exceed 6 trillion barrels of heavy oil and bitumen. Geologists say about a third of that may be recoverable.

Oil shale is a misnomer, since the rock is neither oil nor shale but a substance like peat that is essentially immature oil that never went through the earth's underground heating process.

American Indians were the first to discover the rocks that burned, and there have been several efforts in the last 50 years to try to recover the oil by mining the deposits, and either heating or steaming the hydrocarbons out of them. Exxon in Colorado launched one of the most ambitious efforts after the 1974 Arab oil embargo, but the project collapsed in 1982.

The Shell Oil Co. is still experimenting with novel ways of extracting the oil and has come up with a scheme of heating oil shale underground to temperatures of 650 degrees Fahrenheit for three or four years, and then siphoning off the hydrocarbons as they separate. The company is using energy from the electrical power grid for the experimental phase, but acknowledges a full-scale commercial project would require its own power plant or some other source of energy.

Stephen Mut, chief executive officer of Shell's Unconventional Resources Unit, told the Senate Energy Committee last year that pilot projects have produced more than 1,200 barrels of light oil. He said the process results in bringing about 70 percent of the hydrocarbons to the surface.

Mut said that for each unit of energy used to generate power to provide heat for the process, about 3.5 units of energy are produced - comparable to the energy expenditure involved in using steam in conventional oil fields to coax heavy oil from the ground.

Rep. Roscoe Bartlett, R-Md., a member of the House Science Committee who examined the project, noted that it would require a lot of plants extracting oil from shale to make any contribution to the 84 million barrels of oil the world consumes today.

The Congressional Research Service also is cautious. "High prices may not be enough of an incentive for risky developments in conventional oil, let alone oil shale," says CRS industry analyst Anthony Andrews.

Andrews cited studies estimating extraction and refinery facilities could cost up to $7 billion and require completion of about 800 government permits. And the petroleum product that would result from oil shale would more likely be used for diesel fuel rather than gasoline in cars. Without some long-term commitment, he said use of oil shale "will remain questionable."

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