Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on August 26, 2018
A Plan to Unlock Billions of Barrels of Oil From Utah’s Sands
Utah is a yawn amid the drilling frenzy that has upended the energy picture in recent years. It accounts for just one of every 100 barrels of oil produced nationwide.
But a couple of executives who have spent decades hunting for oil across the Middle East, South America and Canada are betting that the next energy patch will be near here, in a remote stretch of craggy desert known as Asphalt Ridge.
They are trying something that has repeatedly failed in Utah: mining the state’s enormous deposits of oil sands, an arduous process of extracting oil from hard rock.
The two oversee Petroteq Energy, a Canadian company that aims to have the first commercially viable oil sands production in the United States underway here by early September.
Petroteq’s claims challenge the notion that oil sands mining is in eclipse. The heavy oil produced from oil sands is among the most carbon-intensive fuels, a drawback as concerns about climate change grow.
Even in Canada, where oil sands production dominates the energy industry, some major oil companies have written off or withdrawn their investments. The Keystone XL pipeline designed to carry the fuel to American refineries has been stalled by environmentalists with protests and lawsuits. They typically call oil sands “a carbon bomb.”
David Sealock, Petroteq’s chief executive, is undeterred. He likens his tiny operation — with its modular mixing vessels, rock crushers and conveyor belt — to a humble Lego set. But when he picks up a canister of newly processed oil, he smiles at the acrid odor. “That’s the smell of money,” he said.
“We have a very disruptive technology,” said Mr. Sealock, who has worked for Chevron in several countries and managed two oil sands companies in Canada. “There was a treasure chest here that didn’t have a key, and this technology is the key.”
He says what makes his operation different from larger and deeper Canadian mining operations and all the past failures in Utah is a cocktail of solvents that can separate oil from rocks at little cost and with no water or air pollution.
He and the other veteran executive, Jerry Bailey, say that their approach will be far cleaner than oil sands mining in Canada, which is more water intensive and leaves vast toxic tailing ponds.
“What’s in Canada is an environmental nightmare,” said Mr. Bailey, a former ExxonMobil senior executive in the Middle East and now president of Petroteq. “With our operation, nothing goes in the air, nothing goes in the ground, and there is no water involved.”
If Petroteq can make a go of it here, Mr. Sealock and Mr. Bailey say they can unlock billions of barrels of oil in Utah and surrounding states, and from other shallow oil sands deposits around the world. They say they are talking with companies in Australia, Colombia, Venezuela and Trinidad and Tobago about joint ventures or licensing agreements.
Utah has the nation’s largest deposits of raw oil sand, or bitumen — enough to produce as much as 15 billion barrels of oil and potentially more, according to the Utah Geological Survey.
Years of attempts to mine the sands profitably here have failed. One company, U.S. Oil Sands, went bankrupt last year before it could begin production.
At the same time, the United States is no longer starving for oil as it was at the beginning of the century, when experts thought reserves were in decline and Canadian oil sands investments climbed. The American shale drilling boom has produced an abundance of crude, enough to make the United States a major exporter.
Petroteq executives say the country can always use more.
Not surprisingly, environmentalists are skeptical. “If this project takes flight, then it risks vast strip mining and air, water and greenhouse gas pollution in a region that is already facing a dire climate and water future,” said Taylor McKinnon, a public lands campaigner at the Center for Biological Diversity.
Environmentalists say remnants of the solvents could go into the air, be eaten by wildlife and leach into groundwater. And once the crust of the land is removed in the strip-mining process, topsoil can become airborne dust and cover snow on nearby mountain ridges.
Dirty snow is more apt to absorb solar heat, leading to more evaporation and unreliable water flow — potentially hurting farming and leading to more forest fires.
Protests in recent years over oil sands development have focused on other projects, but Mr. McKinnon said that may now change. “We have our eye on these guys,” he said.
Under its system, Petroteq mines and crushes the oil-saturated sands into small chunks, then moves them along a 150-foot conveyor belt into a tank where they are mixed with solvents. The mix is then transferred to a second tank, where a centrifuge spins the lumpy liquid, separating the oil from the sands. Clean sand is moved to a reclamation landfill. Finally, the solvents are distilled out of the oily liquid and recycled over and over again.
The company says virtually no chemicals are left in the sand that is put back. Executives say their solvents and the rest of their operations have passed all regulatory procedures.
Mr. Sealock insists that his employees spray water on recycled sands so they do not blow away and that his solvent mix is “benign,” though he refuses to disclose its contents. “They are not going to have a major effect on plants, wildlife or water,” he added.
At the moment the operation here is tiny, employing 20 people. Its first pilot plant produced 250 barrels a day. When the newly expanded plant begins commercial output it will yield 1,000 barrels a day for shipment by truck to refineries in Salt Lake City, 150 miles away, where they can be processed into diesel fuel. The production goal is to reach 5,000 barrels a day in three years.
That is a trifle in the global 100-million-barrel a day market, but the company has leased over 2,500 acres of private land, and executives say they will eventually be able to produce 10,000 barrels a day over 25 years.
Other companies could jump in with their own solvents, especially since Utah offers sizable tax credits for mining oil sands and oil shale. Also helpful has been the 40 percent rise in oil prices over the last year, which is an incentive for new investment.
“The price is now in a zone where Petroteq can possibly justify what they are trying to do,” said Kevin Birn, an oil sands expert at IHS Markit, an energy consultancy. “If the last decade has told us anything, I’d hesitate to rule out the potential for technology to generate new sources of energy supply.”
Petroteq executives say they are in good shape financially because the company founder and chairman, Alex Blyumkin, a fuel distributor from Ukraine, has invested roughly $10 million of his own money and the company has a mere $500,000 in debt.
Moreover, they say the economics of their project work, claiming that their break-even price is $32 a barrel, including all costs and taxes — less than half the current price for crude.
Thomas Liles, an oil sands expert at Rystad Energy, a Norwegian consultancy, said Petroteq’s business aspirations were “theoretically possible.” But he added, “It’s really a little early to say until these technologies are fully demonstrated.”
The demonstration is about to begin, and hiccups are always possible with new ventures. There have been logistical, electrical and mechanical challenges and glitches during equipment testing. Earlier this month, operations were halted for the day when a pump engine malfunctioned and a worker broke an arm.
Failure here could doom Utah oil sands once and for all.
“This is not baseball, where you get three strikes,” Mr. Sealock acknowledged. “You get one chance to get this right.”
24 Comments on "A Plan to Unlock Billions of Barrels of Oil From Utah’s Sands"
george on Sun, 26th Aug 2018 6:21 pm
Here we go .
Another oil executive with a plan.
makati1 on Sun, 26th Aug 2018 6:38 pm
Desperation!
Fact Checker on Sun, 26th Aug 2018 6:48 pm
“The American shale drilling boom has produced an abundance of crude, enough to make the United States a major exporter.”
Wrong. The US produces 10 millions barrels a day but consumes 20 millions barrels a day.
twocats on Sun, 26th Aug 2018 8:04 pm
“step right up” – “everyone’s a winner, bargains galore!”
dear god of mormons, please turn their state into an open pit wasteland so that they may smile on your bounty of acrid smelling money. and may their kids have enough bone density to work the pits. amen.
deadly on Sun, 26th Aug 2018 10:39 pm
Hexane is used to dissolve the oil in canola seed, oil sunflowers, so maybe hexane is the solvent used to dissolve the oils from the sand. Crushing the seeds, adding the solvent, then removing the solvent with distillation, voila, sunflower oil, canola oil.
Be a good guess, hexane as the solvent.
print baby print on Sun, 26th Aug 2018 11:39 pm
And the trillions to invest are ready. Hold on just to plug the presses
Cloggie on Mon, 27th Aug 2018 12:59 am
Peak oil, mhwuhahaha:
https://deepresource.wordpress.com/#jp-carousel-68376
For better and for worse (mostly for worse), technology makes things possible that weren’t before.
Technology is going to bring us a hot, prosperous planet.
https://www.youtube.com/watch?v=aPEhQugz-Ew
“Venus”
MASTERMIND on Mon, 27th Aug 2018 1:10 am
Clogg
I grew up with technology and worked for a fortune 500 tech company for around a decade..I love technology, but its not our salvation..You are putting the cart in front of the horse..And citing amateur youtube videos just shows how pathetic your arguments truly are.
Go Speed Racer on Mon, 27th Aug 2018 1:39 am
This is awesome news.
Utah is filled full of Mormons.
The oil-sands extraction will pollute
the water and ruin their land, exactly
what they deserve for believing such
a stupid religion, or is it a business.
Outcast_Searcher on Mon, 27th Aug 2018 1:56 am
So, Go Speed Racer, what religions aren’t stupid? Yours?
As far as I know, they all believe in things for which there is zero evidence, placing them on the same footing, re intelligence.
Go Speed Racer on Mon, 27th Aug 2018 2:25 am
My religion is to deliver a sacrifice,
to the Almighty Couch God who sits on
a great big sofa up in the sky, with
his Holy bowl of popcorn and his almighty
Golden Remote Control and the Omnipotent
big screen.
To deliver praises and glories to the
Almighty Couch God,
at least once a month sacrifice an old
sofa in your backyard in a ritual fire
delivering a sweet sweet smell
unto The Heavens.
Amen!
makati1 on Mon, 27th Aug 2018 3:45 am
Go Speed, Mormonism is a business disguised as a religion. Why?
To get ANY of the really good “blessings” you have to pay…er…tithe at least 10% of your total income annually. for life. If you miss a payment, you lose your free pass to that top level of eternity and the ability to renew your vows in their temples.
Mormons believe that you can become a god and have your own plant to rule if you are pure enough. Not to mention those weird long-johns you have to wear and the lies you have to tell when you get your annual interrogation by the Bishop. And, did I mention, as a male priesthood holder, you get to snoop in the family’s lives and homes that you are assigned to visit every month. Gestapo? They call it “home teaching”. Then you report your “visit” to the bishop, along with any signs of “slippage” in obeying the laws of the church. An empty cigarette pack or butt? An empty beer bottle left on the counter? And on and on.
Oh, ans if you ever tell about their ‘secrets’, you will be excommunicated. There goes your godhood and that planet to rule.
I actually hold the Melchizedek priesthood in the Mormon Church. That is the top one and equal to that hold by the fabled carpenter, Mt Romney, etc. And, as far as the Mormon Church is concerned I am just an “inactive” member. They have millions of them Only about 1/3 go to church regularity and many only on religious holidays. LMAO
GetAVasectomyAndLetTheHumanRaceDie on Mon, 27th Aug 2018 8:43 am
If tar sand were such a good source of net positive energy, Venezuela would be a rich country with generous social programs.
Venezuela and the tar sand dilemma prove without a doubt that energy in Joule, is what make the world go around, not money.
The only future for the human race is to abandon the concept of money and move into a economical energy (Joule) based economy and trade system.
twocats on Mon, 27th Aug 2018 8:50 am
if you had asked me in 2008 which crises would be the most significant in the next twenty years I would have said maybe 65% peak oil. 10% water shortages. 20% global pandemic. 5% climate chaos. Now I’d put climate chaos at a higher percentage than peak oil (still by 2028). which is crazy that CC was so underestimated by scientists (read – politicians controlling scientists).
onlooker on Mon, 27th Aug 2018 10:35 am
Two, the thing is that humanity can muddle thru those other crisis but CC stands alone as possibly an extinction level event for us!
Uncle Bill on Mon, 27th Aug 2018 10:35 am
Boy, that black Rock looks like gold…
Just need a few nuclear plants to melt it into liquid gold…no problem, we got no choice but to March forward in whatever it takes to keep BAU alive. Fck future generations and the climate…
dave thompson on Mon, 27th Aug 2018 11:48 am
The desperation of going after these oil sands reeks of stupidity.
rockman on Mon, 27th Aug 2018 12:43 pm
““With our operation, nothing goes in the air, nothing goes in the ground, and there is no water involved.” So I assume the ground up rock will be transported to the moon in one of Elon’s rockets. Unlike their picture of the conveyor belt dumping it on the ground right now. So many other bits of obvious BS but I won’t waste space on them.
Mak – Just one more obvious stock play looking for “mullets”. Yes: that is the actual term we use in the oil patch for foolish investors.
Goat1001 on Mon, 27th Aug 2018 12:57 pm
What in Tar Nation are these oil executives thinking?
Go Speed Racer on Mon, 27th Aug 2018 6:22 pm
Hi Makita power tools,
Well I bet we should get ourselves some
hot little Mormon gals and we can hurry
up and get started on repopulating our
own private planet.
I know a guy who got kicked out
of the Mormon church.
He is smart and makes lots of money.
And he is very proud about
getting kicked-out.
Anonymouse1 on Mon, 27th Aug 2018 6:27 pm
We call corporate oil shills, narratveimen. Yes that is the actual term we use in the reality patch for foolish mouthpieces of the amerikan oil cartel.
makati1 on Mon, 27th Aug 2018 7:06 pm
GSR, like most religions, the church relies on children being born into their religion and then being indoctrinated by their parents. A child fears to rebel against those teachings and that makes a powerful chain.
The Mormon church, like many others, discourages contraception and encourages large families. It grows the power of the church and makes defection difficult.
An intelligent, rational person can see thru the brainwashing an make his/her own decision about how to live their one life. Not be dictated to by some power hungry psychopath.
This is also true of nations and “patriotism”. The brainwashed inability of citizens to think for themselves makes places like Hitler’s Germany, Stalin’s USSR, Saudi Arabia’s dictatorship, America’s wars of choice, etc. possible.
Merman on Mon, 27th Aug 2018 8:56 pm
Religions and atheisms are demon worshiping cults except for one.
goat1001 on Wed, 12th Sep 2018 11:22 am
We hit peak religion a few decades ago and are now in steep decline.