[Pops]

Shell gives up on oil shale... too

Geology beats technology: Shell shuts down oil shale pilot project

http://www.resilience.org/stories/2013- ... 0-dry-hole

[dissident]

Some argue that as long as you get something out of the ground for a profit (even if small) it will be a viable process even if you spend more energy than you get out (the energy is from the same source so there is a net gain). You burn through the resource faster, but you at least get something out. Looks like Shell and others are failing to establish such a process.

Converting kerogens to syncrude is just too involved. You have to either crush the shale rock (energy) and cook it (more energy) or set up a cryogenic firebox (energy to cool and it appears massive control problems). Then there is the little problem that what you get out of the kerogens is not of the same quality. This is what killed Exxon's shale gas fracking efforts in Poland. They were getting 50% Nitrogen out of some wells. This issue applies to the oil conversion efforts as well.

[rollin]

One of the engineering difficulties that is not often talked about, is the capacity of the newly created "oil" to drift into the aquifers. The solution was to provide a freeze wall around the operation to contain the hydrocarbon and keep the water out. So not just heating was involved, refrigeration on a large scale underground is required. That's if you want to do it without massive harm to the environment. I am sure the western folk are a bit sensitive about their water getting polluted.

[ROCKMAN]

The good news was that we didn't lose a trillion bbls of "proved' oil reserves. At least not "proved" by industry standards. At best (and a bit of a stretch) those were "probable" bbls but really more
"possible" bbls. Even that is a bit of a stretch by our standards. Given how difficult it is to get an accurate handle on proved reserves we really don't tend to take prob/poss reserves very serious. Unfortunately Joe6Pack doesn't understand the distinction. All he hears is a "trillion bbls". Equally important I serious doubt the MSM will publicize the recent Shell news like they did when they started hyping the kerogen deposits.

[rockdoc123]

These would be neither probable nor possible reserves. They would be classified as contingent resource, meaning the oil is known to be there but economic recovery of oil is not yet possible. In order to get to reserve category you have to get over the economic hurdle.

[dcoyne78]

Rockdoc,

Can you refer me to a document that covers the differences between reserve categories (proved, probable, possible, and any others I may not be aware of) and resource categories as well? Is it mainly economics (that the oil can produced profitably), that allows one to move resources to the reserves category? Also are kerogen deposits even in the technically recoverable resource category, or are the TRR and contingent resource categories mutually exclusive?

Thanks.

DC

[Pops]

You're right ROCK, the PR blitz has been in full swing the last few years. I didn't go in for bashing the OilCos in the past but boy, they've really pulled the stops on the Saudi America spin in order to keep the idea alive that we should be exporting our bounty to the world. Wanna see a picture of why we're still paying record high average unleaded prices in the midst of the infamous Glut?




Saudi America only profits one sector and it ain't the US consumer sector.


Here's the first mainstream story I Googled up on "trillions of barrels of oil in america"
$this->bbcode_second_pass_quote('', '[')url=http://abcnews.go.com/Business/american-oil-find-holds-oil-opec/story?id=17536852]An American Oil Find That Holds More Than All of OPEC[/url]
Nov. 13, 2012

An initial exploration well 40 miles northwest of Rifle, Colorado, owned by American Shale Oil LLC. It sits atop part of the Green River Formation of shale, believed to contain 3 trillion barrels of oil. Courtesy Roger L. Day/American Shale Oil LLC

Drillers in Utah and Colorado are poking into a massive shale deposit trying to find a way to unlock oil reserves that are so vast they would swamp OPEC.

A recent report by the U.S. Government Accountability Office estimated that if half of the oil bound up in the rock of the Green River Formation could be recovered it would be "equal to the entire world's proven oil reserves."

Both the GAO and private industry estimate the amount of oil recoverable to be 3 trillion barrels.

"In the past 100 years — in all of human history -- we have consumed 1 trillion barrels of oil. There are several times that much here," said Roger Day, vice president for operations for American Shale Oil (AMSO).

The Green River drilling is beginning as shale mining is booming in the U.S. and a report by the International Energy Agency predicts that the U.S. will become the world's largest oil producer by 2020. That flood of oil can have major implications for the U.S. economy as well as the country's foreign policy which has been based on a growing scarcity of oil.

[ROCKMAN]

DC – As doc says calling them reserves of any sort isn’t kosher. Here’s way too much detail to answer your question:
http://www.sec.gov/divisions/corpfin/gu ... interp.htm

But jump to how a resource (something far less concrete than a “reserve”) is defined. Even by the loose standards below it doesn’t appear that those shales even qualify as a resource.

“A more sophisticated system of evaluating petroleum accumulations was adopted in 2007 by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG), and Society of Petroleum Evaluation Engineers (SPEE). It incorporates the 1997 definitions for reserves, but adds categories for contingent resources and prospective resources.

Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality.”

[copious.abundance]

Who can blame them?





Which has resulted in ...



Why bother with the stuff you have to mine and process when there's so much light sweet crude still available in Texas, ND and elsewhere?

[Pops]

Yer right OF, hardly any money in oil now that we have that huge glut

[dcoyne78]

Pops,

That chart should have prices on a secondary axis, and most people do nor present it with a zero scale, there has been some increase in world output since 1998. If you really want to make output look flat, you could scale the y-axis to 1 billion barrels per day.

DC

[TheDude]

There was a huge kerfluffle about exporting Alaska crude in the 90s - volumes ca. 50 kb/d I think. We can't do that! Matter of national security! It was even mandated in the TAPS authorization act that all NS crude be benchmarked for US markets. But now we can export mbs/d of product and somehow that's jake...snopes.com: Alaskan Oil Shipped to Japan?

It's no surprise at all that oil shale projects have been shelved. Wonder how Craig Ventor and his oil pooping bacteria projects are fairing these days?

[ROCKMAN]

Dude – unless the law has changed it isn’t illegal to export NS crude…it’s just illegal to sell it. Sounds wrong, eh? It’s been done in the past with Japan. Called a paper swap: Japan buys a contract for crude from, say Mexico. They then swap that contract with a Gulf Coast refiner for an equivalent value of NS crude. This way both sides of the trade save on transport costs. Technically the US doesn’t lose 1 bbl of NS crude…it’s replaced with Mexican crude.

But your link sounds like there have been a variety of twists in the last 15 years. But paper swaps are relatively common and have been for decades. As is exporting any oil is allowed by a permit from the feds. Currently about 50k bopd of Eagle Ford production is being tankered from Corpus Christi up the east coast to Canadian refineries. They make such a better spread up there with that oil it’s worth paying the transport. Last I read as far as any Canadian oil piped to the Gulf Coast no permit is required to ship it out of the US. Any foreign sourced oil can be transshipped through the US and sold anywhere on the international market.

And the last time I saw the regs there was no restriction on exporting products. Which is the trick they are using to ship that EFS oil to Canada: they run it though a very light refining process. Thus we aren’t shipping EFS oil via non-US flag vessels to Canada…we are shipping refined products. One can make a lot of money reading the fine print, eh? LOL