Oil shale is a rich petroleum source rock that never got buried deep enough to generate oil and gas. Worldwide, oil shale is a massive resource that potentially could yield a trillion barrels of oil and gas equivalent.
Prior to the discovery of commercial natural petroleum deposits, oil shale was a significant source of heating and lighting oil, particularly in Scotland in the 19th century. In the United States, interest in oil shale awakens every 30 years or so with concerns about conventional petroleum supplies, then wanes with new oil discoveries.
Oil shale activities in other parts of the world are less variable. Prior to the recent drop in oil prices, the future of oil shale looked bright, at least in certain parts of the world. The current status is in flux, but it is too early to know whether we are seeing a repeat of the 1980s.
The United States has the largest deposit of oil shale (Green River Formation), but Estonia and China currently are the largest producers, using it for making both electric power by burning and shale oil by retorting (destructive distillation).
The unfortunate recent use of the term "shale oil" for oil produced by hydraulically fracturing mature source rocks is a source of major confusion in both public and scientific circles, as the resources and production means are completely different.
Oil shale mining peaked in 1980 at about 43 million tons per year; declined to about 16 million tons a year in 2000; but has grown steadily since to about 33 million tons in 2014, of which 90 percent was split between China and Estonia (see figure above).
Brazil produced most of the rest.
From the portion retorted, China averaged about 16,000 BOPD, Estonia 14,000 BOPD, and Brazil nearly 4,000 BOPD. The Chinese and Estonian numbers include new capacity added during the year, so those totals will rise in 2015.
New oil shale development is proposed in the three currently producing countries and in Jordan, the United States, Australia, Morocco, Mongolia, Israel, Canada and Uzbekistan.
How fast this expansion proceeds depends strongly on the price of oil - but it is likely that some R&D and incipient commercial production will occur in order to refine processing technology and economics, under the presumption that oil prices will go up during the years before significant commercial production.
Projections prior to the recent oil-price collapse were about 400 million tons of oil shale mined per year and 500,000 BOPD by 2030.
The two primary processes for producing shale oil are hot-gas retorts and hot-solids retorts.
Many variations of each exist, with the Fushun, Kiviter, Petrosix and Paraho processes being the dominant hot-gas types used in China, Estonia, Brazil, Australia and the United States; and the Galoter, Petroter, Enefit and ATP processes being the hot-solids types used in Estonia and China, and potentially in the United States, Jordan and Morocco.
Enefit is pursuing a commercial development in Utah on both private and U.S. land (via its BLM RD&D lease) using its hot-solids technology. They have been actively seeking a permit for a utility corridor across federal land to their property, with a draft decision expected this year.
The two new types of processes being researched are:
♦ In-capsule heating.
This is a new type of process invented by Red Leaf Resources, in which shallow oil shale is mined and used to create stadium-sized rubble beds surrounded by engineered earthen walls. The oil shale is heated indirectly to retorting temperatures by flowing hot gas through embedded tubes, with heat distributed by conduction and convection and the spent shale abandoned in place.
♦ In-situ heating.
This was resurrected from Swedish technology of the mid-20th century by Shell using more modern drilling technology and heating cables, and several companies are researching variations of in-situ heating in the United States and Israel.
Shell recently abandoned its U.S. BLM RD&D leases in preference for a demonstration of its in-situ conversion process (ICP) in Jordan. Israel Energy Initiatives was recently denied a permit in Israel to conduct a pilot test of a similar process and is considering its options.
The first commercial shale oil production in the United States will likely use Red Leaf's EcoShale in-capsule heating technology in a joint Utah project with Total S.A. Red Leaf obtained the necessary permits from the state of Utah and started construction on a 5/8th commercial-scale demonstration that would produce more than 300,000 barrels of oil over 400 days.
However, the drop in oil prices has caused them to re-optimize the project and begin in 2016, or possibly later.
TomCo Energy recently received temporary approval from the state of Utah for its development using the Red Leaf EcoShale process after the demonstration is completed.
Agreements were reached with one environmental group to proceed, but other environmental groups recently filed another suit to stop the projects.