Oil Shale Development Economics

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INTEK
Oil Shale Development Economics
May 16, 2007
Khosrow Biglarbigi INTEK, INC.
EFI Gas-to-Market Conference The Westin
Edmonton 14-16 May 2007
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Economic Discussion

• Part I - Project Economics
• Project costs
• Economic price
• Cash flow
• Part II A new oil shale industry
• Potential size
• Economic hurdles/solutions
• Benefits on U.S. economy

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National Oil Shale Model
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Resource Base Analyzed

• Industry nominated tracts
• 79 Billion Barrels of resource in place
• Detailed geologic petrophysical data

Western Oil Shale
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Technologies Considered
2
1
4
3
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Project Costs
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However, the Capital Costs are Increasing(Source
CAPP, March 2007)
Presented at the 2007 EIA conference,
Washington. D.C.
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Economic Price for Oil Shale Technology
Generic Projects (Price /Bbl)
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Breakdown of Economic Price for Generic Surface
Project
43/Bbl
Transfer Payments
6
/Bbl
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Cashflow of a Generic Oil Shale Project
1200
Before Tax
Room for Government Action
Cumulative Discounted After Tax Cashflow (MM)
Year
After Tax
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Impact of Incentives on Generic Cashflow
1200
Before Tax
Cumulative Discounted After Tax Cashflow (MM)
After Tax
Year
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Projected Production Potential (BOE)(Shale Oil
in the U.S.)
RDD
Accelerated
Tax Incentives
Measured
Base
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Potential Influence of Oil Shale Development
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Favorable Fuel Prices Will Increase Consumer
Discretionary Spending, Non-Petroleum Jobs, And
GDP
Oil Price
Fuel Price
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Impact of Increased Production on Future Prices
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Savings to U.S. Consumers
(Cumulative)
200 to 900 Billion
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Contribution to GDP
Up to 1.2 Trillion
(Cumulative)
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New Jobs
Up to 250,000
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Savings on Foreign Imports
Up to 325 Billion
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Direct Local, State, And Federal Revenues Will
Increase by 25 to 85 Billion by 2035
(Cumulative)
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Summary

• Provide Long Term Sustained Production
• With Substantial Benefits to the U.S. Economy
• Contribution to GDP up to 1.2 Trillion
• New Jobs 250,000
• Reduction in Foreign Imports 325 Billion
• Consumer Savings 900 Billion
• Additional Investments 145 Billion
  (Stimulated)
• Public Revenues up To 85 Billion
• Concerted Efforts by Government and Industry
  Needed to Capitalize on this Opportunity

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Acknowledgements
Office of Naval Petroleum
Oil Shale Reserves
Office of Petroleum Reserves
U.S. Department of Energy