Potential for Oil Shale Development in the United States

1
Potential for Oil Shale Development in the
United States
INTEK

• Khosrow Biglarbigi
• Hitesh Mohan
• Marshall Carolus

July 15, 2009 Calgary, Canada
2
Americas Oil Shale

• Resource
• Technology
• Economics
• Environmental
• Path Forward

3
What is Oil Shale?

Upgrade
Syn- Crude
Naphtha Jet Fuel Diesel Nat. Gas
Hydrogen
Rock Kerogen
700 - 800 F
Pyrolysis
4
10 Trillion Barrels of Shale Oil Worldwide
Russia
Estonia
Canada
France
Italy
United States
Israel
China
Jordan
Morocco
Egypt
Zaire
Brazil
Australia
Countries With Oil Shale Deposits
5
Most Concentrated Hydrocarbon Deposit
2 Trillion Barrels
6 Trillion Barrels
Source US DOE, 2004
6
The Mahogany Zone

• The Most Prolific
• Up to 1000 Ft Thick
• Up to 75 Gal/Ton

Source Redleaf Resources, 2008
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Oil Shale Production Approaches
Surface Process
Retort
Mining
Upgrading
Resource
Refinery
In Situ Process
Heating
Drilling
Upgrading
Resource
Refinery
Source US DOE, 2004
8
Shell In-Situ Conversion Process
High Value Products
Pilot Test (Colorado)
Light Surface Processing
PRODUCER
HEATER
OVERBURDEN
Source US DOE, 2008
9
Other Examples of In-Situ
Pilot Tests (Colorado)
Source US DOE, 2004
10
Ecoshale In-Capsule Technology
Pilot Test (Utah)
COOL GAS
HOT GAS
Source Redleaf Resources, 2008
11
Alberta Taciuk Processor (ATP)
Pilot Test (Utah)
Source US DOE, 2006
12
Gas Combustion Retort (GCR)
Raw Shale
Raw Shale
Oil Mist

• Australia (Project Scale Up)
• Brazil (In Production)
• China (In Production)
• Estonia (In Production)
• USA (In Pilot)

Extractors
PREHEATING
PREHEATING
PREHEATING
MIST FORMATION
PYROLYSIS
PYROLYSIS
PYROLYSIS
STRIPPING
STRIPPING
STRIPPING
COMBUSTION
COMBUSTION
COMBUSTION
RESIDUE
RESIDUE
RESIDUE
COOLING
COOLING
COOLING
Spent Shale
Spent Shale
Source US DOE, 2007
13
First Generation Project Costs
Item
Unit
Range

Capital Cost
/BPD
40K
-
55K
OM Cost
/Bbl
12
-
20
Barrel of Daily Capacity
Source INTEK, Inc., 2006
14
Economic Price for Oil Shale Technology
70
57
Rate of Return 15
60
47
50
38
40
35
2007 Dollars Per Bbl
30
20
10
0
True In-Situ
Surface Mining
Underground Mining
In-Capsule
Source INTEK, Inc., 2008
15
Breakdown of Economic Price for Generic Surface
Mining
47/Bbl
Source INTEK, Inc., 2008
16
Oil Shale Environmental Impacts

• Air Quality

Source SPE 110590, 2007
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Land Use

• 1 MMBbl/D Production for 40 Years
• Surface 31 Square Miles
• In-Situ 14 Square Miles
• A Small Footprint for a 2.5 MMBbl/D Industry

Source SPE 110590, 2007
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Water Requirements

• 1-3 Barrels of Water per Barrel of Shale Oil
• Challenges
• Water rights
• Ground water protection
• Water runoff

Source US DOE, 2007
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Development Hurdles

• Access to Land
• 70 on Federal Land
• RD D
• Environmental Permitting
• Fiscal Regime

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The Prize
Total Resource 6 Trillion Barrels
High Quality Resource 2 Trillion Barrels
Technical Recovery 1 Trillion Barrels
Reserves 600 750 Billion Bbls
_at_
50 - 65 / Bbl
Source INTEK, Inc., 2008
21
Production Potential(Shale Oil in the U.S.)
2,500
Accelerated Scenario
2,000
RDD
Measured Scenario
1,500
Thousand Bbl/D
Business as Usual
Tax Incentives
1,000
500
Base
0
2005
2010
2015
2020
2025
2030
2035
Year
Source US DOE, 2007
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Summary

• Over 6 trillion barrels of in place resource
• The most concentrated hydrocarbon deposits on
  Earth
• Conversion technologies are advancing rapidly
• Sustained production potential of up to 2.5
  MMBbl/Day
• Substantial economic benefits
• Requires concerted effort by the private sector,
  governments, and local communities