Oil Shale and Tar Sands

Fundamentals of Materials for Energy and Environmental Sustainability Editors David S. Ginley and David Cahen Oil shale and tar sands James W. Bunger 11 JWBA, Inc., Energy Technology and Engineering, Salt Lake City, UT, USA 11.1 Focus 11.2 Synopsis Tar sands and oil shale are “uncon- Oil shale and tar sands occur in dozens of countries around the world. With in-place ventional” oil resources. Unconven- resources totaling at least 4 trillion barrels (bbl), they exceed the world's remaining tional oil resources are characterized petroleum reserves, which are probably less than 2 trillion bbl. As petroleum becomes by their solid, or near-solid, state harder to produce, oil shale and tar sands are finding economic and thermodynamic under reservoir conditions, which parity with petroleum. Thermodynamic parity, e.g., similarity in the energy cost requires new, and sometimes of producing energy, is a key indicator of economic competitiveness. unproven, technology for their Oil is being produced on a large commercial scale by Canada from tar sands, recovery. For tar sands the hydrocar- and to a lesser extent by Venezuela. The USA now imports well over 2 million barrels bon is a highly viscous bitumen; for of oil per day from Canada, the majority of which is produced from tar sands. oil shale, it is a solid hydrocarbon Production of oil from oil shale is occurring in Estonia, China, and Brazil albeit on called “kerogen.” Unconventional smaller scales. Importantly, the USA is the largest holder of oil-shale resources. oil resources are found in greater For that reason alone, and because of the growing need for imports in the USA, quantities than conventional petrol- oil shale will receive greater development attention as petroleum supplies dwindle. eum, and will play an increasingly Growth of unconventional fuel industries will be driven by continuing demand for important role in liquid fuel supply liquid fuels, for which there are no non-fossil-fuel substitutes on a very large scale. as conventional petroleum becomes Economically, oil shale and tar sands are now competitive with petroleum. harder to produce. With the com- Current and future technology development seeks reliable, efficient recovery methods mercial success of Canadian tar-sand that keep emissions, discharges, and solids management within regulatory bounds. production, and the proving of Once established, these unconventional oil industries will provide production technology, these unconventional assurances for decades, since there will be no decline in production, as with oil or resources are increasingly becoming gas. These assurances provide long-term social benefit, and support the sustainability “conventional.” This chapter focuses of both the economy and the energy supply. on the trends that drive increased production from tar sands and oil shale, and discusses the geological, technical, environmental, and fiscal issues governing their development. 128 Bunger 11.3 Historical perspective and Brazil. Estonia has exhibited continuous operations for about 90 years. Each of these ventures is relatively small, Tar-sand and oil-shale deposits are located near the with total worldwide production less than 100,000 bbl per surface, and because of this humans very probably knew day. Several attempts were made to commercialize oil about both resources even before historical records were shale in the USA, beginning in the mid 1970s but ending kept. In early times bitumen from tar sands was used in 1991 with the closure of the Unocal plant in Colorado. to caulk boats and canoes. Oil shale has been used as For the most part, failures to achieve sustained com- a heating fuel by burning it directly. mercialization in the USA have derived from two causes. The Green River Formation oil shale of Colorado, The most obvious factor, which stopped several major Utah, and Wyoming was well known in the pioneer days projects (Colony, in Colorado, and White River, in Utah, of the USA. Mining claims were made under the Mining for example, and nearly caused the failure of Syncrude, Act of 1872. In 1912, President Taft designated the Office Canada) was the unexpected, severe drop in oil prices of of Naval Petroleum and Oil Shale Reserves within the early 1980s. The second factor has derived from poor the Department of Defense to manage and develop technological reliability. Poor reliability at the startup these resources, most of which occur on federal land. almost finished the GCOS plant in Alberta, and, had The Mineral Leasing Act of 1920 prohibited further pri- senior management at Sun Oil (the owner) pulled the vate mining claims for oil shale, and in 1930 President plug on this operation in 1967–8 when the magnitude of Hoover issued Executive Order 5327, placing a morator- the problems became obvious, it is entirely possible that ium on leasing of oil-shale lands. Although President there would be no tar-sand industry in Alberta today. Truman lifted the moratorium in 1952 with Executive The lessons for the future developments of these Order 10355, and the US Department of the Interior took industries are, in some ways, simple. The investment a tentative step in the mid 1970s to lease oil shale, as of requires fiscal certainty relative to prices and policies, the time of writing of this chapter there is no oil-shale and they need an efficient, robust technology. Such tech- leasing program for federal land in the USA. Some devel- nological characteristics can be proven only through opment is proceeding on state or privately owned land. field experience, which itself requires a significant investment. Until the investor can see the potential for long- 11.3.1 A commercial history of tar sands term growth, which also requires access to adequate resources in order to support growth, commercialization The first successful venture in tar sands was the startup of oil shale will be constrained. of the Great Canadian Oil Sands venture in 1967 at a location north of Ft. McMurray, Alberta, Canada. The 11.4 Origin and location of tar sands and oil shale Suncor operation of today is a continuation and expan- sion of this plant. The original design capacity was Tar sands contain bitumen, a viscous form of petroleum 50,000 barrels per day of synthetic crude oil. The GCOS that does not flow at reservoir temperatures. In the USA venture pioneered the way for Syncrude, Canada, Ltd. to tar sand is a sandstone containing a hydrocarbonaceous go onstream in 1978. material with a gas-free viscosity of greater than 10,000 By the mid 1990s, the Province of Alberta and the cP (centipoise). Oil shale is a fine-grained sedimentary government of Canada had realized that certain tax and rock that contains kerogen. For the most part kerogen royalty conditions were unnecessarily adding to invest- is a solid that, upon heating, chemically converts to oil ment risk, so these governments adopted fiscal policies that is fluid at room temperatures. that reduced this risk and promoted the growth of the industry. Today, well over 1 million barrels per day 11.4.1 Tar sands of syncrude and bitumen are being produced by a com- bination of surface and in situ technologies. Products The geochemical origins of tar sands are similar to those are sold throughout Canada and the USA. The syncrude of petroleum; that is, remnants of prehistoric life, mostly produced from the upgraders commands a premium algae, are co-deposited with sediment in fresh, brackish, price in relationship to conventional crude oil, largely or salt water. Certain chemical processes destroy because it contains no distillation residue. About proteins and carbohydrates, which are subjected to 600,000 bbl per day of bitumen are produced from the hydrolysis and biological activity. Fats resist these pro- Orinoco tar belt in Venezuela. cesses and persist as oil. Over time these sediments are buried ever deeper and are heated by heat from the 11.3.2 A commercial history of oil shale Earth’s core. Under high lithostatic pressure, these remaining “oils” are squeezed from the sediment and The only continuing, commercially successful oil-shale migrate to nearby sandstones that have greater porosity operations existing today are found in Estonia, China, (larger void spaces between the grains), where the oil is Oil shale and tar sands 129 found today. The process of deposition, chemical Because these oils have not migrated very far, most changes, squeezing of oil from the shale-like sediments, of the original organic material is still there, leading also known as primary migration, and secondary migra- to quantities of bitumen and kerogen that equal or tion (flowing through porous media until a trap is exceed the quantities of petroleum, at 2 trillion bar- encountered) is known as petroleum maturation. Tar- rels or more. In other words, the sheer magnitude of sand bitumen is the heavy ends of petroleum, left from the resource is significant. near-surface deposition that has allowed evaporation of Because these resources occur in shallow deposits the light ends, and which has not been exposed to the they are easily found and are readily measured, higher temperatures of deeper deposition over longer leading to low exploration risk. (In conventional oil periods of time. Hence, in one view, tar-sand bitumen production, finding the oil deposits presents a large can be considered an “immature” form of petroleum. investment risk, and the number of prospective Over the years there has been some objection to the places on Earth yet to explore is dwindling very use of the word “tar” because the native bitumen differs rapidly.) significantly from pyrolysis products made from coal or Once the technology for recovery has been proven, petroleum residue, which historically have been called there is a high degree of certainty regarding the tar (as in “coal tar”).

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