Estonian Oil Shale Industry Yearbook 2018
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ESTONIAN OIL SHALE INDUSTRY YEARBOOK 2018 I Texts: Eesti Energia (EE), Viru Keemia Grupp (VKG), Kiviõli Keemiatööstus (KKT), and the Oil Shale Competence Centre at the TalTech Virumaa College (OSCC) Editor: Mariliis Beger, KPMS (www.kpms.ee) Design: Kristjan Jung Photos: The yearbook of the Estonian oil shale industry was issued by: Cover Per William Petersen “Kiviõli”, 2014 (OSCC) EESTI ENERGIA p. 6 Lelle 22, 11318 Tallinn Auvere Power Plant (EE) Phone: +372 715 2222 www.energia.ee p. 14 A wheel loader at Põhja-Kiviõli II oil shale open- VIRU KEEMIA GRUPP cast (Kaidi Sulp) Järveküla tee 14, 30328 Kohtla-Järve, Ida-Virumaa Phone: +372 334 2701 p. 26 www.vkg.ee Pine seedling (EE) KIVIÕLI KEEMIATÖÖSTUS p. 36 Turu 3, 43125 Kiviõli, Ida-Virumaa Narva Energiajooks 2018 (EE) Phone: +372 685 0534 www.keemiatoostus.ee This book is published with the support of: THE OIL SHALE COMPETENCE CENTRE AT THE TALTECH’S VIRUMAA COLLEGE Järveküla tee 75, 30322 Kohtla-Järve, Ida-Virumaa Phone: +372 332 5479 European Union Investing European Structural in your future www.pkk.ee and Investment Funds ESTONIAN OIL SHALE INDUSTRY YEARBOOK 2018 Statements from heads of companies and organizations in the oil shale industry . 4 ROLE OF THE OIL SHALE INDUSTRY IN THE ECONOMY 7 State revenue from the oil shale industry . 8 The competitiveness of the oil shale industry . 10. Operating framework . 11 . OIL SHALE VALUE CHAIN: FROM MINING TO END PRODUCTS 15 Mining permits and volumes . 16 Power . 19 . Liquid fuels . .21 . Heat . 24 . Chemicals from oil shale . 25. OIL SHALE INDUSTRY AND THE ENVIRONMENT 27 Investments into the environment . 28 . Water and the oil shale industry . 29. Emissions into ambient air . 32. Use of by-products of the energy generation process . 34. OIL SHALE AND ESTONIAN SOCIETY 37 Oil shale industry’s contribution to society . 38 Contribution to education . 39 . Supporting innovation and knowledge export . 41 Giving back to the community . 45 . Estonian oil shale industry in 2018: Income into Total Investments Positions Sales the state treasury investments into the environment for revenue 122 116 55 7303 772 million euros million euros million euros people million euros Estonian oil shale industry in 2017: Income into Total Investments Positions Sales the state treasury investments into the environment for revenue 104 70 31 7387 663 million euros* million euros million euros people** million euros Estonian oil shale industry in 2016: Income into Total Investments Positions Sales the state treasury investments into the environment for revenue 103 63 26 6400 606 million euros million euros million euros people million euros Estonian oil shale industry in 2015: Income into Total Investments Positions Sales the state treasury investments into the environment for revenue 120 199 82 7411 669 million euros million euros million euros people million euros Estonian oil shale industry in 2014: Income into Total Investments Positions Sales the state treasury investments into the environment for revenue 174 266 42 6683 933 million euros million euros million euros people million euros * Includes the adjusted total of KKT’s natural resource and pollution charges ** Includes investments into Auvere Power Plant development Statements from heads of companies and organiza- tions in the oil shale industry Witnessing rapid change in the Estonian energy sector The oil shale energy sector is undergoing changes that use shale gas in an energy generating unit there. This are probably the biggest in history, and it is all happe- will increase the flexibility and profitability of power ning faster than we are able to forecast. generation and reduce environmental impact. We also boosted the efficiency of our proprietary Enefit tech- In 2018, the development of the oil shale sector was nology even further and produced more shale oil than dictated by the tripling of the market price of carbon ever before. For Eesti Energia, this means a secure dioxide emissions. This placed power generation under footing for the planned expansion of the oil industry. serious pressure, but provided motivation for taking faster steps toward even better valorization of oil shale. The future of the sector depends largely on coopera- tion between market participants. Shale oil producers The largest industrial investment in Estonian his- are setting the bar even higher and there are already tory – the completion of Auvere Power Plant – is a a number of good examples of the synergy created. If Hando Sutter milestone on the road to making energy cleaner and the joint idea of a hydrogen processing plant is rea- Chairman of the Management Board more efficient. We completed a development project lised, this investment will guarantee export revenue of Eesti Energia in Eesti Power Plant, quadrupling our capability to for Estonia for a longer period. Smart development and automation are the keys to progress Estonian oil shale is valuable today above all in the VKG has embraced the changes successfully. We have context of the global oil market, which is why the oil optimized our production volumes and are focusing shale sector focuses mainly on production and valo- on raising the quality of our output. We see untapped rization of shale oil. Thanks to our years of experi- potential in valorization of oils and retort gas and inc- ence, our investments and constant development, we reasing the level of automation. are capable of being competitive on a market forecas- ted to grow at an average of 1.2% per year over the In 2019, we will mark the 95th anniversary of Esto- next five years. To ensure competitiveness over the nian shale oil production, which started on VKG’s long term, it is important that we operate in a smart, current production territory. Our chemists, miners clean and socially responsible manner. Energy con- and energy researchers carry on the traditions, know- Ahti Asmann servation, waste-free production and a CO2-neutral ledge and experience developed over time, and have Chairman of the Management Board economy are just a few of the goals we strive toward what it takes to maintain our natural resources as a of Viru Keemia Grupp every day. competitive energy source on the global market. 4 Oil shale industry developing despite complicated conditions The oil shale industry is adapting to a new reality Chemicals derived from oil shale are one of the lar- characterised by ever more stringent environmental gest export sectors in Estonia and companies in this conditions, the dramatic increase in environmental field directly and indirectly provide work for tens of charges, more costly resources, ageing of the work- thousands of people in Ida-Viru County. It’s a sector force and shortage of young specialists. These fac- that has not received enough attention at the state tors have altered growth prospects for KKT and have level, and as a result it is difficult to find new quali- forced us to look for new areas of activity. fied workforce. Today the average age of employees at KKT is over 50 and growing with each passing year. We’re constantly working to reduce the environ- To retain existing employees and find new ones, we mental impact of our activities. Last year as well, have reviewed our remuneration and bonus policies, Andreas Laane investments were aimed at developing the necessary improved work conditions for employees and increa- Chairman of the Management Board technology for more environmentally friendly pro- sed cooperation with various academic and research of Alexela Group duction and upgrading our equipment and vehicles. institutions. The key for industrial development is ensuring a future workforce At the opening of the new Auvere Power Plant, mem- employees who have in-depth knowledge in at least bers of the Estonian research community who contri- one field and the skills to understand and integrate buted to the plant’s completion were also recognised different disciplines and the people engaged in them. alongside the engineers. The list of research papers published this year confirms that science related to Fundamental research and applied research are both this sector is of a high calibre. At the same time, more important in scientific work. Success is ensured by the than before, companies and research institutions are ability to cross-link them and use them in the inte- forced to devote attention to educating the next gene- rests of enterprise. The business sector is certainly not ration of specialists. the only consumer of research. Various broad-based research studies and analyses are just as important Digitalization of industry is leading to increasing for planning regulations and policies, because deci- Kalle Pirk automation. The introduction of robots should in sions concerning the investment-intensive oil shale Director of the TalTech theory reduce the need for workforce. In actuality, sector must be high in quality. Only in this way can Virumaa College’s Oil Shale Competence however, the changing situation is imposing greater we ensure that businesses have certainty for a period Centre demands on specialists. There is a greater need for comparable to the investment life cycle. 5 6 ROLE OF THE OIL SHALE INDUSTRY IN THE ECONOMY State revenue from the oil shale industry Continued stable growth in the oil shale sector and record levels 116 million into innovation and development of oil production in 2018 showed that the industry has recovered The improvement in the market situation encouraged the oil shale successfully from a complicated period a few years ago. Similarly industry to initiate and continue large-scale development projects to the year before, the price level of liquid fuels rose significantly. to adopt new technologies and make existing ones even more The average price of Brent crude oil grew by one-third in spite of efficient and environmentally friendly. In 2018, four companies extraordinarily high volatility, and remained at 72 dollars per invested over 116 million euros into innovation and development, barrel.