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SHALE OIL---PETROLEUM'S FUTURE PARTNER

By

H. M. Thorne, U. S. Bureau of Mines

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This paper is to be presented at the Rocky Mountain Joint Regional Meeting in Denver, Colo. May 27-28, 1963, and is considered the property of the Society of Petroleum Engineers. Permission to publish is hereby restricted to an abstract of not more than 300 words, with no illustrations, unless the paper is specifically released to the press by the Editor of the Journal of Petroleum or the Executive Secretary. Such abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in Journal of Petroleum Technology or Society of Petroleum Engineers Journal is granted on re~uest, providing proper is given that publication and the original presentation of the paper.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of P~troleum Engineers office. Such discussion may be presented at the above meeting and considered for publication in one of the two SPE magazines with the paper.

ABSTRACT trial operations in other countries generally have had similar experiences; that is, when Industrial shale-oil operations in North petroleum became readily available at reasonable America and predated the Drake discovery, cost, the o"il-shale operations could not compete but, since then, most have succumbed to competi­ without sizable subsidies. Industrial operatiO[lS tion from petroleum. However, the existence of are presently conducted only in , , enormous oil-shale resources in the Green River , Manchuria and the U.S.S.R. formation of Colorado, utah and Wyoming [esti­ mated at over a trillion bblof shale oil in Oil shales do not contain oil; instead, they place] and the advancement of oil­ consist of solid, largely insoluble, organic shale technology by pro­ material intimately associated with a mixture of grams of government and during the past that make up about 85 per cent of an 15 years point to a natural of average shale yielding 25 gal of' oil per ton. petroleum and to meet the accelerating Oil shales are widely distributed throughout the energy demands of' the future. The utilization of world in sedimentary rocks from Cambrian to oil shale is not a ~uestion of' limited petroleum Recent, but by far the largest known deposit is supplies, but one of' economics. Two factors are in the in Colorado, Utah expected to improve the economic outlook f'or and Wyoming. industrial shale-oil production -~ a rise in petroleum replacement cost and f'urther advances Lewis G. Weeks2 in 1959 published a compre­ in oil-shale technology. hensive analysis and forecast of demand and sources of' supply of energy for the next 100 INTRODUCTION years. He estimated that, in addition to im­ ported petroleum, the United States would use The production of oil f'rom oil shale dates 490 billion bbl of' the 570-billion-bbl ultimate ,back to the 17th century, when medicinal oils werE reserve of' domestic petroleum [including natural produced from bituminous shales in England.l gas energy in e~uivalent bbl of' petroleum and oil Shale-oil industries . started in in 1838; from sands] and 600 billion bbl of' shale oil in in 1850; in in 1860; in f'rom 1960 to 2059. Although Weeks considered all Estonia, Spain and Manchuria in the 1920's; and of the oil-shale deposits throughout the U. S. as in South Af'rica and Sweden in the i930's. A sources of' shale oil, the 1.132 trillion bbl of' small shale-oil industry was operating in Canada potential oil in place in the Green River forma­ and the eastern United States in 1860 but dis­ tion, as estimated by Donald Duncan of' the Feder­ appeared when petroleum became plentif'ul f'ollow­ al Geological Survey,3 constitutes almost twice ing the Drake discovery in . Indus- the supply re~uired to meet the need estimated by Weeks. Other f'orecasters would undoubtedly dif­ References at end of paper. f'er from Weeks, but it seems evident that, at 2 SHALE OIL -- PETROLEUM'S FUTURE PARTNER SPE-5l8

least within the next decade or so, sufficient ing 27 ft high and two benches· each 23 ft domestic sources of petroleum [including oil from high. Subsequently, a two-level operation was shales and tar sands and equivalent ] adopted -- a top heading 39 ft high and a single can be made available, but that the production bench 34 ft high. Special equipment developed from each source will depend largely upon rela­ for mining the high faces included tive cost. jumbos, -loading platforms, scaling rigs, and a mobile and utility sta­ The Bureau of Mines and the Society of tion. An electric shovel with a 3-cu-yd dipper Petroleum Engineers have a common objective, "to was used to load the broken shale. Diesel­ promote the science of economic recovery of powered end-dump trucks, of 15- to 22-ton capa­ petroleum." The Bureau of Mines has the further city, were used for haulage. Room openings and obligation to promote the conservation of the roof-supporting pillars were both 60 ft square. nation's petroleum resources, including the An extraction ratio of 75 per cent was Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 development of supplementary sources. Between attained. 1918 and 1930 the Bureau intermittently studied oil-shale conversion and shale-oil chemistry and Drilling proved to be a major cost item. At refining. In 1944, when petroleum shortages dur­ first only percussion-type drills were available, ing the caused Congress to pass the Synthetic and most of the research on drilling and costs Liquid Fuels Act, comprehensive investigations of was based on this type of drill. For drilling mining, retorting and refining on a pilot-plant vertical holes, a hydraulically operated rotary scale were started at Rifle, Colo. At the same drill, mounted on a tractor, was developed to time, supporting laboratory research and bench­ improve drilling efficiency. For horizontal scale experimental operations were begun at holes, another rotary drill was developed, but Laramie, Wyo. Reduced appropriations ended ex­ closing of the mine prevented comprehensive test­ perimental operations at the Rifle plant in 1956, ing. A 45 per cent semi-gelatin dynamite was but it has been maintained in standby condition adopted, after considerable experimental , since that time. Activities at Laramie have been as the standard . continued, with emphasis on studies of the characteristics and extent of oil-shale deposits, Two roof falls demonstrated the need for the composition of shale oils and the oil-shale caution in mining oil shale. Test room data in­ organic constituent [], and laboratory dicate a progressive roof deterioration that can and bench-scale process research. The process result in failure. The minimum roof life was studies include evaluation of uncommon methods of more than two years. Therefore, in a normal producing shale oil and gas from oil shale; in commercial operation, where a unit area would be situ retorting, including the possible applica­ mined out in less than 60 days and then closed tion of nuclear explosives; and refining of shale off to entry, roof-fall hazards should be virtu­ oil. ally eliminated.

This paper summarizes the information and The Bureau and several cooperating organi­ technology developed by the Bureau of Mines pro­ zations have conducted crushing tests on oil gram and by industry, describes the status of oil shale, using jaw, gyratory, impact, and roll-type shale in the national energy picture today, and equipment. Resulting data have proved useful speculates on its future as a supplemental source for some purposes but are probably inade­ of petroleum. quate for exact design of a commercial oil-shale crushing plant. The. tough, elastic Green River BUREAU OF MINES OIL-SHALE PROGRAM oil shale tends to form slabs that present screening and handling problems. Mining Methods Mining costs, computed during the period of Mining methods developed at the Bureau's oil­ operation in the 1940's, ranged between 47 and 56 shale mine near Rifle, Colo.,4 apply to cliff­ cents per ton.4 They included labor, supplies, face locations in the Colorado River drainage depreciation, taxes and administrative overhead. area. A "selective mine" was opened first to ob­ Important developments in and open-pit tain specific shales from any of the nine beds mining techniques and machinery have occurred within the principle oil-shale section, commonly during the past decade. Many of these methods referred to as the Mahogany zone, for retort test­ COuld. be used in oil-shale mining to cut costs ing, and to determine if theoretical stUdies on and thus offset increased labor costs and capital safe roof spans were applicable. A "demonstration investments. mine" then was opened in a 73-ft minable section of the Mahogany zone to prove that low mining Retorting costs and high recovery in a room-and-pillar operation were possible. Application of heat is the only means of producing shale oil that has been devised during Development of the demonstration mine was the worldwide interest in shale-oil production, initially planned to include driving a top head- and numerous heating processes and retorts H. M. THORNE 3

[mechanical devices within which to heat oil use of microorganisms for obtaining beneficial shale] have been developed. The Bureau has changes in the organic matter and is participat­ retorted Green River oil shale experimentally in ing in a experiment to determine the N-T-U, Royster, gas-flow, counterflow, gas­ effects of nuclear arid other radiations on the combustion and entrained-solids retorts, and by a organic matter. thermal-solution process.5-7 The gas-combustion process was the subject of an intensive develop­ Oil shale customarily is considered only as ment program. The retort is a vertical, refrac­ a source of a liquid petroleum supplement, but tory-lined shaft in which crushed shale moves some research has been conducted on producing downward as a bed by gravity. Retorting heat, high-Btu gases bb hydrogasification of its furnished by internal combustion, is transferred organic matter.l This process would fit oil by direct gas-to-solids heat exchange. A novel shale into that part of the energy use pattern combination of retorting, combustion and heat­ now supplied largely from natural gas and cur­ exchange functions results in high retorting and rently accounting for about 30 per cent of the Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 thermal efficiencies. A unique feature is the total energy consumed in the U. S. recovery of oil as a mist. The process was studied in three sizes of pilot plants, the Refining largest being operated at a rate of about 200 tons of shale per day. The experimental program Crude shale oil from retorts designed to was not completed, but much was learned about obtain a maximum yield of oil contains only a equipment design, effects of process conditions, small quantity of distillate in the ­ and internal mechanisms of retorting, combustion, boiling range. However, fuel Oils, both distil­ and oil-mist formation. late and residual, can be prepared directly from this type of crude, although the distillate fuels Other also have studied re­ usually require chemical or other treatment to torting. The Socony Vacuum Oil Co. [now Socony meet specifications. Mobil Oil Co. J studied the application of Thermo­ for catalytic equipment to oil-shale Gasoline and in satisfactory retorting. The Development Co. [now yield and quality for such products were obtained Esso Research and Co.] conducted by thermal cracking and low-temperature chemical retorting tests in a modified two-vessel, fluid treatment in the Bureau's experimental refinery catalytic cracking pilot plant. More recently, at Rifle, Colo. Poor yields of gasoline were the Union Oil Co. of California erected, near obtained by catalytic cracking in the laboratory Grand Valley, Colo., a large pilot model of a con­ because of the poisoning effect on the catalysts tinuous, underfeed, countercurrent, internal com­ of shale-oil compounds. bustion retort. A throughput of 1,200 tons of shale per day was reported. The Oil Shale Corp., is an effective processll,12 through the Denver Research Institute, has con­ for removing the , nitrogen and from ducted tests with a process originally devised in shale oil and producing excellent yields of high­ Sweden and presently called the Tosco process. quality jet, diesel and distillate fuels. Such Only limited amounts of technical data have been hydrogenated oils also are satisfactory charging released by these companies. Hundreds gf other stocks for catalytic cracking and reforming retorting processes have been patented, ,9 but fev; processes and may be suitable for use in manu­ have reached a pilot-plant stage of development. facturing lubricants.

Mining, crushing and retorting oil shale Waxes having properties similar to petroleum make up about 60 per cent of the cost of produc­ waxes can be separated from shale-oil fractions ing &hale oil; thus, consideration also has been by conventional processes. Some treatment may be given to retorting the shale in place as a possi­ required to obtain products of desired specifica­ ble means of reducing the cost of oil production. tions. Sinclair Oil and Gas Co. conducted a field test on such a process. In Sweden an electrothermal prepared from shale oil differ method was operated for many years. Numerous from straight-run petroleum asphalts. However, patents have been issued on other in situ methods. satisfactory -surfacing materials were pre­ The Bureau of Mines has proposed a cooperative pared by reducing crude shale oil and cracked experiment with the Atomic Energy Commission and residuum and used on at the Bureau's Oil­ industry wherein a nuclear device would be used Shale Engineering Experiment Station, Rifle, Colo to fracture-large tonnages of shale after which experiments would be made to produce shale oil by Shale-oil pitch and were found to be in situ combustion of the fractured shale. suitable additives to coking to improve the quality of blast-furnace coke. These materials Problems involved in refining shale oil pro­ were also of interest to manufacturers of elec­ duced by thermal retorting encourage study of trodes and carbon brushes. other methods for converting shale organic matter to oil. The Bureau of Mines is investigating the 4 SHALE OIL -- PETROLEUM'S FUTURE PARTNER SPE-518

Uses ture may be increased until the oil obtained is composed entirely of aromatic compounds. The Shale oil will be utilized in much the same characteristics of the shale from which an oil is manner as petroleum, with the major portion con­ produced also affect its composition. Oils from sumed in producing heat and power. The present European shales contain less than one-half as use pattern for petroleum suggests the wide range much nitrogen as do Colorado oils. Processes of possible outlets for shale-oil products. applicable to shale oil from one source are, therefore, not usually directly applicable to oil Because shale oil differs in composition from another source. from most , converting it to some products may result in byproducts not commonly The most extensive composition data on frac­ obtained from petroleum, at least in as large tions of shale oil are available for the naphtha quantities. Among these may be phenols, pyri­ fraction [boiling up to 2000 C]. This material isDownloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 dines and ammonia. Others, commonly obtained processed into gasoline and so is particularly from petroleum, may be sulfide or sulfur important; techniques for determining its compo­ and olefinic and aromatic . sition are readily available. Although there is no typical shale oil, the following values give In addition to the byproducts from shale-oil an approximate picture of many shale-oil processing, others will result from the retorting naphthas: process. From internal-combustion retorts, large Volume volumes of low-Btu gas will be obtained. Other per cent retorts will produce gases rich in hydrogen, Saturated hydrocarbons 30 carbon dioxide; and hydrogen sulfide, and hydro­ Olefinic hydrocarbons 40 carbon gases, including ethylene, propylene, and Aromatic hydrocarbons 18 other olefins of interest to the chemical indus­ Nitrogen compounds 8 try. All retorting processes will discharge Sulfur compounds 3 , which consists largely of the Acidic oxygen compounds inorganic components of oil shale. This material 1 may find uses in special situations. In more detailed studies, numerous individual compounds have been identified in various shale­ Shale-Oil Properties oil naphthas.15

Shale oils produced from Green River shale The heavy-gas-oil fraction [boiling at 3250 by the processes that have received the most to 6000 C] contains Dnly about 35 per cent satur­ developmental work, such as the Bureau's gas­ ated and olefinic hydrocarbons, compared with the combustion process or that of Union Oil Co. of 70 per cent of these compounds in the naphtha. California, have similar compositions.13 They The remaining 65 per cent is aromatic material contain less than 10 per cent naphtha, so that containing one or more atoms of nitrogen, oxygen production of gasoline from them will require or sulfur in most of the molecules in addition to extensive use of cracking processes. They have carbon and hydrogen.16 Detailed information con­ a high pour point [about 75°F] and a high vis­ cerning the higher boiling fractions is meager. cosity [about 300 S.U. seconds at 1000F], so that application of degradation processes is required During the last several years a number of before the oil can be transported conveniently by techniques have been developed for characterizing pipe line. They contain about 0.75 per cent organic materials. Among these are high-resolu­ sulfur and 2.0 per cent nitrogen, which require tion mass spectrometry, gas-liquid chromatography special processing techniques for removal. that can be used as a distillation substitute or to separate compounds on the basis of function­ There are two major differences in composi­ ality, labeling of selected compounds with radio­ tion between crude shale oil and crude petroleum active isotopes, thermal diffusion separation of that are particularly important in making molecules according to shape, and nuclear mag­ finished products. First, shale oil is the re­ netic resonance. Adaption of these and similar sult of a pyrolytic process and therefore con­ new techniques to the characterization of shale­ tains large quantities of unsaturated"compounds oil fractions will provide a much clearer picture that are not present in crude petroleum. Second, of these fractions than has been obtainable by the 2.0 per cent nitrogen in shale oil is far procedures available in the past. higher than that in most petroleums. Nitrogen reduces the efficiency of catalytic processing Oil-Shale Resources techniques, and its presence in products promotes instability. Estimates of reserves in the principal oil­ shale deposits of the world are given in Table 1. Oils with unusual pro~erties may be obtained The ultimate recovery of shale oil from the l under certain conditions. For example, oils deposits may be less than the indicated potential produced at higher retorting temperatures are reserve, depending upon the methods used i3 mining more aromatic. In fact, the retorting tempera- and processing •. The U.S. reserve estimate given ::PE-51S H. M. THORNE 5 in Table 1 represents only the Green River forma­ TABLE 1 -- MAJOR SHALE-* tion; the known reserves of other deposits are comparatively minor. Continuous sectipns of the Oil oil shales in Colorado that are at least 15 ft in place, thick and average 15 gal of oil per ton represent million about 1 trillion bbl of oil in place. Included Country or area bbl in these 15-gal-per-ton sections are richer sections averaging 25 gal of oil per ton, repre­ Australia 200 senting 400 billion bbl of oil in place. In 342,000 Utah, the 25-gal-per-ton sections, 15 or more ft Bulgaria 200 thick, represent 120 billion bbl of oil in place, Burma and Thailand 17,100 and those in Wyoming represent about 12 billion Canada 34,200 bbl of oil in place. 00

2,7 Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 England 1,400 By cooperative effort, extensive information Estonia17 17,300 has been obtained on the size and oil-yield France 1,400 potential of part of the Green River oil shales. Germany [West] 2,000 This cooperation involved the determination of IsraellS 20 oil yields by the Bureau of Mines on about 90,000 34,200 oil-shale samples provided by companies engaged New Zealand19- 21 200 in evaluating their oil-shale properties or Madagascar 200 drilling for oil and gas.23 The Federal Geo­ Manchuria22 2,000 logical Survey uses these data for resource eval­ Republic of the Congo [Former uations. As a result, reliable information is Belgian Congo] 103,000 available on the extent and thickness of oil­ Scotland 600 shale sections averaging 25 and 15 gal of oil Spain 300 per ton in Garfield County, Colo., and along the Sweden 2,SOO eastern edge of Uintah County, Utah. Additional Union of South 30 sampling and geologic data are needed to appraise United States3 1,132,000 the more deeply buried Green River oil shales in U.S.S.R. 6,SOO Uintah County, utah, Rio Blanco County, Colo., Yugoslavia 1,400 and Sweetwater County, Wyo. Similarly, addi­ tional studies are necessary to estimate the oil­ Total yield potential of oil shales of other deposits in the U.S. The other domestic oil shales are of *Except as noted by citations, estimates are secondary importance, as they commonly yield less based on descriptive pamphlet of Swedish oil­ than 15 gal of oil per ton and occur in thick­ shale operation by Claes Gejrot, Swnska nesses of less than 25 ft. Skifferolje, AB, Orebro, Sweden [195S].

The Green River oil shales were formed by the deposition, in large shallow lakes, of Present information indicates that the maximum organic and matter that become compact, continuous section of oil shale having an average laminated sediments up to several thousand feet oil yield of 25 gal per ton is about 100 ft thick thick. These oil shales or marlstones contain in utah and about 40 ft thick in Wyoming. widely varying amounts of organic material and, consequently, yield different amounts of oil by The Mahogany zone of the Green River shale . In Colorado, the Green River forma­ is exposed about 600 ft from the top of cliffs tion covers an area of 2,600 square miles, but along the Colorado River on the southern flank the principal oil-shale measures occur in the of the basin. In this area it is about 90 to 100 Parachute Creek member within an area of 1~400 ft thick. It has an average oil yield. of about square miles in the Piceance Creek basin.24 27 gal per ton and is comprised of individual Analyses of drill cuttings indicate that an oil­ beds containing from 7 to 77 gal of oil per ton. shale section up .to 1,900 ft thick with an aver­ • age potential yield of 25 gal of oil per ton Green River oil shale has little porosity or occurs under an overburden of 1,000 ft or more in permeability. It is somewhat resilient and re­ the center of the basin. The potential oil in sistant to fracture and has a Mohs' hardness of this section is 1,790 bbl per acre ft, equivalent about 5. Detailed analyses givi~g the composi­ to almost 2-1/4 billion bbl in plac~ under each tions, oil yields and other chemical and physical square mile. properties of different grades of the shale have been published.25 These results and studies in Oil shales also are found in the Green River progress indicate that the Mahogany zone oil formation, covering 4,700 square miles in Utah shales have similar characteristics over a wide and 9,200 square miles in Wyoming. However, they area. The average composition is shown in Table are not as thick or as rich as those in Colorado, 2. nor have they been as thoroughly evaluated. 6 SHALE-OIL--PETROLEUM! S FUTURE PARI'NER SPE-518 TABLE 2 -- AVERAGE COMPOSITION OF 25-GAL-PER-TON 3. Re- a blend of the naphthas pro­ OIL-SHALE SECTIONS OF THE MAHOGANY duced in the coking and hydrogenating steps. ZONE IN COLORADO AND UTAH 4. Catalytically cracking the portion of the hydrogenated coker distillate that boils per above 4000 F together with the polymer produced Weight cent in naphtha re-forming. Organic material: It was calculated that these refining operations, Yield from raw shale 13.8 together with polymerization of C3 and C4 olefins Ultimate composition: available from the catalytic cracking steps and Carbon 80.5 appropriate fractionation and blending of the Hydrogen 10.3 various streams, would produce gasoline and

Nitrogen 2.4 diesel fuels in a ratio of about 1.92 gasoline Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 Sulfur 1.0 being the product in largest volume. It was Oxygen 5.8 estimated that equal volumes of premium and regu­ Total 100.0 lar grades of gasoline could be made and that the Mineral material: --- diesel fuel would approach a cetane number of Yield from raw shale 86.2 50. Coke, sulfur, ammonia, liquefied petroleum Estimated mineral constituents: gases and a small amount of would con­ Dolomite 35 stitute the balance of products from this process. Calcite 15 Feldspars 25 The NPC based its economic study on the pro­ Quartz 15 duction of 250,000 bbl of shale oil per day. Clay [illite] 5 The coking and hydrogenation steps would be per­ Pyrite 1 formed near the retorting plant in Colorado, the Analcite and other minerals 4 hydrogenated oil would be pipe lined to California Total 100.0 100 and the balance of the refining would be done there. The organic and inorganic constituents of Mahogany zone oil shale are intimately mixed, and With this processing scheme, NPC estimated attempts to concentrate or separate them have that the cost of shale gasoline would be 14.7 been only partially successful. Consequently, cents per gal, compared with the 1951 California research on the constitution of the organic refinery price for petroleum gasoline of 12 cents material [kerogen] has used degradation tech­ per gal. The shale-gasoline cost included a 6 niques to yield organic products that are uncon­ per cent return on investment after taxes. taminated by minerals and are more amenable to analysis. Degradation studies involving hydro­ No more recent study, comparable in scope genolysis and oxidation show that the kerogen is to the NPC 1951 study, of the economics of pro­ predominantly heterocyclic but contains small ducing shale products has been published. It is amounts of straight-chain and aromatic hydrocar­ still frequently cited and used by escalating bons. Recent studies of low-temperature thermal 1951 costs to current costs and modifying the extracts indicate that kerogen is comprised of 10 assumptions made by NPC. to 12 per cent straight-chain paraffins contain­ ing 25 to 30 carbon atoms, 20 to 25 per cent One such modification was that published by naphthenic structures, 10 to 15 per cent aromatic Miller and Cameron in 1958.27 These authors structures having 3 to 5 rings per molecule, and based their estimate on the cost of producing 45 to 60 per cent heterocyclic material. crude shale oil only, eliminating the refining steps except for visbreaking to produce a pipe­ ECONOMICS line oil. They also attempted to correct for technological developments between 1951 and 1957, In 1951, the Secretary of the Interior re­ and they estimated costs using both the Union Oil qnested the petroleum industry through the Co. and the Bureau of Mines retorts. A summary National Petroleum Council [NPC], to make a of their evaluations is given in Table 3. comprehensive study of the economics of producing liquid fuels from Colorado oil shale, using Bureat These costs were then compared with 1957 of Mines and other available data. The NPC com­ prices of 210 API California and West Texas crude piled a comprehensive report on its stUdy,26 oils, which were about $3 per bbl, including which was based upon mining methods developed by approximate transportation costs to California the Bureau of Mines, a retorting method developed area refineries. The authors concluded: by Union Oil Co., and a refining plan that con­ IIEven without depletion allowance, and sisted of the follOwing steps: assuming a realistic profit, the gas com­ bustion retort case economics are esti­ 1. Coking crude shale oil to produce a dis­ 0 mated to be within 10 per cent of present tillate of approximately 700 F end pOint. [1957] crude petroleum prices. II 2. Hydrogenating the portion of the coker distillate that boils above 4000 F. SPE-518 H. M. THORNE 7

TABLE 3 -- ECONOMICS OF CRUDE SHALE-OIL PRODUCTION Type of Retort Union Oil Co. Bureau of Mines

Capital investment: * Mining and crushing $323,000,000 $323,000,000 Retorting 468,000,000 201,000,000 Pipeline preparation 86,000,000 86,000,000 Pipeline to California 103,000,000 103,000,000

Total $980,000,000 $713,000,000

Net daily cost** 431,000 356,000 Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021

Cost per bbl of oil delivered in California-­ 3.00 2.35 at 6 per cent return on investment after taxes, no depletion allowance

at 12 per cent return, no depletion 3.30 allowance

at 6 per cent return and 15 per cent 2.85 2.20 depletion allowance on crude

at 12 per cent return and 15 per cent 3·95 depletion allowance on crude

* Includes housing. ** Includes depreciation but no depletion or return on investment

About the time that this economic study was some unforeseen reversal of the trend in crude published, the Union Oil Co. was completing an oil replacement costs, the conclusion is ines­ extensive research and development program on its capable that shale oil as a supplement to natural process. It is not known if the costs listed in crude oil is fast approaching a position of Table 3 for the Union Oil Co. process are consist­ economic attractiveness. ent with the results of this development program. The Union Oil Co. has not published a detailed Without attempting to set a date when shale economic study based on this work, but Hartley28 oil will reach competitive status, one definite has stated: warning should be sounded. oil-shale plants and developing mines on a scale large IIpreliminary figures indicate that, on enough to provide an appreciable supplement to the basis of 25,000-50,000 bbl/day, petroleum will require at least three years under delivering semirefined products to the nonemergency conditions. Even more time would be Pacific Coast or comparable areas, advantageous, because design of commercial pro­ costs compare favorably with similar cessing equipment should be preceded by addi­ products made from natural crude oil tional research and development to fill gaps in at price presently posted for such present technical knowledge. crudes. II CONCLUSIONS Perhaps as realistic a yardstick as the price of crude oil for assessing the economic status The estimated 1.7 trillion bbl of potential and prospects of shale oil is crude oil replace­ oil from U.S. Green River oil-shale, petroleum, ment cost. Priestman of the Standard Oil Co. natural gas, and tar sand sources, if technically [New Jersey] developed nationwide replacement and economically recoverable, will more than meet costs of $2.93 per bbl as of 1957, compared with the estimated domestic demand fOF petroleum about $2 per bbl in 1950; both figures were based products for the next hundred years. Oil-shale on constant 1958 dollars and included finding, technology applicable to U.S. shales, although development and operating costs.29 In contrast, still incomplete, has been advanced extensively the cost in constant dollars of producing shale during the past 15 years. by both government and oil, whatever actual figure is accepted at a industry research and development programs. given date, has at worst only remained static Shale-oil production is expected to become finan­ over a similar period of time and logically has cially attractive in the foreseeable future as decreased in view of technologic advances by in­ petroleum replacement costs increase while the dustry and the Bureau of Mines. Thus, barring potential cost of shale-oil production -remains 8 SHALE-OIL--PETROLEUM'S FUTURE PARTNER SPE-5l8

static or decreases. S.: "Analysis of Crude Shale Oil", RI4898, USBM [l952]. ACKNOWLEDGMENT l4. Dinneen, G. U.: "Shale Oil--What Is It?" Petrol. Refiner [Feb., 1954] 33, No.2, ll3. The work at the Laramie Petroleum Research l5. Dinneen, G. U., Van Meter, R.-X., Smith, Center is done under a cooperative agreement J. R., Bailey, C. W., Cook, G. L., between the Bureau of Mines, U.S. Department of Allbright, C. S. and Ball, J. S.: "Compo­ the Interior, and the of Wyoming. sition of Shale-Oil Naphtha", Bull. 593, USBM [l96l]. REFERENCES l6. Dinneen, G. U., Cook, G. L. and Jensen, H. B.: "Estimation of Types of Nitrogen Com­ l. Gavin, M. J.: "Oil Shale: An Historical, pounds in Shale-Oil Gas Oil", Anal. Chem. Technical and Economic Study", Bull. 2lO, [Dec., 1958] 30, No. l2, 2026. Downloaded from http://onepetro.org/SPEAIMEAM/proceedings-pdf/63AIME/All-63AIME/SPE-518-MS/2085926/spe-518-ms.pdf by guest on 24 September 2021 USBM [l922]. l7. Urnblia, E. J.: "Estonian Oil Shale", Ind. 2. Weeks, Lewis G.: ''Where Will Energy Come and Engr. Chem. [l962] 54, 42. From in 2059", Pet. Engr. [Aug., 1959] 3l, lB. Gil-Av, E., Heller, S. and Steckel, F.: No.9, A24. "The Urn Barek Oil Shale", Bull. Research 3. Duncan, Donald C.: "Oil-Shale Deposits in Council Israel [Sept., 1954] IV, No.2, l36. the United States", Independent Petrol. Assoc. 19. Willett, R. W.: "The Nevis Oil-Shale of America [Aug., 1958] 22. Deposit, Nevis Survey District, Otago Cen­ 4. East, J. H., Jr. and Gardner, E. D.: "Oil­ tral", Jour. Sci. Technol. Shale Mining, Rifle, Colo., 1944-56", Bull. [l943] XXIV, No. 6B, 239B. 6ll -- in press, USBM. 20. "Oil Shale of Cambrian, Freshford, and 5. Guthrie, Boyd: "Technological Developments Waitati, Otago and Southland", New Zealand in Retorting Coloradct Oil Shale, 1944-54", Jour. Sci. Technol. [l943] XXIV, No. 6B, Proc. of the Fourth World Petroleum Congress 255B. [l955] Sec. III, 4l5. 2l. Willett .. R. W. and Wellman, H. W.: "The Oil­ 6. Oil Shale and Cannel Coal. vol. g, Inst. of Shale Deposit of Orepuki, Southland", New Petroleum, London [l95l]. Reviews of work of Zealand Jour. Sci. Technol. [l940] XXIr;-No. Bureau of Mines published also as reprints: 2B, 84B. -- [a] Cattell, R. A., Guthrie, Boyd and Schramm, 22. Ishibashi, Kohi: "Present Status of Proper­ L. W.: "Retorting Colorado Oil Shale", 345, ties and Refining of Fushun Shale Oil", [b] Gardner, E. D. and Sipprelle, E. M.: World Petrol. Congo 2d, Sec. 2, Phys. Chim. "Investigations for Production of Oil Shale Raffinage [l937] l83. on a Commercial Scale", l62, [c] Lankford, 23. Stanfield, K. E., Smith, J. W., Smith, H. J. D. and Morris, B.: "Refining Colorado Oil N. and Robb, W. A.: "Oil Yields of Sections Shale", 500, [d] Thorne, R. M., Murphy, W. I. of Green River Oil Shale in Colorado, 1954- R., Stanfield, K. E., Ball, J. S. and Horne, 57", RI 56l4, USBM [l960]. J. W.: "Green River Oil Shales and Products ", 24. Donnell, John R.: "Preliminary Report on 30l. Oil-Shale Resources of Piceance Creek Basin, 7. Sohns, H. W., Jukkola, E. E. and Murphy, W. I Northwestern Colorado", Geol. Survey Bull. R. : "Development and Operation of an Experi­ l042-H [l957] 255. mental, Entrained-Solids, Oil-Shale Retort", 25. Stanfield, K. E., Frost, I. C., McAuley, W. RI 5522, USBM [l959]. S. and Smith, H. N.: "Properties of Colo­ 8. Klosky, Simon: "An Index of Oil-Shale rado Oil Shale", RI 4825, USBM (l95l]. Patents", Bull. 468, USBM [l959]. 26. National Petroleum Council Committee on 9. "Index of Oil-Shale and Shale-Oil Patents, Synthetic Fuels Production Costs, Shale-Oil 1946-56", A Supplement to Bulletins 467 and Retorting and Refining Fapilities, Sept. l5, 468. Bull. 574, USBM -- in three parts. 1951, hearings before special Subcommittee I. "United States Patents!! [l958], II. on Minerals, Materials, and Fuel Economics, "United Kingdom Patents" [l958], III. "Euro­ Committee on Interior and Insular Affairs, pean Patents and Classification" (l959]. U.S. Senate, 83d Congress, Part 6 [l953 and . lO. Schultz, E. B., Jr. and Linden, H. R.: 1954] 334 • "Production of Pipeline Gas by Hydrogenolysis 27. Miller, Ernest P. and Cameron, Russel J.: of Oil Shale", Ind. and Engr. Chern. [May, "Shale Oil Nears Competi tive Level with 1959] 5l, No.5, 573. Domestic Petroleum", Jour. Pet Tech. (Aug. , ll. Carpenter, H. c., Hopkins, C. B., Kelley, R. 1958] X, No.8, 25. E •.and Murphy, W. I. R.: "A Method for Re­ 28. Hartley, Fred L.: "Shale Oil--How Soon?", fining Shale Oil", Ind. and Engr. Chem. [July, Ohem. Eng. Frog. [March, 1959] 55, 59. 1956] 48, No.7, ll39. 29. !>riestman, G. Dawson: "A Key tothe Future l2. Cottingham, P. L., White, E. R. and Frost, C. --A Review of the Economics of the U.S. Oil M. : "Hydrogenating Shale Oil to Catalytic Producing Industry", Jour. Pet. Tech. (Nov., Reforming Stocks", Ind. and Engr. Chem. 1960] XII, No. ll, ll. [April, 1957] 49, No. 24, 679. l3. Stevens, R. F.-,-Dinneen, G. U. and Ball, J.