Oil Shale
Oil shale is a group of rocks rich enough in organic material, known as kerogen, to yield petroleum upon distillation. The kerogen in oil shale can be converted to oil through the chemical process of pyrolysis.
Two methods are used to extract oil shale, and they are known as surface mining and in-situ processing. Oil shale can be mined either by traditional underground mining or surface mining from the ground. The material is then transported to the processing facility where the shale goes through the chemical process of pyrolysis. The resulting oil is then separated from the waste material.
Measuring oil shale can be difficult because the amount of kerogen in oil shale differs from reserve to reserve. Some countries report reserves as a total amount of oil shale rather than reserves that are economically recoverable via current technologies. According to the U.S. Energy Information Administration (EIA), the global resource base is quite large, equaling 2.9 trillion barrels of recoverable oil. This amount exceeds conventional oil resources by more than 50 percent, which are estimated at 1.9 trillion barrels. The U.S. currently holds 750 billion barrels of oil shale with the biggest concentration of reserves located in Utah, Wyoming and Colorado. Deposits that yield more than 25 gallons of syncrude from 1 ton of oil shale are said to be economically viable. Using this calculation, fully-developed U.S. reserves could supply the U.S. for more than 100 years. More research is needed to lower the costs of extraction and lessen the environmental impact. Better technology will certainly lead to an increase in the economical, social and political benefits of oil shale development.
If low-cost shale oil production methods can be achieved to produce approximately three million barrels per day, the direct economic profits in could reach about $20 billion per year. Through lease bonus payments, royalties on production and corporate income taxes, roughly half of these profits would likely go to federal, state and local governments and provide large benefits to the consuming public.
An increase in oil shale production would cause an increase in employment within the regions where shale oil production occurs, or within regions that contain industries providing inputs to the production process. A few hundred thousand jobs would likely be associated, directly and indirectly, with oil shale production. The net effect on nationwide employment is uncertain, however, because increases in employment arising from shale oil production could be partially offset by reductions in employment in other parts of the country.
Moreover, production of three million barrels of oil per day from oil shale would likely cause oil prices to decrease. According to the U.S. National Energy Technology Laboratory, if world oil prices were to fall by three to five percent, benefits to consumers and businesses in the U.S. would be roughly $15 to $20 billion per year.
Tar Sands
The oil from tar sands is extracted through strip mining. The sand is collected using huge power shovels and placed in gigantic trucks, which then transport the sand to the processing plant.
The equipment used in the extraction process is very large. These machines are very expensive and add to the price of the synthetic oil that is produced from the tar sand. Processing begins when hot water and caustic soda are added to the sand to make it more fluid and easier to handle. The water and the caustic soda also help free the bitumen from the sand and cause small air bubbles to attach to the bitumen. These small air bubbles force the bitumen froth to float to the top of the “tank” in the separation chambers.
From the top of the tank, it is collected and further “cleaned”. Before the cleaned bitumen can be upgraded into synthetic oil, however, it must be mixed with lighter petroleum (liquid or gas) or chemically split to make it lighter because bitumen is much heavier than traditional heavy crude oil.
However, the traditional bitumen processing technique described above has some disadvantages. In particular, the technique produces CO2 emissions and needs large amounts of water during the process. As a result, these two factors have stimulated many companies to conduct research on alternative ways of extraction, which would lessen the burden on the environment.
The whole process of turning bitumen into usable synthetic oil is very expensive. For example, compared to a barrel of oil from a well in Texas, the bitumen in Canada is not economically viable unless the price of crude is around US$ 30 to 45 per barrel (depending on method and location). The higher the price, the more the tar sands will be feasible to extract. As technological advances in bitumen extraction and processing take place, the costs are likely to fall, which will make this resource more accessible.
Although tar sands are found in more than 70 countries worldwide, the bulk of the proven resources of tar sands are located in Venezuela (Orinoco tar sands, 1.8 trillion barrels) and Canada (Athabasca tar sands, 1.7 trillion barrels). The resources in Canada alone surpass the total crude oil resources in Saudi Arabia, which provides a good example of the large quantities of energy resources contained in these tar sands. In the U.S., there are some minor tar sands fields located in Utah amounting to an estimated 32 billion barrels.
Potentially large resources located in Canada, just north of the U.S. border, could be extremely beneficial to the U.S. If technology continues to advance and the crude oil price maintains levels above US$ 45 per barrel, the tar sands have the potential to become one of the main sources of oil for the U.S. in the future. Further, these resources would be coming from the politically stable and U.S.-allied Canadian government. As a result, U.S. dependence upon Venezuela and other politically stable countries for energy resources would lessen.
Sources: U.S. Department of Energy, U.S. Energy Information Administration, U.S. National Energy Technology Laboratory, World Energy Council and Wikipedia